8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

October 20, 2004

Date of report (Date of earliest event reported)

PIPER JAFFRAY COMPANIES

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1-31720	30-0168701
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

800 Nicollet Mall, Suite 800 Minneapolis, Minnesota	55402
(Address of Principal Executive Offices)	(Zip Code)

(612) 303-6000

(Registrant’s Telephone Number, Including Area Code)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02 Results of Operations and Financial Condition.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Press Release

Item 2.02 Results of Operations and Financial Condition.

     On October 20, 2004, Piper Jaffray Companies (the “Company”) reported its financial results for its third fiscal quarter ended September 30, 2004. See the Company’s press release dated October 20, 2004, which is furnished as Exhibit 99 hereto.

Item 9.01 Financial Statements and Exhibits.

     (c) Exhibit

99 Press Release dated October 20, 2004

2

SIGNATURES

     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 hereunto duly authorized.

	PIPER JAFFRAY COMPANIES
Date: October 20, 2004	/s/ Sandra G. Sponem
	Sandra G. Sponem
	Chief Financial Officer

3

EXHIBIT INDEX

No.	Description	Manner of Filing
99	Press Release dated October 20, 2004	Filed Electronically

EX-99

Exhibit 99

	Piper Jaffray Companies, 800 Nicollet Mall, Minneapolis, MN 55402-7020
	C O N T A C T
	Jennifer A. Olson-Goude	Dana H. Wade
	Investor Relations	Public Affairs and Media Relations
	Tel: 612 303-6277	Tel: 415 277-1556

F O R   I M M E D I A T E   R E L E A S E

Piper Jaffray Companies Announces 2004 Third Quarter Results

MINNEAPOLIS – October 20, 2004 – Piper Jaffray Companies (NYSE: PJC) today announced net income of $11.8 million, or $0.61 per diluted share, for the quarter ended Sept. 30, 2004, down from $16.0 million, or $0.83 per diluted share, for the year-ago period. Net income totaled $13.0 million, or $0.67 per diluted share in the second quarter of 2004. Net revenues for the third quarter were $186.2 million, down 11.6 percent and 10.2 percent from the third quarter of 2003 and the second quarter of 2004, respectively.

For the first nine months, net income improved 31.3 percent to $38.5 million, and earnings per diluted share rose 30.1 percent to $1.99 compared to the year-ago period. Net revenues increased to $602.9 million year-to-date, up 3.1 percent over the first nine months of 2003.

“Our third quarter results reflect the continued challenging market conditions,” said chairman and chief executive officer Andrew S. Duff. “Despite the short-term market challenges, we remain focused on positioning our firm for long-term, profitable growth. In that regard, during the quarter we were very pleased to announce the definitive agreement to acquire Vie Securities, LLC, which we believe will enable us to fulfill the increasing client demand for automated, cost-effective equity execution services.”

Results of Operations

Net Revenues

Due to challenging market conditions, third quarter net revenues declined $24.5 million, or 11.6 percent, from the year-ago period, in which the firm recorded its strongest quarterly revenues for 2003. Revenues from principal transactions decreased by $11.8 million, or 22.8 

percent, primarily driven by lower fixed-income institutional sales and trading activity. The fixed-income business had achieved near-record revenues in the third quarter of 2003, driven by high-yield corporate bonds where the firm has proprietary research capabilities. Third quarter investment banking revenues declined by $9.8 million, or 13.1 percent, due to fewer equity underwriting transactions, which were relatively strong in the year-ago period due to a rebound from soft markets in the first half of 2003. Commissions and fees declined by $2.6 million compared to the third quarter of 2003 as a result of reduced private client activity and fewer financial advisors.

Compared to the second quarter of 2004, net revenues declined $21.1 million. Contributing to the decline were lower revenues in Private Client Services, institutional sales and trading, and equity investment banking.

Non-Interest Expenses

For the quarter, non-interest expenses were $167.7 million, down 9.3 percent from the third quarter of 2003 due mainly to lower variable compensation costs. Non-compensation expenses were $53.5 million, an improvement of 3.5 percent compared to the third quarter of 2003. Lower litigation-related expenses were offset by increases from investments in technology and additional expenses to support expanded fixed-income sales and trading capabilities and new public company costs.

Compared to the second quarter of 2004, non-interest expenses improved 10.2 percent, primarily due to lower variable compensation costs.

