SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended Commission file number 1-8517
February 28, 1995
THE QUICK & REILLY GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3082841
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
230 South County Road, Palm Beach, Florida 33480
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (407) 655-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, par value $.10 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. (X)
The aggregate market value of voting stock held by non-affiliates
of the registrant is $303,877,311 at May 12, 1995.
11,075,075
(Number of shares of common stock outstanding at May 12, 1995)
Documents Incorporated by Reference Form 10-K
Annual Report to Shareholders for Parts II, IV
year ended February 28, 1995
Proxy Statement for Annual Meeting Part III
of Shareholders - June 27, 1995
PART I
Item 1. Business
(a) General Development of Business
The Quick & Reilly Group, Inc. (the "Company") was
originally incorporated in New York on June 25, 1981. The Company
was reincorporated in Delaware in 1987. It is a holding company
owning all of the capital stock of its primary subsidiaries: Quick
& Reilly, Inc., U.S. Clearing Corp., and JJC Specialist Corp.
Quick & Reilly, Inc. ("Q&R") was incorporated in New York
on March 1, 1974. Q&R became a member organization of the New York
Stock Exchange, Inc. ("NYSE") on May 2, 1974, and became the first
member organization to offer substantially discounted commission
rates to individual investors following the elimination of fixed
commission rates by the Securities and Exchange Commission ("SEC")
on May 1, 1975.
U.S. Clearing Corp. ("USCC") was incorporated in New York
on December 22, 1978, as a subsidiary of Q&R and began clearing
customer securities transactions in March 1979.
JJC Specialist Corp. ("JJC Specialist") was incorporated
in New York as a subsidiary of the Company on September 10, 1982,
and conducts specialist operations on the floor of the NYSE.
Q&R, USCC, and JJC Specialist (the "primary
subsidiaries") are member organizations of the NYSE and are
registered as broker-dealers with the SEC. Q&R and USCC
are members of the National Association of Securities Dealers (the
"NASD"). USCC is also a member of the American Stock Exchange (the
"AMEX"), Boston Stock Exchange, Philadelphia Stock Exchange,
Pacific Stock Exchange, Chicago Stock Exchange and Chicago Board of
Options Exchange. The primary subsidiaries are members of the
Securities Investor Protection Corporation, which provides
protection for customer accounts up to $500,000 per customer, with
a limitation of $100,000 on claims for cash balances. USCC has
also arranged for an additional $24.5 million worth of protection
per customer on securities through the Aetna Casualty & Surety Co.
(b) Financial Information about Industry Segments
The Company operates in a single industry segment and has
no foreign operations. No material part of the Company's
consolidated revenues is received from a single customer or group
of customers.
(c) Narrative Description of Business
The following table sets forth consolidated revenues of
the Company, the number of branch offices of Q&R, and the number of
USCC correspondents at year-end, on a comparative basis for each of
the last three fiscal years:
<TABLE>
Fiscal Year Ended February 28th,
<CAPTION>
1995 1994 1993
Amount % Amount % Amount %
<S> <C> <C> <C>
Commissions (Net
of clearance
fees) (1) $111,963,830 35.6 $116,127,964 43.8 $95,033,443 48.5
Clearance
Income (1) 27,815,389 8.8 38,039,653 14.3 28,915,075 14.8
Interest 128,988,369 40.9 68,336,767 25.8 47,334,287 24.2
Specialist Trading
and Commissions 40,413,850 12.8 37,869,617 14.3 19,083,325 9.7
Other 5,989,559 1.9 4,821,607 1.8 5,567,901 2.8
TOTAL REVENUES $315,170,997 100% $265,195,608 100% $195,934,031 100%
Number of Q&R
Offices 103 97 82
Number of USCC
Correspondents 233 179 165
<F1>
(1) Amounts for the fiscal year ended February 28, 1993 have been
restated to conform with the presentation for the fiscal years
ended February 28, 1995 and 1994.
</TABLE>
Discount Brokerage Services
On May 1, 1975, the SEC eliminated fixed commission rates
on securities transactions. Although this resulted in an immediate
and substantial reduction in commission rates charged to
institutional customers, rates charged to individual retail
customers by the full-service national brokerage firms were not
reduced. At that time, Q&R's management perceived that an
opportunity existed for firms willing to offer brokerage services
at commission rates substantially below the pre-"May Day" fixed
rates, and Q&R began offering such services.
