The Bear Stearns Companies Inc. Reports First Fiscal Quarter Results; Declares Preferred Stock Cash Dividends.Business EditorsNEW YORK--(BUSINESS WIRE)--March 20, 2002 The Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. Companies Inc. (NYSE NYSE See: New York Stock Exchange :BSC (Binary Synchronous Communications) See bisync. ) today reported net earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of $1.29 for the first quarter ended February February: see month. 28, 2002, up 21.7% from $1.06 per share for the quarter ended February 23, 2001. Net income for the first fiscal quarter of 2002 was $180.5 million, up 13.1% from $159.7 million for the comparable quarter a year ago. First quarter 2002 net revenues were $1.24 billion, up 2.1% from $1.21 billion for the quarter ended February 23, 2001. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. return on common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. for the quarter ended February 28, 2002 was 15.2% and for the trailing 12-month period ended February 28, 2002 was 14.0%. Commenting on the quarter, James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. E. Cayne, chairman and chief executive officer of Bear Stearns, said, "Our quarterly results demonstrate the benefit of a diversified diversified (di·verˑ·s portfolio of businesses in markets such as these. The fixed income franchise continued to show extremely strong results at a time when most other major sectors in the industry were experiencing persistent Permanent. See persistent data, persistent name and persistent object. persistent - persistence weakness. Record results were achieved in each of our principal fixed income product areas, with particularly strong performance from our industry-leading Mortgage-Backed Securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. Department." "In addition, the steps taken during fiscal 2001 to reduce operating costs operating costs npl → gastos mpl operacionales and increase margins have had a positive effect on the current period's earnings. Having put many of the difficult decisions with respect to headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. behind us, we are free to focus all of our energy on our top priority: serving our clients." A brief discussion of the firm's business segments, compared to the prior year quarter, follows: CAPITAL MARKETS Net revenues for the Capital Markets segment were $937.4 million for the quarter ended February 28, 2002, up 17.0% from $801.5 million for the first quarter last year. -- Private Client Services revenues declined on lower levels of individual investor activity. -- As of February 28, 2002, total assets under management stood at $25.8 billion, up 20.0% from $21.5 billion at February 23, 2001. Alternative investment products under management were $6.8 billion as of February 28, 2002, a 47.9% increase from the end of the prior year's first fiscal quarter. Mutual funds under management also increased as of February 28, 2002 to $6.4 billion, up 23.1% from the end of the same period in 2001. GLOBAL CLEARING SERVICES Net revenues for Global Clearing Services were $187.4 million for the quarter ended February 28, 2002, down 16.3% from $223.9 million for the quarter ended February 23, 2001. This decline in net revenue reflected reduced net interest profits attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower margin balances and reduced commission revenues. Average levels of customer margin debt and customer short balances have declined significantly from a year earlier. Average customer margin debt balances were $35.1 billion during the quarter ended February 28, 2002, as compared with $42.0 billion in the prior year quarter ended February 23, 2001. Customer short balances experienced similar declines averaging $47.3 billion for the first quarter of 2002, as compared with $55.0 billion for the first quarter of 2001. WEALTH MANAGEMENT Wealth Management net revenues for the quarter ended February 28, 2002 were $123.2 million, down 14.8% from $144.6 million for the quarter ended February 23, 2001. -- Private Client Services revenues declined on lower levels of individual investor activity. -- As of February 28, 2002, total assets under management stood at $25.8 billion, up 20.0% from $21.5 billion at February 23, 2001. Alternative investment products under management were $6.8 billion as of February 28, 2002, a 47.9% increase from the end of the prior year's first fiscal quarter. Mutual funds under management also increased as of February 28, 2002 to $6.4 billion, up 23.1% from the end of the same period in 2001. EXPENSES Compensation as a percentage of net revenues was 51.1% and 52.3% for the quarters ended February 28, 2002 and February 23, 2001, respectively. Non-compensation expenses were $332.0 million for the quarter ended February 28, 2002, up 1.9% from $325.7 million for the comparable prior year. Communications and technology, advertising and market development, and professional fee reductions were offset by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19 million of non-recurring costs associated with relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of our worldwide headquarters to 383 Madison Avenue Madison Avenue, celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S. . The pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , pre-CAP-Plan profit margin was 24.9% in the current quarter as compared with 23.4% in the comparable prior year period. As of February 28, 2002 total capital, including stockholders' equity and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. borrowings, was $31.1 billion. Book value as of February 28, 2002 was $34.95 per share, based on 147,040,102 shares outstanding. Quarterly Preferred Cash Dividends Declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. (1) The Board of Directors of The Bear Stearns Companies Inc. declared a quarterly cash dividend of 68.75 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. on the outstanding shares of Adjustable Rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Cumulative Preferred Stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. , Series A, payable April 15, 2002 to stockholders of record on March 29, 2002. In addition, other regular dividends declared by the Board of Directors include: (i) a cash dividend of $3.075 per share on the outstanding shares of 6.15% Cumulative Preferred Stock, Series E (which is equivalent to 76.875 cents per related depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. share); (ii) a cash dividend of $2.86 per share on the outstanding shares of 5.72% Cumulative Preferred Stock, Series F (which is equivalent to 71.50 cents per related depositary share); and (iii) a cash dividend of $2.745 per share on the outstanding shares of 5.49% Cumulative Preferred Stock, Series G (which is equivalent to 68.625 cents per related depositary share) all payable April 15, 2002 to stockholders of record on March 29, 2002. (1) A cash dividend on the common stock has not yet been declared. The next meeting of The Bear Stearns Companies Inc.'s Board of Directors is scheduled for March 26, 2002. 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 securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the and brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. firm serving governments, corporations, institutions and individuals worldwide. With approximately $31.1 billion in total capital, the company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , foreign exchange and futures sales and trading, asset management and custody The care, possession, and control of a thing or person. The retention, inspection, guarding, maintenance, or security of a thing within the immediate care and control of the person to whom it is committed. The detention of a person by lawful authority or process. services. Through Bear, Stearns Securities Corp., it offers prime broker and broker dealer clearing services, including securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. . Headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , the company has approximately 10,350 employees worldwide. For additional information about Bear Stearns, please visit our Web site at http://www.bearstearns.com. Certain statements contained in this discussion are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" and "Risk Management" in the Company's 2001 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 at 9:00 a.m., E.S.T. The call will be open to the public. Those wishing to listen to the conference call should dial 1-877-282-0743 (or 1-703-871-3073 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 Web site at http://www.bearstearns.com. For those unable to listen to the live broadcast of the call, a replay will be available on our Web site or by dialing 1-888-266-2081 (or 1-703-925-2533 for international callers) at approximately 12:00 p.m. E.S.T. The passcode for the replay is 5879849. If you have any questions on how to obtain access to the conference call, please contact Kerri Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. at 1-212-272-2529 or via email at kkelly@bear.com.
THE BEAR STEARNS COMPANIES INC.
-------------------------------
SEGMENT DATA
------------
(UNAUDITED)
-----------
Three Months Ended % Change From
------------------------------- ------------------
Feb. 28, Feb. 23, Nov. 30, Feb. 23, Nov. 30,
2002 2001 2001 2001 2001
-------- -------- -------- -------- --------
(In thousands)
NET REVENUES
Capital Markets
Institutional
Equities $ 247,918 $ 341,171 $ 232,181 (27%) 7%
Fixed Income 548,194 340,389 331,231 61% 66%
Investment
Banking 141,318 119,975 227,372 18% (38%)
--------- --------- ---------
Total Capital
Markets 937,430 801,535 790,784 17% 19%
Global Clearing
Services 187,380 223,900 187,297 (16%) 0%
Wealth Management 123,211 144,588 136,963 (15%) (10%)
Other (a) (8,843) 43,764 4,788 (120%) (285%)
--------- --------- ---------
Total net
revenues $ 1,239,178 $ 1,213,787 $ 1,119,832 2% 11%
=========== =========== ===========
PRE-TAX INCOME
Capital Markets $ 273,593 $ 188,281 $ 206,465 45% 33%
Global Clearing
Services 68,973 79,133 61,511 (13%) 12%
Wealth Management 1,780 16,204 10,151 (89%) (82%)
Other (a) (70,819) (30,654) (68,162) (131%) (4%)
--------- --------- ---------
Total pre-tax
income $ 273,527 $ 252,964 $ 209,965 8% 30%
========= ========= =========
(a) Other is comprised of consolidation/elimination entries,
unallocated revenues (predominantly interest) and certain
corporate administrative functions, including certain legal costs
and costs related to the Capital Accumulation Plan (the "CAP
Plan") for Senior Managing Directors.
