-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ih4aIAUCeupQ+qV5sTukh7AEQdsMntHynwm5/odO9k5xnoYKsiZv1RIPLLZXhrBN iI7qB/1DuWnIjtJbMIs6Zg== 0001048750-00-000043.txt : 20000421 0001048750-00-000043.hdr.sgml : 20000421 ACCESSION NUMBER: 0001048750-00-000043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000420 ITEM INFORMATION: FILED AS OF DATE: 20000420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRIEDMAN BILLINGS RAMSEY GROUP INC CENTRAL INDEX KEY: 0001048750 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 541837743 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13731 FILM NUMBER: 605930 BUSINESS ADDRESS: STREET 1: 1001 19TH STREET N CITY: ARLINGTON STATE: VA ZIP: 22209 BUSINESS PHONE: 7033129500 MAIL ADDRESS: STREET 1: 1001 NINETEENTH ST N CITY: ARLINGTON STATE: VA ZIP: 22209 8-K 1 PRESS RELEASE FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): April 20, 2000 Friedman, Billings, Ramsey Group, Inc. (Exact name of Registrant as specified in its charter) Virginia 54-1837743 001-13731 (State or other (I.R.S. Employer incorporation or (Commission File Number) jurisdiction of organization) Identification No.) 1001 Nineteenth Street North Arlington, VA 22209 (Address of principal executive offices) (Zip code) (703) 312-9500 (Registrant's telephone number including area code) Item 5. Other Events 1. On April 20, 2000, Friedman, Billings, Ramsey Group, Inc. issued a press release announcing its earnings for the 1st quarter 2000. The entire text of that press release is being filed herewith and attached as exhibit 99.1. 2. On April 20, 2000, Friedman, Billings, Ramsey Group, Inc. held a conference call announcing its earnings for the 1st quarter 2000. The text of that conference call is being filed herewith and attached as exhibit 99.2. 3. Friedman, Billings, Ramsey Group, Inc., attaches herewith, as exhibit 99.3, Financial & Statistical Supplement - Operating Results, financial schedule of its operating results for 1999 and the 1st quarter 2000. 99.1 Press Release dated April 20, 2000. 99.2 Conference Call script dated April 20, 2000. 99.3 Financial & Statistical Supplement - Operating Results. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. By: /s/ Emanuel J. Friedman Chairman and Co-Chief Executive Officer For Immediate Release Contact: Michael W. Robinson (703)-312-1830 or mrobinson@fbr.com Friedman, Billings, Ramsey Group Reports $0.12 Per Share First Quarter Earnings ARLINGTON, Va., April 20, 2000 - Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) today reported net income of $6.4 million, or $0.12 (diluted) per share for the first quarter ended March 31, 2000, versus net income of $45,000, or $0.00 per share for the same quarter last year. Revenue for the first quarter was $66.2 million, compared with $22.1 million for the first quarter of 1999 - a 200 percent increase. The Company said that its quarterly revenue reflected a mix of contributions from its institutional brokerage, investment banking, venture capital, and other asset management businesses. "During the first quarter we saw continued strength across the company," Chairman and Co-Chief Executive Officer Emanuel J. Friedman said. "As a result of our strategy over the last three years, we have built broad financing capabilities for new economy companies and maintained FBR's core franchise in our traditional sectors. We continue to benefit from the growth of the new economy and from the sector rotation in the capital markets." Friedman continued: "Each of our businesses produced solid revenues in the first quarter. We saw an increase in our recurring, and relatively predictable, revenue sources, notably our institutional brokerage operations." Venture capital and principal investing activities, including unrealized gains and carry, net of losses, accounted for approximately $4.0 million of pre-tax earnings in the first quarter. W. Russell Ramsey, President and Co-Chief Executive Officer, said, "During the first quarter, our managed Technology Venture Partners (FBR TVP) portfolio continued to see a steady stream of IPOs, mergers, private rounds at stepped-up valuations, and the announcement of the cash sale of Call Technologies to 3Com." FBR generates gross revenues (before fund management expenses) from its managed venture capital and private equity funds in three ways: base management fees of 2 to 2.5 percent, a return on its principal invested as one of the funds' investors (about three percent in FBR TVP I, for example), and a 20 percent gross carry of the funds' overall gains. - more - The Company noted that, to the extent that its managed funds hold securities of public