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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2004
STIFEL FINANCIAL CORP.
Delaware |
1-9305 |
43-1273600 |
One Financial Plaza
501 North Broadway
St. Louis, Missouri 63102-2102
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code
(314) 342-2000
___________________________N/A___________________________
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibit is furnished pursuant to Item 12 "Disclosure of Results of Operations and Financial Condition," is not to be considered "filed" under the Securities Exchange Act of 1934, as amended, ("Exchange Act") and shall not be incorporated by reference into any filing by Stifel Financial Corp. under the Securities Act of 1933, as amended, ("Securities Act") or the Exchange Act.
Exhibit 99: Unaudited Earnings Summaries for the three months and year ended December 31, 2003 and supplemental information.
Items 12. Disclosure of Results of Operations and Financial Condition
(a) Exhibit 99 consists of a copy of the press release issued February 4, 2004 reporting results for the fourth quarter and year ended December 31, 2003.
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 hereunto duly authorized.
Date: February 11, 2004 |
STIFEL FINANCIAL CORP. |
STIFEL FINANCIAL CORP.
[Stifel Financial Corp. logo] Stifel Financial News
One Financial Plaza |
|
For further information contact: |
For Immediate Release
Stifel Financial Corp.
Reports Record Year and Quarter
Revenues, Net Income, and Earnings Per Share
4th Quarter EPS $0.78
2003 Full Year EPS $1.82
St. Louis, Missouri, February 4, 2004 - Stifel Financial Corp. (NYSE: "SF") today reported unaudited record quarterly net income of $6.7 million, or $0.78 per diluted share, on record net revenues of $61.6 million for the quarter ended December 31, 2003, compared to a net income of $1.7 million, or $0.21 per diluted share, on net revenues of $45.4 million for the comparable quarter of 2002.
For the year ended December 31, 2003, the Company reported record net income of $15.0 million, or $1.82 per diluted share, compared with $2.8 million, or $0.34 per diluted share, for the same period one year earlier. The current year results include a third quarter reversal of a $1.2 million charge, net of tax, or approximately $0.15 per diluted share, resulting from the favorable settlement of an arbitration award. The prior year results include a third quarter after-tax charge of $3.5 million related to that arbitration award and other legal matters. Excluding the current year reversal and the prior year charge, net earnings increased 117% to $13.8 million, or $1.67 per diluted share, compared to $6.3 million, or $0.78 per diluted share, for the previous year. Net revenues for 2003 were a record $216.5 million, compared with $187.8 million the previous year, an increase of 15%. At December 31, 2003, the Company's equity was $100.0 million, resulting in book v alue per share of $14.47. Return on average equity was 28% and 17% for the quarter and year ended December 31, 2003, respectively. During 2003, the Company repurchased 167,734 shares, under existing Board authorization, at an average cost of $12.77 per share.
Chairman and Chief Executive Officer, Ronald J. Kruszewski, commented, "We are pleased with our record results for the 4th quarter and the year ending December 31, 2003, and believe our performance is reflective of our on-going investment in people and technology. We would like to thank our loyal clients, as well as our 1,300 plus dedicated associates, for helping the Company enjoy the success achieved in 2003."
Page 1
Fourth Quarter Discussion
Net revenues for the quarter increased 36% to $61.6 million from $45.4 million in the prior year fourth quarter, and increased 3% from the third quarter of 2003. Commission and principal transaction revenues increased 31% to $36.3 million from $27.8 million in the same period last year and increased 5% from the third quarter of 2003. Investment banking revenues increased 57% to $15.0 million in the fourth quarter of 2003 from $9.5 million in the prior year fourth quarter, but decreased 3% from the third quarter of 2003. Other income increased 37% to $8.6 million from $6.3 million in the fourth quarter of 2002 and increased 3% from the preceding third quarter of 2003. Net interest declined 5% to $1.8 million from $1.9 million in the prior year fourth quarter, but increased 1% from the third quarter of 2003.