Q&R offers discount brokerage services to investors who
make their own investment decisions. Q&R's management
perceives that these investors basically wish to have their
orders executed at the best possible price, and to have their
transactions cleared and their accounts maintained - all at the
lowest commission rate consistent with a professional level of
service. Q&R, together with the clearing operations of USCC, is
able to provide all of these services.
Q&R reaches the self-directed investor through a
combination of customer referrals and national and local
advertising. When an individual is referred or responds to
advertising, he receives a new account package that includes a
description of the services offered, a commission schedule and an
application. An account is established when the application is
returned and an initial transaction takes place.
An extensive branch office system has been established by
Q&R for the many investors who prefer to be close to their broker.
The branch office provides Q&R with a presence in the community and
provides the client with the opportunity to visit an office. The
investor may also contact a branch office by phone. A client is
assigned an Account Executive who does not offer investment advice.
From a single office in New York in 1974, Q&R has grown
to a total of 103 offices nationwide. Six new offices were opened
during the fiscal year ended February 28, 1995. These
offices are located in Davie, Florida; Schaumburg, Illinois; Santa
Barbara and Sunnyvale, California; Harrisburg, Pennsylvania; and
Great Neck, New York.
Q&R also has available various money market and mutual
funds that are provided by outside vendors, representing 81 mutual
fund families, of which there are in excess of 1,600 individual
funds, including 145 no-load funds.
Q&R provides investment information to its active clients
to assist them in making investment decisions. A list of these
services includes: Standard & Poor's Marketscope; Standard &
Poor's Research Reports; the Dow Jones News Service; Telescan
Charting Software; Wall Street by Fax; Quick & Reilly Top
Performers Report prepared by Standard & Poor's; and Quick &
Reilly's Dividend Study.
During fiscal 1995, Q&R added three services: the 24-Hour
Trading Desk to serve customers when the branch offices are closed;
"Easy Trade", an automated telephone trading and quotation service
which provides clients with an additional means to conduct business
24-hours a day with the use of a touch-tone telephone; and Dividend
Reinvestment Plus which enables investors to automatically reinvest
the dividends of any U.S. security and to keep track of this
activity on monthly statements.
Q&R offers a service that allows customers with personal
computers to monitor and manage their portfolios 24-hours a day
without talking to an account executive. The "Quick Way" system
enables customers to receive quotes, to have access to timely
market and research information, and to enter orders that are
electronically routed through a Q&R office to the proper market for
execution.
The Company believes that Q&R's advertising has played a
role in expanding the firm's customer base. Advertising expenses
for the fiscal years ended in 1995, 1994 and 1993 were
approximately $5,218,000, $6,226,000 and $6,011,000, respectively.
Clearing Services
USCC, which became operational in 1979, maintains
accounts and clears securities transactions for correspondents.
Correspondents consist of Q&R, JJC, banks and broker-dealers. When
a correspondent opens an account, the account is physically
maintained by USCC as agent.
USCC clears all securities transactions for Q&R's
customer accounts and presently carries accounts and clears
transactions for 233 correspondents. There is
competition to obtain clearing agreements with correspondent
brokers. USCC competes in this respect with a number of highly
visible, large, well-financed clearing firms. Contacts between
USCC and potential correspondent brokers are made by advertising,
referrals and solicited calls. Price, services, diversity of data
processing programs and applications, and reputation are the main
basis of competition. Management believes that USCC's services and
systems are competitive.
During the fiscal year ended February 28, 1995, USCC
purchased the correspondent clearing operations of Mabon Securities
Corp., adding sixteen correspondents, increasing USCC's presence in
the third party marketing of bank services.
During the fourth quarter, USCC signed an exclusive
referral agreement with the Independent Bankers Association of
America's Financial Services ("IBAA"), to supply discount brokerage
and clearing services to IBAA's 5,800 member community banks across
the United States.
Electronic data processing is an integral part of the
Company's entire brokerage operations, and particularly of USCC's
operations. The Company owns or leases the data processing
hardware necessary to input trades and back-office data. It relies
on a data processing service bureau for programming and main frame
computer capabilities. Management thus far has been satisfied with
the service bureau's performance, but there can be no assurance of
satisfactory performance in the future.
