SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 25, 2000
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
(2l4) 754-8300
(Address, Including Zip Code, and Telephone Number,
Including Area Code of Registrant's Executive Offices)
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 THEREFORE IS FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT CONTEMPLATED THEREBY.
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition (Unaudited) at February 25,
2000 and November 26, 1999.
Statements of Operations (Unaudited) for the three-months
ended February 25, 2000 and February 26, 1999.
Statements of Cash Flows (Unaudited) for the three-months
ended February 25, 2000 and February 26, 1999.
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
<PAGE>
<TABLE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
February 25, November 26,
<CAPTION> 2000 1999
----------------- -----------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 1,000 $ 1,000
Receivable from affiliates 128,206 128,254
Other assets 686 686
----------------- -----------------
Total Assets $ 129,892 $ 129,940
================= =================
Stockholder's Equity
Common Stock, $.01 par value;
1,000 shares authorized; 100 shares issued and outstanding 1 1
Paid-in capital 500,999 500,999
Accumulated deficit (371,108) (371,060)
----------------- -----------------
Total Stockholder's Equity 129,892 129,940
----------------- -----------------
Total Liabilities and Stockholder's Equity $ 129,892 $ 129,940
================= =================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three-Months Ended
---------------------------------------
February 25, February 26,
2000 1999
---------------- ----------------
<S> <C> <C>
Expenses
Other $ 84 $ 111
---------------- ----------------
Total expenses 84 111
---------------- ----------------
Loss before income tax benefit (84) (111)
Income tax benefit (36) (48)
---------------- ----------------
Net loss $ (48) $ (63)
================ ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three-Months Ended
----------------------------------------
February 25, February 26,
2000 1999
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (48) $ (63)
---------------- ----------------
Cash used in operating activities (48) (63)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease (increase) in receivable from affiliates 48 (28,052)
Increase in payable to Parent - 28,115
---------------- ----------------
Cash provided by financing activities 48 63
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 1,000 1,000
---------------- ----------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 1,000 $ 1,000
================ ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Organization and Basis of Presentation
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.
On January 18, 2000, the Parent's Board of Directors elected to change its
fiscal year end to November 30 from June 30, effective with the year beginning
November 27, 1999. The Company has also elected to change its fiscal year end to
November 30, effective with the year beginning November 27, 1999. This Quarterly
Report on Form 10-Q presents the unaudited results of the Company's operations
for the first fiscal quarter ended February 25, 2000 and for the three-month
period covering November 28, 1998 through February 26, 1999.
The financial statements are prepared in conformity with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.
Note 2. Collateralized Mortgage Obligations
During the three-months ended February 25, 2000 and February 26, 1999 the
Company did not issue any CMO's.
The Company clears all of its securities transactions relating to the purchase
of the underlying collateral and issuance of CMO's through an affiliate. An
affiliate also acts as the principal underwriter for the Company's CMO
issuances.
<PAGE>
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 where it originates and retains such servicing obligation.
The Company's level of activity and results of operations reflect 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 Company had a net loss for the three-months ended February 25, 2000 and
February 26, 1999 of $48 and $63, respectively. Net losses are the result of the
Company incurring operating expenses with no earned revenue. The Company did not
issue any CMO's in each of the three-months ended February 25, 2000 and February
26, 1999.
Year 2000 Issue
The Year 2000 issue was the result of legacy computer programs having been
written using two digits rather than four digits to define the applicable year
and therefore without consideration of the impact of the upcoming change in the
century. Such programs, unless corrected, may not have been able to accurately
process dates ending in the Year 2000 and thereafter.
Through February 25, 2000, the amounts incurred by the Parent related to the
assessment of, and efforts in connection with, the Year 2000 and the development
and execution of a remediation plan have approximated $78.2 million of which
approximately $11.0 million in hardware and software has been capitalized. The
total remaining Year 2000 project cost as of February 25, 2000 was not material.
Nothing has come to the Parent's attention which would cause it to believe that
its Year 2000 compliance effort was not successful. While the Parent will
continue to monitor for Year 2000 related problems, to date no significant Year
2000 issues have been encountered.
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
No legal proceedings are pending.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
period covered by this report.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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, on
the 6th day of April, 2000.
Bear Stearns Secured Investors Inc.
(Registrant)
By: /s/ Samuel L. Molinaro Jr.
Samuel L. Molinaro Jr.
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
unaudited Statement of Financial Condition at February 25, 2000 and unaudited
Statement of Operations for the three-months ended February 25, 2000, 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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Nov-30-2000
<PERIOD-END> Feb-25-2000
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 128,206
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 129,892
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 129,891
<TOTAL-LIABILITY-AND-EQUITY> 129,892
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 84
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (84)
<INCOME-TAX> (36)
<INCOME-CONTINUING> (48)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (48)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
