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) March 17, 2004
THE BEAR STEARNS COMPANIES INC.
Exact Name of Registrant as Specified in its Charter
DELAWARE File No. 1-8989 13-3286161
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State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation) Number)
383 Madison Avenue, New York, New York 10179
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 272-2000
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Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated March 17, 2004.
Item 12. Results of Operations and Financial Condition
On March 17, 2004, The Bear Stearns Companies Inc. issued a press release
announcing financial results for its quarter ended November 30, 2003. A copy of
the press release is filed as Exhibit 99 to this Form 8-K and by this reference
incorporated herein and made a part hereof.
This information shall be considered "filed" for purposes of the Securities
Exchange Act of 1934, as amended.
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 thereunto duly authorized.
THE BEAR STEARNS COMPANIES INC.
By: /s/ Jeffrey M. Farber
----------------------
Jeffrey M. Farber
Controller
(Principal Accounting Officer)
Dated: March 17, 2004
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
(99) Press Release, dated March 17, 2004
Contact: Elizabeth Ventura (212) 272-9251
John Quinn (212) 272-5934
BEAR STEARNS REPORTS RECORD RESULTS FOR FIRST QUARTER 2004,
NET INCOME UP 32% TO $361.1 MILLION
Return on Equity Reaches 21.3%, Earnings Rise to $2.57 Per Share
Investment Banking Revenue Up 35%
Global Clearing Services Revenue Up 24%
Wealth Management Revenue Up 32%
Fixed Income Reports Record Revenue of $822.3 Million
NEW YORK - March 17, 2004 - The Bear Stearns Companies Inc. (NYSE:BSC) today
reported earnings per share (diluted) of $2.57 for the first quarter ended
February 29, 2004, up 29% from $2.00 per share for the first quarter of 2003.
Net income for the first quarter of 2004 was $361.1 million, up 32% from $274.3
million for the first quarter of 2003. Net revenues for the 2004 first quarter
were $1.7 billion, up 14% from $1.5 billion for the 2003 first quarter. The
annualized return on common stockholders' equity for the first quarter of 2004
was 21.3% and 20.4% for the trailing 12-month period ended February 29, 2004.
"The power and diversity of our franchise is clearly demonstrated in
this quarter's outstanding performance," said James E. Cayne, chairman and chief
executive officer of The Bear Stearns Companies Inc. "Operating earnings are at
an all time high, with each of our major businesses producing improved results.
These superior returns validate our strategy to `Deliver the Firm' to our
clients. Our fixed income division continues to garner market share and customer
flow across the full spectrum of our businesses as we serve our customers better
and more comprehensively than ever before. In Equities, Global Clearing,
Investment Banking and Wealth Management, the plans we put into place in
anticipation of improving equity market conditions are now coming to fruition.
We are particularly gratified by the market share gains we have experienced due
to these efforts. It is an exciting time for Bear Stearns and a great start to
2004."
A brief discussion of the firm's business segments follows:
CAPITAL MARKETS
Capital Markets net revenues for the first quarter of 2004 were $1.4 billion, up
9% from $1.3 billion for the first quarter ended February 28, 2003.
o Institutional Equities net revenues were $297.4 million, up 8% from $276.5
million for the first quarter of 2003. Revenues rose significantly in the
domestic and international equity sales and trading and risk arbitrage
areas, reflecting greater customer activity. A decline in customer
activity levels and reduced market volatility resulted in lower levels of
equity derivative and convertible arbitrage revenues. Due to a change of
control, the results of the majority owned subsidiary Bear Wagner
Specialists, LLC are reported on a consolidated basis for the first time.
This change in reporting accounts for a substantial portion of the
increase in net revenues.
o Fixed Income net revenues were $822.3 million, up 4% from $791.2 million
in the year ago quarter. Fixed Income reported its best ever quarterly
results with all three major product areas -- mortgages, credit and
interest rate -- demonstrating excellent performance. In the mortgage
area, active customer flow in the secondary market across the full
spectrum of product offerings drove revenues. The leveraged finance, high
yield, and foreign exchange areas also reported exceptional results as
strong growth in the non-mortgage related businesses continued.
o Investment Banking net revenues were $253.2 million in the first quarter
of 2004, up 35% from the $187.8 million in the comparable prior year
period. Merger and acquisition advisory fees increased, while equity, high
grade and high yield underwriting results improved with more positive
market conditions.