For the quarter, pre-tax operating margin was 10.0 percent, down from the 12.3 percent recorded for the year-ago period but consistent with the pre-tax margin for the prior quarter.

Business Segment Review

Capital Markets

Capital Markets recorded $101.3 million in net revenues for the quarter, down $19.0 million, or 15.8 percent, from the year-ago period. Segment pre-tax operating income for the quarter decreased 31.0 percent to $17.3 million compared to the third quarter of 2003, in which Capital Markets recorded its strongest quarterly revenues for 2003. Fixed-income institutional sales and trading revenues declined by $8.6 million, as the third quarter of last year had very strong results in high-yield corporate bonds where the firm has proprietary research capabilities. Equity underwriting declined $8.2 million from the third quarter of 2003; equity underwriting revenues had rebounded in the year-ago period relative to soft markets in the first half of 2003. Public finance underwriting and mergers and acquisitions revenues were consistent with the year-ago period.

Compared to the second quarter of 2004, Capital Markets revenues declined $12.3 million, or 10.8 percent. The primary contributor of the decline was institutional sales and trading revenues, which softened by $9.7 million due to lower trading volumes during the summer months.

Segment operating expenses for the quarter were $84.0 million, a decrease of $11.3 million, or 11.8 percent, from the same period a year ago, primarily driven by lower variable compensation expenses.

Segment pre-tax operating margin was 17.1 percent, a decline from the 20.8 percent recorded in the year-ago period. The decline was primarily due to lower revenues.

Despite the challenging markets, the firm maintained or improved its industry rankings for completed deals. Public finance underwriting was the most active in terms of both the number of transactions and par amount since the second quarter of 2003. Following is a recap of completed deals and industry rankings (based on the number of transactions completed) during the third quarter of 2004.

• 19 equity offerings, raising a total of $3.2 billion in capital, and placing the firm 10th nationally. These results compare to completion of 24 equity offerings in the same quarter last year for a total of $3.5 billion in capital raised. (Source: Dealogic)

• 13 M&A transactions with an enterprise value of $2.0 billion, ranking ninth among all advisors. In the same period last year the firm completed 13 transactions with an enterprise value of $1.9 billion. Among middle market advisors (which excludes investment banks with average deal size greater than $500 million), the firm ranked second nationally. (Source: Mergerstat)

• 140 tax-exempt issues with a total par value of $1.5 billion, ranking the firm fourth nationally. In the third quarter of last year, the firm completed 115 tax-exempt issues nationally, with a total par value of $1.2 billion. In the Upper Midwest, the firm completed 80 public finance issues during the quarter with a total par value of $0.6 billion, ranking the firm the lead underwriter of Upper Midwest tax-exempt issues. (Source: Thomson Financial)

Private Client Services

Private Client Services recorded net revenues of $83.7 million, down $6.0 million, or 6.6 percent, compared to the third quarter of 2003 due to lower private client activity and fewer financial advisors. Net revenues slowed 4.9 percent compared to second quarter of 2004 as private client activity decreased due to uncertainties in the financial markets and the slower summer trading months. Segment pre-tax operating income was $12.1 million, down 3.6 percent from the third quarter of 2003 and up 2.4 percent compared to the second quarter of 2004.

Segment operating expenses were $71.6 million for the quarter, a 7.1 percent improvement from the year-ago period, primarily due to reduced variable compensation costs. Segment pre-tax operating margin was 14.5 percent, up from both the 14.0 percent margin in the third quarter of 2003 and the 13.4 percent margin for the second quarter of 2004.

Corporate Support and Other

Corporate Support and Other pre-tax operating loss was $9.6 million for the third quarter, an improvement of $1.0 million over the third quarter of 2003 and essentially unchanged from the second quarter of 2004.

Additional Shareholder Information

	As of Sept. 30, 2004		As of June 30, 2004		As of Sept. 30, 2003
Full Time Employees:		3,029		3,043		2,994
Financial Advisors:		853		850		883
Client Assets:	$49 billion		$49 billion		$48 billion
Shareholders’ equity:	$715.0 million		$700.7 million		$634.4 million
Book value per share:	$	36.98	$	36.24	$	32.94
Tangible book value per share:	$	21.17	$	20.43	$	17.07

Conference Call

Andrew S. Duff, chairman and chief executive officer, and Sandra G. Sponem, chief financial officer, will host a conference call to discuss third quarter 2004 financial results on Wednesday, Oct. 20, 2004, at 11 a.m. ET (10 a.m. CT). The call can be accessed via live audio webcast available through the firm’s web page, www.piperjaffray.com, or by dialing (800) 374-0255, or (706) 643-7489 international, and refer to conference ID 1077232 and the leader’s name, Andrew Duff. Callers should dial in at least 15 minutes early to receive instructions. A replay of the conference call will be available beginning at approximately 1 p.m. ET Oct. 20 at the same web address or by calling (800) 642-1687 or (706) 645-9291 international.

