<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ to __________
COMMISSION FILE NUMBER 001-15251
LABRANCHE & CO INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4064735
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE EXCHANGE PLAZA, NEW YORK, NEW YORK 10006
(Address of principal executive offices)
(212) 425-1144
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
The number of shares of the registrant's common stock outstanding as of August
7, 2000 was 48,675,352.
LABRANCHE & CO INC.
FORM 10-Q
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION...............................................3
Item 1. Financial Statements...............................................3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS..........................3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION................................................................4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS..........................6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.....................8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................13
Item 3. Quantitative and Qualitative Disclosures about Market Risk........21
PART II OTHER INFORMATION..................................................23
Item 6. Exhibits and Reports on Form 8-K..................................23
SIGNATURES..............................................................24
<PAGE>
EXPLANATORY NOTE
AS OF JUNE 30, 2000, THE COMPANY COMPLETED A RESTRUCTURING OF ITS
SUBSIDIARIES. LAB INVESTING CO. L.L.C., A NEW YORK LIMITED LIABILITY COMPANY
OF WHICH THE COMPANY WAS THE SOLE MEMBER ("LAB INVESTING"), WAS MERGED WITH
AND INTO LABRANCHE & CO., WITH LABRANCHE & CO. BEING THE SURVIVOR. ON THE
DATE THE MERGER WAS EFFECTIVE, LABRANCHE & CO. WAS ALSO CONVERTED INTO A
LIMITED LIABILITY COMPANY AND ITS NAME WAS CHANGED TO "LABRANCHE & CO. LLC".
AS A RESULT, THE COMPANY IS THE SOLE MEMBER OF LABRANCHE & CO. LLC. HENDERSON
BROTHERS HOLDINGS, INC. WAS ALSO DISSOLVED AS OF JUNE 30, 2000 AND, IN DOING
SO, DISTRIBUTED ALL OF ITS ASSETS, INCLUDING THE STOCK IN ITS WHOLLY-OWNED
SUBSIDIARY, HENDERSON BROTHERS, INC., TO THE COMPANY.
IN ACCORDANCE WITH THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION,
PART I OF THIS REPORT CONTAINS HISTORICAL FINANCIAL INFORMATION, MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
LABRANCHE & CO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(000'S OMITTED EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
-------------------------- -------------------------
2000 1999 2000 1999
-------- ---------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Net gain on principal transactions $ 73,323 $ 42,300 $138,714 $ 78,666
Commissions 11,147 9,615 20,332 17,885
Other 3,154 3,957 7,268 6,942
-------- -------- -------- --------
Total revenues 87,624 55,872 166,314 103,493
EXPENSES:
Employee compensation and related benefits 22,969 6,558 45,768 11,299
Interest 11,603 1,096 18,050 2,195
Depreciation and amortization of intangibles 4,871 846 7,625 1,693
Lease of exchange memberships 2,781 2,092 5,338 4,165
Exchange, clearing and brokerage fees 1,340 990 2,373 1,997
Other 2,960 1,467 5,626 2,795
-------- -------- -------- --------
Total expenses before managing directors'
compensation and limited partners' interest
in earnings of subsidiary and provision
for income taxes 46,524 13,049 84,780 24,144
-------- -------- -------- --------
Income before managing directors' compensation
and limited partners' interest in earnings of
subsidiary and provision for income taxes 41,100 42,823 81,534 79,349
MANAGING DIRECTORS' COMPENSATION -- 25,114 -- 48,214
-------- -------- -------- --------
Income before limited partners' interest in
earnings of subsidiary and provision
for income taxes 41,100 17,709 81,534 31,135
LIMITED PARTNERS' INTEREST IN
EARNINGS OF SUBSIDIARY -- 10,609 -- 21,054
-------- -------- -------- --------
Income before provision for income taxes 41,100 7,100 81,534 10,081
PROVISION FOR INCOME TAXES 20,975 2,389 40,853 3,789
-------- -------- -------- --------
Net income $ 20,125 $ 4,711 $ 40,681 $ 6,292
======== ======== ======== ========
Diluted weighted average shares outstanding 48,838 38,617 47,739 37,125
Basic and diluted earnings per share $ 0.41 $ 0.12 $ 0.85 $ 0.17
</TABLE>
3
<PAGE>
LABRANCHE & CO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(000'S OMITTED)
<TABLE>
<CAPTION>
As of
--------------------------------
ASSETS June 30, 2000 DECEMBER 31, 1999
------------- -----------------
(unaudited)
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 67,484 $ 83,774
CASH SEGREGATED UNDER FEDERAL REGULATIONS 2,985 --
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL 61,800 25,422
RECEIVABLE FROM BROKERS AND DEALERS 126,122 37,497
RECEIVABLE FROM CUSTOMERS 1,403 --
SECURITIES OWNED, at market value:
Corporate equities 325,662 148,563
United States Government obligations -- 1,471
Other 6,474 2,515
EXCHANGE MEMBERSHIPS CONTRIBUTED FOR USE, at market value 16,500 20,700
EXCHANGE MEMBERSHIPS OWNED, at cost (market value of $42,900 and $9,200) 50,300 6,300
OFFICE EQUIPMENT AND LEASEHOLD IMPROVEMENTS, at cost,
less accumulated depreciation and amortization of $1,641 and
$1,250, respectively 2,380 1,355
INTANGIBLE ASSETS, net of accumulated amortization
Specialist Stock List 188,385 92,789
Trade Name 26,008 26,340
Goodwill 182,465 51,212
OTHER ASSETS 17,836 7,187
---------- ----------
Total assets $1,075,804 $ 505,125
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Payable to brokers and dealers $ 112,763 $ 7,726
Payable to customers 4,115 --
Securities sold, but not yet purchased, at market value 88,422 36,900
Accounts payable and other accrued expenses 56,562 17,538
Income taxes payable 62,810 7,959
---------- ----------