companies that are restricted as to resale, these securities are generally valued at a discount to the public market price on the last day of the quarter, to reflect restrictions on liquidity, including the size of the funds' holdings relative to the public market float. In addition, accrued compensation is based on the performance of the managed funds and other criteria, and therefore is subject to future adjustment. Vice Chairman and Co-Chief Executive Officer Eric F. Billings said, "The first quarter saw FBR continue its evolution into a broad-based capital markets and asset management company with a focused effort in technology, financial services, and real estate - and developing businesses in energy, insurance, as well as consumer and business growth." FBR had 49.1 million common shares outstanding, shareholders' equity of $198.1 million, and book value per share of $4.03 as of March 31, 2000. A live webcast of FBR's conference call on today's results will be available at 9:00 a.m. (Eastern Time) at http://www.vcall.com/NASApp/VCall/EventPage?ID=3D14930. Replays of the webcast will be available afterward. Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a holding company for three businesses: venture capital; investment banking & institutional brokerage; and its own Internet holdings, fbr.com, an online investment bank, and Offering Marketplace, a leading technology for the electronic distribution of new issue securities. Headquartered in Northern Virginia, home to an array of leading global Internet companies, FBR provides capital and financial expertise throughout a company's lifecycle. FBR has offices in Arlington and Reston, Va., Irvine, Ca., Boston, Charlotte, Chicago, Portland, Seattle, London, and Vienna. For more information, see www.fbr.com. # # # Statements concerning future performance, developments, negotiations or events, expectations or plans and objectives for future operations or for growth and market forecasts, and any other guidance on present and future periods, constitute forward-looking statements that are subject to a number of factors risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include but are not limited to competition among venture capital firms and the high degree of risk associated with venture capital investments, the effect of demand for public offerings, activity in the secondary securities markets, available technologies, competition for business and personnel, and general economic, political and market conditions. Note to Editors: 1 page follows this page. - more - FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three months ended March 31, 2000 % 1999 % REVENUES: ------ ----- ----- ----- Investment banking $ 16,696 25.2% $ 6,048 27.4% Institutional brokerage 11,677 17.6% 8,880 40.2% Asset management 35,877 54.2% 4,598 20.9% Interest, dividends and other 1,993 3.0% 2,543 11.5% ------- ------- ------- ------- Total revenues 66,243 100.0% 22,069 100.0% ------- ------- ------- ------- EXPENSES: Compensation and benefits 46,223 69.8% 14,238 64.5% Business development and 4,617 7.0% 2,594 11.8% professional services Interest 222 0.3% 507 2.3% Other 6,625 10.0% 4,685 21.2% ------- ------- ------- ------- Total expenses 57,687 87.1% 22,024 99.8% ------- ------- ------- ------- Net income before income 8,556 12.9% 45 0.2% taxes Provision for income taxes 2,139 3.2% - 0.0% Net income $ 6,417 9.7% $ 45 0.2% ======== ======= ======= ======= Basic earnings per $ 0.13 $ 0.00 share ======== ======= Diluted earnings per $ 0.12 $ 0.00 share ======== ======= Weighted average shares 49,021 49,034 - - basic ======== ======= Weighted average shares 51,353 49,214 - - diluted ======== ======= Exhibit 2 - 99.2 1Q EARNINGS RELEASE Conference Call Script April 20, 2000 [Speaker] Good morning. This is Kurt Harrington, Chief Financial Officer of Friedman Billings Ramsey Group. Before beginning our call, I would like to remind everyone that statements concerning future performance, developments or events, concerning expectations for growth, filed backlog and market forecasts, and any other guidance on present and future periods, constitute forward-looking statements. These forward-looking statements are subject to a number of factors, risks and uncertainties which might cause actual results or developments to differ materially from stated expectations or current circumstances. These factors include but are not limited to the effect of demand for public offerings, activity in the secondary securities markets, the high degree of risk associated with venture capital investment, competition among venture capital firms, competition for business