<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000 Commission File No. 0-9377
-------------------- --------
KINNARD INVESTMENTS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0972952
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(State of incorporation) (I.R.S. Employer identification
number)
920 Second Avenue South, Minneapolis, Minnesota 55402
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(Address of principal executive offices)
(612)-370-2700
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(Registrant's telephone number, including area code)
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 at least the past 90 days. Yes X No _____
As of May 9, 2000, 4,885,691 shares of the Registrant's $0.02 par value common
stock were issued and outstanding.
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION Page
<S> <C>
Item 1. Financial Statements
Consolidated statements of financial condition...................................................3
Consolidated statements of operations............................................................4
Consolidated statements of shareholders' equity..................................................5
Consolidated statements of cash flows............................................................6
Notes to Consolidated Financial Statements.......................................................8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..........11
Item 3. Quantitative and Qualitative Disclosures about Market Risk ....................................13
PART II OTHER INFORMATION.....................................................................................14
Item 1. Legal Proceedings .............................................................................14
Item 6. Exhibits and Reports on Form 8-K ..............................................................14
Signatures .............................................................................................15
Exhibit Index ..........................................................................................16
Exhibits ...............................................................................................17
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------------------------------------------------
March 31, December 31,
2000 1999
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 8,346 $ 8,018
Receivable from clearing firm 999 590
Miscellaneous receivables 4,734 2,899
Trading securities, at market 11,959 12,976
Office equipment at cost, less accumulated depreciation
of $3,841 and $3,594, respectively 1,133 1,247
Investment securities, at fair value 13,477 13,992
Deferred income taxes 337 354
Other assets 343 351
- --------------------------------------------------------------------------------------------------------------------------
Total assets $41,328 $40,427
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- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Securities sold but not yet purchased, at market 748 844
Accrued compensation 5,111 6,233
Other accounts payable and accrued expenses 3,020 3,158
Income taxes payable 1,695 1,228
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities 10,574 11,463
- --------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common stock, $.02 par value; authorized 7,500 shares; issued
and outstanding 4,853 and 4,782 shares, respectively 97 96
Additional paid-in capital 6,310 6,028
Retained earnings 24,347 22,840
- --------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 30,754 28,964
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Total liabilities and shareholders' equity $41,328 $40,427
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- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Operating revenues:
Commissions $ 6,031 $ 4,177
Principal transactions 9,324 5,049
Investment banking 2,388 562
Interest 670 393
Net gain (loss) on investment account (352) 672
Other 961 965
- --------------------------------------------------------------------------------------------------------------------------
Total operating revenues 19,022 11,818
- --------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Compensation and benefits 12,670 7,630
Floor brokerage and clearance 1,497 965
Communications 200 198
Occupancy and equipment 1,292 1,437
Other 851 1,001
- --------------------------------------------------------------------------------------------------------------------------
Total operating expenses 16,510 11,231
- --------------------------------------------------------------------------------------------------------------------------
Operating income 2,512 587
- --------------------------------------------------------------------------------------------------------------------------
Pretax income 2,512 587
- --------------------------------------------------------------------------------------------------------------------------
Income tax expense 1,005 234
- --------------------------------------------------------------------------------------------------------------------------
Net income $1,507 $353
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Earnings per common share:
Basic $0.31 $0.07
Diluted $0.29 $0.07
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------
Common Stock Total
-------------------- Paid-in Retained Shareholders'
Shares Amount Capital Earnings Equity
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 5,955 $119 $11,946 $23,507 $35,572
- --------------------------------------------------------------------------------------------------------------------------