324,672 70,123
---------- ----------
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
LONG TERM DEBT 361,664 115,822
---------- ----------
SUBORDINATED LIABILITIES
Exchange memberships, at market value 16,500 20,700
Other subordinated indebtedness 46,508 46,508
---------- ----------
63,008 67,208
---------- ----------
PREFERRED STOCK, $.01 par value, 10,000,000 shares authorized;
none issued and outstanding -- --
COMMON STOCK, $.01 par value, 200,000,000 shares authorized;
48,675,352 and 45,875,000 shares issued and outstanding
for June 30, 2000 and December 31, 1999 respectively 487 459
ADDITIONAL PAID-IN-CAPITAL 262,550 228,771
RETAINED EARNINGS 63,423 22,742
---------- ----------
326,460 251,972
---------- ----------
Total liabilities and stockholders' equity $1,075,804 $ 505,125
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
5
<PAGE>
LABRANCHE & CO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(000'S OMITTED)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 40,681 $ 6,292
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 8,251 1,887
Compensation expense related to stock based compensation 1,495 --
Undistributed limited partners interest in earnings of subsidiary -- (2,148)
Deferred tax provision 72 --
Change in assets and liabilities:
Securities purchased under agreements to resell (36,378) (14,200)
Receivable from brokers and dealers (88,626) (60,659)
Receivable from customers (1,403) --
Corporate equities (177,099) 8,747
United States Government obligations 1,471 32
Other securities owned (3,959) --
Other assets (10,649) (873)
Payable to brokers and dealers 105,037 (545)
Payable to customers 4,115 --
Securities sold, but not yet purchased 51,522 22,682
Accounts payable and other accrued expenses 39,024 22,392
Income taxes payable (7,026) --
--------- ---------
Net cash used in operating activities (73,472) (15,853)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash received from Webco acquisition 8,370 --
Net cash paid for Henderson acquisition (192,734) --
Payments for office equipment and leasehold improvements (1,162) (74)
--------- ---------
Net cash used in investing activities (185,526) (74)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash received from issuance of senior subordinated debt 245,693 1,784
Proceeds from contributions of capital -- 18,096
Payments for distributions of capital -- (5,912)
--------- ---------
Net cash provided by financing activities 13,968
245,693 ---------
(Decrease) in cash and cash equivalents (13,305) (1,959)
--------- ---------
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
CASH AND CASH EQUIVALENTS, beginning of period 83,774 4,722
CASH AND CASH EQUIVALENTS, end of the period $ 70,469 $ 2,763
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH PAID FOR:
Interest $ 6,478 $ 6,344
Income taxes 48,538 5,339
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES:
Acquisitions:
Intangibles assets
Fair value of tangible assets acquired, other than cash $ 171,936 $ --
Deferred tax liabilities related to intangible assets 33,863 --
Common stock issuance 61,774 --
Increase in additional paid in capital related to stock based compensation 32,312 --
1,495 --
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements
7
<PAGE>
LABRANCHE & CO INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
The condensed consolidated financial statements include the accounts of
LaBranche & Co Inc., a Delaware corporation (the "Holding Company"), and its
subsidiaries, LaBranche & Co. LLC, a New York limited liability company
("LaBranche"), and Henderson Brothers, Inc., a Delaware corporation ("Henderson
Brothers" and, collectively with the Holding Company and LaBranche, the
"Company"). The Holding Company is the sole member of LaBranche and 100% owner
of Henderson Brothers. LaBranche is a registered broker-dealer and operates
primarily as a specialist in certain equity securities listed on the New York
Stock Exchange, Inc. ("NYSE").
On August 24, 1999, the Company reorganized from partnership to corporate
form and completed its initial public offering. In that offering, the Company
sold 10,500,000 shares of common stock and received net proceeds of $134.8
million. Concurrently with the offering, the Company issued $100.0 million
aggregate principal amount of Senior Notes.
Effective March 2, 2000, the Holding Company acquired all the outstanding
capital stock of Henderson Brothers Holdings, Inc., which in turn wholly owned
Henderson Brothers, Inc., for an aggregate purchase price of approximately
$228.4 million. In addition, effective March 9, 2000, the Holding Company
acquired, through a merger, Webco Securities, Inc. ("Webco"), a specialist on
the NYSE, for an aggregate purchase price of $11.0 million in cash, $3.0 million
in senior promissory notes and 2.8 million shares of the Company's common stock.
In connection with the acquisitions of Henderson Brothers Holdings, Inc. and
Webco, the Holding Company issued $250.0 million aggregate principal amount of
Senior Subordinated Notes that bear interest at a rate of 12.0% annually and
mature on March 2, 2007.
As of June 30, 2000, the Company completed a reorganization of its
subsidiaries. Lab Investing Co. L.L.C., a New York limited liability company of
which the Holding Company was the sole member ("LaB Investing"), was merged with
and into LaBranche & Co., with LaBranche & Co. being the survivor. On the date
the merger was effective, LaBranche & Co. was also converted into a limited
liability company, of which the Holding Company is the sole member, and changed
its name to LaBranche & Co. LLC. Henderson Brothers Holdings, Inc. was also
dissolved and in doing so distributed all of its assets, including the stock in
its wholly-owned subsidiary, Henderson Brothers, Inc., to the Holding Company.