and personnel, available technologies and general economic, political and market conditions. Additional information concerning factors that could cause actual results to differ materially is contained in FBR's Annual Report on Form 10K and quarterly reports on Form 10Q. I would now like to turn over the call to our Chairman, Emanuel J. Friedman. [New speaker: Manny Friedman] Thank you and good morning. As I'm sure you've seen by now, Friedman Billings Ramsey reported net income of $6.4 million or $0.12 per share on a diluted basis for the first quarter of 2000. Revenue for the quarter was $66.2 million, which is a 200 percent increase over our first quarter 1999 revenue of $22.1 million. In the first quarter, institutional brokerage, investment banking, and venture capital and other asset management operations all achieved year-over-year growth. Our strong performance in the first quarter demonstrated the success of our long-term strategy to diversify our business and our revenue streams, as we outlined in our 1999 annual report. Over the past three years, FBR has maintained its strength in, but reduced its dependence on, financial services and real estate investment banking. We have become a much more diverse investment firm by developing Internet-centric technology business units. Our value-added, consultative approach to financing is built on the pillars of our industry expertise in the capital markets. This approach enables us to advise companies from the early stages ... through private and public capital raising... to M&A and other advisory assignments. We do this throughout the corporate lifecycle and provide value-added capital markets expertise to our brokerage clients as well. In the first quarter, the successful execution of our business model was reflected by the fact that FBR advised, financed or raised capital for 29 companies, including 13 venture capital investments, 10 managed public offerings, and 6 corporate finance assignments. FBR has a demonstrated ability to capture opportunity wherever it exists in the capital formation process. And it is clear that our decisions over the last three years to invest in the technology sector, to expand our asset management activities into venture capital and private equity, and to create a focused M&A team have paid off. For additional details on the quarter, I will now turn it over to our Chief Financial Officer, Kurt Harrington. [New speaker: Kurt Harrington] Thank you, Manny. Technology venture capital was the biggest contributor to first-quarter revenues and earnings. Revenue from venture capital and private equity as well as other asset management and principal investing activity, including unrealized gains, and carry, net of losses, accounted for $35.9 million in the first quarter. This compares to $4.6 million in the first quarter of 1999. At the end of the first quarter, our first technology fund, was up more than ten times. We have begun to return cash to investors in FBR TVP I - and by the end of this month, we expect to have returned more than 40 percent of the fund's called capital. In addition, we will continue to help our existing technology portfolio companies reach the next level and fulfill their considerable promise. As we have seen in recent weeks, the technology sector is subject to substantial stock volatility. Still, there is little doubt that the Internet will continue to revolutionize communications and commerce around the world, and that FBR is well positioned to participate in the Internet's growth. Now, I would like to turn to the performance of our investment banking and institutional brokerage businesses. Investment banking revenue totaled $16.7 million, compared to $6 million for the first quarter of 1999. FBR acted as lead manager for the IPO of Atlas Pipeline Partners, an energy company. We also co-managed a total of nine transactions, including four IPOs. fbr.com, our online arm, participated in 14 online offerings, including the IPOs of webMethods and Lante. On the corporate finance front, FBR represented clients in five M&A transactions. Among these transactions, FBR advised Lead Dog Design and Enterprise Works on their separate acquisitions by Iconixx, as well as Imperial Credit Industry Inc. on its acquisition of Imperial Credit Commercial Mortgage Investment Corporation. Finally, Sales & Trading, supported by Research, once again reported record revenues - almost $11.7 million for the quarter. Much of this sequential growth has been recurring and predictable, reflecting FBR's continued expansion - and our evolution into a more balanced, diversified and successful investment firm. With