Total non-interest expenses in the 2003 fourth quarter were $50.5 million, up 19% from $42.6 million in the same period of 2002, but decreased 2% from the third quarter of 2003. Employee compensation and benefits increased 23% to $36.7 million from $29.9 million in the prior year fourth quarter and decreased 7% from the third quarter of 2003. As a percentage of net revenues, compensation totaled 59.6% in the fourth quarter of 2003, 65.8% in the 2002 comparable quarter, and 65.7% in the third quarter of 2003. A portion of compensation and benefits includes transition pay in connection with the Company's expansion efforts. Excluding these expenses, compensation as a percentage of net revenues totaled 56.3% in the fourth quarter of 2003, 61.3% in the 2002 comparable quarter, and 62.2% in the third quarter of 2003. Excluding compensation and benefits, non-interest expenses increased 9% from the prior year fourth quarter and decreased 1% from the third quarter of 2003 (excluding the fav orable settlement of an arbitration award).
Twelve-Month Discussion
Net revenues increased 15% to a record $216.5 million from $187.8 million in 2002. Commission and principal transaction revenues increased 20% to $129.3 million from $107.8 million. Investment banking revenues increased 8% to $49.7 million from $45.9 million. Other income increased 17% to $30.4 million from $25.9 million. Net interest declined 13% to $7.1 million from $8.2 million in the prior year.
Total non-interest expenses of $191.5 million increased 5% from $183.0 million in 2002. Employee compensation and benefits increased 11% to $141.0 million from $126.7 million. As a percentage of net revenues, compensation totaled 65.1% in 2003, compared to 67.5% for one year earlier. A portion of compensation and benefits includes transition pay in connection with the Company's expansion efforts. Excluding these expenses, compensation as a percentage of net revenues totaled 61.3%, compared to 62.8%. Excluding compensation and benefits, the current year reversal, and the prior year charge, non-interest expenses increased 5% from the prior year.
Page 2
Business Segment Results for the Three Months Ended December 31, 2003:
Business Segment Results for the Year Ended December 31, 2003:
Page 3
Conference Call Information
Stifel Financial Corp. will hold a conference call tomorrow, Thursday, February 5, 2004, at 4:15 p.m. EST. This call will be Webcast and can be accessed on the Investor Relations portion of the Stifel Financial Corp. web site at www.stifel.com as well as on all sites within CCBN's Investor Distribution Network. To participate on the call, please dial 888-676-3684 and request the Stifel Financial Corp. earnings call.
Company Information
Stifel Financial Corp. is a financial services holding company whose subsidiaries are engaged in general securities brokerage, investment banking, and money management with 83 locations in 15 states, primarily in the Midwest. To learn more about Stifel, please visit the Company's web site at www.stifel.com.
Statements in this news release contain forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory actions, changes in legislation, and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this news release. The Company does not undertake any obligation to publicly update any forward-looking statements.
Page 4
Stifel Financial Corp., Consolidated |
|||||||||||||||||
Summary Of Results Of Operations (Unaudited) |
|||||||||||||||||
(In Thousands, Except Per Share Amounts) |
|||||||||||||||||
|
Three Months Ended |
Percent Change From |
Twelve Months Ended |
Change |
|
||||||||||||
|
12/31/2003 |