The reorganization of entities under common control was accounted for on the
historical basis of accounting, and accordingly did not affect the carrying
value of assets, liabilities and stockholders' equity.
8
<PAGE>
2. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
INFORMATION
The unaudited interim condensed consolidated financial information as of
June 30, 2000 and for the three months ended June 30, 2000 and 1999 are
presented in the accompanying condensed consolidated financial statements. The
unaudited interim condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial information. The unaudited interim condensed consolidated financial
information reflects all adjustments, which are, in the opinion of management,
necessary for a fair presentation of the results for such periods. This interim
condensed consolidated financial information as of June 30, 2000 should be read
in conjunction with the audited consolidated financial statements and notes
thereto as of December 31, 1999 included in the Company's Form 10-K filed with
the Securities and Exchange Commission ("SEC") on March 30, 2000, as amended,
and also the interim condensed financial information as of March 31, 2000
included in the Company's Form 10-Q. Results of the interim periods are not
necessarily indicative of results to be obtained for a full fiscal year.
3. INCOME TAXES
Prior to its conversion to corporate form, the Company operated as a
partnership and generally was not subject to U.S. federal and state income
taxes. The earnings of the Company, however, were subject to local
unincorporated business taxes. The members of LaB Investing and the limited
partners of LaBranche were taxed on their respective proportionate shares of
LaBranche's taxable income or loss. Effective with its conversion from
partnership to corporate form on August 24, 1999, the Company became subject to
U.S. federal, state and local corporate income taxes. The Company accounts for
taxes in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes", which requires the recognition of tax
benefits or expenses on temporary differences between the financial reporting
and tax bases of its assets and liabilities. Deferred tax assets and liabilities
relate to stock-based compensation, amortization of intangibles and differences
in the accounting and tax basis of certain assets acquired. The Company's
effective tax rate for the three months ended June 30, 2000 differs from the
federal statutory rate primarily due to non-deductible amortization of
intangibles. The components of provision for income taxes reflected on the
condensed consolidated statements of operations are set forth below (000's
omitted):
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------------ ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Current federal, state and local taxes $ 20,831 $ -- $ 39,456 $ --
Deferred tax (benefit)/provision (81) -- 72 --
Unincorporated business tax 225 2,389 1,325 3,789
======== ======== ======== ========
Total provision for income taxes $ 20,975 $ 2,389 $ 40,853 $ 3,789
======== ======== ======== ========
</TABLE>
9
<PAGE>
4. REGULATORY REQUIREMENTS
LaBranche, a specialist and member of the NYSE and subsidiary of the
Holding Company, is subject to SEC Rule 15c3-1 adopted and administered by the
NYSE and the SEC. LaBranche is required to maintain minimum net capital, as
defined, equivalent to the greater of $100,000 or 1/15 of aggregate
indebtedness, as defined.
As of June 30, 2000 and as of December 31, 1999, LaBranche's net capital,
as defined under SEC Rule 15c3-1, was $284.7 million and $161.4 million,
respectively, and exceeded minimum requirements by $282.2 million and $159.9
million, respectively. LaBranche's aggregate indebtedness to net capital ratio
as of June 30, 2000 and December 31, 1999 was .13 to 1 and .13 to 1,
respectively.
The NYSE generally requires members registered as specialists to maintain
a minimum dollar regulatory capital amount in order to establish that they can
meet, with their own net liquid assets, their position requirement.
As of June 30, 2000 and December 31, 1999, LaBranche's NYSE minimum
required dollar amount of net liquid assets, as defined, was $284.3 million and
$93.6 million, respectively, compared to actual net liquid assets, as defined,
of $325.5 million and $175.9 million, respectively.
5. COMMITMENTS
Minimum rental commitments under existing non-cancelable leases for office
space and equipment are as follows:
YEAR ENDING DECEMBER 31:
2000 $1,000,756
2001 1,082,358
2002 1,026,650
2003 807,750
2004 807,750
Thereafter 2,687,020
These leases contain escalation clauses providing for increased rentals
based upon maintenance and tax increases.
6. SUBORDINATED LIABILTITES
LaBranche is a party to subordinated loan agreements under which it has
indebtedness approved by the NYSE for inclusion as net capital, as defined.
Interest is payable quarterly at various annual rates. Six of the agreements,
representing $4,173,000, mature within the last six months of 2000, seven
agreements, representing $3,385,000, mature within the first six months of 2001
and five agreements, representing $2,650,000, mature within the last six months
of 2001.
10
<PAGE>
These agreements all have automatic rollover provisions, and the scheduled
maturity date of each agreement will be extended an additional year, unless the
lender gives LaBranche seven months' advance notice that the maturity date will
not be extended. Two of the holders representing $850,000 of subordinated loan
agreements maturing in November 2000 have notified LaBranche that the scheduled
maturity date will not be extended. In addition, five holders representing
$3,723,000 of subordinated loan agreements maturing December 2000 and January
2001 have notified LaBranche that the scheduled maturity date will not be
extended.
7. EARNINGS PER SHARE
Earnings per share ("EPS") are computed in accordance with SFAS No. 128,
"Earnings Per Share". Basic EPS is calculated by dividing net income by the
weighted-average number of common shares outstanding. Diluted EPS includes the
determinants of basic EPS and, in addition, gives effect to dilutive potential
common shares. For purposes of determining weighted average shares outstanding
for periods prior to the Company's reorganization from partnership to corporate
form, the outstanding shares were determined based on the conversion ratio of
members' capital to common stock issued to the members upon reorganization.
