Exhibit 99.1
For Immediate Release
Investor Contact: David Allan, FBR (703) 469-1080
Media Contact: Melanie Nelson, FBR (703) 312-9623
Friedman Billings Ramsey Group
Reports $0.12 Per Share in Second Quarter
National Advertising Campaign for fbr.com Begins Tomorrow
Washington, D.C., July 21, 1999 -- Friedman Billings Ramsey Group, Inc.
(NYSE:FBR) today reported $5.8 million in net income or $0.12 per share for the
second quarter ended June 30, 1999 versus $7.4 million in net income or $0.15
per share for the same quarter a year ago. Revenue for the quarter was $40
million compared with $57 million in the second quarter of 1998.
"The second quarter was an excellent quarter for the firm with contributions
from each area of our business, notably with increases in M&A advisory revenues
and significant gains in incentive-based assets under management" said Emanuel
J. Friedman, Chairman and Chief Executive Officer of Friedman Billings Ramsey
Group, Inc. "We are also pleased with the increase in investment banking
activity during the quarter led by our $182 million equity offering for Key
Energy Services (NYSE: KEG) in May."
Net income for the six-month period was $5.9 million or $0.12 per share versus
$23.0 million or $0.46 per share for the first six months of 1998. For the six-
month period ended June 30, 1999, revenue amounted to $62.4 million compared to
$125.3 million for the same period in 1998.
Friedman continued, "Our focus now is on pursuing the tremendous market
opportunity for fbr.com, our financial services portal for the online investor.
With no 'bricks-and-mortar' retail channel and no retail brokers, we are in an
excellent position to aggressively go after the online investor market, which is
expected to triple from approximately 8 million accounts to 24 million accounts
over the next two and a half years. FBR, with approximately 85 investment
bankers and 55 research analysts, is well positioned to leverage its strengths
on the Internet."
"Tomorrow, our first national ads for fbr.com will appear in major daily
newspapers around the country," Friedman continued. "The message of the ads is
clear. As a leading underwriter with an electronic distribution channel, we
plan to put meaningful amounts of IPO shares in the hands of the online
investor. Last week's 'no action' letter by the SEC strengthens our ability to
allocate shares in size by effectively eliminating the practical problems of
confirming hundreds or thousands of orders by phone. The SEC's position is a
benefit to online investment banks and online investors alike."
- more -
-2-
Progress on fbr.com
President of FBR Group W. Russell Ramsey said, "We are pleased with the progress
we have made since launching fbr.com's IPO DesktopSM on April 15th. We
completed two, co-managed offerings during the quarter CareerBuilder (CBDR) on
May 12 followed by CAIS Internet (CAIS) on May 20."
Ramsey continued, "It is important for the investing public to realize that FBR,
as a lead and co-manager of IPOs, has a much greater ability to allocate IPO
shares than an underwriter who is participating in a syndicate or selling group.
This is a key point of differentiation for our company from comparable online
investment banks and electronic brokerages."
"We have recently established a $2,000 account minimum to invest online with
fbr.com and to have access to our IPOs at a 100 share, round-lot, minimum order.
This reasonable minimum is consistent with our goal to democratize the IPO
process for the online investor. Other firms, by comparison, have set this
minimum as high as $100,000 or higher, which eliminates many individual
investors," Ramsey said.
In July, fbr.com engaged Hill, Holliday, Connors, Cosmopulos Inc. in New York to
create and execute an overall brand awareness campaign. The first component of
the campaign, full-page, print ads, will appear in tomorrow's editions of The
Wall Street Journal, The New York Times, The Boston Globe, The Washington Post,
Chicago Tribune, Austin American-Statesmen, The Los Angeles Times, San Francisco
Chronicle, San Francisco Examiner, San Jose Mercury News, Seattle Times and
Seattle Post-Intelligencer.
On June 23, fbr.com launched online trading. Investors can now trade in stocks
and mutual funds and have access to research and IPOs through fbr.com. As part
of a summer promotion, new customers receive their first eight trades
commission-free before September 30, 1999.
President of fbr.com Suzanne Richardson said, "Our goal is to provide online
investors with exceptional customer service and the best possible user
experience. During the quarter, we established a customer service call center
in Arlington, Virginia with a capacity of 80 seats and room to grow."
Richardson continued, "Our goals for the next four months are to roll-out Fund
DesktopSM, which will offer accredited investors private investment
partnerships, venture capital and private equity funds, as well as Research
DesktopSM, which will offer both FBR's research and research from third parties.
Later in the year, we plan to introduce DAE (direct access execution) DesktopSM
to provide active investors with a highly efficient, alternative way to trade
online with Level II trading information.