The Company believes that USCC's internal controls and
safeguards against risk of securities theft are adequate. USCC
relies upon certificate counts, microfilming procedures, and video
cameras recording movements in high security areas as deterrents to
securities theft. In addition, as required by the NYSE and certain
other regulatory authorities, USCC carries a fidelity bond covering
loss or theft. The total coverage of $20,000,000 (with a $250,000
deductible provision per incident) is believed to be adequate.
Customer Financing
Customers of correspondent brokers may effect transactions
either on a cash or margin basis. In an account authorized for margin
trading, USCC may lend its customers an amount up to that permitted by the
Federal Reserve Board, currently 50% of the market value of securities
purchased (Regulation T). The amount of the loan is also subject to NYSE
margin requirements and the firm's internal policies, which in some
instances are more stringent than Regulation T and NYSE
requirements.
Short sales of securities represent sales of borrowed
securities and obligate the client to purchase the securities at
a later date. Clients may sell securities short in a margin
account subject to minimum equity, applicable margin requirements,
and the availability of such securities to be borrowed and
delivered.
Interest is charged on the amount borrowed by customers
to finance their margin transactions. Interest charged on customer
accounts represented a major component of the Company's gross
revenues for the fiscal years ended February 28, 1995, 1994, and
1993.
Secured borrowings, subordinated loans and equity capital
are the primary sources of funds to finance customer margin account
borrowings. USCC also uses cash balances in customer accounts,
known as free credit balances, to finance customer margin account
balances.
The amount of the Company's net interest revenues from
financing margin transactions and from free credit balances is
affected not only by the volume of business but also by
fluctuations in prevailing interest rates.
Specialist Business
JJC Specialist Corp. is a wholly-owned subsidiary of
the Company. The unit consists of 23 specialists who are members
of the NYSE that make markets in 162 issues. Each specialist unit
is obligated by NYSE rules to maintain a fair and orderly market in
those stocks in which it is registered. It does so by purchasing
and selling stocks at times of demand and supply. The specialist,
therefore, becomes the central figure in the auction market.
The business provides an opportunity for profits but also
involves a high degree of risk during market volatility. At
present, there are 38 specialist units that compete in the
allocation process for new stocks.
On December 24, 1992, JJC Specialist Corp. acquired the
partnership of Stokes, Hoyt & Co., a specialist on the floor of the
NYSE. This unit became JJC Specialist Partners and was merged into
JJC Specialist Corp. on March 1, 1994.
The following table sets forth the highest, lowest and
average month-end long and short positions of the Company's
specialist business for the year ending February 28, 1995:
Average Month-End
Highest Position Lowest Position Position
Long Short Long Short Long Short
$23,561,103 $12,840,882 $8,671,775 $2,234,118 $16,047,389 $5,716,097
Competition
All aspects of the Company's business are highly
competitive. Competition within the securities industry is
principally based on the price and quality of the products and
services offered, financial resources, and the Company's reputation
within the investing community. There is also competition to
attract and retain personnel within the securities industry.
Competition for clients has increased from other sources, such as
commercial banks, savings institutions, mutual fund management
companies and investment advisory companies. It is likely that
competition from these institutions will intensify as they expand
their brokerage, clearance and specialist operations.
Regulation
The Company's primary subsidiaries are subject to various
federal and state laws which specifically regulate their
activities. The primary purpose of these requirements is to
enhance the protection of customer assets rather than the Company's
shareholders. Under certain circumstances, these rules may limit
the ability of the Company to make withdrawals of capital from the
primary subsidiaries. These laws and regulatory requirements
generally subject the primary subsidiaries to standards of solvency
with respect to capital requirements, financial reporting
requirements, approval of qualifications of personnel engaged in
various aspects of their business, record keeping and business
practices, the handling of customer funds resulting from securities
transactions and the extension of credit to customers on margin
transactions. Infractions of these rules and regulations may
result in suspension of individual employees and/or their
supervisors, termination of employees, limitations on certain
aspects of the subsidiary's business, as well as censures and
fines, or even proceedings of a civil or criminal nature which
could result in a temporary or permanent suspension of a part or
all of the primary subsidiaries' activities. Additional
information regarding regulation is set forth in Note 12 of the
Notes to Consolidated Financial Statements under the caption
"Capital Requirements". Such information is incorporated by
reference.
Employees
As of February 28, 1995, the Company and its sub-
sidiaries had 913 employees, including full-time and part-time
employees. Of these, 412 acted as Account Executives for Q&R. The
Company's executive management group consists of six executive
officers. The Company believes its relations with its employees
are good.