The computations of basic and diluted EPS are set forth below (000's
omitted, except per share data):
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Numerator for basic and
Diluted earnings per share
- net income $20,126 $ 4,711 $40,681 $ 6,292
Denominator for basic
Earnings per share -
Weighted-average number
of common shares 48,675 38,617 47,614 37,125
Restricted stock units 163 -- 125 --
------- ------- ------- -------
Denominator for diluted
Earnings per share -
Weighted-average number
of common shares 48,838 38,617 47,739 37,125
Basic earnings per share $ 0.41 $ 0.12 $ 0.85 $ 0.17
Diluted earnings per share $ 0.41 $ 0.12 $ 0.85 $ 0.17
</TABLE>
Under the treasury stock method of accounting, restricted stock units
representing 902,403 and 939,575 shares of common stock and options to purchase
an aggregate of 1,200,000 shares of common stock were not included in the
calculation of diluted earnings per share for the three months ended and the six
months ended June 30, 2000, respectively, due to their antidilutive effect.
11
<PAGE>
8. PRO FORMA FINANCIAL INFORMATION
The following 1999 pro forma consolidated results give effect to the
Company's August 1999 reorganization from partnership to corporate form and
related transactions, which include the acquisition of LaBranche's limited
partnership interests, and the application of the net proceeds from the
Company's August 1999 initial public offering and Senior Note offering (the
"Reorganization Transactions") as if the Reorganization Transactions occurred as
of January 1, 1999. In addition, the 1999 pro forma consolidated results give
effect to the acquisition of all the outstanding capital stock of Henderson
Brothers, the acquisition of Webco Securities and the issuance of the Senior
Subordinated Notes as if they occurred as of January 1, 1999. The 2000 pro forma
consolidated results give effect to the March 2000 acquisitions of Henderson
Brothers and Webco Securities and the issuance of the Senior Subordinated Notes
as if they all occurred as of January 1, 2000. The pro forma impact on revenues,
pre-tax income and earnings are as follows (000's omitted, except per share
data):
FOR THE SIX MONTHS ENDED
JUNE 30,
-------------------------
2000 1999
---- ----
(PRO-FORMA) (PRO-FORMA)
Revenues $ 178,956 $128,762
Pre-Tax Income 70,377 51,253
Net Income 33,602 23,942
EPS $ 0.69 $ 0.60
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
UNLESS THE CONTEXT OTHERWISE REQUIRES, THE "COMPANY," "LABRANCHE" OR
"WE" SHALL MEAN LABRANCHE & CO INC. AND ITS WHOLLY-OWNED SUBSIDIARIES.
LABRANCHE'S QUARTERLY AND ANNUAL OPERATING RESULTS ARE AFFECTED BY A
WIDE VARIETY OF FACTORS THAT COULD MATERIALLY AND ADVERSELY AFFECT ACTUAL
RESULTS, INCLUDING: A DECREASE IN TRADING VOLUME ON THE NEW YORK STOCK EXCHANGE,
VOLATILITY IN THE EQUITY SECURITIES MARKET AND CHANGES IN THE VALUE OF OUR
SECURITIES POSITIONS. AS A RESULT OF THESE AND OTHER FACTORS, LABRANCHE MAY
EXPERIENCE MATERIAL FLUCTUATIONS IN FUTURE OPERATING RESULTS ON A QUARTERLY OR
ANNUAL BASIS, WHICH COULD MATERIALLY AND ADVERSELY AFFECT ITS BUSINESS,
FINANCIAL CONDITION, OPERATING RESULTS, AND STOCK PRICE. AN INVESTMENT IN
LABRANCHE INVOLVES VARIOUS RISKS, INCLUDING THOSE MENTIONED ABOVE AND THOSE THAT
ARE DETAILED FROM TIME TO TIME IN LABRANCHE'S SEC FILINGS.
CERTAIN STATEMENTS CONTAINED IN THIS REPORT, INCLUDING WITHOUT
LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES", "INTENDS", "EXPECTS",
"ANTICIPATES" AND WORDS OF SIMILAR IMPORT, CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. READERS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE, AND SINCE SUCH STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES, THE ACTUAL RESULTS AND PERFORMANCE OF LABRANCHE AND THE
SPECIALIST INDUSTRY MAY TURN OUT TO BE MATERIALLY DIFFERENT FROM THE RESULTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. GIVEN THESE
UNCERTAINTIES, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH
FORWARD-LOOKING STATEMENTS. LABRANCHE ALSO DISCLAIMS ANY OBLIGATION TO UPDATE
ITS VIEW OF ANY SUCH RISKS OR UNCERTAINTIES OR TO PUBLICLY ANNOUNCE THE RESULT
OF ANY REVISIONS TO THE FORWARD-LOOKING STATEMENTS MADE IN THIS REPORT.
THIS DISCUSSION SHOULD BE READ IN CONJUNCTION WITH LABRANCHE'S CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO CONTAINED IN THIS
REPORT.
REVENUES
Our revenues consist primarily of net gains earned from principal
transactions in securities for which we act as specialist, and commissions
revenue earned from specialist activities. Net gain on principal transactions
represents trading gains net of trading losses and transaction fees, and are
earned by us when we act as principal buying and selling our specialist stocks.
Commissions revenue consists of commissions we earn when acting as agent to
match buyers and sellers for limit orders executed by us on behalf of brokers
after a specified period of time; we do not earn commissions when we match
market orders. Other revenue consists of proprietary trading revenue, an
investment in a hedge fund and interest income earned on short-term investments.
For the three months ended June 30, 2000, net gain on principal transactions
represented 83.7% of our total revenues, commissions revenue represented 12.7%
of our total revenues, and other revenues represented 3.6% of our total
revenues. For the six months ended June 30, 2000, net gain on principal
transactions represented 83.4% of our total revenues, commissions revenue
represented 12.2% of our total revenues, and other revenues represented 4.4% of
our total revenues.