Issuance of shares under the employee
stock purchase plan 13 0 78 78
Issuance of shares under the employee
stock option plan 81 2 379 381
Repurchase of stock (566) (11) (3,138) (3,149)
Net loss (3,376) (3,376)
- --------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 5,483 110 9,265 20,131 29,506
- --------------------------------------------------------------------------------------------------------------------------
Issuance of shares under the employee
stock option plan 59 1 367 368
Repurchase of stock (760) (15) (3,604) (3,619)
Net income 2,709 2,709
- --------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 4,782 96 6,028 22,840 28,964
- --------------------------------------------------------------------------------------------------------------------------
Issuance of shares under the employee
stock option plan 71 1 282 283
Net income 1,507 1,507
- --------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000 (unaudited) 4,853 $97 $6,310 $24,347 $30,754
- --------------------------------------------------------------------------------------------------------------------------
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</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and clearing firm $19,216 $ 9,646
Cash paid to suppliers and employees (19,350) (12,779)
Interest received 670 393
Income taxes paid / income tax refunds received (615) 38
- --------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (79) (2,702)
- --------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment securities 846 7,827
Purchases of:
Office equipment (133) (71)
Investment securities (683) (5,209)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 30 2,547
- --------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 377 21
Repurchase of common stock -- (1,716)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 377 (1,695)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 328 (1,850)
Cash and cash equivalents at beginning of period 8,018 2,689
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $8,346 $839
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
USED IN OPERATING ACTIVITIES:
Net income $1,507 $ 353
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 247 284
Net unrealized loss on investment securities 979 115
Net realized gain on sale of investment securities (627) (787)
Deferred income taxes 17 (18)
(Increase) decrease in:
Receivable from clearing firm (409) (515)
Miscellaneous receivables (1,835) 164
Trading securities, at market 1,017 (702)
Income tax receivable -- 291
Other assets 8 110
Increase (decrease) in:
Securities sold but not yet purchased, at market (96) 111
Accrued compensation (1,122) (1,769)
Other accounts payable and accrued expenses (138) (339)
Income taxes payable 373 --
- --------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities ($79) ($2,702)
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- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
7
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of Kinnard
Investments, Inc., (the "Company") have been prepared in
conformity with generally accepted accounting principles and
should be read in conjunction with the Company's Annual Report on
Form 10-K for the year ended December 31, 1999. The results of
operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the year
ending December 31, 2000.
The consolidated statement of financial condition as of March 31,
2000 and other financial information for the three months ended
March 31, 2000 and 1999, are unaudited, but management of the
Company believes that all adjustments (consisting only of normal
recurring adjustments) necessary for a fair statement of the
results of operations for the periods have been included.
NOTE 2. BINDING ARBITRATION AWARD
On December 10, 1999, the National Association of Securities
Dealers ("NASD") issued a binding arbitration award for $16.6
million in favor of the Company and against Dain Rauscher
Corporation ("Dain") and several of its investment executives who
were wrongfully recruited by Dain from the Company from 1997 to
1999.
NASD arbitration awards are not subject to appeal. While Dain has
filed a motion with the Hennepin County District Court (the
"Court") to vacate the arbitration panel's decision, the Company
believes that vacature is unlikely due to the narrow grounds upon
which a binding arbitration award may be vacated. Under both
Federal and Minnesota Arbitration Acts, the Court must find
evidence of fraud, corruption, misconduct or partiality on the
part of the arbitration panel, or that the panel exceeded its
powers in rendering its award decision.
The award included compensatory damages of $9.1 million, punitive
damages of $7.1 million and reimbursement of legal costs of $350
thousand. Under NASD Rules, Dain is required to pay interest on
the unpaid settlement amount based on a statutory interest rate of
5.5%. Upon exhaustion of all vacature efforts, the Company
anticipates recognizing up to $16.6 million in revenue from the
settlement, plus interest income during the period that the
settlement remains unpaid. Recognition of such revenue may result
in additional compensation and income tax expense.
8
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. BINDING ARBITRATION AWARD (CONTINUED)
The following unaudited pro forma information has been prepared
assuming that the binding arbitration settlement and related
accrued interest had been recognized at the end of the period
presented after the impact of certain adjustments to revenue,
employee compensation based on current formulas and the related
income tax effects thereof.