About Piper Jaffray Companies

Piper Jaffray Companies (NYSE: PJC) is a focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected sectors of the financial services marketplace. The company operates through two primary

revenue-generating segments: Capital Markets and Private Client Services. Investment Research, an independent group reporting to the CEO, supports clients of both segments. Through its chief operating subsidiary, Piper Jaffray & Co., the firm has served corporations, government and non-profit entities, institutional investors and the financial advisory needs of private individuals since 1895. Headquartered in Minneapolis, Piper Jaffray has approximately 3,000 employees in 111 offices in 23 states across the country and in London. For more information about Piper Jaffray, visit us online at www.piperjaffray.com.

Since 1895. Member SIPC and NYSE.
© 2004 Piper Jaffray & Co., 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402-7020

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements cover, among other things, the future prospects of Piper Jaffray Companies. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including the following: (1) we may experience increased costs resulting from decreased purchasing power and size compared to that previously provided by our association with U.S. Bancorp, (2) we compete with U.S. Bancorp with respect to clients we both serviced prior to our spin-off from U.S. Bancorp and may not be able to retain these clients, (3) the continued ownership of U.S. Bancorp common stock and options by our executive officers and some of our directors will create, or will appear to create, conflicts of interest, (4) we have agreed to certain restrictions to preserve the tax treatment of the spin-off, which reduce our strategic and operating flexibility, (5) we have agreed to indemnify U.S. Bancorp for taxes and related losses resulting from any actions we take that cause the spin-off to fail to qualify as a tax-free transaction, (6) the separation and distribution agreement entered into between U.S. Bancorp and us contains cross-indemnification obligations of U.S. Bancorp and us that either party may be unable to satisfy, (7) developments in market and economic conditions have in the past adversely affected, and may in the future adversely affect, our business and profitability, (8) we may not be able to compete successfully with other companies in the financial services industry, (9) our underwriting and market-making activities may place our capital at risk, (10) an inability to readily divest or transfer trading positions may result in financial losses to our business, (11) use of derivative instruments as part of our risk management techniques may place our capital at risk, while our risk management techniques themselves may not fully mitigate our market risk exposure, (12) an inability to access capital readily or on terms favorable to us could impair our ability to fund operations and could jeopardize our financial condition, (13) we may make strategic acquisitions of businesses or may divest or exit existing businesses, which could cause us to incur unforeseen expense and have disruptive effects on our business but may not yield the benefits we expect, (14) our technology systems are critical components of our operations and the failure of those systems may disrupt our business, cause financial loss and constrain our growth, (15) our business is subject to extensive regulation that limits our business activities, and a significant regulatory action against our company may have a material adverse financial effect or cause significant reputational harm, (16) regulatory capital requirements may adversely affect our ability to expand or maintain present levels of our business or impair our ability to meet our financial obligations, (17) our exposure to legal liability is significant, and could lead to substantial damages and restrictions on our business going forward, (18) we may suffer losses if our reputation is harmed, (19) provisions in our certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the market

value of our common stock, (20) other factors identified in the document entitled “Risk Factors” filed as Exhibit 99.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, and in our subsequent reports filed with the SEC. These reports are available at our Web site at www.piperjaffray.com and at the SEC’s Web site at www.sec.gov. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.