9/30/2003 |
12/31/2002 |
9/30/2003 |
12/31/2002 |
12/31/2003 |
12/31/2002 |
Percent |
|
||||||||
Revenues |
|
||||||||||||||||
Commissions |
$ 24,386 |
$ 22,488 |
$ 17,241 |
8% |
41% |
$ 85,409 |
$ 71,520 |
19% |
|
||||||||
Principal transactions |
11,869 |
11,892 |
10,512 |
0% |
13% |
43,912 |
36,251 |
21% |
|
||||||||
Investment banking |
14,952 |
15,402 |
9,498 |
-3% |
57% |
49,705 |
45,918 |
8% |
|
||||||||
Other |
8,583 |
8,352 |
6,281 |
3% |
37% |
30,351 |
25,880 |
17% |
|
||||||||
Total operating revenues |
59,790 |
58,134 |
43,532 |
3% |
37% |
209,377 |
179,569 |
17% |
|
||||||||
Interest revenue |
3,004 |
3,050 |
3,342 |
-2% |
-10% |
12,243 |
14,544 |
-16% |
|
||||||||
Total revenues |
62,794 |
61,184 |
46,874 |
3% |
34% |
221,620 |
194,113 |
14% |
|
||||||||
Less: Interest expense |
1,192 |
1,259 |
1,430 |
-5% |
-17% |
5,108 |
6,319 |
-19% |
|
||||||||
Net revenues |
61,602 |
59,925 |
45,444 |
3% |
36% |
216,512 |
187,794 |
15% |
|
||||||||
Non-Interest Expenses |
|
|
|||||||||||||||
Employee compensation and benefits |
36,704 |
39,355 |
29,913 |
-7% |
23% |
140,973 |
126,726 |
11% |
|
||||||||
Occupancy and equipment rental |
4,989 |
4,724 |
4,805 |
6% |
4% |
19,278 |
18,631 |
3% |
|
||||||||
Communication and office supplies |
2,725 |
2,607 |
2,726 |
5% |
0% |
10,740 |
10,737 |
0% |
|
||||||||
Commissions and floor brokerage |
893 |
852 |
823 |
5% |
9% |
3,263 |
3,373 |
-3% |
|
||||||||
Other operating expenses |
5,193 |
3,818 |
4,351 |
36% |
19% |
17,198 |
23,533 |
-27% |
|
||||||||
Total non-interest expenses |
50,504 |
51,356 |
42,618 |
-2% |
19% |
191,452 |
183,000 |
5% |
|
||||||||
Income before income taxes |
11,098 |
8,569 |
2,826 |
30% |
293% |
25,060 |
4,794 |
423% |
|
||||||||
Provision for income taxes |
4,435 |
3,445 |
1,168 |
29% |
280% |
10,053 |
2,014 |
399% |
|
||||||||
Net income |
$ 6,663 |
$ 5,124 |
$ 1,658 |
30% |
302% |
$ 15,007 |
$ 2,780 |
440% |
|
||||||||
|
|
|
|||||||||||||||
Per Share Information |
|
||||||||||||||||
|
Three Months Ended |
Percent Change From |
Twelve Months Ended |
Change |
|
||||||||||||
|
12/31/2003 |
9/30/2003 |
12/31/2002 |
9/30/2003 |
12/31/2002 |
12/31/2003 |
12/31/2002 |
Percent |
|
||||||||
Earnings Per Share: |
|
||||||||||||||||
Basic |
$ 0.96 |
$ 0.74 |
$ 0.24 |
30% |
300% |
$ 2.17 |
$ 0.40 |
443% |
|
||||||||
Diluted |
$ 0.78 |
$ 0.62 |
$ 0.21 |
26% |
271% |
$ 1.82 |
$ 0.34 |
435% |
|
||||||||
Number of Shares for Earnings Per Share Computations: |
|
|
|||||||||||||||
Basic shares |
6,925 |
6,941 |
6,825 |
0% |
1% |
6,925 |
7,033 |
-2% |
|
||||||||
Diluted shares |
8,538 |
8,297 |
7,979 |
3% |
7% |
8,227 |
8,169 |
1% |
|
||||||||
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. |
|
|
|
|
Page 5
Stifel Financial Corp., Consolidated |
||||||||||||||
Summary of Segment Data & Statistical Information (Unaudited) |
||||||||||||||
($ In Thousands, Except Per Share Amounts) |
||||||||||||||
Segment Data |
|
|||||||||||||
|
Three Months Ended |
Percent Change From |
Nine Months Ended |
Change |
|
|||||||||
Net Revenues |
12/31/2003 |
9/30/2003 |
12/31/2002 |
9/30/2003 |
12/31/2002 |
12/31/2003 |
12/31/2002 |
Percent |
|
|||||
Private client |
$ 44,363 |
$ 42,969 |
$ 33,048 |
3% |
34% |
$ 160,225 |
$ 134,326 |
19% |
|
|||||
Equity capital markets |
10,351 |
12,358 |
6,865 |
-16% |
51% |
35,532 |
32,011 |
11% |
|
|||||
Fixed income capital markets |
5,286 |
2,974 |
4,324 |
78% |
22% |
15,384 |
16,750 |
-8% |
|
|||||
Other |
1,602 |
1,624 |
1,207 |
-1% |
33% |
5,371 |
4,707 |
14% |
|
|||||
Total net revenues |
$ 61,602 |
$ 59,925 |
$ 45,444 |
3% |
36% |
$ 216,512 |
$ 187,794 |
15% |
|
|||||
Operating Contribution |
|