that, I would like to open the call for questions. Joining me are Manny, Russ Ramsey, Eric Billings, and Bob Smith. [At end of Q&A] If there are no further questions, that concludes our conference call for today. Thank you for joining us and have a good day. # # # Exhibit 3 - 99.3 FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement -Operating Results (unaudited) (Dollars in thousands, except per share data) Q-1 00 YTD 1999 Q-4 99 -------------- -------------- ------------ Revenues Investment banking: Underwriting $ 10,506 $ 22,642 $ 6,200 Corporate finance 6,190 22,541 11,820 Investment gains - 3,853 1,690 Institutional brokerage: Principal transactions 6,001 22,058 4,472 Agency commissions 5,676 14,988 5,048 Asset management: Base management fees 2,174 9,409 2,379 Incentive income 36,603 35,903 35,298 Net investment gains (losses) (2,900) (3,196) (1,870) Interest, dividends and other 1,993 10,768 2,559 -------------- -------------- ------------ Total revenues 66,243 138,966 67,596 -------------- -------------- ------------ Expenses Compensation and benefits 46,223 98,424 45,759 Business development & 4,617 23,582 5,418 professional services Clearing and brokerage fees 1,567 4,693 1,386 Occupancy & equipment 2,323 6,674 1,952 Communications 1,181 4,323 1,240 Interest expense 222 1,323 163 Other operating expenses 1,554 6,918 1,482 -------------- -------------- ------------ Total expenses 57,687 145,937 57,400 -------------- -------------- ------------ Net income (loss) before taxes 8,556 (6,971) 10,196 -------------- -------------- ------------ Provision (benefit) for income taxes 2,139 - - Net income (loss) $ 6,417 $ (6,971) $ 10,196 ============== ============== ============ Net income (loss) before taxes as a percentage of revenue 12.9% -5.0% 15.1% ROE (annualized) 13.3% -3.7% 22.7% Total shareholders' equity $ 198,063 $ 188,969 $188,969 Basic earnings (loss) per share $ 0.13 $ (0.14) $ 0.21 Diluted earnings (loss) per share $ 0.12 $ (0.14) $ 0.21 Ending shares outstanding (in thousands) 49,096 48,961 48,961 Book value per share $ 4.03 $ 3.86 $ 3.86 Assets under management (in millions) Managed accounts $ 114.6 $ 180.2 $ 180.2 Hedge & offshore funds 98.8 151.6 151.6 Mutual funds 54.7 66.1 66.1 Private equity & venture capital 661.7 480.9 480.9 ============== ============== =========== Total $ 929.8 $ 878.8 $ 878.8 ============== ============== =========== Employee count 396 390 390 ============== ============== ===========
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement -Operating Results (unaudited) (Dollars in thousands, except per share data) (Continued) Q-3 99 Q-2 99 Q-1 99 -------------- -------------- ------------ Revenues Investment banking: Underwriting $ 4,026 $ 9,245 $ 3,171 Corporate finance 2,024 5,820 2,877 Investment gains 15 2,148 - Institutional brokerage: Principal transactions 4,721 6,804 6,061 Agency commissions 3,372 3,749 2,819 Asset management: Base management fees 2,714 2,052 2,264 Incentive income 62 470 73 Net investment gains (losses) (10,572) 6,985 2,261 Interest, dividends and other 2,560 3,106 2,543 ----------- ------------ ------------- Total revenues 8,922 40,379 22,069 ----------- ------------ ------------- Expenses Compensation and benefits 16,318 22,109 14,238 Business development & 9,662 5,908 2,594 professional services Clearing and brokerage fees 1,098 1,195 1,014 Occupancy & equipment 1,738 1,422 1,562 Communications 1,246 913 924 Interest expense 159 494 507 Other operating expenses 1,762 2,489 1,185 ----------- ------------ ------------- Total expenses 31,983 34,530 22,024 ----------- ------------ ------------- Net income (loss) before taxes (23,061) 5,849 45 ----------- ------------ ------------- Provision (benefit) for income taxes - - - Net income (loss) $(23,061) $ 5,849 $ 45 =========== ============ ============= Net income (loss) before taxes as a percentage of revenue 258.5% 14.5% 0.2% ROE (annualized) -51.4% 12.8% 0.1% Total shareholders' equity $ 170,922 $ 187,852 $ 176,876 Basic earnings (loss) per share $ (0.47) $ 0.12 $ 0.00 Diluted earnings (loss) per share $ (0.47) $ 0.12 $ 0.00 Ending shares outstanding (in thousands) 48,882 48,882 48,733 Book value per share $ 3.50 $ 3.84 $ 3.63 Assets under management (in millions) Managed accounts $ 200.5 $ 212.5 $ 229.4 Hedge & offshore funds 177.1 212.4 194.7 Mutual funds 78.1 91.6 95.9 Private equity & venture capital 329.6 295.7 152.9 =========== ============ ============= Total $ 785.3 $ 812.2 $ 672.9 =========== ============ ============= Employee count 390 350 349 =========== ============ =============
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