###

Piper Jaffray Companies
Preliminary Unaudited Results of Operations

	For the Three Months Ended						Percent Inc/(Dec)
	September 30,		June 30,		September 30,		3Q04 vs.			3Q04 vs.
(Amounts in thousands, except per share data)	2004		2004		2003		2Q04			3Q03
Revenues:
Commissions and fees	$	61,187	$	65,776	$	63,797		(7.0	)%		(4.1	)%
Principal transactions		39,813		50,243		51,592		(20.8	)		(22.8	)
Investment banking		65,204		68,180		74,992		(4.4	)		(13.1	)
Interest		10,667		11,088		10,358		(3.8	)		3.0
Other income		13,571		16,407		14,161		(17.3	)		(4.2	)
Total revenues		190,442		211,694		214,900		(10.0	)		(11.4	)
Interest expense		4,217		4,391		4,225		(4.0	)		(0.2	)
Net revenues		186,225		207,303		210,675		(10.2	)		(11.6	)
Non-interest expenses:
Compensation and benefits		114,197		127,690		129,455		(10.6	)		(11.8	)
Occupancy and equipment		14,968		13,683		13,623		9.4			9.9
Communications		10,558		10,712		9,100		(1.4	)		16.0
Floor brokerage and clearance		4,068		4,559		5,700		(10.8	)		(28.6	)
Marketing and business development		9,723		11,131		8,576		(12.6	)		13.4
Outside services		11,215		9,922		9,763		13.0			14.9
Cash award program		1,219		1,269		—		(3.9	)		N/M
Royalty fee		—		—		1,128		N/M			N/M
Other operating expenses		1,702		7,647		7,476		(77.7	)		(77.2	)
Total non-interest expenses		167,650		186,613		184,821		(10.2	)		(9.3	)
Income before income tax expense		18,575		20,690		25,854		(10.2	)		(28.2	)
Income tax expense		6,806		7,710		9,824		(11.7	)		(30.7	)
Net income	$	11,769	$	12,980	$	16,030		(9.3	)%		(26.6	)%
Earnings per common share
Basic	$	0.61	$	0.67	$	0.83		(9.0	)%		(26.5	)%
Diluted	$	0.61	$	0.67	$	0.83		(9.0	)%		(26.5	)%
Weighted average number of common shares
Basic		19,333		19,333		19,260		0.0	%		0.4	%
Diluted		19,387		19,395		19,260		(0.0	)%		0.7	%

N/M — Not Meaningful

Piper Jaffray Companies
Preliminary Unaudited Results of Operations

	For the Nine Months Ended
	September 30,		September 30,		Percent
(Amounts in thousands, except per share data)	2004		2003		Inc/(Dec)
Revenues:
Commissions and fees	$	196,475	$	189,139		3.9	%
Principal transactions		142,132		162,126		(12.3	)
Investment banking		198,246		170,750		16.1
Interest		34,218		33,665		1.6
Other income		44,378		44,231		0.3
Total revenues		615,449		599,911		2.6
Interest expense		12,521		14,979		(16.4	)
Net revenues		602,928		584,932		3.1
Non-interest expenses:
Compensation and benefits		371,594		365,431		1.7
Occupancy and equipment		42,383		40,297		5.2
Communications		31,728		27,584		15.0
Floor brokerage and clearance		13,427		17,527		(23.4	)
Marketing and business development		31,516		27,284		15.5
Outside services		30,295		27,355		10.7
Cash award program		3,559		—		N/M
Royalty fee		—		3,107		N/M
Other operating expenses		16,989		30,090		(43.5	)
Total non-interest expenses		541,491		538,675		0.5
Income before income tax expense		61,437		46,257		32.8
Income tax expense		22,898		16,912		35.4
Net income	$	38,539	$	29,345		31.3	%
Earnings per common share
Basic	$	1.99	$	1.53		30.1	%
Diluted	$	1.99	$	1.53		30.1	%
Weighted average number of common shares
Basic		19,333		19,224		0.6	%
Diluted		19,383		19,224		0.8	%