13
<PAGE>
EXPENSES
Our largest operating expense is compensation and benefits. Employee
compensation and benefits primarily consist of salaries and wages and
profitability-based compensation. Profitability-based compensation includes
compensation and benefits paid to managing directors, trading professionals and
other employees based on our profitability and each employee's overall
performance.
Prior to our reorganization from partnership to corporate form, a large
portion of the compensation payments to our managing directors had not been
presented as part of operating expenses. The aggregate amount of these
compensation payments generally approximated LaB Investing Co. L.L.C.'s interest
in the income of LaBranche & Co., before managing directors' compensation.
Generally, these payments of compensation were allocated among our managing
directors based on their respective percentage interests in the profits of LaB
Investing Co. L.L.C. Subsequent to the reorganization transactions, we include
payments to managing directors in employee compensation and benefits expense.
Therefore, historical income before managing directors' compensation, limited
partnership interest in earnings of subsidiary and provision for income taxes
understates our operating costs.
INCOME TAXES
As a partnership, we generally were not subject to U.S. federal, state
and local income taxes, apart from the 4% New York City unincorporated business
tax. As a result of our restructuring to a corporation, we are subject to U.S.
federal, state and local income taxes.
ACQUISITIONS DURING THE SIX MONTHS ENDED JUNE 30, 2000
On March 2, 2000, we completed the acquisition of all the outstanding
capital stock of Henderson Brothers for approximately $228.4 million in cash. In
addition, on March 9, 2000, we acquired Webco through a merger for 2.8 million
shares of our common stock, $11.0 million in cash and senior promissory notes in
the aggregate principal amount of $3.0 million bearing interest of 10.0% per
annum. These acquisitions were accounted for under the purchase method and the
excess of cost over estimated fair value of the net assets acquired of $204.9
million for Henderson Brothers and $28.8 million for Webco was allocated to
intangible assets. The results of the specialist operations of each of these
acquired companies are included in our consolidated financial statements
beginning on the date of completion of its acquisition.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
REVENUES
Total revenues increased 56.7% to $87.6 million for the three months
ended June 30, 2000, from $55.9 million for the same period in 1999, principally
due to the increase in revenue from net gain on principal transactions. Net gain
on principal transactions increased 73.3% to
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$73.3 million for the three months ended June 30, 2000, from $42.3 million for
the same period in 1999. This increase was primarily due to the Henderson
Brothers and Webco acquisitions, as a result of which we became the specialist
for 147 additional common stock listings, as well as increased share volume in
principal trading in our existing specialist stocks traded on the NYSE. Our
share volume as principal increased 95.7% to 4.5 billion shares for the three
months ended June 30, 2000, from 2.3 billion shares for the same period in 1999.
Commissions revenue increased 15.6% to $11.1 million for the three
months ended June 30, 2000, from $9.6 million for the same period in 1999. This
increase was primarily due to the increase in the number of our common stock
listings as a result of the Henderson Brothers and Webco acquisitions, and to
increased share volume in our existing specialist stocks traded on the NYSE in
which we acted as agent. The share volume executed by us as agent in our
specialist stocks increased 50.0% to 1.5 billion shares for the three months
ended June 30, 2000, from 1.0 billion shares for the same period in 1999.
Other revenue decreased 20.0% to $3.2 million for the three months ended
June 30, 2000, from $4.0 million for the same period in 1999. This decrease was
primarily due to a decrease in our proprietary trading revenues.
EXPENSES
Total expenses before managing directors' compensation and limited
partners' interest in earnings of subsidiary and provision for income taxes
increased 257.7% to $46.5 million for the three months ended June 30, 2000 from
$13.0 million for the same period in 1999. This increase is primarily due to the
inclusion of managing director salary, incentive-based compensation and related
benefits in employee compensation subsequent to our reorganization on August 24,
1999.
Employee compensation and related benefits increased 248.5% to $23.0
million for the three months ended June 30, 2000, from $6.6 million for the same
period in 1999. This increase was primarily due to the inclusion of managing
director salary, incentive-based compensation and related benefits in employee
compensation subsequent to our reorganization, and due to the Henderson Brothers
and Webco acquisitions that resulted in our employment of 97 additional
individuals. As a percentage of total revenues, employee compensation increased
to 26.2% of total revenues for the three months ended June 30, 2000, from 11.7%
of total revenues for the same period in 1999.
Interest expense increased 954.5% to $11.6 million for the three months
ended June 30, 2000, from $1.1 million for the same period in 1999. This
increase was primarily due to the issuance, in connection with the Henderson
Brothers and Webco acquisitions, of $250.0 million of indebtedness that began
accruing interest on March 2, 2000. In addition, the increase was due to the
issuance of $116.4 million of indebtedness in connection with our reorganization
that began accruing interest from August 24, 1999. As a percentage of total
revenues, interest increased to 13.2% of total revenues for the three months
ended June 30, 2000, from 2.0% of total revenues for the same period in 1999.
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Depreciation and amortization of intangibles expense increased 512.5% to
$4.9 million for the three months ended June 30, 2000, from $.8 million for the
same period in 1999. Amortization of intangibles increased as a result of the
$233.7 million of intangible assets recorded as a result of our acquisitions of
Henderson Brothers and Webco on March 2, 2000 and March 9, 2000, respectively.
