EXHIBIT 99.1
For Immediate Release
Media Contact: Melissa Hurney 703.312.1827 or mhurney@fbr.com
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Investor Contact: Kurt R. Harrington 703.312.9647 or kharrington@fbr.com
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Friedman, Billings, Ramsey Group Reports
Third Quarter 2001 Results
Net Loss of $22.4 Million or $(0.49) Per Share Reported
ARLINGTON, Va., October 25, 2001 - Friedman, Billings, Ramsey Group, Inc. (NYSE:
FBR) today reported a net loss of $22.4 million, or $(0.49) (diluted) per share,
for the quarter ended September 30, 2001, versus net income of $5.0 million, or
$0.10 (diluted) per share, for the same quarter last year. Revenues were $21.8
million for the third quarter, compared with $44.7 million for the same quarter
a year ago.
For the first nine months of the year, FBR reported a net loss of $(0.49)
(diluted) per share on revenues of $99.4 million, versus earnings of $0.33
(diluted) per share on revenues of $154.5 million for the same period in 2000.
Revenues in 2000 included $58.9 million of incentive and investment revenues
primarily related to technology venture capital.
"While FBR's core operating platform remains strong, our results, in common with
others in our industry, reflect general market conditions in the third quarter,
particularly in the last three weeks of September," Chairman and Co-Chief
Executive Officer Emanuel J. Friedman said. "Third quarter results reflect
significant mark-downs in investments. In addition, costs associated with the
build-out of personnel, and software write-offs associated with fbr.com,
contributed to the loss," he added.
Approximately $17.0 million of the reported loss for the quarter is considered
unrelated to the core ongoing operating business, as follows: $9.5 million in
investment and incentive write-downs, primarily in technology; $3.8 million in
fbr.com primarily related to software write-offs; $1.7 million in FBR
International primarily related to the expansion in London; and approximately
$2.0 million in miscellaneous items, such as recruiting costs.
In its capital markets business, FBR reported investment banking revenue for the
quarter of $11.1 million, down from $13.6 million in the third quarter of 2000.
The Company reported quarterly institutional brokerage revenue of $10.4 million,
essentially flat versus the third quarter of 2000, net of trading gains or
losses.
In its asset management business, the Company reported fee revenue from base
management and administration fees of $5.8 million for the quarter versus $2.5
million in the third quarter of 2000.
Vice Chairman and Co-Chief Executive Officer Eric F. Billings said, "The
non-core items reported in the quarter should not obscure the growing strength
of our operating capital markets and asset management businesses, where the
addition of key people and the focus on specific verticals continue to place the
firm in a better and better position to win business."
During the third quarter, the Company managed seven underwritings, three as
lead-manager and four as co-manager, and one private placement, for a total
transaction value in excess of half a billion dollars. Among the third quarter
transactions was a $103.5 million lead-managed follow-on offering for FBR Asset
Investment Corporation, which now has total equity of $191.3 million, assets of
$1.3 billion and yesterday announced earnings of $0.88 per share for the third
quarter. FBR Group owns 24.6% of FBR Asset, holds options to purchase an
additional 9.3%, and generates base and incentive fees from the management of
that vehicle.
Also significant to the Company's asset management business during the third
quarter was the successful sale of Future Financial Corporation to a Citicorp
subsidiary. Future Financial was one of FBR's first private equity investments
and the holding company of Future Mortgages in England. FBR created Future
Mortgages in 1996.
The Company also announced that it has implemented a program to reduce fixed
costs by a targeted 20% of the third quarter run-rate. Cost reductions will be
achieved while preserving the enhancements that resulted from the build-out.
"The combination of these measures with the improvements that we are seeing in
secondary volumes and potential investment banking transactions across all of
our verticals, plus the ongoing reallocation of our equity into less volatile
assets, leads us to expect increased levels of profitability going forward," Mr.
Billings said.
FBR had 45.5 million common shares outstanding, shareholders' equity of $173.7
million (net of loans of $22.0 million associated with employee stock
purchases), and book value per share of $3.82 as of September 30, 2001. Total
assets as of September 30, 2001, were $230.9 million, including cash and liquid
assets of more than $50.0 million.
Investors who want to listen to the Company's 9 a.m. (Eastern Time)
conference call may do so via the web at:
http://dmg.activate.com/dmgi.dll?3589&a17c. Replays of the webcast will be
available afterward.
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Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a financial holding
company for businesses that provide investment banking, institutional brokerage,
specialized asset management, and banking products and services. FBR provides
capital and financial expertise throughout a company's lifecycle and affords
investors access to a range of proprietary financial products and services.
Headquartered in the Washington metropolitan area, FBR has offices in Arlington,
Va., Atlanta, Bethesda, Md., Boston, Charlotte, Cleveland, Dallas, Irvine, Ca.,
New York City, Portland, Seattle, London, and Vienna. Bank products and services
are offered by FBR National Bank & Trust, member FDIC and an Equal Housing
Lender. For more information, see www.fbr.com.
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Statements concerning future performance, developments, or events,
expectations or 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
results to differ materially from stated expectations or current
circumstances. These factors include but are not limited to competition
among venture capital firms and the high degree of risk associated with
venture capital investments, the effect of demand for public offerings
and advisory services, activity in the secondary securities markets,
available technologies, competition for business and personnel, and
general economic, political and market conditions.
Note to Editors: 4-pages of financial information follow this page.