(d) Financial Information about Foreign and
Domestic Operations and Export Sales
Not applicable.
Item 2. Properties
The headquarters of the Company are located at 230 South
County Road, Palm Beach, Florida, 33480. The offices of its
primary subsidiaries are located at 26 Broadway, New York, New York
10004 under a lease expiring in 2002. Q&R's 103 branch offices are
located in 33 states and the District of Columbia. These offices
are located in premises covered by leases that expire on various
dates through 2005.
Item 3. Legal Proceedings
In the ordinary course of their securities business,
certain of the Company's primary subsidiaries have been named as
defendants in a number of legal actions. In the opinion of
management, based on discussions with counsel, the resolution of
such actions will not have a material adverse effect on the
consolidated financial condition of the Company or on its results
of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's
security holders during the last quarter of its fiscal year ended
February 28, 1995.
PART II
Market for the Registrant's Common
Item 5. Equity and Related Shareholder Matters
The information required herein is reported on page 24 of
the Company's Annual Report to Shareholders for the year ended
February 28, 1995, and is incorporated herein by reference.
Item 6. Selected Financial Data
The information required herein is reported on page 1 of
the Company's Annual Report to Shareholders for the year ended
February 28, 1995, and is incorporated herein by reference.
Management's Discussion and Analysis of
Item 7. Financial Condition and Results of Operations
The information required herein is reported on pages 11
and 12 of the Company's Annual Report to Shareholders for the year
ended February 28, 1995, and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The information required herein is reported on pages 13
through 23 of the Company's Annual Report to Shareholders for the
year ended February 28, 1995, and is incorporated herein by
reference.
Changes in and Disagreements with Accountants on
Item 9. Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required herein will be reported in the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held June 27, 1995, which will be filed on or
before June 27, 1995, and is incorporated herein by reference.
The Company's executive officers hold office until their
respective successors are duly elected and qualified, or until
their earlier resignation or removal. The executive officers
devote substantially all of their business efforts to the affairs
of the Company. The following table sets forth the name, age and
position with the Company of the executive officers.
Name Age Position
Leslie C. Quick, Jr. 69 Chairman of the Board of
Directors, Chief Executive
Officer, Chief Financial
Officer and Director
Peter Quick 39 Director and President
Leslie C. Quick III 42 Director, Vice President and
Treasurer
Thomas C. Quick 40 Director and Vice President
Christopher C. Quick 38 Director and Vice President
Pascal J. Mercurio 56 Director and Vice President
Leslie C. Quick, Jr. is the founder of the Company and
served as President, from its organization in 1981 until June 1986
and as Chief Executive Officer and Director from its organization
in 1981 until present. In April 1983, he was elected Chairman of
the Board of Directors of the Company. He served as President and
Chief Executive Officer of Q&R from its organization in 1974 until
June 1986 and as a Director from 1974 until March 1993. He has
served as President and Chief Executive Officer of USCC from
January 1979 to May 1981, and as a Director from January 1979 to
May 1993. Mr. Quick has also served as Treasurer and a Director of
JJC Specialist from September 1982 until March 1990, and as
President and Chief Executive Officer from March 1983 until June
1986. Mr. Quick has also served as President and a Director of Q&R
Charter, Inc. since December 1982.
Peter Quick, a son of Leslie C. Quick, Jr., became a
Director of the Company in November 1982 and was elected President
in March 1994. Mr. Quick has served as Vice President from June
1985 until his election as President in March 1994. He was named
Vice President of USCC in May 1987. He served in that capacity
until May 1990 when he became President of USCC, which position he
held until March 1994 when he was elected President of the Company
and Vice President of USCC. He serves as Vice President,
Treasurer, Secretary and Director of JJC and as Vice President and
Director of Q&R.
Leslie C. Quick III, a son of Leslie C. Quick, Jr., has
served as Vice President since March 1994, Treasurer since February
1985 and as a Director since July 1981. Mr. Quick served as
President of the Company from June 1986 to March 1994, at which
time he was elected President of USCC and became Vice President of
the Company. He also serves as Vice President, Treasurer,
Secretary and a Director of Q&R. He serves as a Director of JJC
Specialist.
