0001048750-01-500047.txt : 20011030
0001048750-01-500047.hdr.sgml : 20011030
ACCESSION NUMBER: 0001048750-01-500047
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20010930
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011025
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: 541870350
STATE OF INCORPORATION: VA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-13731
FILM NUMBER: 1766248
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
fbrgoct8k.txt
FORM 8-K FILING FOR 3RD QUARTER EARNINGS REPORT
--------------------------------------------------------------------------------
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): October 25, 2001
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 October 25, 2001, Friedman, Billings, Ramsey Group, Inc. issued a press
release announcing its earnings for the 3rd quarter 2001. The entire text of
that press release is being filed herewith and attached as Exhibit 99.1.
2. Friedman, Billings, Ramsey Group, Inc. attaches herewith, as Exhibit 99.2,
Condensed Consolidated Statements of Operations, the financial schedule of its
operating results for the 3rd quarter 2001.
3. Friedman, Billings, Ramsey Group, Inc. attaches herewith, as Exhibit 99.3,
Condensed Consolidated Statements of Operations, the financial schedule of its
operating results year-to-date 2001.
4. Friedman, Billings, Ramsey Group, Inc. attaches herewith, as Exhibit 99.4,
Financial & Statistical Supplement-Operating Results (unaudited).
5. Friedman, Billings, Ramsey Group, Inc. attaches herewith, as Exhibit 99.5,
Friedman, Billings, Ramsey Group, Inc. Long-Term Investment Matrix as of
September 30, 2001.
99.1 Press Release dated October 25, 2001.
99.2 Condensed Consolidated Statements of Operations, 3rd quarter 2001.
99.3 Condensed Consolidated Statements of Operations, year-to-date 2001.
99.4 Financial & Statistical Supplement-Operating Results (unaudited).
99.5 Long-Term Investment Matrix as of September 30, 2001.
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.
Date: October 25, 2001 By: /s/ Emanuel J. Friedman
--------------------------------
Emanuel J. Friedman
Chairman & Co-Chief Executive Officer
EX-99.1
3
octoberpressfinal.txt
PRESS RELEASE
EXHIBIT 99.1
For Immediate Release
Media Contact: Melissa Hurney 703.312.1827 or mhurney@fbr.com
---------------
Investor Contact: Kurt R. Harrington 703.312.9647 or kharrington@fbr.com
-------------------
Friedman, Billings, Ramsey Group Reports
Third Quarter 2001 Results
Net Loss of $22.4 Million or $(0.49) Per Share Reported
ARLINGTON, Va., October 25, 2001 - Friedman, Billings, Ramsey Group, Inc. (NYSE:
FBR) today reported a net loss of $22.4 million, or $(0.49) (diluted) per share,
for the quarter ended September 30, 2001, versus net income of $5.0 million, or
$0.10 (diluted) per share, for the same quarter last year. Revenues were $21.8
million for the third quarter, compared with $44.7 million for the same quarter
a year ago.
For the first nine months of the year, FBR reported a net loss of $(0.49)
(diluted) per share on revenues of $99.4 million, versus earnings of $0.33
(diluted) per share on revenues of $154.5 million for the same period in 2000.
Revenues in 2000 included $58.9 million of incentive and investment revenues
primarily related to technology venture capital.
"While FBR's core operating platform remains strong, our results, in common with
others in our industry, reflect general market conditions in the third quarter,
particularly in the last three weeks of September," Chairman and Co-Chief
Executive Officer Emanuel J. Friedman said. "Third quarter results reflect
significant mark-downs in investments. In addition, costs associated with the
build-out of personnel, and software write-offs associated with fbr.com,
contributed to the loss," he added.
Approximately $17.0 million of the reported loss for the quarter is considered
unrelated to the core ongoing operating business, as follows: $9.5 million in
investment and incentive write-downs, primarily in technology; $3.8 million in
fbr.com primarily related to software write-offs; $1.7 million in FBR
International primarily related to the expansion in London; and approximately
$2.0 million in miscellaneous items, such as recruiting costs.
In its capital markets business, FBR reported investment banking revenue for the
quarter of $11.1 million, down from $13.6 million in the third quarter of 2000.
The Company reported quarterly institutional brokerage revenue of $10.4 million,
essentially flat versus the third quarter of 2000, net of trading gains or
losses.
In its asset management business, the Company reported fee revenue from base
management and administration fees of $5.8 million for the quarter versus $2.5
million in the third quarter of 2000.
Vice Chairman and Co-Chief Executive Officer Eric F. Billings said, "The
non-core items reported in the quarter should not obscure the growing strength
of our operating capital markets and asset management businesses, where the
addition of key people and the focus on specific verticals continue to place the
firm in a better and better position to win business."