PRO FORMA STATEMENT OF OPERATIONS DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
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Three-month period ended March 31, 2000
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<S> <C>
Revenues $35,810
Expenses $19,647
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Income before income taxes 16,163
Income tax expense 6,465
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Net income $ 9,698
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Earnings per common share:
Basic $ 2.01
Diluted $ 1.89
Book value per common share: $ 8.02
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</TABLE>
NOTE 3. OTHER COMMITMENTS AND CONTINGENT LIABILITIES
John G. Kinnard and Company, Incorporated ("John G. Kinnard") is a
defendant in various actions relating to its business, some of
which involve claims for unspecified amounts. Although the
resolution of these matters cannot be predicted with certainty,
management believes that while their outcome may have a material
effect on the earnings in a particular period, the outcome will
not have a material adverse effect on the financial condition of
the Company.
NOTE 4. SEGMENTS
The Company's reportable segments are: retail sales, equity
capital markets, fixed income and other. The retail segment
consists of various retail branch locations and the financial
services division. Equity capital markets consists of equity
trading, institutional sales, research and investment banking.
Fixed income includes the origination, trading, and institutional
sales of fixed income securities. Other consists of general
corporate and administrative support functions. The Company does
not provide balance sheet data for segment reporting as this data
is not measured.
9
<PAGE>
KINNARD INVESTMENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4. SEGMENTS (CONTINUED)
Information concerning operations in these segments of business is
as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
----------------------------------------------------------------------------------
Three months ended March 31, 2000 1999
----------------------------------------------------------------------------------
<S> <C> <C>
Operating revenue:
Retail sales $11,259 $ 6,896
Equity capital markets 5,597 2,433
Fixed income 1,882 1,329
Other 284 1,160
----------------------------------------------------------------------------------
$19,022 $11,818
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Operating income / (loss):
Retail sales $ 2,416 $ 1,183
Equity capital markets 1,074 (405)
Fixed income 435 203
Other (1,413) (394)
----------------------------------------------------------------------------------
$ 2,512 $ 587
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
RESULTS OF OPERATIONS
The following table sets forth a summary of first quarter
increases (decreases) in segment revenue and expenses for 2000
versus 1999:
<TABLE>
<CAPTION>
(IN THOUSANDS)
- -----------------------------------------------------------------------------------------------------------------
Three months ended Change from
March 31, 2000 prior year Percent
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues:
Retail $11,259 $ 4,363 63.3%
Equity capital markets 5,597 3,164 130.0
Fixed income 1,882 553 41.6
Corporate 284 (876) (75.5)
- -----------------------------------------------------------------------------------------------------------------
Total operating revenues 19,022 8,228 73.8%
- -----------------------------------------------------------------------------------------------------------------
Operating income:
Retail 2,416 1,233 104.2
Equity capital markets 1,074 1,479 N.M.
Fixed income 435 232 114.3
Corporate (1,413) (1,019) (258.6)
- -----------------------------------------------------------------------------------------------------------------
Total operating income 2,512 1,925 327.9%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Pretax income 2,512 1,925 327.9%
- -----------------------------------------------------------------------------------------------------------------
Income tax expense 1,005 771 329.5
- -----------------------------------------------------------------------------------------------------------------
Net income $1,507 $1,154 326.9%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
RETAIL SALES. The Retail Sales business segment consists of various branch
locations and the financial services division. Revenue is generated primarily on
commissions generated by the sale of financial products and services to
individual investors.
The improvement in retail revenues was due to increased transaction levels and
improved investment executive productivity. Individual investors were more
active in the current period as evidenced by increases in the NASDAQ index,
which includes small cap stocks in which the Company specializes. Products that
recorded significant revenue increases included OTC principal, exchange listed
securities, OTC agency, options, unit trust and revenues from corporate finance
and syndicate offerings.
11
<PAGE>
The operating profit of Retail Sales in the current period was $2.4 million, an
increase of $1.2 million or 104.2% over the first quarter of 1999. The
improvement was due primarily to an increase in revenues along with a reduction
of certain fixed costs from the closing of unprofitable branch offices.
