-----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, L87E0uNQG+2+04qWBwhfDQQrHOwGq4siK+BGwXHjxbORJSw75ioY8PohfkYXpe1N UGcu22WUP9A4e+zYz+ADMw== 0000891092-04-001813.txt : 20040422 0000891092-04-001813.hdr.sgml : 20040422 20040422061331 ACCESSION NUMBER: 0000891092-04-001813 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040422 ITEM INFORMATION: FILED AS OF DATE: 20040422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWS GROUP INC CENTRAL INDEX KEY: 0000878520 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 752040825 STATE OF INCORPORATION: DE FISCAL YEAR END: 0625 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19483 FILM NUMBER: 04746676 BUSINESS ADDRESS: STREET 1: SUITE 3500 STREET 2: 1201 ELM STREET CITY: DALLAS STATE: TX ZIP: 75270 BUSINESS PHONE: 2146511800 MAIL ADDRESS: STREET 1: SUITE 3500 STREET 2: 1201 ELM STREET CITY: DALLAS STATE: TX ZIP: 75270 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHWEST SECURITIES GROUP INC DATE OF NAME CHANGE: 19930328 8-K 1 e17570_8k.txt FORM 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 Date of Report (Date of earliest event reported): April 22, 2004 SWS GROUP, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) DELAWARE No. 0-19483 No. 75-2040825 (State or other jurisdiction (Commission (IRS employer of incorporation) File Number) Identification No.) 1201 ELM STREET, SUITE 3500 DALLAS, TEXAS 75270 (Address, including zip code, of principal executive office) ---------------------------------------------------------------- Registrants' telephone number, including area code: 214-859-1800 Not applicable ------------------------------------------------------------------- (Registrant's former name or address, if changed since last report) Item 12. Results of Operations and Financial Condition. On April 22, 2004, SWS Group, Inc. ("SWS") issued a press release regarding its results of operations for the three and nine months ended March 26, 2004. The following information contained therein shall be deemed to be "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and shall be incorporated by reference in SWS' filings under the Securities Act of 1933, as amended: For the third quarter ended March 26, 2004, SWS reported net income of $1.5 million, or diluted earnings per share (EPS) of 9 cents, on revenues of $69.7 million, compared with a net loss of $710,000, or a loss of 4 cents per share, on revenues of $59.3 million in the prior year's third quarter. For the first nine months of fiscal 2004, SWS recorded revenues of $205.5 million, net income of $7 million and diluted EPS of 41 cents, compared with revenues of $191.4 million, a net loss of $171,000 or a loss of 1 cent per share in the same period of the prior fiscal year. Southwest Securities investment banking operations produced corporate finance transaction fees of more than $2 million in the quarter. Commissions earned were up 26 percent from those recorded in the prior year's third quarter, while net interest revenues increased 10 percent. The third quarter also benefited from a $1 million gain on the sale of $11.6 million in loans by FSB Financial, a subsidiary of First Savings Bank. Fiscal-year-to-date transactions processed by Southwest Securities, Inc. for correspondent broker/dealers totaled 22.7 million compared with 19.1 million in the prior year period. Book value per share was $14.92 compared with $14.57 a year ago. Return on equity (ROE) was 2.33 percent for the quarter and 3.75 percent for the nine-month period compared with a negative ROE for the prior year periods. As previously disclosed, the company is continuing to cooperate with the SEC in its inquiries regarding certain mutual fund trading practices. Although SWS is unable to estimate the ultimate exposure related to the inquiries, the company believes the results could be material. SWS recorded an after-tax liability of $2 million in the third quarter for these issues. This release contains forward-looking statements regarding SWS' future overall performance. Readers are cautioned that any forward-looking statements, including those predicting or forecasting future events or results, which depend on future events for their accuracy, embody projections or assumptions, or express the intent, belief or current expectations of SWS or management, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially as a result of various factors, some of which are out of our control, including, but not limited to the ultimate resolution of the SEC inquiry discussed herein and those factors discussed in our Annual Report on Form 10-K and in our other reports filed with and available from the Securities and Exchange Commission. Pursuant to General Instruction B.6. of Form 8-K, the following information shall be deemed to be "furnished" and not "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and, therefore, shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended: A copy of the press release issued by SWS on April 22, 2004 is attached hereto as Exhibit 99.1. 