In addition, the increase was due to the $127.4 of intangible assets recorded as
a result of our acquisition of all the limited partner interests in LaBranche &
Co. in connection with our reorganization transactions. As a percentage of total
revenues, depreciation and amortization of intangibles increased to 5.6% of
total revenues for the three months ended June 30, 2000, from 1.5% of total
revenues for the same period in 1999.
Lease of exchange memberships expense increased 33.3% to $2.8 million
for the three months ended June 30, 2000, from $2.1 million for the same period
in 1999. This increase was due to the increase in the number of leased
memberships from 44 to 48, and was also due to an increase in the average annual
leasing cost of the memberships from approximately $192,000 to $276,000 per
membership.
Exchange, clearing and brokerage fees consist primarily of fees paid by
us as a specialist to the NYSE and to clearing houses. Fees paid by us to the
NYSE primarily include fees based on the volume of transactions executed as
principal and as agent, as well as a flat annual fee. Exchange, clearing and
brokerage fees expense increased 30.0% to $1.3 million for the three months
ended June 30, 2000, from 1.0 million the same period in 1999. This increase was
primarily due to the increased trading volumes as a result of the Henderson
Brothers and Webco acquisitions.
Other expenses increased 100.0% to $3.0 million for the three months
ended June 30, 2000, from $1.5 million for the same period in 1999. This
increase was primarily the result of an increase in advertising and promotional
costs as well as increased charitable contributions.
INCOME BEFORE MANAGING DIRECTORS' COMPENSATION, LIMITED PARTNERS' EARNINGS IN
INTEREST OF SUBSIDIARY AND PROVISION FOR INCOME TAXES
Income before managing directors' compensation and limited partners'
interest in earnings of subsidiary and before provision for income taxes
decreased 4.2% to $41.0 million for the three months ended June 30, 2000, from
$42.8 million for the same period in 1999. This decrease was primarily due to
the inclusion of managing director's salary and incentive based compensation in
the employee compensation and related benefits.
INCOME TAXES
Provision for income taxes increased 775.0% to $21.0 million for the
three months ended June 30, 2000, from $2.4 million for the same period in 1999,
as a result of the federal, state and local income taxes to which we are subject
as a result of our reorganization from partnership to corporate form as well as
our increased profitability.
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SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
REVENUES
Total revenues increased 60.7% to $166.3 million for the six months
ended June 30, 2000, from $103.5 million for the same period in 1999,
principally due to the increase in revenue from net gain on principal
transactions. Net gain on principal transactions increased 76.2% to $138.7
million for the six months ended June 30, 2000, from $78.7 million for the same
period in 1999. This increase was primarily due to the Henderson Brothers and
Webco acquisitions on March 2, 2000 and March 9, 2000, respectively, as a result
of which we became the specialist for 147 additional common stock listings, as
well as increased share volume in principal trading in our existing specialist
stocks traded on the NYSE. Our share volume as principal increased 97.7% to 8.7
billion shares for the six months ended June 30, 2000, from 4.4 billion shares
for the same period in 1999.
Commissions revenue increased 13.4% to $20.3 million for the six months
ended June 30, 2000, from $17.9 million for the same period in 1999. This
increase was primarily due to the increase in the number of our common stock
listings as a result of the Henderson Brothers and Webco acquisitions on March
2, 2000 and March 9, 2000, respectively, and to increased share volume in our
existing specialist stocks traded on the NYSE in which we acted as agent. The
share volume executed by us as agent in our specialist stocks increased 30.0% to
2.6 billion shares for the six months ended June 30, 2000, from 2.0 billion
shares for the same period in 1999.
Other revenue increased 5.8% to $7.3 million for the six months ended
June 30, 2000, from $6.9 million for the same period in 1999. This increase was
primarily due to an increase in our interest income, which was also offset by a
decrease in our proprietary trading revenues.
EXPENSES
Total expenses before managing directors' compensation and limited
partners' interest in earnings of subsidiary and provision for income taxes
increased 251.9% to $84.8 million for the six months ended June 30, 2000 from
$24.1 million for the same period in 1999.
Employee compensation and related benefits increased 305.3% to $45.8
million for the six months ended June 30, 2000, from $11.3 million for the same
period in 1999. This increase was primarily due to the inclusion of managing
director salary, incentive-based compensation and related benefits in employee
compensation subsequent to our reorganization, and due to the Henderson Brothers
and Webco acquisitions that resulted in our employment of 97 additional
individuals as of the respective acquisition dates. As a percentage of total
revenues, employee compensation increased to 27.5% of total revenues for the six
months ended June 30, 2000, from 10.9% of total revenues for the same period in
1999.
Interest expense increased 722.7% to $18.1 million for the six months
ended June 30, 2000, from $2.2 million for the same period in 1999. This
increase was primarily due to the issuance, in connection with the Henderson
Brothers and Webco acquisitions, of $250.0 million
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of indebtedness that began accruing interest on March 2, 2000. In addition, the
increase was due to the issuance of $116.4 million of indebtedness in connection
with our reorganization that began accruing interest from August 24, 1999. As a
percentage of total revenues, interest increased to 10.9% of total revenues for
the six months ended June 30, 2000, from 2.1% of total revenues for the same
period in 1999.
Depreciation and amortization of intangibles expense increased 347.1% to
$7.6 million for the six months ended June 30, 2000, from $1.7 million for the
same period in 1999. Amortization of intangibles increased as a result of the
$233.7 million of intangible assets recorded as a result of our acquisition of
Henderson Brothers and Webco. In addition, the increase was due to the $127.4 of
intangible assets recorded as a result of our acquisition of all the limited
partner interests in LaBranche & Co. in connection with our reorganization
transactions. As a percentage of total revenues, depreciation and amortization
of intangibles increased to 4.6% of total revenues for the six months ended June
30, 2000, from 1.6% of total revenues for the same period in 1999.
