<PAGE> 1
UNITED STATES
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 period ended MARCH 27, 1997
[ ] Transaction report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number: 1-7467
FIRST OF MICHIGAN CAPITAL CORPORATION
_____________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 13-2780197
_______________________________________ ______________________________________
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
100 RENAISSANCE CENTER/26TH FLOOR
DETROIT, MICHIGAN 48243
_________________________________________ ____________________________________
(Address of principal executive offices) (Zip Code)
(313) 259-2600
_____________________________________________________________
(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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $.10 Par Value - 2,497,764 shares as of May 14, 1997
<PAGE> 2
INDEX
FIRST OF MICHIGAN CAPITAL CORPORATION
<TABLE>
<S><C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets - March 27, 1997 and September 27, 1996
Condensed consolidated statements of income - Three months ended March 27, 1997
and March 29, 1996 and six months ended March 27, 1997 and March 29, 1996
Condensed consolidated statements of cash flows - Six months ended March 27, 1997
and March 29, 1996
Notes to condensed consolidated financial statements - March 27, 1997 and March 29, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
Exhibits
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
FIRST OF MICHIGAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 27, SEPTEMBER 27,
1997 1996
-------------- ---------------
<S> <C> <C>
ASSETS
Cash and cash equivalents........................... $ 4,906,229 $ 4,413,970
Receivable from brokers and dealers................. 1,969,387 2,779,493
Receivable from customers........................... 81,749,680 76,358,815
Notes receivable from employees..................... 2,003,717 2,008,716
Income taxes receivable............................. 108,660 1,072,972
Other accounts receivable........................... 1,252,624 1,114,085
Securities owned.................................... 6,845,539 6,574,071
Memberships in exchanges, at cost (market value-
$ 1,431,000 at March 27, 1997 and
$ 1,212,000 at September 27, 1996).............. 420,453 420,453
Equipment and leasehold improvements, at
depreciated cost................................. 3,012,177 3,063,704
Other investments................................... 201,531 230,331
Deferred income taxes............................... 822,000 826,000
Other assets........................................ 2,994,515 2,690,741
-------------- ---------------
$ 106,286,512 $ 101,553,351
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable to banks........................... $ 29,700,000 $ 18,500,000
Payable to brokers and dealers................... 23,193,949 31,630,491
Payable to customers............................. 11,447,455 9,410,879
Securities sold, not yet purchased............... 252,552 363,666
Employee compensation payable.................... 6,847,518 7,346,850
Income taxes payable............................. 328,943 42,159
Other accounts payable and accrued liabilities... 3,431,302 3,466,958
Capital lease obligation......................... 792,547 940,539
-------------- ---------------
75,994,266 71,701,542
Contingencies - See note
Stockholders' equity:
Common stock, $.10 par value 10,000,000
shares authorized, 2,891,558 issued............. 289,156 289,156
Capital in excess of par value...................... 3,676,635 3,676,635
Retained earnings................................... 29,948,213 28,362,180
-------------- ---------------
33,914,004 32,327,971
Less treasury stock, at cost ( 393,794 shares at
March 27, 1997 and 258,025 at
September 27, 1996............................... (3,621,758) (2,476,162)
-------------- ---------------
30,292,246 29,851,809
-------------- ---------------
$ 106,286,512 $ 101,553,351
============== ===============
</TABLE>
Note: The balance sheet at September 27, 1996 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. See notes to condensed consolidated
financial statements.
I-1
<PAGE> 4
FIRST OF MICHIGAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
MARCH 27, MARCH 29, MARCH 27, MARCH 29,
1997 1996 1997 1996
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Commissions................................. $ 11,400,679 $ 11,051,925 $ 22,029,361 $ 20,771,876
Principal transactions...................... 1,227,320 1,123,049 2,550,593 2,138,815
Investment banking.......................... 1,658,816 2,420,177 3,575,580 4,722,058
Interest.................................... 1,644,893 1,854,992 3,290,566 3,730,793
Insurance commissions....................... 949,763 680,018 1,984,544 1,320,354
Other....................................... 1,107,152 1,333,959 2,303,158 2,787,831
------------ ------------ ------------- ------------
Total revenues.............................. $ 17,988,623 $ 18,464,120 35,733,802 35,471,727
------------ ------------ ------------- ------------
EXPENSES:
Employee compensation and benefits.......... $ 9,715,499 $ 11,204,051 19,256,114 20,582,257
Floor brokerage, exchange, clearance and
other fees.............................. 1,567,256 1,271,037 2,812,449 2,514,383
Communications.............................. 250,195 267,889 506,656 579,876
Interest.................................... 600,000 797,103 1,162,649 1,654,146
Occupancy and equipment rental.............. 1,447,048 1,315,969 2,823,292 2,599,846
Taxes, other than income taxes.............. 1,011,039 958,368 1,557,067 1,540,642
Office supplies and expenses................ 1,020,395 1,136,265 2,003,432 2,164,057
Other operating expenses.................... 1,539,183 2,107,489 3,135,110 3,794,240
------------ ------------ ------------- ------------
Total expenses.............................. 17,150,615 19,058,171 33,256,769 35,429,447
------------ ------------ ------------- ------------
Income before income taxes.................... 838,008 (594,051) 2,477,033 42,280
Provision for income taxes.................... 296,000 (210,000) 891,000 10,000
------------ ------------ ------------- ------------
Net income .................................... $ 542,008 $ (384,051) $ 1,586,033 $ 32,280
============ ============ ============= ============
Net income per share.......................... $ .21 $ (.14) $ .61 $ .01
Average number of common and common
equivalent shares outstanding for income
per share.................................... 2,567,905 2,662,015 2,600,174 2,708,427
Cash dividends per share....................... --- --- --- ---
</TABLE>
See notes to condensed consolidated financial statements.
I-2
<PAGE> 5
FIRST OF MICHIGAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------
MARCH 27, MARCH 29,
1997 1996
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................... $ 1,586,033 $ 32,280
Noncash items included in net income:
Depreciation and amortization............................. 518,156 422,059
Deferred income taxes..................................... 4,000 (189,000)
Loss (gain) on sale of fixed assets....................... (251) 83
--------------- ----------------
2,107,938 265,422
--------------- ----------------
(Increase) decrease in operating receivables:
Customers................................................. (5,390,865) (5,214,743)
Brokers and dealers....................................... 810,106 2,185,130
Employees................................................. 4,999 422,147
Other..................................................... 825,773 549,972
Increase (decrease) in operating payables:
Customers................................................. 2,036,576 (1,487,880)
Brokers and dealers....................................... (8,436,542) (3,340,638)
Employee compensation..................................... (499,332) (6,706,333)
Income taxes.............................................. 286,784 (193,504)
Other..................................................... (35,656) 901,241
(Increase) decrease in:
Securities inventory...................................... (271,468) (191,843)
Other assets.............................................. (303,774) 1,389,664
Increase (decrease) in:
Securities sold, not yet purchased........................ (111,114) 35,347
--------------- ----------------
(11,084,513) (11,651,440)
--------------- ----------------
CASH USED FOR OPERATING ACTIVITIES........................... (8,976,575) (11,386,018)
--------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings......................... 11,200,000 13,250,000
Payments on capital lease obligation...................... (147,992) (141,417)
Employee stock transactions............................... --- 17,609
Repurchases of common stock............................... (1,145,596) (1,421,150)
--------------- ----------------
CASH PROVIDED BY FINANCING ACTIVITIES........................ 9,906,412 11,705,042
--------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net payments for equipment and leasehold improvements..... (466,378) (777,933)
Purchases, advances and other activity in other
investments - net....................................... 28,800 455,290
--------------- ----------------
CASH USED FOR INVESTING ACTIVITIES........................... (437,578) (322,643)
--------------- ----------------
INCREASE ( DECREASE ) IN CASH AND CASH EQUIVALENTS........... 492,259 (3,619)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............... 4,413,970 2,995,513
--------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF YEAR..................... $ 4,906,229 $ 2,991,894
=============== ================
Income tax payments.......................................... $ 600,216 $ 392,554
Interest payments............................................ $ 1,143,444 $ 1,609,718
</TABLE>
See notes to condensed consolidated financial statements.
I-3
<PAGE> 6
FIRST OF MICHIGAN CAPITAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 27, 1997 AND MARCH 29, 1996
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements include the accounts and
operations of First of Michigan Capital Corporation and its subsidiary
companies (the Company) including First of Michigan Corporation, a registered
securities broker-dealer and a member organization of the New York Stock
Exchange, Inc., after elimination of all significant inter-company accounts and
transactions.
Securities owned and securities sold, not yet purchased, are valued at market
and unrealized gains and losses are reflected in revenues.
Investment account securities are carried at the lower of cost or market.
Certain other investments are accounted for on the equity method. The
Company's equity in such operations was not material in amount during the
periods ended March 27, 1997 and March 29, 1996.
Net income per share is computed on the basis of the weighted average number of
common shares outstanding, assuming dilutive stock options were exercised at
the beginning of the quarter or at the date of issuance, if later, with the
applicable proceeds used to acquire additional treasury shares at the average
market price for the period.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
about amounts in the financial statements and accompanying notes. Actual
results could differ.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact resulted in no change in primary
earnings per share for the three months and six months ended March 27, 1997 and
March 29, 1996, respectively. The impact of Statement 128 on the calculation of
fully diluted earnings per share for these periods is not expected to be
material.
INCOME TAXES
The provision for income taxes consists of the following:
SIX MONTHS ENDED
-----------------
MARCH 27, 1997 MARCH 29, 1996
-------------- --------------
FEDERAL STATE & LOCAL FEDERAL STATE & LOCAL
------- ------------- --------- -------------
Current .............. $ 862,000 $ 25,000 $ 189,000 $ 10,000
Deferred.............. 4,000 --- (179,000) (10,000)
--------- -------- --------- ---------
Total................. $ 866,000 $ 25,000 $ 10,000 $ ---
========= ======== ========= =========
Deferred income taxes arise principally arise from retirement benefits expense
(and deferred compensation expense for 1996).
CONTINGENCIES
In the normal course of business, First of Michigan Corporation enters into
underwriting commitments. Transactions relating to such underwriting
commitments which were open at March 27, 1997 and subsequently settled, had no
material effect on the financial statements as of that date.
I-4
<PAGE> 7
As is the case with many firms in the securities industry, First of Michigan
Corporation is a defendant or co-defendant in a number of lawsuits or
arbitration's alleging damages, which are ordinary and routine litigation and
arbitration, incidental to the securities and investment banking business. The
Company is contesting the allegations of the complaints in these cases
and believes that there are meritorious defenses in each of these lawsuits.
Some of the proceedings relate to public underwriting of securities in which
First of Michigan Corporation participated as a member of the underwriting
syndicate.
In view of the number and diversity of claims against the Company and the
inherent difficulty of predicting the outcome of litigation and other claims,
the Company cannot state with certainty what the eventual outcome of pending
litigation or other claims will be. The Company provides for costs relating to
these matters when a loss is probable and the amount can be reasonably
estimated. The effect of the outcome of these matters on the Company's future
results of operations cannot be predicted because any such effects depends on
future results of operations and the amount and timing of the resolution of
such matters. While it is not possible to predict with certainty, management
believes that the ultimate resolution of such matters will not have a material
adverse effect on the consolidated financial position of the Company.
CAPITAL REQUIREMENTS
First of Michigan Corporation is subject to the uniform net capital rule (Rule
15c3-1) of the Securities and Exchange Commission and the capital rules of the
New York Stock Exchange, Inc., of which it is a member, and elects to compute
its net capital requirements in accordance with the alternative method.
Under this method, the Corporation is required to maintain minimum net capital,
as defined, equal to 2 percent of aggregate debit balances arising from
customer transactions, as defined. The net capital rules also provide that
equity capital may not be withdrawn or cash dividends paid if the resulting net
capital would be less than 5 percent of aggregate debits. At March 27, 1997
First of Michigan Corporation's net capital of $17,529,019 was 21 percent of
aggregate debit balances, and was $15,840,833 in excess of the 2 percent
minimum net capital required and $13,308,554 in excess of the 5 percent
dividend restriction.
_____________________________________
The preceding information is unaudited and accordingly, does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation of the results of the period have been
included. The results for the interim period are not necessarily indicative of
the results to be expected for the full year. For further information, refer
to the financial statements and footnotes thereto included in the Company's
annual report on Form 10-K for the year ended September 27, 1996.
I-5
<PAGE> 8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Second quarter and six months of fiscal 1997 compared to second quarter and
six months of fiscal 1996.
GENERAL
First of Michigan Capital Corporation's principal subsidiary is First of
Michigan Corporation, a member of the New York Stock Exchange Inc., and
Michigan's largest full-service securities firm. Founded more than 60 years
ago, First of Michigan Corporation specializes in a wide range of financial
services that include investment products such as stocks, bonds, unit trusts
and mutual funds; investment services such as retirement plans, money
management, underwriting and trading and investment banking. First of Michigan
offers these services through its 553 employees located in 33 offices
throughout Michigan, as well as an office at 100 Wall Street, New York.
The Company's profitability, to a large degree, is sensitive to the volume of
trading in securities and the volatility and general level of securities market
prices. While the Company places emphasis on controlling fixed costs, many of
its activities have high operating costs which do not decrease proportionately
with reduced levels of activity. Sustained periods of reduced volume, or loss
of clients, could have adverse effects upon profitability.
RESULTS OF OPERATIONS
During the quarter ended March 27, 1997, the U.S. financial markets continued
their upward movement due to low inflation and interest rates as well as a
growing economy. Retail trade volume at First of Michigan Corporation for the
six months was up 5% versus the same period last year. Total revenues for the
three months and six months were down slightly compared to the prior year. Net
income for the three months increased $.9 million (241%) to $.21 per share
compared to a loss of $.15 per share last year. Net income for the six months
increased $1.6 million (4813%) to $.61 per share compared to $.01 per share
last year.
Commission revenues which includes revenues from listed and over-the-counter
equity transactions as well as mutual fund transactions showed a modest
increase for the quarter and an increase of $1.3 million (6%) for the six
months. The Company is a market-maker in both equity and fixed income products
and maintains inventory of varying amounts in these products. Revenues from
these principal transactions favored equities, however, demand for fixed income
products remains strong. Investment banking revenues decreased for both the
three months and six months primarily in the area of equity underwriting (IPO).
Revenues from municipal and corporate underwritings as well as revenues from
financial consulting engagements also decreased. Interest income, primarily
derived from customer borrowings on margin, declined as short-term rates were
down approximately 25 basis points ( .25%) from this same time last year.
Average customer borrowings were also down for both the three month and six
month periods. Insurance commissions increased $.3 million (40%) for the
quarter and $.7 million (50%) for the six months primarily in the area of
tax-favored variable annuities. Other revenues decreased due to our
discontinuance as distributor for certain proprietary money market funds for a
local bank.
Total expenses decreased approximately $2 million for both the three months and
six months partially reflecting the Company's continuing cost containment
efforts. The largest expense category, employee compensation and benefits,
decreased $1.5 million for both the quarter and six months due to a charge in
the second quarter of fiscal 1996 of approximately $1 million resulting from a
realignment of the Company's operations and management structure. Floor
brokerage, exchange, clearance and other fees decreased for the quarter due to
fees paid to fully-disclosed brokers based upon revenues generated by those
firms. Interest expense decreased primarily due to the decline in interest
rates. Other expenses decreased $.6 million for both the three months and six
months due to a reduction in outside legal costs resulting from a staff
addition to our internal legal department as well as a reduction in settlement
costs and also partially due to a decrease in the use of outside computer
consultants. The provision for income taxes was up proportionately to the
increase in pre-tax earnings.
I-6
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Cash used for operating activities showed a net decrease for the three month
period. The largest source of cash resulted from an increase in payables to
customers. The greatest use of cash resulted from a reduction in payables to
other broker and dealers. Due to the nature of the Company's business, the
changes in operating asset and liability account balances for any particular
accounting period can be quite large and, therefore, are not useful indicators
of long-term trends in the sources on uses of cash. Cash provided by
financing and investing activities showed a net increase due to an increase in
short-term bank borrowings. At March 27, 1997, approximately 90% of the
Company's assets were liquid, consisting mainly of cash or assets readily
convertible into cash. The Company's largest asset is its receivables from
customers, representing borrowings by customers to finance the purchase of
securities on margin. Such receivables from customers are substantially
financed by equity capital, short-term borrowings under established lines of
credit with several banking institutions as well as from stock loan activities.
A total of $122,000,000 in approved lines of credit was available to the
Company at March 27, 1997, of which $29,700,000 was outstanding.
Under separate agreements, First of Michigan Capital Corporation had available
short-term lines of credit on an unsecured basis, aggregating $8,000,000.
There were no borrowings against these lines of credit at March 27, 1997.
The Company is subject to the net capital requirements of the Securities and
Exchange Commission and the New York Stock Exchange Inc., which are designed to
measure the general financial soundness and liquidity of broker-dealers. The
Company has consistently operated well in excess of the minimum requirements.
At March 27, 1997, the Company's net capital of $17,529,019 exceeded the
minimum requirement by $15,840,833.
Management believes that funds provided by net cash earnings combined with the
liquidity of its assets, its existing capital base and its available lines of
credit are fully adequate to meet the Company's financing needs for the
foreseeable future.
The Company does not engage in any derivative trading that would result in any
additional off-balance sheet risk.
CONTINGENT MATTERS
First of Michigan Corporation is the subject of claims made in several civil
actions arising out of its business as a broker-dealer and as an investment
banker. The company provides for costs related to contingencies when a loss is
probable and the amount is reasonably determinable. While these actions in the
aggregate seek substantial amounts, management believes that their ultimate
resolution, to the extent not previously provided for, will not have a material
adverse effect on the financial condition, liquidity, or results of operations
of the Company. However, depending on the amount and timing of an unfavorable
resolution to a contingency, it is possible that the Company's future results
of operations or cash flows could be materially affected in a particular
quarter.
OUTLOOK
The Company is focusing on growing its business in the State of Michigan and
on generating a consistent level of profitability. Recruiting efforts for
experienced investment executives is continuing as well as the development of
new financial products and services. The Company is monitoring the level of
all expenses closely and making adjustments wherever beneficial savings can be
achieved. Due to the recent purchase by General Motors of the building in
which the Company's headquarters is located, its lease expiring on August 31,
1997 will not be renewed. The Company has signed a lease for approximately
43,000 square feet, under a ten-year arrangement, at Stroh River Place - one
mile east of its current location, and will be moving to the new location
approximately August 1997.
The Company wishes to caution readers not to place undue reliance on any
forward-looking statements, which speak only as of the date of this Report, and
to advise readers that various factors, including national and regional
economic conditions and competitive factors, could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ materially from those anticipated or projected. The Company
does not undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of this Report.
I-7
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
(11) Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the
three months ended March 27, 1997.
II-1
<PAGE> 11
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.
FIRST OF MICHIGAN CAPITAL CORPORATION
May 14, 1997 /s/ Conrad W. Koski
_____________________________________
CONRAD W. KOSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 14, 1997 /s/ Charles M. Grimley
_____________________________________
CHARLES M. GRIMLEY
TREASURER AND CHIEF FINANCIAL OFFICER
S-1
<PAGE> 12
EXHIBIT INDEX
(11) Computation of Per Share Earnings
(27) Financial Data Schedule
<PAGE> 1
EXHIBIT 11
FIRST OF MICHIGAN CAPITAL CORPORATION
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
------------------------
MARCH 27, 1997 MARCH 29, 1996
-------------- --------------
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding:
Common shares 2,564,788 2,564,788 2,660,459 2,660,459
Dilutive shares available
under stock option plans 3,117 (29) 1,556 (65,298)
Weighted average common shares
and common stock equivalents
outstanding ------------ ------------- ------------- -------------
2,567,905 2,564,759 2,662,015 2,595,161
============ ============= ============= =============
Net earnings applicable to
common shares $ 542,008 $ 542,008 $ (384,051) $ (384,051)
============ ============= ============= =============
Earnings per share $ .21 $ .21 $ (.14) $ (.15)
============ ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
------------------------
MARCH 27, 1997 MARCH 29, 1996
-------------- --------------
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding:
Common shares 2,597,798 2,597,798 2,706,185 2,706,185
Dilutive shares available
under stock option plans 2,376 (752) 2,242 (64,977)
Weighted average common shares
and common stock equivalents
outstanding ------------ ------------- ------------- -------------
2,600,174 2,597,046 2,708,427 2,641,208
============ ============= ============= =============
Net earnings applicable to
common shares $ 1,586,033 $ 1,586,033 $ 32,280 $ 32,280
============ ============= ============= =============
Earnings per share $ .61 $ .61 $ .01 $ .01
============ ============= ============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-26-1997
<PERIOD-START> SEP-28-1996
<PERIOD-END> MAR-27-1997
<CASH> 4,906,229
<RECEIVABLES> 85,362,564
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 1,721,504
<INSTRUMENTS-OWNED> 6,845,539
<PP&E> 3,012,177
<TOTAL-ASSETS> 106,286,512
<SHORT-TERM> 29,700,000
<PAYABLES> 24,734,514
<REPOS-SOLD> 0
<SECURITIES-LOANED> 21,307,200
<INSTRUMENTS-SOLD> 252,552
<LONG-TERM> 0
0
0
<COMMON> 289,156
<OTHER-SE> 30,003,090
<TOTAL-LIABILITY-AND-EQUITY> 106,286,512
<TRADING-REVENUE> 2,550,593
<INTEREST-DIVIDENDS> 3,290,566
<COMMISSIONS> 22,029,361
<INVESTMENT-BANKING-REVENUES> 3,575,580
<FEE-REVENUE> 2,303,158
<INTEREST-EXPENSE> 1,162,649
<COMPENSATION> 19,256,114
<INCOME-PRETAX> 2,477,033
<INCOME-PRE-EXTRAORDINARY> 1,586,033
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,586,033
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.61
</TABLE>