THE BEAR STEARNS COMPANIES INC.
-------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
-----------
Three Months Ended % Change From
-------------------------------- -------------------
Feb. 28, Feb. 23, Nov. 30, Feb. 23, Nov. 30,
2002 2001 2001 2001 2001
-------- -------- -------- -------- --------
(In thousands, except share and per share data)
REVENUES
Commissions $ 264,657 $ 282,401 $ 276,605 (6%) (4%)
Principal
transactions 660,750 589,571 419,501 12% 58%
Investment
banking 151,894 138,324 240,396 10% (37%)
Interest and
dividends 598,633 1,086,599 803,094 (45%) (25%)
Other income 42,210 39,281 74,074 7% (43%)
----------- ----------- ---------
Total
revenues 1,718,144 2,136,176 1,813,670 (20%) (5%)
Interest
expense 478,966 922,389 693,838 (48%) (31%)
----------- ----------- ---------
Revenues, net
of interest
expense 1,239,178 1,213,787 1,119,832 2% 11%
----------- ----------- ---------
NON-INTEREST EXPENSES
Employee
compensation
and benefits 633,642 635,125 523,052 0% 21%
Floor brokerage,
exchange and
clearance fees 39,749 35,573 42,925 12% (7%)
Communications
and technology 104,673 115,034 111,917 (9%) (6%)
Occupancy 44,206 31,257 37,587 41% 18%
Advertising and
market
development 23,524 33,832 25,690 (30%) (8%)
Professional fees 33,824 37,428 42,522 (10%) (20%)
Other expenses 86,033 72,574 126,174 19% (32%)
----------- ----------- ---------
Total
non-interest
expenses 965,651 960,823 909,867 1% 6%
----------- ----------- ---------
Income before
provision for
income taxes and
cumulative effect
of change in
accounting
principle 273,527 252,964 209,965 8% 30%
Provision for
income taxes 93,001 87,010 55,019 7% 69%
----------- ----------- ---------
Income before
cumulative effect
of change in
accounting
principle 180,526 165,954 154,946 9% 17%
Cumulative effect
of change in
accounting
principle,
net of tax - (6,273) - - -
----------- ----------- ---------
Net income $ 180,526 $ 159,681 $ 154,946 13% 17%
=========== =========== =========
Net income
applicable to
common shares $ 170,748 $ 149,903 $ 145,168 14% 18%
=========== =========== =========
Adjusted net
income used
for diluted
earnings
per share (1) $ 190,739 $ 167,544 $ 157,118 14% 21%
========= ========= =========
Basic earnings
per share $ 1.39 $ 1.11 (2) $ 1.14 25% 22%
======= ========= =========
Diluted earnings
per share $ 1.29 $ 1.06 (2) $ 1.08 22% 19%
========= ========= =========
Weighted average
common and common
equivalent shares
outstanding:
Basic 134,793,949 149,080,028 136,671,817
=========== =========== ===========
Diluted 148,115,050 158,617,123 145,040,061
=========== =========== ===========
Cash dividends
declared per
common share $ 0.15 $ 0.15 $ 0.15
=========== =========== ===========
(1) Represents net income reduced for preferred stock dividends and
increased for costs related to the CAP Plan. For earnings per
share, the costs related to the CAP Plan (net of tax) are added
back as the shares related to the CAP Plan are included in
weighted average shares outstanding.
(2) Amount reflects earnings per share after change in accounting
principle. Basic earnings per share and diluted earnings per share
before the change in accounting principle were $1.15 and $1.10,
respectively.
Note: Certain reclassifications have been made to prior period amounts
to conform to the current period's presentation.
THE BEAR STEARNS COMPANIES INC.