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. SWS GROUP, INC. Date: April 22, 2004 By: /s/ Kenneth R. Hanks ------------------------------------- Kenneth R. Hanks Executive Vice President, Chief Financial Officer and Treasurer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF EXHIBIT 99.1 SWS Group, Inc. Press Release Issued April 22, 2004 EX-99.1 3 e17570ex99-1.txt PRESS RELEASE Exhibit 99.1 SWS Reports Third Quarter Results; Net Income Totaled $1.5 Million on Revenues of $69.7 Million DALLAS, April 22 /PRNewswire-FirstCall/ -- SWS Group, Inc. (NYSE: SWS) today reported net income of $1.5 million, or diluted earnings per share (EPS) of 9 cents, on revenues of $69.7 million for the company's third quarter ended March 26, compared with a net loss of $710,000, or a loss of 4 cents per share, on revenues of $59.3 million in the prior year's third quarter. For the first nine months of fiscal 2004, SWS recorded revenues of $205.5 million, net income of $7 million and diluted EPS of 41 cents, compared with revenues of $191.4 million, a net loss of $171,000 or a loss of 1 cent per share in the same period of the prior fiscal year. "The company has made significant financial progress this year," said Chief Executive Officer Donald W. Hultgren. "Although market conditions softened at the end of the quarter, the outlook for our businesses remains positive." Hultgren said Southwest Securities is beginning to see significant results from its investment banking presence, which he believes can be an important contributor to the company's bottom line, as evidenced by corporate finance transaction fees of more than $2 million in the quarter. "Investment banking is one of the areas we targeted for expansion, similar to the Private Client Group," he said. Commissions earned were up 26 percent from those recorded in the prior year's third quarter, while net interest revenues increased 10 percent. "We were able to take advantage of improving market conditions as we made progress toward becoming a nationally recognized regional brokerage and banking firm," Hultgren said. The third quarter also benefited from a $1 million gain on the sale of $11.6 million in loans by FSB Financial, a subsidiary of First Savings Bank. Fiscal-year-to-date transactions processed by Southwest Securities, Inc. for correspondent broker/dealers totaled 22.7 million compared with 19.1 million in the prior year period. Book value per share was $14.92 compared with $14.57 a year ago. Return on equity (ROE) was 2.33 percent for the quarter and 3.75 percent for the nine-month period compared with a negative ROE for the prior year periods. As previously disclosed, the company is continuing to cooperate with the SEC in its inquiries regarding certain mutual fund trading practices. Although SWS is unable to estimate the ultimate exposure related to the inquiries, the company believes the results could be material. SWS recorded an after-tax liability of $2 million in the third quarter for these issues. SWS Group, Inc. is a Dallas-based holding company that offers a broad range of investment and financial services through its subsidiaries. The company's common stock is listed and traded on the New York Stock Exchange under the symbol SWS. SWS Group, Inc. subsidiaries include Southwest Securities, Inc., First Savings Bank, SWS Financial Services, Inc., SWS Capital Corporation, and Southwest Insurance Agency. This release contains forward-looking statements regarding the company's future overall performance. Readers are cautioned that any forward-looking statements, including those predicting or forecasting future events or results, which depend on future events for their accuracy, embody projections or assumptions, or express the intent, belief or current expectations of the company or management, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially as a result of various factors, some of which are out of our control, including, but