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) June 16, 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 June 16, 2004.
Item 12. Results of Operations and Financial Condition
On June 16, 2004, The Bear Stearns Companies Inc. issued a press release
announcing financial results for its quarter ended May 31, 2004. 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: June 16, 2004
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
(99) Press Release, dated June 16, 2004
Contact: Elizabeth Ventura (212) 272-9251
John Quinn (212) 272-5934
BEAR STEARNS REPORTS 2004 SECOND QUARTER RESULTS
EARNINGS UP 24.0% TO $347.8 MILLION OR $2.49 PER SHARE
Net revenues up 17.8% to $1.7 billion from $1.5 billion in 2nd quarter 2003
Global Clearing Services revenue up 19.4% to $223.7 million from $187.4 million
Record Fixed Income net revenues up 10.4% to reach new high of $844.4 million
NEW YORK - June 16, 2004 - The Bear Stearns Companies Inc. (NYSE:BSC) today
reported earnings per share (diluted) of $2.49 for the second quarter ended May
31, 2004, up 21.5% from $2.05 per share for the second quarter of 2003. Net
income for the second quarter of 2004 was $347.8 million, up 24.0% from $280.4
million for the second quarter of 2003. Net revenues for the 2004 second quarter
were $1.7 billion, up 17.8% from $1.5 billion for the 2003 second quarter. The
annualized return on common stockholders' equity for the second quarter of 2004
was 19.6% and 20.4% for the trailing 12-month period ended May 31, 2004.
"I am extremely pleased to report that Bear Stearns posted excellent
results for the second quarter and record results the first half of 2004,"said
James E. Cayne, chairman and chief executive officer. "This success highlights
the diversity of our business mix and the sustainability of the underlying
earnings power of this franchise. We saw robust activity across the fixed income
businesses and steady improvement in clearing, wealth management and many of the
equity areas. Our dedication to comprehensively serving our clients' needs
enables us to drive shareholder value and to continue to produce industry-
leading returns."
A brief discussion of the firm's business segments follows:
CAPITAL MARKETS
Capital Markets net revenues for the second quarter of 2004 were $1.35 billion,
up 14.7% from $1.18 billion for the quarter ended May 31, 2003.
o Institutional Equities net revenues were $252.0 million, up 33.1%
from $189.3 million for the second quarter of 2003. Revenues increased in
the domestic and international equity sales and trading areas reflecting
higher market volumes and increased market share. A decline in customer
activity levels and reduced market volatility had a negative effect on
equity derivative, risk arbitrage and convertible arbitrage revenues. The
results of Bear Wagner Specialists, LLC were reported on a consolidated
basis for the first time in the first quarter of 2004. This change in
reporting increased the 2004 second quarter net revenues by approximately
$50 million compared to the prior year quarter.
o Fixed Income net revenues were a record $844.4 million, up 10.4%
from $765.2 million in the comparable prior year quarter. Fixed Income
reported its best ever quarterly results with the mortgage area operating
at record levels and the interest rate product areas continuing to provide
strong results. Mortgage related revenues were driven by active customer
flow in the ARMs, non-agency and commercial mortgage markets. In the
credit businesses, the high yield and corporate bond trading areas
experienced lower levels of activity from prior year record levels as
credit spreads widened during the quarter.
o Investment Banking net revenues were $254.9 million in the second
quarter of 2004, up 14.1% from the $223.4 million in the comparable prior
year period. Equity underwriting continued to show improvement, while
merger and acquisition advisory fees were on par with the prior year
quarter.
GLOBAL CLEARING SERVICES
Second quarter 2004 Global Clearing Services net revenues were $223.7 million,
up 19.4% from $187.4 million in the second quarter of 2003. Average customer
margin debt balances for the quarter ended May 31, 2004 were $46.7 billion, up
18.2% from $39.5 billion in the prior year quarter. Increased customer activity,
particularly in the prime brokerage area, was evident as higher margin debt,
customer short, and stock borrow balances drove revenue growth.
WEALTH MANAGEMENT
Wealth Management net revenues for the quarter ended May 31, 2004 were $176.5
million, up 41.9% from $124.4 million in the second quarter of 2003.
o Private Client Services net revenues were $117.3 million, an increase
of 28.7% from $91.1 million in the 2003 second quarter. This revenue
growth was fueled by the rebound in the equity markets, increased
customer trading volume and the hiring of high producing brokers.
o Asset Management net revenues grew 78.1% to $59.2 million for the
second quarter of 2004 from $33.3 million in the prior year's quarter.
Excluding revenues of $21.5 million from the sale of certain mutual funds
assets to The Dreyfus Corporation, Asset Management revenues increased
13.5% to $37.7 million. Assets under management increased to $27.3
billion on May 31, 2004 from $24.4 billion on May 31, 2003. Excluding
assets transferred to Dreyfus, assets under management increased 29.5%
from the second quarter of 2003.
EXPENSES
o Compensation as a percentage of net revenues was 49.9% in the second
quarter of 2004 as compared with 47.3% for the second quarter of 2003.
Year to date compensation to net revenues was 49.5% for 2004 versus 48.7%
for 2003.
o Non-compensation expenses were $352.0 million for the quarter ended
May 31, 2004, an increase of 2.8% from $342.4 million in the 2003 quarter.
The ratio of non-compensation expenses to net revenues was 20.4% in the
second quarter 2004 versus 23.4% in the prior year quarter. The increase in
non-compensation expenses is primarily attributable to the consolidation
of the results of Bear Wagner Specialists, LLC in the May 2004 income
statement.
The pre-tax profit margin increased to 29.7% in the quarter ended May
31, 2004 from 29.3% in the 2003 second quarter.
As of May 31, 2004, total capital, including stockholders' equity
and long-term borrowings, was approximately $40.0 billion. Book value as of May
31, 2004 was $53.38 per share, based on 144.3 million shares outstanding.
Update on Mutual Fund Investigation
In relation to an ongoing investigation by the Securities and Exchange
Commission (SEC) into mutual fund trading practices, Bear, Stearns & Co. Inc.
and Bear, Stearns Securities Corp. have received a notice that the staff of the
SEC is considering recommending that the commission bring a civil injunctive
action and/or issue an administrative cease and desist order against them. Such
action could result in, among other things, disgorgement, civil monetary
penalties, and/or other remedial sanctions. Bear Stearns is cooperating fully
with the SEC in connection with this matter.
Quarterly Common Stock Cash Dividend Declared
The Board of Directors of The Bear Stearns Companies Inc. declared a regular,
quarterly cash dividend of 20 cents per share on the outstanding shares of
common stock, payable July 30, 2004, to stockholders of record on July 16, 2004.
Quarterly Preferred Cash Dividends Declared
The Board of Directors of The Bear Stearns Companies Inc. declared the following
regular quarterly dividends: (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 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 July 15, 2004 to stockholders of
record on June 30, 2004.
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.
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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 and similar sections of the
company's quarterly reports on Form 10-Q which have been filed with the
Securities and Exchange Commission.
A conference call to discuss the company's results will be held on Wednesday,
June 16, 2004, at 10 a.m., EST. The call will be open to the public. Those
wishing to listen to the conference call should dial 1-888-243-0813 (or
1-703-925-2400 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 489322.
The replay will be available until midnight on Friday, July 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.