EQUITY CAPITAL MARKETS. Equity Capital Markets consists of equity trading,
institutional sales, research and investment banking. Investment banking
includes the fees earned on public equity underwritings, private placements and
merger and acquisition transactions.
The increase in Equity Capital Markets revenue was the result of a $1.3 million
increase in trading revenue from $0.9 million in the first quarter of 1999 to
$2.2 million in the quarter ended March 31, 2000, and the result of
approximately $1.2 million in revenue generated by the February 2000 WorldQuest
Networks, Inc. public offering for which the Company was a co-manager. There
were no significant investment banking transactions in the first quarter of
1999. The timing and magnitude of investment banking activity can vary
significantly from period to period based on market conditions and other
factors.
Equity Capital Markets group operating income of $1,074,000 in the first quarter
of 2000 compares to an operating loss of $405,000 in the first quarter of 1999.
The increase is primarily the result of increased trading and investment banking
revenues offset by commission expense and incentives and other incremental
compensation costs associated with the WorkQuest Networks, Inc. public offering.
FIXED INCOME. Fixed Income includes the origination, trading and institutional
sale of fixed income securities. The Fixed Income group results are driven
largely by the activity of the originations department which raises capital for
municipal and corporate clients located primarily in the Upper Midwest.
Fixed Income revenues increased by $553,000 or 41.6% from the first quarter of
1999. Fixed income origination revenue increased $229,000 from the first quarter
of 1999 as a result of an increase in the number and size of bond originations.
Bond trading revenue increased $225,000 from the first quarter of 1999, mostly
due to increased municipal bond trading activities. Revenues for the
institutional sales and trading of other fixed income securities were down
reflecting the continued slow pace of volumes from the fourth quarter of 1999.
Fixed income operating income increased $232,000 from the first quarter of 1999
reflecting the higher revenues for both originations and trades.
CORPORATE. Corporate consists of various administrative functions required to
support the revenue generating business units, such as Accounting, Human
Resources and Marketing, and the Company's investment porfolio
The operating loss in the Corporate area increased by $1.0 million or 258.6%.
Operating cost savings improved over last year, offset by higher incremental
incentive compensation costs driven by increased consolidated corporate profits.
The net loss on the investment account of $352,000 in the current period
compares to a net gain of $672,000 in the first quarter of 1999. The Company's
investment account has historically been a volatile source of income, and may
change significantly from period to period.
Net income rose by $1,154,000 or 326.9% from the first quarter of 1999. Diluted
earnings per share rose to twenty-nine cents from seven cents.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES
A large portion of the Company's assets are cash and assets readily convertible
to cash. The liquid portions of the Company's trading and investment securities
are stated at quoted market values and are readily marketable. The less liquid
portions of trading and investment securities, which totaled $1,150,000 at March
31, 2000, are stated at fair value, which is determined by management consistent
with prior pricing practices.
12
<PAGE>
OPERATING ACTIVITIES (CONTINUED)
Between December 31, 1999 and March 31, 2000 trading securities decreased
$1,017,000 and securities sold but not yet purchased decreased by $96,000. Both
long and short inventories are generally maintained to facilitate customer
transactions rather than for market speculation.
Based on the Company's current liquidity positions, available bank line and
operating plans, it is anticipated that the Company has sufficient resources to
meet the cash requirements of its operations in the foreseeable future.
INVESTING ACTIVITIES
The Company's investment account is invested in fixed income securities,
publicly traded equity securities and privately placed equity securities. Equity
securities, including warrants and private placement securities, are frequently
held as a result of past investment banking activities performed by the Company.
The Company may utilize outside advisors to manage a portion of the investment
portfolio consistent with the Company's investment policy.
The value of certain securities held in the investment account may fluctuate
significantly, with the resulting valuation changes being reported as net gains
or losses on the investment account. These fluctuations in value may have a
material impact on reported earnings.
FINANCING ACTIVITIES
John G. Kinnard maintains a discretionary credit facility in order to meet
short-term operating needs of up to $10 million. At December 31, 1999 and March
31, 2000 there were no outstanding balances under this facility.