During the third quarter, the Company managed seven underwritings, three as
lead-manager and four as co-manager, and one private placement, for a total
transaction value in excess of half a billion dollars. Among the third quarter
transactions was a $103.5 million lead-managed follow-on offering for FBR Asset
Investment Corporation, which now has total equity of $191.3 million, assets of
$1.3 billion and yesterday announced earnings of $0.88 per share for the third
quarter. FBR Group owns 24.6% of FBR Asset, holds options to purchase an
additional 9.3%, and generates base and incentive fees from the management of
that vehicle.
Also significant to the Company's asset management business during the third
quarter was the successful sale of Future Financial Corporation to a Citicorp
subsidiary. Future Financial was one of FBR's first private equity investments
and the holding company of Future Mortgages in England. FBR created Future
Mortgages in 1996.
The Company also announced that it has implemented a program to reduce fixed
costs by a targeted 20% of the third quarter run-rate. Cost reductions will be
achieved while preserving the enhancements that resulted from the build-out.
"The combination of these measures with the improvements that we are seeing in
secondary volumes and potential investment banking transactions across all of
our verticals, plus the ongoing reallocation of our equity into less volatile
assets, leads us to expect increased levels of profitability going forward," Mr.
Billings said.
FBR had 45.5 million common shares outstanding, shareholders' equity of $173.7
million (net of loans of $22.0 million associated with employee stock
purchases), and book value per share of $3.82 as of September 30, 2001. Total
assets as of September 30, 2001, were $230.9 million, including cash and liquid
assets of more than $50.0 million.
Investors who want to listen to the Company's 9 a.m. (Eastern Time)
conference call may do so via the web at:
http://dmg.activate.com/dmgi.dll?3589&a17c. Replays of the webcast will be
available afterward.
------------------------------------------
Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a financial holding
company for businesses that provide investment banking, institutional brokerage,
specialized asset management, and banking products and services. FBR provides
capital and financial expertise throughout a company's lifecycle and affords
investors access to a range of proprietary financial products and services.
Headquartered in the Washington metropolitan area, FBR has offices in Arlington,
Va., Atlanta, Bethesda, Md., Boston, Charlotte, Cleveland, Dallas, Irvine, Ca.,
New York City, Portland, Seattle, London, and Vienna. Bank products and services
are offered by FBR National Bank & Trust, member FDIC and an Equal Housing
Lender. For more information, see www.fbr.com.
-----------
# # #
Statements concerning future performance, developments, 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
and advisory services, activity in the secondary securities markets,
available technologies, competition for business and personnel, and
general economic, political and market conditions.
Note to Editors: 4-pages of financial information follow this page.
EX-99.2
4
octex992.txt
CONDENSED CONSOLIDATED STATEMENTS (3 MOS.)
EXHIBIT 99.2
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three months ended
September 30,
2001 % 2000 %
--------------- --------------- -------------- --------------
REVENUES:
Investment banking $ 11,084 50.9% $ 13,645 30.5%
Institutional brokerage 10,092 46.3% 12,008 26.9%
Asset management
Base fees 5,836 26.8% 2,504 5.6%
Incentive and investment income (loss) (8,397) -38.5% 13,531 30.3%
Interest, dividends and other 3,168 14.5% 3,014 6.7%
--------------- -------------- ------------- -------------
Total revenues 21,783 100.0% 44,702 100.0%
--------------- --------------- -------------- -------------
EXPENSES:
Compensation and benefits 24,276 111.4% 24,809 55.5%
Business development and professional services 7,639 35.1% 5,974 13.4%
Interest 322 1.5% 424 0.9%
Other 11,936 54.8% 7,302 16.3%
--------------- -------------- ------------- -------------
Total expenses 44,173 202.8% 38,509 86.1%
--------------- -------------- -------------- -------------
Net income (loss) before income taxes (22,390) -102.8% 6,193 13.9%
Provision for income taxes - 0.0% 1,239 2.8%
--------------- -------------- ------------- -------------
Net income (loss) $ (22,390) -102.8% $ 4,954 11.1%
=============== ============== ============= =============
Basic earnings (loss) per share $ (0.49) $ 0.10
=============== ==============
Diluted earnings (loss) per share $ (0.49) $ 0.10
=============== ==============
Weighted average shares - basic 45,808 49,229
=============== ==============
Weighted average shares - diluted 45,808 50,360
=============== ==============
EX-99.3
5
octex993.txt
CONDENSED CONSOLIDATED STATEMENTS (YTD)
EXHIBIT 99.3
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Nine months ended
September 30,
2001 % 2000 %
------------- --------------- -------------- --------------
REVENUES:
Investment banking $ 53,793 54.1% $ 40,287 26.1%
Institutional brokerage 33,974 34.2% 41,100 26.6%
Asset management
Base fees 13,934 14.0% 6,884 4.4%
Incentive and investment income (loss) (9,727) -9.8% 58,851 38.1%
Interest, dividends and other 7,414 7.5% 7,359 4.8%
------------- --------------- -------------- --------------
Total revenues 99,388 100.0% 154,481 100.0%
------------- --------------- -------------- --------------
EXPENSES:
Compensation and benefits 73,283 73.7% 96,241 62.3%
Business development and professional services 21,170 21.3% 14,982 9.7%
Interest 737 0.8% 965 0.6%
Other 27,617 27.8% 21,479 13.9%
------------- --------------- -------------- --------------
Total expenses 122,807 123.6% 133,667 86.5%
------------- --------------- -------------- --------------
Net income (loss) before income taxes (23,419) -23.6% 20,814 13.5%
Provision for income taxes - 0.0% 4,163 2.7%
------------- --------------- -------------- --------------
Net income (loss) $ (23,419) -23.6% $16,651 10.8%
============= =============== ============== ==============
Basic earnings (loss) per share $ (0.49) $ 0.34
============= ==============
Diluted earnings (loss) per share $ (0.49) $ 0.33
============= ==============
Weighted average shares - basic 48,122 49,119
============= ==============
Weighted average shares - diluted 48,122 50,787
============= ==============
EX-99.4
6
octex994.txt
FINANCIAL & STAT. SUPP.