Lease of exchange memberships expense increased 26.2% to $5.3 million
for the six months ended June 30, 2000, from $4.2 million for the same period in
1999. This increase was due to the increase in the number of leased memberships
from 44 to 48, and was also due to an increase in the average annual leasing
cost of the memberships from approximately $192,000 to $276,000 per membership.
Exchange, clearing and brokerage fees consist primarily of fees paid by
us as a specialist to the NYSE and to clearing houses. Fees paid by us to the
NYSE primarily include fees based on the volume of transactions executed as
principal and as agent, as well as a flat annual fee. Exchange, clearing and
brokerage fees expense increased 20.0% to $2.4 million for the six months ended
June 30, 2000, from 2.0 million the same period in 1999. This increase was
primarily due to the increased trading volumes as a result of the Henderson
Brothers and Webco acquisitions.
Other expenses increased 100.0% to $5.6 million for the six months ended
June 30, 2000, from $2.8 million for the same period in 1999. This increase was
primarily the result of additional fees incurred in connection with the increase
and extension of our line-of-credit with a U.S. commercial bank, increased
charitable contributions, as well as an increase in advertising and promotional
costs.
INCOME BEFORE MANAGING DIRECTORS' COMPENSATION, LIMITED PARTNERS' EARNINGS IN
INTEREST OF SUBSIDIARY AND PROVISION FOR INCOME TAXES
Income before managing directors' compensation and limited partners'
interest in earnings of subsidiary and before provision for income taxes
increased 2.8% to $81.5 million for the six months ended June 30, 2000, from
$79.3 million for the same period in 1999. This increase was primarily due to
the Henderson Brothers and Webco acquisitions.
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INCOME TAXES
Provision for income taxes increased 976.3% to $40.9 million for the six
months ended June 30, 2000, from $3.8 million for the same period in 1999, as a
result of the federal, state and local income taxes to which we are subject as a
result of our reorganization from partnership to corporate form as well as our
increased profitability.
LIQUIDITY
Prior to our initial public offering of common stock and our 9-1/2 %
Senior Notes offering, we had financed our business primarily through members'
capital and the issuance of subordinated indebtedness. As of June 30, 2000, we
had $1,075.8 million in assets, of which $129.3 million consisted of cash and
short-term investments, which primarily consist of commercial paper maturing
within thirty days and overnight repurchase agreements.
We currently have a line-of-credit with a U.S. commercial bank for
$200.0 million. Amounts outstanding under the U.S. commercial bank credit
facility are secured by our inventory of specialist stocks and bear interest at
the U.S. commercial bank's broker loan rate. To date, we have not utilized this
facility. The credit facility matures on February 2, 2001.
As of June 30, 2000, the subordinated debt of LaBranche & Co. totaled
$46.5 million (excluding subordinated liabilities related to contributed
exchange memberships). Of this amount, $35.0 million represented senior
subordinated debt privately placed pursuant to several note purchase agreements.
Of this $35.0 million, $20.0 million matures on September 15, 2002 and bears
interest at an annual rate of 8.17%, payable on a quarterly basis, and $15.0
million matures on June 3, 2008 and bears interest at an annual rate of 7.69%,
payable on a quarterly basis. These notes are senior to all other subordinated
notes of LaBranche & Co. Subordinated liabilities totaling $11.5 million
represents junior subordinated indebtedness of LaBranche & Co. placed with
former limited partners and members of LaB Investing Co. L.L.C., their family
members and current employees. This debt has maturities ranging from the second
half of 2000 through the second half of 2001, and bears interest at an annual
rate between 8.0% and 10.0%, payable on a quarterly basis. The agreements
relating to the junior subordinated debt generally have automatic rollover
provisions that extend the maturities for an additional year, unless the lender
provides notice at least seven months prior to maturity.
Concurrently with the initial public offering of our common stock and
our 9-1/2 % Senior Notes offering and as part of our reorganization from
partnership to corporate form, we acquired all the limited partnership interests
in LaBranche & Co. and the entire membership interest in LaB Investing Co.
L.L.C. for shares of our common stock, cash in the aggregate amount of $149.2
million and subordinated debt.
On August 24, 1999, we issued $100.0 million aggregate principal amount
of Senior Notes. The Senior Notes bear interest at a rate of 9-1/2 % annually
and mature in August 2004. The indenture covering the Senior Notes includes
certain covenants that, among other things,
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limit our ability to borrow money, pay dividends or purchase our stock, make
investments, engage in transactions with stockholders and affiliates, create
liens on our assets, and sell assets or engage in mergers and consolidations.
At approximately the same time as our 9-1/2 % Senior Notes offering and
the initial public offering of our common stock, we issued a $16.0 million
senior note as partial payment for the acquisition of a certain limited
partnership interest in LaBranche & Co. The note is payable in three
installments of $6.0 million on the first anniversary of issuance, $5.0 million
on the second anniversary of issuance and $5.0 million on the third anniversary
of issuance, and bears interest at the annual rate of 9-1/2 %. LaBranche & Co.
also entered into a $350,000 cash subordinated loan agreement, bearing interest
at an annual rate of 8.0%, in connection with the acquisition of a certain
limited partner interest.
In connection with our acquisitions of Henderson Brothers and Webco, we
issued $250.0 million aggregate principal amount of the Senior Subordinated
Notes on March 2, 2000. These notes bear interest at a rate of 12% annually and
mature in March 2007. The indenture covering these notes includes certain
covenants that, among other things, limit our ability to borrow money, pay
dividends or purchase our stock, make investments, engage in transactions with
stockholders and affiliates, create liens on our assets, and sell assets or
engage in mergers and consolidations.