Thomas C. Quick, a son of Leslie C. Quick, Jr., has
served as Vice President, Assistant Treasurer and a Director of the
Company since July 1981. In addition, Mr. Quick has served as Vice
President and Director of USCC since May 1982. Mr. Quick joined
Q&R in 1977, became Vice President and a Director in May 1981 and
was elected President of that corporation in June 1986. He serves
as Director of JJC.
Christopher C. Quick, a son of Leslie C. Quick, Jr., has
served as Vice President of the Company since 1988 and as a Director
since November 1982. Mr. Quick has served as President of JJC
Specialist since June 1986 and as a Director since its organization in
September 1982. From September 1982 until June 1986, Mr. Quick served as
Vice President - Trading of JJC Specialist. He is a memebre of the NYSE
and serves as a registered specialist in the specialist book managed by
JJC Specialist.
Pascal J. Mercurio has been a Director of the Company
since July 1981 and a Director of Q&R since March 1980. He joined
USCC as a Director and Executive Vice President upon its
organization in January 1979. Since that time he has served in
various capacities and in May 1990, he became USCC's Chairman of
the Board and Chief Executive Officer.
Item 11. Executive Compensation
The information required herein will be reported in the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held June 27, 1995, which will be filed on or
before June 27, 1995, and is incorporated herein by reference.
Security Ownership of Certain Beneficial
Item 12. Owners and Management
The information required herein will be reported in the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held June 27, 1995, which will be filed on or
before June 27, 1995, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information required herein will be reported in the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held June 27, 1995, which will be filed on or
before June 27, 1995, and is incorporated herein by reference.
PART IV
Exhibits, Financial Statement Schedules
Item 14. and Reports on Form 8-K
(a)(1) The following report and consolidated financial
statements are incorporated by reference from the
Registrant's 1995 Annual Report to Shareholders and
filed as part of this Report:
Report of Independent Public Accountants
Consolidated Financial Statements:
Consolidated Statements of Financial Condition -
February 28, 1995 and 1994
Consolidated Statements of Income for the Years
Ended February 28, 1995, 1994 and 1993
Consolidated Statements of Changes in
Shareholders' Equity for the Years Ended
February 28, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the
Years Ended February 28, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
(a)(2) The following is a list of financial statement
schedules filed as part of this report beginning
on page 26:
Schedule I - Condensed Financial Information of
Registrant
Report of Independent Public Accountants on
Schedules
(a)(3) See accompanying Index to Exhibits
(b) No reports on Form 8-K were filed by the Registrant
during the last fiscal quarter of the fiscal
year covered by this Report.
(c) The following is a list of all Exhibits filed as
part of this Report:
Exhibit Description Page
3.1 Amended By-Laws previously filed and herein
incorporated by reference.
3.2 The Company's restated certificate of
incorporation was filed as Exhibit 4.1
to the Company's Registration Statement
on Form S-8, Registration No. 33-28345,
and is hereby incorporated by reference.
4.1 Instruments defining the rights of
security holders were filed as
Exhibits 4.1 and 4.2 to the Company's
Registration Statement on Form S-1,
Registration No. 2-83667, and Exhibit 4.3
to the Company's Registration Statement
on Form S-8, Registration No. 33-28345,
and are hereby incorporated by reference.
10.1 Material contracts were filed as Exhibits
10.4 and 10.5 to the Company's
Registration Statement on Form S-1,
Registration No. 2-83667, and are hereby
incorporated by reference.
10.2 Agreement and Plan of Merger (Reincorporation
Merger Agreement) was filed as Exhibit A to the
Company's Notice of Annual Meeting of Shareholders
and Proxy Statement for the June 23, 1987 Annual
Meeting of Shareholders. Restated Certificate of
Incorporation of The Quick & Reilly (Delaware)
Group, Inc. was filed as Exhibit B to the Company's
Notice of Annual Meeting of Shareholders and Proxy
Statement for the June 23, 1987 Annual Meeting of
Shareholders. By-Laws of The Quick & Reilly
(Delaware) Group, Inc. was filed as Exhibit C to
the Company's Notice of Annual Meeting of
Shareholders and Proxy Statement for the June 23,
1987 Annual Meeting of Shareholders.
10.3 Quick & Reilly Stock Option Plan was filed as
Appendix A to the Company's Notice of Annual
Meeting of Shareholders for the fiscal year ended
February 28, 1991.
