SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 27, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 33-26824
Bear Stearns Secured Investors Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3402173
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1601 Elm Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
(214) 754-8300
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)
(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT CONTEMPLATED THEREBY.
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BEAR STEARNS SECURED INVESTORS INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition at March 27, 1998
(Unaudited) and June 30, 1997
Statements of Operations (Unaudited) for the three months and nine months ended
March 27, 1998 and March 27, 1997 Statements of Cash Flows (Unaudited) for the
nine months ended March 27, 1998 and March 27, 1997 Notes to Financial
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signature
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<TABLE>
<CAPTION>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF FINANCIAL CONDITION
March 27, June 30,
1998 1997
(Unaudited)
ASSETS
<S> <C> <C>
Assets
Cash and cash equivalents $ 1,000 $ 1,000
Receivable from affiliates 16,176,822 16,176,822
Deferred organization cost 162,201 611,514
------------ -----------
Total Assets $ 16,340,023 $ 16,789,336
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Payable to Parent $ 16,349,716 $ 16,520,993
Other liabilities 165,000 164,312
------------ -----------
Total Liabilities 16,514,716 16,685,305
------------- ------------
Stockholder's Equity
Common stock, $.01 par value;
1,000 shares authorized;
100 shares outstanding 1 1
Paid-in capital 999 999
(Accumulated deficit)/Retained earnings (175,693) 103,031
---------- -----------
Total Stockholder's Equity (174,693) 104,031
----------- -----------
Total Liabilities and Stockholder's Equity $16,340,023 $ 16,789,336
========== ==========
See accompanying notes to financial statements.
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</TABLE>
<TABLE>
<CAPTION>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 27, March 27, March 27, March 27,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Expenses
Other expenses $ 166,388 $ 5,615 $ 493,498 $ 9,632
------------- ------------ ------------- -------------
Total expenses 166,388 5,615 $ 493,498 $ 9,632
------------- ------------ ------------- -------------
Loss before benefit from income taxes (166,388) (5,615) (493,498) (9,632)
Benefit from income taxes 72,413 2,466 214,775 4,230
------------ ------------ -------------- -------------
Net loss $ (93,975) $ (3,149) $ (278,723) $ (5,402)
=========== ============ ============= ============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
March 27, March 27,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (278,723) $ (5,402)
Decrease in deferred organization costs 449,313 --
Increase (decrease) in other liabilities 688 (16)
------------ ------------
Cash provided by (used in) operating activities 171,278 (5,418)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payable to Parent (171,278) 5,418
------------ -----------
Cash (used in) provided by financing activities (171,278) 5,418
------------ -----------
Cash and cash equivalents, beginning of period 1,000 1,000
------------- ------------
Cash and cash equivalents, end of period $ 1,000 $ 1,000
=========== ==========
See accompanying notes to financial statements.
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BEAR STEARNS SECURED INVESTORS INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Organization
Bear Stearns Secured Investors Inc. (the "Company") a direct wholly-owned
limited purpose finance subsidiary of The Bear Stearns Companies Inc. (the
"Parent") was organized on November 26, 1986 as a Delaware corporation. The
Company's sole purpose is to issue and sell one or more series of collateralized
mortgage obligations ("CMO's") directly or through one or more trusts
established by it. In connection therewith, the Company provides management and
administrative services after the issuance of each CMO issued.
The Company's activities are limited to issuing CMO's that will be
collateralized by mortgage-backed certificates, whole residential or commercial
mortgage loans or participations therein, and, in connection therewith,
acquiring, owning, holding and pledging mortgage-backed certificates, whole
loans or commercial mortgage loans.
The financial statements are prepared in conformity with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the amounts in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Note 2. Collateralized Mortgage Obligations
The Company clears all of its security transactions relating to the
purchase of the underlying collateral and issuance of collateralized mortgage
obligations ("CMO") through an affiliate. An affiliate also acts as the
principal underwriter for the Company's CMO issuances. However, the Company did
not issue any CMO's during the nine month periods ended March 27, 1998 and 1997.
Note 3. Commitments and Contingencies
In the normal course of business, the Company has been named as a defendant
in several lawsuits which involve claims for substantial amounts. Although the
ultimate outcome of these suits cannot be ascertained at this time, it is the
opinion of management, after consultation with counsel, that the resolution of
such suits will not have a material adverse effect on the results of operations
or the financial condition of the Company.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The Company's principal business activity is the issuing of collateralized
mortgage obligations ("CMO's") that are secured by mortgage-backed certificates,
whole residential or commercial mortgage loans or participations therein, and in
connection therewith, acquiring, owning, holding, and pledging mortgage-backed
certificates, whole residential or commercial mortgage loans. The Company also
derives revenues in its capacity as administrator during the life of the CMO
transactions for which it originated and retained such obligation.
The Company's net income and revenues reflects the impact of many factors
in the issuance of CMO's, including securities market conditions, the level of
volatility of interest rates, competitive conditions and the size and timing of
transactions. In addition, results of operations for any particular interim
period may not be indicative of results to be expected for a full year.
The net loss for the third quarter of the fiscal year 1998 was $93,975 as
compared with a net loss of $3,149 for the third quarter of fiscal year 1997.
During the fiscal quarters and fiscal year to date periods ended March 27,1998
and 1997, the Company did not issue any CMO's.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the period covered by this report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Bear Stearns Secured Investors Inc.
(Registrant)
Date: May 4, 1998 By: /s/William J. Montgoris
William J. Montgoris
Secretary, Treasurer and
Chief Financial Officer
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from the unaudited
Statement of Financial Condition at March 27, 1998 and unaudited Statement of
Operations for the nine-months ended March 27, 1998, which are contained in the
body of the accompanying Form 10-Q and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-27-1998
<CASH> 1000
<SECURITIES> 0
<RECEIVABLES> 16,176,822
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,340,023
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> (174,693)
<TOTAL-LIABILITY-AND-EQUITY> 16,340,023
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 493,498
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (493,498)
<INCOME-TAX> 214,775
<INCOME-CONTINUING> (278,723)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (278,723)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