-------------------------------
SELECTED FINANCIAL INFORMATION
------------------------------
(UNAUDITED)
-----------
Three Months Ended
------------------------------------------------------
Feb. 28, Nov. 30, Aug. 31, May 25, Feb. 23,
2002 2001 2001 2001 2001
------- ------- ------- ------ --------
(In thousands, except per share amounts and Other Data)
Income Statement
----------------
Revenues,
net of
interest
expense $ 1,239,178 $ 1,119,832 $ 1,204,758 $ 1,368,658 $ 1,213,787
Net income $ 180,526 $ 154,946 $ 134,572 $ 169,493 $ 159,681
Net income
applicable
to common
shares $ 170,748 $ 145,168 $ 124,794 $ 159,715 $ 149,903
Adjusted net
income used
for diluted
earnings per
share (1) $ 190,739 $ 157,118 $ 141,866 $ 183,046 $ 167,544
Earnings per
common share:
Basic $ 1.39 $ 1.14 $ 1.00 $ 1.23 $ 1.11(2)
Diluted $ 1.29 $ 1.08 $ 0.95 $ 1.18 $ 1.06(2)
Financial Ratios
----------------
Return on
average common
equity
(annualized) 15.2% 13.9% 12.2% 15.0% 13.6%
Adjusted
pre-tax
profit
margin (3) 24.9% 20.6% 19.5% 22.5% 23.4%
Pre-tax
profit
margin (4) 22.1% 18.7% 17.0% 19.5% 20.8%
After-tax
profit
margin (5) 14.6% 13.8% 11.2% 12.4% 13.2%
Compensation &
benefits /
Revenues, net
of interest
expense 51.1% 46.7% 52.7% 53.7% 52.3%
Balance Sheet
-------------
Stockholders'
equity,
at period
end $ 5,760,905 $ 5,628,527 $ 5,148,394 $ 5,534,723 $ 5,621,405
Total
stockholders'
equity and
trust issued
preferred
securities,
at period
end $ 6,323,405 $ 6,391,027 $ 5,910,894 $ 6,297,223 $ 6,121,405
Total
capital,
at period
end $ 31,063,625 $29,820,080 $28,655,969 $27,566,286 $25,768,270
Book value
per common
share, at
period end $ 34.95 $ 33.84 $ 32.34 $ 32.57 $ 31.94
Other Data
(in millions,
except share
and employee data)
-------------------
Margin debt
balances, at
period end $ 34,600 $ 34,300 $ 34,600 $ 42,200 $ 37,600
Margin debt
balances,
average for
period $ 35,100 $ 32,500 $ 38,300 $ 37,800 $ 42,000
Customer
short
balances,
at period
end $ 54,500 $ 55,000 $ 53,000 $ 61,400 $ 53,800
Customer
short
balances,
average for
period $ 47,300 $ 45,200 $ 49,800 $ 50,600 $ 55,000
Stock
borrowed,
at period
end $ 37,300 $ 38,700 $ 39,300 $ 45,900 $ 41,400
Stock
borrowed,
average
for period $ 45,600 $ 43,500 $ 46,100 $ 45,400 $ 49,300
Free credit
balances,
at period
end $ 17,900 $ 18,100 $ 20,300 $ 15,900 $ 17,300
Free credit
balances,
average for
period $ 19,600 $ 21,400 $ 19,700 $ 17,900 $ 18,300
Assets under
management,
at period
end $ 25,800 $ 24,200 $ 23,500 $ 22,600 $ 21,500
Employees,
at period
end 10,341 10,452 11,147 10,855 11,298
Common shares
and common
share
equivalents
outstanding,
at period
end 147,040,102 146,465,210 149,669,365 156,485,942 159,125,959
Weighted
average
common
and common
equivalent
shares
outstanding:
Basic 134,793,949 136,671,817 140,331,572 145,455,590 149,080,028
Diluted 148,115,050 145,040,061 149,056,301 154,825,604 158,617,123
(1) Represents net income reduced for preferred stock dividends and
increased for costs related to the CAP Plan. For earnings per
share, the costs related to the CAP Plan (net of tax) are added
back as the shares related to the CAP Plan are included in
weighted average shares outstanding.
(2) After change in accounting principle.
(3) Represents the ratio of income before both CAP Plan costs and
provision for income taxes to revenues, net of interest expense.
(4) Represents the ratio of income before provision for income taxes
to revenues, net of interest expense.
(5) Represents the ratio of net income to revenues, net of interest
expense.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion