SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): July 16, 1998
THE ADVEST GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-8408 06-0950444
(State or other juris- (Commission (IRS employer
diction of incorporation) file number) identification no.)
90 State House Square, Hartford CT 06103
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (860) 509-1000
No change
(Former name or former address, if changed since last report)
Page 1
Exhibit Index on Page 3
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Item 5. Other Events.
On July 16, 1998, The Advest Group, Inc. issued a news release reporting
third quarter results and announcing a change to the Company's accounting
procedures concerning the recognition of income from warrants and the
related restatement of financial statements for the fiscal years ended
September 30, 1995, 1996 and 1997.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits:
99 News release dated July 16, 1998
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 hereunto duly authorized.
THE ADVEST GROUP, INC.
Date: July 16, 1998 By: /s/ MARTIN M. LILIENTHAL
Martin M. Lilienthal
Chief Financial Officer
Page 2
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EXHIBIT INDEX
Number Exhibit Page No.
99 News release dated July 16, 1998 3
Page 3
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Exhibit 99
Contact: Grant Kurtz, President
Martin Lilienthal, Executive Vice President and Chief Financial
Officer
(860) 509-1000 ext. 2339
The Advest Group, Inc. Reports Third Quarter Results
Hartford, CT July 16, 1998 -- The Advest Group, Inc. today announced
earnings for its third fiscal quarter which ended June 30. Net income was
$4.1 million or diluted earnings per share of $.44 compared with $3.8
million or $.42 per share a year ago, a 10% increase. Total revenues were
a record $82.9 million, an increase of 12% from $73.8 million in the year
earlier quarter.
Pre-tax earnings for Advest, Inc., the Company's broker/dealer
subsidiary, were $7.2 million compared with $7.0 million last year, a 2%
increase. Total revenues increased 14% to a record $78.3 million.
Investment banking revenues were a record $10.8 million, a 4% increase from
the previous high set in the year earlier quarter. Asset management
revenue increased 36% to $7.8 million and net interest income increased 13%
to $6.1 million, both reflecting record highs.
"Overall, the equity markets posted nominal gains during the quarter.
On a industry by industry basis, however, it was either feast or famine as
investors continue to assess the long-term impact of the ongoing Asian
crisis on corporate earnings," said Grant Kurtz, the Company's President.
"In this challenging environment, we are pleased to report another quarter
of record revenues, in particular, in our fee-based and investment banking
activities - two key areas."
For the nine months ended June 30, 1998, the Company reported net
income of $12.9 million or diluted earnings per share of $1.38 compared
with $10.3 million or $1.12 per share in the prior year, a 26% increase.
Total revenues increased 15% to a record $243.3 million.
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The Advest Group, Inc.
Third Quarter Report
Page 2
Earnings for the nine months ended June 30, 1998 reflect a change in
the Company's accounting procedures concerning the recognition of income
from warrants. Advest periodically receives warrants in conjunction with
its investment banking activities. Because the exercise of these warrants
frequently is restricted for one year and large block sales of the
underlying stocks may be difficult, the Company has historically recognized
income only upon exercise. Retroactive to October 1, 1994, the Company
adopted the accounting procedures for warrants outlined in Emerging Issue
Task Force ("EITF") 96-11. The cumulative effect was to increase retained
earnings as of September 30, 1994 by $850,000. The effect on the
subsequent periods was a collective net decrease in earnings of $30,000 and
is reflected in the tables following the current quarter's financial
summary below. The overall impact of the adoption of EITF 96-11 is a net
increase to equity of $820,000 and is immaterial to consolidated results
both as previously reported and as restated.
In other news, on July 15, the Company paid a quarterly dividend of
$.04 per share to shareholders of record date June 30. At June 30, 1998,
8,975,757 shares of common stock were outstanding.
Last week, the Company reported that its fourth quarter results would
include income of approximately $3 million related to the payoff of a $9
million real estate mortgage which had previously been classified as a
nonperforming asset.
The Advest Group, Inc. is a diversified financial company listed on
the New York Stock Exchange under the symbol ADV. Advest, Inc., its
principal subsidiary, provides brokerage, investment banking and asset
management services to retail and institutional investors through 89 sales
offices in 16 states and Washington, DC. Advest Bank and Trust offers
residential first mortgage and home equity loans and trust services
primarily through Advest, Inc.'s branch network. For more information,
visit our Internet site at www.advest.com.
______________________
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The Advest Group, Inc.
Third Quarter Results
Page 3
The Advest Group, Inc. Comparative Results
(In thousands, except per share amounts)
<TABLE>
Three months ended
6/30/98 6/30/97
- ----------------------------------------------------------------------------------
<S> <C> <C>
Revenues $82,870 $73,839
Pretax income $ 6,913 $ 6,613
Net income $ 4,148 $ 3,784
Net income per common and
common equivalent shares:
Basic $ 0.51 $ 0.47
Diluted $ 0.44 $ 0.42
Average common and common
equivalent shares outstanding:
Basic 8,182 8,041
Diluted 9,427 8,951
Cash dividend per common share $ 0.04 $ 0.03
- ----------------------------------------------------------------------------------
Nine months ended
6/30/98 6/30/97
- ----------------------------------------------------------------------------------
<S> <C> <C>
Revenues $243,263 $212,222
Pretax income $ 21,510 $ 17,967
Net income $ 12,906 $ 10,256
Net income per common and
common equivalent shares:
Basic $ 1.59 $ 1.28
Diluted $ 1.38 $ 1.12
Average common and common
equivalent shares outstanding:
Basic 8,146 8,035
Diluted 9,327 9,403
Cash dividend per common share $ 0.12 $ 0.06
- ----------------------------------------------------------------------------------
</TABLE>
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The Advest Group, Inc.
Third Quarter Report
Page 4
<TABLE>
The Advest Group, Inc. Comparative Results
As restated for the adoption of EITF 96-11
For the six months ended
March 31, 1998 and 1997
(In thousands)
1998 1997
- - - - - - - - - - - - - - - - - - - - - -
As Reported As Restated As Reported As Restated
- - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C> <C> <C> <C>
Revenues $161,012 $160,393 $138,360 $138,383
Expenses $146,013 $145,796 $127,021 $127,029
Pretax income $ 14,999 $ 14,597 $ 11,339 $ 11,354
Net income $ 8,999 $ 8,758 $ 6,463 $ 6,472
- - - - - - - - - - - - - - - - - - - - - - - - - - -
For the fiscal years ended
September 30, 1997, 1996 and 1995
(In thousands)
As Reported As Restated
- - - - - - - - - - - - - - - - -
<S> <C> <C>
1997
Revenues $289,345 $291,207
Expenses $265,247 $265,899
Pretax income $ 24,098 $ 25,308
Net income $ 14,218 $ 14,932
1996
Revenues $261,381 $259,902
Expenses $240,313 $239,795
Pretax income $ 21,068 $ 20,107
Net income $ 11,798 $ 11,260
1995
Revenues $232,633 $232,734
Expenses $220,872 $220,907
Pretax income $ 11,761 $ 11,827
Net income $ 6,351 $ 6,387
- - - - - - - - - - - - - - - - -
</TABLE>