The Senior Subordinated Notes also require us, within 150 days after the
end of each fiscal year, to offer to redeem from all holders of the Notes a
principal amount equal to the Excess Cash Flow at a price equal to 103% of the
principal amount being offered for purchase plus accrued and unpaid interest, if
any, to the date of redemption. Each holder is entitled to be offered his pro
rata share based upon his ownership percentage of the outstanding Notes. Excess
Cash Flow is defined for this purpose as 40% of the amount by which our
consolidated EBITDA exceeds the sum of our interest expense, tax expense,
increase in net capital or net liquid asset requirements, capital expenditures,
any cash amounts related to acquisitions of NYSE specialists or any cash
payments related to our payment at maturity of the principal amount of our
existing or certain other indebtedness.
In connection with the Webco acquisition, we issued unsecured senior
promissory notes in the aggregate principal amount of $3.0 million to the
stockholders of Webco. These notes bear interest at an annual rate of 10%. Of
the aggregate principal amount, $500,000 has already been repaid. The remaining
$2.5 million is due September 9, 2001 and is subject to set-off for any amounts
for which the former stockholders of Webco may be obligated to indemnify us for
any breaches of their or Webco's representations, warranties and covenants under
the merger agreement withWebco.
As a broker-dealer, LaBranche & Co. is subject to regulatory
requirements intended to ensure the general financial soundness and liquidity of
broker-dealers and requiring the maintenance of minimum levels of net capital,
as defined in SEC Rule 15c3-1. LaBranche & Co. is required to maintain minimum
net capital, as defined, equivalent to the greater of $100,000 or 1/15 of
aggregate indebtedness, as defined. NYSE Rule 326(c) also prohibits a
broker-dealer
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from repaying subordinated borrowings, paying cash dividends, making loans to
any parent, affiliates or employees, or otherwise entering into transactions
which would result in a reduction of its total net capital to less than 150% of
its required minimum capital.
At June 30, 2000, LaBranche & Co. had net capital of $284.7 million,
which was $282.2 million in excess of its required net capital of $2.5 million.
The NYSE generally requires members registered as specialists to
maintain a minimum dollar regulatory capital amount in order to establish that
they can meet, with their own net liquid assets, their position requirement. As
a result of our acquisitions of Henderson Brothers and Webco, our net liquid
asset requirement is $284.3 million, which represents the previous combined net
liquid assets of the three firms as separate entities. As of June 30, 2000, our
actual net liquid assets were approximately $325.5 million.
Failure to maintain the required net capital and net liquid assets may
subject us to suspension or revocation of SEC registration or suspension or
expulsion by the NYSE.
We currently anticipate that our available cash resources and credit
facilities will be sufficient to meet our anticipated working capital,
regulatory capital and capital expenditure requirements through the end of 2000.
Following our acquisition of Henderson Brothers, the clearing operations
of Henderson Brothers are operated as a separate subsidiary. As a clearing
broker, pursuant to SEC Rule 15c3-1, Henderson Brothers is required to maintain
a minimum net capital of $250,000. As of June 30, 2000, Henderson Brothers had
net capital of $6.2 million, which was $6.0 million in excess of its required
minimum net capital.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
A majority of our specialist related revenues are derived from trading
as principal. We also operate a proprietary trading desk separately from our
NYSE specialist operations, which represented .2% of our total revenues in the
six months ended June 30, 2000 and 4.6% of our total revenues in the same period
in 1999. These activities involve primarily the purchase, sale or short sale of
securities for our own account. These activities are subject to a number of
risks, including risks of price fluctuations and rapid changes in the liquidity
of markets. In any period, we may incur trading losses in our specialist stocks
for a variety of reasons, including price declines of our specialist stocks,
lack of trading volume in our specialist stocks and the performance of our
specialist obligations. From time to time, we have large position concentrations
in securities of a single issuer or issuers engaged in a specific industry. In
general, because our inventory of securities is marked to market on a daily
basis, any downward price movement in these securities will result in a
reduction of our revenues and operating profits.
We have developed a risk management process that is intended to balance
our ability to profit from our specialist activities with our exposure to
potential losses. In addition, we have trading limits relating to our
proprietary trading activities.
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Although we have adopted risk management policies, we cannot be sure
that these policies have been formulated properly to identify or limit our
risks. Even if these policies are formulated properly, we cannot be sure that we
will successfully implement these policies. As a result, we may not be able to
manage our risks successfully or avoid trading losses.
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
10.1 Stock Purchase Agreement, dated as of December 23, 1999, among
the Registrant, Henderson Brothers Holdings, Inc. and the
stockholders listed on Schedule A thereto(1)
10.2 Amendment to Stock Purchase Agreement, dated as of February 1,
2000, by and among the Registrant, Henderson Brothers
Holdings, Inc., and the authorized representatives of the
previous listed on Schedule A thereto(1)
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K.
(i) On May 17, 2000, we filed a Form 8-K/A, dated March 2, 2000,
with respect to our acquisition of Henderson Brothers, under
Item 2 of Form 8-K in order to include the financial
statements of Henderson Brothers and modify our pro forma
condensed consolidated financial information in order to give
effect to the Henderson Brothers acquisitions.
All other items of this report are inapplicable.
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(1) Previously filed as an exhibit to the company's Report on Form 8-K dated
March 2, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
August 14, 2000 LABRANCHE & CO INC.
By: /s/ Harvey Traison
------------------
Name: Harvey Traison
Title: Chief Financial Officer
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