13.1 Annual Report to Shareholders for the 32
year ended February 28, 1995. With the
exception of the information incorporated
by reference into Items 5, 6, 7, and 8 of
this Form 10-K, the Annual Report to
Shareholders for the year ended February 28,
1995 is not deemed filed as part of this
report for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended.
21.1 A list of the Company's subsidiaries. 62
23.1 Consent of Independent Public Accountants 63
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Annual report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE QUICK & REILLY GROUP, INC.
BY PETER QUICK /s/ Dated: May 15, 1995
Peter Quick, President
Pursuant to the requirement of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
LESLIE C. QUICK, JR. /s/ Dated: May 15, 1995
Leslie C. Quick, Jr.
Chairman of the Board
Chief Executive Officer, Chief
Financial Officer, and Director
PETER QUICK /s/ Dated: May 15, 1995
Peter Quick
President and Director
THOMAS C. QUICK /s/ Dated: May 15, 1995
Thomas C. Quick
Vice President, Assistant Treasurer,
and Director
CHRISTOPHER C. QUICK /s/ Dated: May 15, 1995
Christopher C. Quick
Vice President and Director
LESLIE C. QUICK III /s/ Dated: May 15, 1995
Leslie C. Quick III
Vice President, Treasurer and Director
ALEXANDER BENISATTO /s/ Dated: May 15, 1995
Alexander Benisatto
Director
RICHARD G. BRODRICK /s/ Dated: May 15, 1995
Richard G. Brodrick
Director
THOMAS E. CHRISTMAN /s/ Dated: May 15, 1995
Thomas E. Christman
Director
ARLENE B. FRYER /s/ Dated: May 15, 1995
Arlene B. Fryer
Secretary and Director
HENRY P. KILROY /s/ Dated: May 15, 1995
Henry P. Kilroy
Director
CLIFFORD W. MAYS /s/ Dated: May 15, 1995
Clifford W. Mays
Director
PASCAL J. MERCURIO /s/ Dated: May 15, 1995
Pascal J. Mercurio
Vice President and Director
ROBERT J. RABINOFF /s/ Dated: May 15, 1995
Robert J. Rabinoff
Controller and Principal Accounting
Officer
THE QUICK & REILLY GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Reference
Annual
Report to
Share-
Form holders
10-K (page)
Financial Statements
Consolidated Statements of Financial
Condition at February 28, 1995
and 1994 13
For each of the three fiscal years in
the period ended February 28, 1995:
Consolidated Statements of Income 14
Consolidated Statements of Changes
in Shareholders' Equity 15
Consolidated Statements of Cash Flows 16
Notes to Consolidated Financial Statements 17
Report of Independent Public Accountants 22
Supplementary Information:
Quarterly Financial Data (unaudited) 23
Common Stock Data 24
THE QUICK & REILLY GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES (Continued)
Reference
Annual
Report to
Share-
holders
10-K (page)
Schedules
Report of Independent Public Accountants 31
on Schedules
I - Condensed Financial Information of
Registrant 26-30
THE QUICK AND REILLY GROUP, INC.
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
(Item 14(a))
Information presented in the schedules pertains only to
continuing operations unless otherwise stated.
All other schedules are omitted because the required
information is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the consolidated financial statements and notes
thereto.
The consolidated financial statements and supplementary
information listed in the above index, which are included in the
Annual Report to Shareholders of The Quick & Reilly Group, Inc. for
the year ended February 28, 1995, are hereby incorporated by
reference.
<TABLE>
Schedule I
(Page 1)
<CAPTION>
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
THE QUICK & REILLY GROUP, INC.