N/M — Not Meaningful

Piper Jaffray Companies
Preliminary Unaudited Segment Data

	For the Three Months Ended									Percent Inc/(Dec)
	September 30,			June 30,			September 30,			3Q04 vs.			3Q04 vs.
(Dollars in thousands)	2004			2004			2003			2Q04			3Q03
Capital Markets
Net revenues	$	101,282		$	113,598		$	120,323			(10.8	)%		(15.8	)%
Operating expenses		83,984			93,565			95,248			(10.2	)		(11.8	)
Segment pre-tax operating income	$	17,298		$	20,033		$	25,075			(13.7	)%		(31.0	)%
Segment operating margin		17.1	%		17.6	%		20.8	%
Private Client Services
Net revenues	$	83,727		$	88,071		$	89,688			(4.9	)%		(6.6	)%
Operating expenses		71,623			76,251			77,137			(6.1	)		(7.1	)
Segment pre-tax operating income	$	12,104		$	11,820		$	12,551			2.4	%		(3.6	)%
Segment operating margin		14.5	%		13.4	%		14.0	%
Corporate Support and Other
Net revenues	$	1,216		$	5,634		$	664			(78.4	)%		83.1	%
Operating expenses		10,824			15,528			11,308			(30.3	)		(4.3	)
Segment pre-tax operating loss	$	(9,608	)	$	(9,894	)	$	(10,644	)		(2.9	)%		(9.7	)%
Segment operating margin		N/M			N/M			N/M
Reconciliation to total income before taxes:
Total segment pre-tax operating income	$	19,794		$	21,959		$	26,982			(9.9	)%		(26.6	)%
Royalty fee		—			—			1,128			N/M			N/M
Cash award program		1,219			1,269			—			(3.9	)		N/M
Total income before tax expense	$	18,575		$	20,690		$	25,854			(10.2	)%		(28.2	)%
Pre-tax operating margin		10.0	%		10.0	%		12.3	%

N/M — Not Meaningful

Piper Jaffray Companies
Preliminary Unaudited Segment Data

	For the Nine Months Ended
	September 30,			September 30,			Percent
(Dollars in thousands)	2004			2003			Inc/(Dec)
Capital Markets
Net revenues	$	326,760		$	319,616			2.2	%
Operating expenses		269,790			260,768			3.5
Segment pre-tax operating income	$	56,970		$	58,848			(3.2	)%
Segment operating margin		17.4	%		18.4	%
Private Client Services
Net revenues	$	267,340		$	263,292			1.5	%
Operating expenses		231,146			243,478			(5.1	)
Segment pre-tax operating income	$	36,194		$	19,814			82.7	%
Segment operating margin		13.5	%		7.5	%
Corporate Support and Other
Net revenues	$	8,828		$	2,024			336.2	%
Operating expenses		36,996			31,322			18.1
Segment pre-tax operating loss	$	(28,168	)	$	(29,298	)		(3.9	)%
Segment operating margin		N/M			N/M
Reconciliation to total income before taxes:
Total segment pre-tax operating income	$	64,996		$	49,364			31.7	%
Royalty fee		—			3,107			N/M
Cash award program		3,559			—			N/M
Total income before tax expense	$	61,437		$	46,257			32.8	%
Pre-tax operating margin		10.2	%		7.9	%

N/M — Not Meaningful

Piper Jaffray Companies
Preliminary Unaudited Supplemental Information

	For the Three Months Ended							Percent Inc/(Dec)
(Dollars in thousands)	September 30,		June 30,			September 30,		3Q04 vs.			3Q04 vs.
Capital Markets	2004		2004			2003		2Q04			3Q03
Institutional Sales
Fixed Income	$	13,154	$	18,876		$	21,717		(30.3	)%		(39.4	)%
Equities		26,318		30,268			29,789		(13.1	)		(11.7	)
Total Institutional Sales		39,472		49,144			51,506		(19.7	)		(23.4	)
Investment Banking
Underwriting
Fixed Income		18,223		14,540			18,727		25.3			(2.7	)
Equities		16,836		20,888			25,066		(19.4	)		(32.8	)
Mergers and Acquisitions		23,083		26,399			22,454		(12.6	)		2.8
Total Investment Banking		58,142		61,827			66,247		(6.0	)		(12.2	)
Net Interest		3,196		3,151			2,362		1.4			35.3
Other Income		472		(524	)		208		190.1			126.9
Capital Markets Net Revenues	$	101,282	$	113,598		$	120,323		(10.8	)%		(15.8	)%

Piper Jaffray Companies
Preliminary Unaudited Supplemental Information

	For the Nine Months Ended
(Dollars in thousands)	September 30,		September 30,		Percent
Capital Markets	2004		2003		Inc/(Dec)
Institutional Sales
Fixed Income	$	51,326	$	75,459		(32.0	)%
Equities		91,073		88,882		2.5
Total Institutional Sales		142,399		164,341		(13.4	)
Investment Banking
Underwriting
Fixed Income		47,484		49,862		(4.8	)
Equities		64,642		47,400		36.4
Mergers and Acquisitions		62,634		48,870		28.2
Total Investment Banking		174,760		146,132		19.6
Net Interest		8,653		6,904		25.3
Other Income		948		2,239		(57.7	)
Capital Markets Net Revenues	$	326,760	$	319,616		2.2	%