During the first three months of 2000, the Company repurchased no shares of its
common stock. For the full year of 1999, a total of 760,000 shares were
repurchased at a cost of $3.6 million. Remaining shares authorized by the Board
of Directors for repurchase at March 31, 2000 are 1,231,491.
CAUTIONARY STATEMENTS
The Company wishes to caution investors of the following factors which could
affect the Company's results of operations and cause such results to differ
materially from those anticipated in forward-looking statements made in this
document elsewhere by or on behalf of the Company: volatility in the securities
markets, risks in the ownership and underwriting of securities, consolidation in
the financial services industry, volatility in earnings and losses of investment
securities, competition, government regulation, customer litigation and
arbitration, and off-balance-sheet credit and market risks. For a more complete
discussion of these and other factors, see the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The primary market risk exposure of the Company is the impact that market and
interest rate volatility may have on the value of financial securities and
underwriting commitments. The Company manages this risk exposure through a
process of internal controls, due diligence and management review. Position
limits for trading and inventory controls are established and monitored on an
ongoing basis. The trading inventory is turned over frequently throughout the
year. Securities held in the investment portfolio are guided by an investment
policy and are reviewed on a regular basis. Current and proposed underwriting
and other banking commitments are subject to due diligence reviews by the
appropriate business unit as well as by senior management.
The Company has evaluated its financial securities and underwriting commitments
at March 31, 2000 and assessed the related market risk. This inventory is turned
over frequently throughout the year. Based on this evaluation, in the opinion of
management, the market risk associated with the Company's financial securities
may have a material effect on the earnings in a particular period, but will not
have a material adverse effect on the financial condition of the Company.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 2 in Notes to Consolidated Financial Statements
contained in Part I above and incorporated herein by
reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule (filed in electronic format only)
(b) REPORTS ON FORM 8-K
None
14
<PAGE>
SIGNATURES
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.
KINNARD INVESTMENTS, INC.
/s/ Paul H. Perseke
----------------------------
Paul H. Perseke
Chief Financial Officer and Treasurer
(duly authorized officer and principal financial and
accounting officer)
Dated: MAY 10, 2000
15
<PAGE>
KINNARD INVESTMENTS, INC.
(Commission File Number: 0-9377)
EXHIBIT INDEX
for
Form 10-Q for the quarterly period ended March 31, 2000
<TABLE>
<CAPTION>
Exhibit
-------
<S> <C>
11 Statement Regarding Computation of Per Share Earnings (filed in
electronic form only)
27 Financial Data Schedule (filed in electronic form
only)
</TABLE>
16
<PAGE>
EXHIBIT 11. Statement Regarding Computation of Per Share Earnings
The following reconciliation illustrates the computation of basic
and diluted earnings per share:
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended
-------------
3/31/00 3/31/99
------- -------
<S> <C> <C>
Net income $1,507 $ 353
------------------------------------------------------------------------------------
Weighted average number of
common shares outstanding 4,835 5,362
Dilutive effect of stock options and
Warrants 0 19
Weighted average number of
common and potential dilutive
common shares outstanding 5,126 5,381
------------------------------------------------------------------------------------
Basic earnings (loss) per share $(0.31) $(0.07)
Diluted earnings (loss) per share $(0.29) $(0.07)
------------------------------------------------------------------------------------
</TABLE>
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,346
<SECURITIES> 25,436
<RECEIVABLES> 999
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,974
<DEPRECIATION> 3,841
<TOTAL-ASSETS> 41,328
<CURRENT-LIABILITIES> 10,574
<BONDS> 0
0
0
<COMMON> 97
<OTHER-SE> 30,657
<TOTAL-LIABILITY-AND-EQUITY> 30,754
<SALES> 0
<TOTAL-REVENUES> 19,374
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,510
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,512
<INCOME-TAX> 1,005
<INCOME-CONTINUING> 1,507
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,507
<EPS-BASIC> 0.31
<EPS-DILUTED> 0.29
</TABLE>