not limited to the ultimate resolution of the SEC inquiry discussed herein and those other factors discussed in our Annual Report on Form 10-K and in our other reports filed with and available from the Securities and Exchange Commission. FINANCIAL TABLES FOLLOW SWS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition March 26, 2004 and June 27, 2003 (In thousands, except par values and share amounts) March June (Unaudited) Assets Cash $ 95,270 $ 74,706 Assets segregated for regulatory purposes 378,697 441,184 Marketable equity securities available for sale 9,694 5,599 Receivable from brokers, dealers and clearing organizations 3,265,530 2,488,008 Receivable from clients, net 441,253 297,238 Loans held for sale, net 99,759 201,265 Loans, net 420,947 366,008 Securities owned, at market value 194,143 122,693 Goodwill 8,097 7,558 Other assets 70,140 87,825 Total assets $4,983,530 $4,092,084 Liabilities and Stockholders' Equity Short-term borrowings $ 15,600 $ --- Payable to brokers, dealers and clearing organizations 3,247,614 2,405,427 Payable to clients 700,347 705,474 Deposits 522,607 528,515 Securities sold, not yet purchased, at market value 97,438 40,620 Drafts payable 30,551 29,331 Advances from Federal Home Loan Bank 20,142 49,885 Other liabilities 82,847 73,953 Exchangeable subordinated notes 9,500 7,284 Total liabilities 4,726,646 3,840,489 Minority interest in consolidated subsidiaries 2,333 1,822 Stockholders' equity: Preferred stock of $1.00 par value. Authorized 100,000 shares; none issued --- --- Common stock of $.10 par value. Authorized 60,000,000 shares, issued 17,810,674 outstanding 17,056,919 shares at March 26, 2004 issued 17,707,998 and outstanding 16,957,287 shares at June 27, 2003 1,781 1,770 Additional paid-in capital 245,931 243,683 Retained Earnings 3,332 1,217 Accumulated other comprehensive income - unrealized holding gain (loss), net of tax 13,891 12,673 Deferred compensation, net 792 1,549 Treasury stock (753,755 shares at March 26, 2004 and 750,711 shares at June 27, 2003, at cost) (11,176) (11,119) Total stockholders' equity 254,551 249,773 Commitments and contingencies Total liabilities and stockholders' equity $4,983,530 $4,092,084 SWS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income and Comprehensive Income For the three and nine months ended March 26, 2004 and March 28, 2003 (In thousands, except per share and share amounts) (Unaudited) For the Three Months Ended For the Nine Months Ended March 26, March 28, March 26, March 28, 2004 2003 2004 2003 Net revenues from clearing operations $ 4,678 $ 4,034 $14,964 $14,208 Commissions 24,753 19,701 73,080 60,370 Interest 23,013 22,352 71,154 71,363 Investment banking, advisory and administrative fees 7,765 5,579 19,711 19,574 Net gains on principal transactions 5,087 4,578 14,612 14,144 Other 4,404 3,017 11,966 11,747 Total revenue 69,700 59,261 205,487 191,406 Commissions and other employee compensation 37,380 30,365 106,432 94,540 Interest 8,003 8,667 24,595 29,795 Occupancy, equipment and computer service costs 6,988 7,853 21,497 24,597 Communications 3,390 3,590 9,778 11,442 Floor brokerage and clearing organization charges 1,381 1,325 4,830 4,862 Advertising and promotional 718 763 2,427 2,471 Other 8,254 7,413 23,470 23,356 Total expense 66,114 59,976 193,029 191,063 Income before income tax expense and minority interest in consolidated subsidiaries 3,586 (715) 12,458 343 Income tax expense 1,806 (477) 4,618 (403) Income before minority interest in consolidated subsidiaries 1,780 (238) 7,840 746 Minority interest in consolidated subsidiaries (299) (472) (820) (917) Net income 1,481 (710) 7,020 (171) Net income (loss) recognized in other comprehensive income, net of tax (34) 55 1,218 (15) Comprehensive income $ 1,447 $ (655) $ 8,238 $ (186) Earnings per share - basic Net income $ 0.09 $(0.04) $ 0.41 $(0.01) Weighted average shares outstanding - basic 17,056,661 16,866,511 17,033,225 16,969,887 Earnings per share - diluted Net income $ 0.09 $(0.04) $ 0.41 $(0.01) Weighted average shares outstanding - diluted 17,225,618 16,866,511 17,227,870 16,969,887 SOURCE SWS Group, Inc. -0- 04/22/2004 /NOTE TO EDITORS: A Company background is available upon request. Please call the contact./ /CONTACT: Jim Bowman, Vice President - Corporate Communications of SWS Group, Inc., +1-214-859-9335, or jbowman@swst.com / /Web site: http://www.swsgroupinc.com / (SWS) CO: SWS Group, Inc. ST: Texas IN: FIN SU: ERN -----END PRIVACY-ENHANCED MESSAGE-----