EXHIBIT 99.4
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement -Operating Results (unaudited)
(Dollars in thousands, except per share data)
YTD 2001 Q-3 01 Q-2 01 Q-1 01 YTD 2000 Q-4 00 Q-3 00 Q-2 00 Q-1 00
--------- -------- ---------- --------- --------- --------- --------- --------- ---------
REVENUES
INVESTMENT BANKING:
Underwriting $26,925 $ 9,857 $ 9,414 $ 7,654 $21,086 $ 4,447 $ 4,928 $ 1,205 $10,506
Corporate finance 21,454 1,153 18,057 2,244 31,404 9,209 7,264 8,741 6,190
Investment gains 5,414 74 5,340 - 1,453 - 1,453 - -
INSTITUTIONAL BROKERAGE:
Principal transactions 15,513 4,158 5,383 5,972 32,319 6,511 7,019 12,788 6,001
Agency commissions 18,461 5,934 5,962 6,565 21,084 5,792 4,989 4,627 5,676
ASSET MANAGEMENT:
Base management fees 13,934 5,836 5,191 2,907 9,719 2,835 2,504 2,206 2,174
Incentive income (4,586) (1,843) 301 (3,044) 44,456 (7,747) 7,751 7,849 36,603
Net investment income (loss) (5,141) (6,554) 3,498 (2,085) 9,674 3,026 5,780 3,768 (2,900)
INTEREST, DIVIDENDS AND OTHER 7,414 3,168 2,006 2,240 9,695 2,336 3,014 2,352 1,993
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
Total revenues 99,388 21,783 55,152 22,453 180,890 26,409 44,702 43,536 66,243
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
EXPENSES
Compensation and benefits 73,283 24,276 32,756 16,251 109,768 13,527 24,809 25,209 46,223
Business development & professional serv. 21,170 7,639 8,205 5,326 19,229 4,247 5,974 4,391 4,617
Clearing and brokerage fees 5,106 1,786 1,588 1,732 6,207 1,618 1,483 1,539 1,567
Occupancy & equipment 11,125 5,742 2,883 2,500 9,544 2,191 2,657 2,373 2,323
Communications 4,220 1,555 1,498 1,167 5,085 1,337 1,300 1,267 1,181
Interest expense 737 322 334 81 1,665 700 424 319 222
Other operating expenses 7,166 2,853 2,778 1,535 7,147 1,358 1,862 2,373 1,554
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
Total expenses 122,807 44,173 50,042 28,592 158,645 24,978 38,509 37,471 57,687
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
Net income (loss) before taxes (23,419) (22,390) 5,110 (6,139) 22,245 1,431 6,193 6,065 8,556
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
Provision for income taxes - - - - 4,163 - 1,239 785 2,139
Net income (loss) $(23,419) $(22,390) $ 5,110 $ (6,139) $18,082 $ 1,431 $ 4,954 $ 5,280 $ 6,417
========== ========= ========== ========= ========= ========= ========= ========= =========
Net income (loss) before taxes
as a percentage of revenue -23.6% -102.8% 9.3% -27.3% 12.3% 5.4% 13.9% 13.9% 12.9%
ROE (annualized) -47.9% -47.9% 9.9% -11.5% 9.0% 2.7% 9.5% 10.5% 13.3%
Total shareholders' equity $173,668 $ 173,668 $200,314 $211,001 $214,556 $214,556 $211,796 $203,637 $198,063
Basic earnings (loss) per share $ (0.49) $ (0.49) $ 0.10 $ (0.12) $ 0.37 $ 0.03 $ 0.10 $ 0.11 $ 0.13
Diluted earnings (loss) per share $ (0.49) $ (0.49) $ 0.10 $ (0.12) $ 0.36 $ 0.03 $ 0.10 $ 0.11 $ 0.12
Ending shares outstanding (in thousands) 45,514 45,514 46,100 49,391 49,380 49,380 49,282 49,204 49,096
Book value per share $ 3.82 $ 3.82 $ 4.35 $ 4.27 $ 4.34 $ 4.34 $ 4.30 $ 4.14 $ 4.03
ASSETS UNDER MANAGEMENT (IN MILLIONS)
Managed accounts $ 237.5 $ 237.5 $ 142.4 $ 126.1 $ 133.6 $ 133.6 $ 136.9 $ 131.9 $ 114.6
Hedge & offshore funds 176.1 176.1 186.6 164.7 149.7 149.7 135.1 114.3 98.8
Mutual funds 1,008.3 1,008.3 1,153.1 148.5 119.0 119.0 93.1 56.4 54.7
Private equity & venture capital 305.6 305.6 341.2 336.2 457.2 457.2 757.5 697.4 661.7