GLOBAL CLEARING SERVICES
First quarter 2004 Global Clearing Services net revenues were $217.6 million, up
24% from $175.8 million in the first quarter of 2003. Average customer margin
debt balances for the quarter ended February 29, 2004 were $46.6 billion, up 28%
from $36.3 billion in the prior year quarter. Increased customer activity
coupled with higher customer margin balances drove net revenue growth. More
robust customer activity was also apparent in stock borrow and customer short
balances, which approached all time highs during the first quarter of this year.
WEALTH MANAGEMENT
Wealth Management net revenues for the quarter ended February 29, 2004 were
$152.8 million, up 32% from $115.6 million in the first quarter of 2003. More
favorable equity markets this quarter led to increased customer activity
yielding higher net revenues.
o Private Client Services net revenues were $110.9 million in the first
quarter of 2004, an increase of 32% from $84.2 million in the 2003 first
quarter. This revenue growth was fueled by the rebound in the equity
markets, increased trading volume and the continued hiring of highly
productive brokers.
o Asset Management net revenues grew 33% to $41.9 million for the first
quarter of 2004 from $31.4 million in the prior year's quarter due to
increased management fees. Assets under management rose to $29.1 billion
as of February 29, 2004 from $23.3 billion as of February 28, 2003.
EXPENSES
o Compensation as a percentage of net revenues was 49.2% in the first quarter
of 2004 as compared with 50.0% for the quarter ended February 28, 2003.
o Non-compensation expenses were $345.8 million for the quarter ended
February 29, 2004, an increase of 4% from $332.3 million in the 2003
quarter. The increase in non-compensation expenses is primarily
attributable to the consolidation of the results of Bear Wagner Specialist,
LLC in the February 2004 income statement. Excluding the Bear Wagner
consolidation, non-compensation expenses declined by 4% from the first
quarter of 2003 to $319 million.
The pre-tax profit margin increased to 30.8% in the first quarter of 2004
from 28.1% in the quarter ended February 28, 2003.
As of February 29, 2004, total capital, including stockholders'
equity and long-term borrowings, was approximately $40.0 billion. Book value as
of February 29, 2004 was $51.19 per share, based on 144.3 million shares
outstanding.
Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the
parent company of Bear, Stearns & Co. Inc., a leading investment banking and
securities trading and brokerage firm. With approximately $40.0 billion in total
capital, Bear Stearns serves governments, corporations, institutions and
individuals worldwide. The company's business includes corporate finance and
mergers and acquisitions, institutional equities and fixed income sales and
trading, securities research, private client services, derivatives, foreign
exchange and futures sales and trading, asset management and custody services.
Through Bear, Stearns Securities Corp., it offers financing, securities lending,
clearing and technology solutions to hedge funds, broker-dealers and investment
advisors. Headquartered in New York City, the company has approximately 10,500
employees worldwide. For additional information about Bear Stearns, please visit
the firm's website at http://www.bearstearns.com.
***
Financial Tables Attached
Certain statements contained in this discussion are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties, which could
cause actual results to differ materially from those discussed in the
forward-looking statements. For a discussion of the risks and uncertainties that
may affect the company's future results, please see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Risk Management"
in the company's 2003 Annual Report to Stockholders which has been filed with
the Securities and Exchange Commission.
A conference call to discuss the company's results will be held on Wednesday,
March 17, 2004, at 10 a.m., EST. The call will be open to the public. Those
wishing to listen to the conference call should dial 1-888-792-1069 (or
1-703-871-3019 for international callers) at least 15 minutes prior to the
commencement of the call to ensure connection. The conference call will also be
accessible through our website at http://www.bearstearns.com. For those unable
to listen to the live broadcast of the call, a replay will be available on our
website or by dialing 1-888-266-2081 (or 1-703-925-2533 for international
callers) at approximately 1 p.m. EST. The pass code for the replay is 406521.
The replay will be available until midnight on Friday, April 2, 2004. If you
have any questions on how to obtain access to the conference call, please
contact Joanne Jarema by telephone at 1-212-272-4417 or via e-mail at
jjarema@bear.com.