|||||||||||||
Private client |
$ 8,933 |
$ 10,819 |
$ 4,781 |
-17% |
87% |
$ 30,019 |
$ 13,096 |
129% |
|
|||||
Equity capital markets |
4,302 |
4,017 |
1,453 |
7% |
196% |
9,989 |
7,789 |
28% |
|
|||||
Fixed income capital markets |
1,851 |
(493) |
729 |
n/a |
154% |
2,648 |
3,444 |
-23% |
|
|||||
Other / unallocated overhead |
(3,988) |
(5,774) |
(4,137) |
n/a |
n/a |
(17,596) |
(19,535) |
n/a |
|
|||||
Income before income taxes |
$ 11,098 |
$ 8,569 |
$ 2,826 |
30% |
293% |
$ 25,060 |
$ 4,794 |
423% |
|
|||||
Statistical Information |
|
|||||||||||||
|
Three Months Ended |
Percent Change From |
Nine Months Ended |
Change |
|
|||||||||
|
12/31/2003 |
9/30/2003 |
12/31/2002 |
9/30/2003 |
12/31/2002 |
12/31/2003 |
12/31/2002 |
Percent |
|
|||||
Total Operating Revenues |
$ 59,790 |
$ 58,134 |
$ 43,532 |
3% |
37% |
$ 209,377 |
$ 179,569 |
17% |
|
|||||
Net Operating Interest |
2,588 |
2,567 |
2,688 |
1% |
-4% |
10,239 |
10,648 |
-4% |
|
|||||
Non-Interest Expenses (1) |
48,357 |
48,998 |
40,928 |
-1% |
18% |
181,443 |
172,771 |
5% |
|
|||||
Adjusted EBITDA (2) |
14,021 |
11,703 |
5,292 |
20% |
165% |
38,173 |
17,446 |
119% |
|
|||||
Amortization and Depreciation |
2,147 |
2,358 |
1,690 |
-9% |
27% |
10,009 |
10,229 |
-2% |
|
|||||
Interest on Long-Term Debt (3) |
776 |
776 |
776 |
0% |
0% |
3,104 |
2,423 |
28% |
|
|||||
Income before income taxes |
11,098 |
8,569 |
2,826 |
30% |
293% |
25,060 |
4,794 |
423% |
|
|||||
Provision for income taxes |
4,435 |
3,445 |
1,168 |
29% |
280% |
10,053 |
2,014 |
399% |
|
|||||
Net income |
$ 6,663 |
$ 5,124 |
$ 1,658 |
30% |
302% |
$ 15,007 |
$ 2,780 |
440% |
|
|||||
|
|
|
||||||||||||
Earnings Per Share: |
|
|||||||||||||
Diluted |
$ 0.78 |
$ 0.62 |
$ 0.21 |
26% |
271% |
$ 1.82 |
$ 0.34 |
435% |
|
|||||
|
|
|
||||||||||||
Stockholders' Equity |
$ 100,045 |
$ 93,196 |
$ 79,990 |
7% |
25% |
|
|
|||||||
Book Value Per Share |
$ 14.47 |
$ 13.34 |
$ 11.81 |
8% |
23% |
|
|
|||||||
Total Assets |
$ 412,403 |
$ 407,163 |
$ 422,975 |
1% |
-2% |
|
|
|||||||
Investment Executives |
412 |
429 |
412 |
-4% |
0% |
|
|
|||||||
Full-Time Employees |
1,115 |
1,130 |
1,123 |
-1% |
-1% |
|
|
|||||||
Locations |
83 |
83 |
80 |
0% |
4% |
|
|
|||||||
Total Client Assets |
$20,385,000 |
$18,842,000 |
$16,174,100 |
8% |
26% |
|
|
|||||||
|
|
|
||||||||||||
(1) Non-interest expenses exclude depreciation and amortization of intangibles and employment incentives. Employment incentives include up-front loans and restricted stock units. |
|
|||||||||||||
(2) Adjusted EBITDA, which is defined as net income before income taxes, depreciation, amortization of intangibles and employment incentives, and interest on long-term debt, represents a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income, the most directly comparable measure under accounting principles generally accepted in the United States (GAAP), is included in the table above. The Company believes that adjusted EBITDA is a useful measure of financial performance because of its focus on the Company's results from operations before income taxes, depreciation, amortization, and interest. The Company also believes that this measure is an alternative financial measure of performance used by investors, rating agencies, and financial analysts to estimate the value of a company and evaluate its ability to meet debt service requirements. |
|
|||||||||||||
(3) Long-term debt composed of: 9% $34.5 million Trust Preferred issued April 25, 2002 and 8% $10 million note to Western & Southern Life Insurance Company extinguished April 30, 2002. |
||||||||||||||
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. |
- End -
Page 6