Other 2nd Quarter Highlights
Other highlights for the second quarter include:
* Friedman Billings Ramsey Group, Inc. ended the quarter with $812 million in
total assets under management as of June 30, 1999. This total includes funds
raised in connection with the closing of a second venture capital fund by FBR
Technology Venture Partners, Inc. (TVP) for investments in technology start-up
companies.
- -3-
* Three of FBR TVP's portfolio companies completed Initial Public Offerings in
the second quarter: Proxicom (PXCM), CareerBuilder (CBDR) and Network Access
Solutions (NASC). The market value increase in TVP's investments in these newly
public companies contributed to an increase in the Company's investment gains
and Assets under Management during the quarter.
* The Company acted as M&A advisor to Building One Services Corporation (BOSS)
in its successful re-capitalization in April. (FBR originally acted as the lead
manager for the Initial Public Offering of the predecessor company to Building
One Services in 1997.) Following the completed re-capitalization, the Company
sold warrants it held from the completion of the IPO to Boss Investment LLC in
June, which resulted in investment gains in the second quarter.
Vice Chairman and Chief Operating Officer of FBR Group Eric Billings said,
"Through fbr.com, we are positioning FBR at the forefront of online investment
banking. In IPOs where we are the lead or co-manager, we plan to put up to 50
percent of our share allocation online. Based on our record as an underwriter
and the current health of the capital markets, FBR is in an excellent position
to move online investors into the realm of much larger allocations."
FBR had 48,881,817 common shares outstanding, shareholders' equity of $188
million and book value per share of $3.84 as of June 30, 1999.
Friedman, Billings, Ramsey Group (NYSE:FBR), is an investment bank and asset
manager and the parent company of fbr.com, an online investment bank and
electronic brokerage. Headquartered in Northern Virginia, home to many of the
world's leading online businesses, the Company has become a leading underwriter
of Initial Public Offerings and provides analyst research on 430 companies.
fbr.com, a division of FBR Investment Services, Inc., leverages the Company's
strengths as an underwriter and asset manager by providing online investors with
access to IPOs, online trading, research, and unique asset management products.
For more information, please visit our website at www.fbr.com.
Statements concerning future performance, earnings, developments, expenditures,
negotiations or other events, concerning expectations for plans and objectives
for future operations or for growth and market forecasts, and any other guidance
on present and future periods, constitute forward-looking statements that are
subject to a number of factors, risks and uncertainties that might cause actual
events and results to differ materially from stated expectations. These factors
include but are
not limited to the effect of demand for public offerings, activity in the
secondary securities markets, available technologies, competition for business
and personnel, and general economic, political and market conditions.
# # #
Note to Editors: Two pages of financial information follow this page
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three months ended
June 30,
1999 % 1998 %
REVENUES
Investment Banking $15,065 37.3% $45,928 80.1%
Institutional Brokerage 10,701 26.5% 11,975 20.9%
Asset management fees 2,522 6.2% 2,306 4.0%
Gains and losses, net 9,715 24.1% (8,558) -14.9%
Interest and dividends 2,376 5.9% 5,683 9.9%
Total revenues 40,379 100.0% 57,334 100.0%
EXPENSES:
Compensation and benefits 22,109 54.8% 28,899 50.4%
Business development 5,908 14.6% 8,259 14.4%
Interest 494 1.2% 1,468 2.5%
Other 6,019 14.9% 6,115 10.7%
Total expenses 34,530 85.5% 44,741 78.0%
Net income before income taxes 5,849 14.5% 12,593 22.0%
Provision for income taxes - 0.0% 5,160 9.0%
Net income 5,849 14.5% 7,433 13.0%
Basic and diluted earnings per share $0.12 - $0.15 -
Weighted average shares (in thousands) 48,692 - 50,029 -
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three months ended
June 30,
1999 % 1998 %
REVENUES
Investment banking 21,113 33.8% 97,299 77.7%
Institutional brokerage 20,797 33.3% 24,717 19.7%
Asset management fees 4,859 7.8% 5,475 4.4%
Gains and losses, net 10,760 17.2% (11,475) -9.2%
Interest and dividends 4,919 7.9% 9,302 7.4%
Total revenues 62,448 100.0% 125,318 100.0%
EXPENSES:
Compensation and benefits 36,347 58.2% 57,242 45.7%
Business development 8,502 13.6% 15,065 12.0%
Interest 1,001 1.6% 3,127 2.5%
Other 10,704 17.2% 11,555 9.2%
Total expenses 56,554 90.6% 86,989 69.4%
Net income before income taxes 5,894 9.4% 38,329 30.6%
Provision for income taxes - 0.0% 15,317 12.2%
Net income 5,894 9.4% 23,012 18.4%
Basic and diluted earnings
per share $0.12 - $0.46 -
Weighted average shares
(in thousands) 48,862 - 50,029 -
-5-