---------- --------- ---------- --------- --------- --------- --------- --------- ---------
Total $1,727.5 $1,727.5 $1,823.3 $ 775.5 $ 859.5 $ 859.5 $ 1,122.6 $ 1,000.0 $ 929.8
========== ========= ========== ========= ========= ========= ========= ========= =========
Employee count 502 502 488 400 386 386 367 392 390
========== ========= ========== ========= ========= ========= ========= ========= =========
EX-99.5
7
octex995.txt
LONG-TERM INVESTMENT MATRIX
EXHIBIT 99.5
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
LONG-TERM INVESTMENT MATRIX (1)
AS OF SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS)
The following chart shows the allocation of Friedman, Billings, Ramsey Group,
Inc.'s long-term investments, as stated on the September 30, 2001 balance sheet,
by sector and by managed fund and also shows the allocation of long-term
investments in publicly traded and private securities. Managed funds are
categorized by the value of the majority of their investments. In addition, from
time to time, FBR Group implements risk management strategies, the value of
which may not be included in the balance sheet line for long-term investments.
PUBLIC PRIVATE TOTAL
FINANCIAL ------------- -------------- --------------
FBR Ashton, Limited Partnership $ 16,547 $ - $ 16,547 15.2%
FBR Private Equity Fund, LP 301 1,734 2,035 1.9%
FBR Future Financial Fund, LP - 721 721 0.6%
FBR Financial Services Partners, LP 233 1,406 1,639 1.5%
Direct investment 2,514 1,099 3,613 3.3%
------------- -------------- -------------- ----------
19,595 4,960 24,555 22.5%
REAL ESTATE/MORTGAGE
FBR Asset Investment Corporation 30,740 2,103 32,843 30.2%
Direct investment 5,517 243 5,760 5.3%
------------- -------------- -------------- ----------
36,257 2,346 38,603 35.5%
------------- -------------- -------------- ----------
Subtotal 55,852 7,306 63,158 58.0%
------------- -------------- -------------- ----------
TECHNOLOGY
FBR Technology Venture Partners, LP (2) 456 2,369 2,825 2.6%
FBR Technology Venture Partners II 534 2,759 3,293 3.0%
FBR CoMotion Venture Capital I, LP (3) - 1,813 1,813 1.7%
Capital Crossover Partners 3,000 - 3,000 2.8%
DDL and related direct investments - 5,972 5,972 5.5%
Direct investment 104 - 104 0.1%
------------- -------------- -------------- ----------
4,094 12,913 17,007 15.7%
------------- -------------- -------------- ----------
DEBT ------------- -------------- -------------- ----------
Direct investment (4) - 7,500 7,500 6.9%
------------- -------------- -------------- ----------
OTHER
Braddock Partners, LP 4,920 - 4,920 4.5%
FBR Arbitrage, LLC 11,044 - 11,044 10.1%
FBR Weston, Limited Partnership 1,552 147 1,699 1.6%
Third-party partnerships - 1,442 1,442 1.3%
Other 762 1,281 2,043 1.9%
------------- -------------- -------------- ----------
18,278 2,870 21,148 19.4%
------------- -------------- -------------- ----------
------------- -------------- -------------- ----------
TOTALS $ 78,224 $ 30,589 $ 108,813 100.0%
============= ============== ============== ==========
(1) Excludes trading securities inventory.
(2) Amount is net of accrued Fund Manager Compensation expense ("FMC") of
$280. Asset value before before FMC as of September 30, 2001 was $3,105.
(3) Amount is net of loans of $1,369 made by FBR Group to FBR CoMotion Venture
Capital I, LP.
(4) Represents private debt of one issuer with a face amount of
$7,500.