(Parent Company Only)
CONDENSED STATEMENTS OF FINANCIAL CONDITION
February 28, February 28,
1995 1994
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $6,294,983 $1,479,038
Securities Owned - At Market Value:
Municipal 21,143,104 23,585,782
Other 22,884 20,782
Receivable From Subsidiaries 1,503,044 1,296,850
Investments in Subsidiaries, at Equity 210,511,736 181,679,430
Other Assets 4,331,504 4,250,603
_____________ ____________
TOTAL ASSETS $243,807,255 $212,312,485
_____________ ____________
_____________ ____________
LIABILITIES AND SHAREHOLDERS' EQUITY
Payable to Subsidiaries $2,400,324 $3,274,549
Accrued Expenses and Other Liabilities 4,539,199 4,080,399
_____________ ____________
TOTAL LIABILITIES 6,939,523 7,354,948
_____________ ____________
Shareholders' Equity
Preferred Stock, $.01 Par Value;
Authorized 1,000,000 Shares,
None Issued and Outstanding - -
Common Stock, $.10 Par Value;
Authorized 20,000,000 Shares,
Issued 11,237,475 Shares 1,123,748 1,123,748
Paid-in Capital 74,179,352 74,179,352
Retained Earnings 165,837,020 131,584,887
_____________ ___________
241,140,120 206,887,987
Less: Common Stock in Treasury
at Cost- 162,400 in 1995 and
69,400 shares in 1994 (4,272,388) (1,930,450)
_____________ ___________
TOTAL SHAREHOLDERS' EQUITY 236,867,732 204,957,537
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $243,807,255 $212,312,485
------------ ------------
<F1>
See Notes to Condensed Financial Information.
</TABLE>
<TABLE>
Schedule I
(Page 2)
<CAPTION>
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
THE QUICK & REILLY GROUP, INC.
(Parent Company Only)
CONDENSED STATEMENTS OF INCOME
Fiscal Year Ended February 28,
____________________________________
1995 1994 1993
____________________________________
<S> <C> <C> <C>
REVENUES
Management fees from
Subsidiaries $2,548,997 $1,942,003 $1,664,500
Interest from
Subsidiaries 1,560,000 1,560,000 1,560,000
Other 1,021,505 1,203,652 1,901,829
__________ __________ __________
5,130,502 4,705,655 5,126,329
__________ __________ __________
EXPENSES
Employee Compensation
and Benefits 1,860,293 1,678,306 1,953,424
Interest 1,153 - 10,562
Rent and Other
Occupancy 71,952 62,973 21,239
Professional Services 284,212 240,742 119,453
Other 562,573 696,910 438,615
__________ __________ __________
2,780,183 2,678,931 2,543,293
__________ __________ __________
INCOME BEFORE PROVISION
FOR INCOME TAXES AND
EQUITY IN EARNINGS OF
SUBSIDIARIES 2,350,319 2,026,724 2,583,036
Provision for Income Taxes 471,854 434,663 514,546
__________ __________ __________
INCOME BEFORE EQUITY IN
EARNINGS OF SUBSIDIARIES 1,878,465 1,592,061 2,068,490
Equity in Earnings of
Subsidiaries 39,582,306 40,898,951 26,626,339
___________ ___________ ___________
NET INCOME $41,460,771 $42,491,012 $28,694,829
___________ ___________ ___________
___________ ___________ ___________
<F1>
See Notes to Condensed Financial Information.
</TABLE>
<TABLE>
Schedule I
(Page 3)
<CAPTION>
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
THE QUICK & REILLY GROUP, INC.
(Parent Company Only)
CONDENSED STATEMENTS OF CASH FLOWS
Fiscal Year Ended February 28,
____________________________________
1995 1994 1993
___________ ___________ ___________
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $41,460,771 $42,491,012 $28,694,829
Adjustments to
Reconcile Net Income to
Net Cash Provided By
(Used in) Operating
Activities:
Equity in Earnings
of Subsidiaries (39,582,306) (40,898,951) (26,626,339)
(Increases) Decreases in
Operating Assets:
Securities Owned 2,440,576 (3,827,698) (3,642,127)
Receivable From
Subsidiaries (206,194) 1,090,976 11,464,272
Other Assets (80,901) (1,382,912) (432,173)
Increases (Decreases) in
Operating Liabilities:
Payable to Subsidiaries (874,225) (771,984) 4,046,533
Income Taxes Payable - - (2,975)
Accrued Expenses and
Other Liabilities 458,800 636,201 (358,253)
__________ __________ __________
NET CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES 3,616,521 (2,663,356) 13,143,767
__________ __________ __________
CASH FLOWS FROM FINANCING
ACTIVITIES:
Dividends Paid on Common
Stock (7,208,638) (6,195,508) (4,588,255)
Purchase of Treasury
Stock (2,341,938) (1,784,600) (1,167,500)
Proceeds From Sale of
Treasury Stock Under Stock
Option Plan - 1,121,185 -
Proceeds from Issuance of
Common Stock Under Stock
Option Plan - - 229,532
Purchase of Shares Held
in Escrow - (82) -
__________ __________ __________
NET CASH USED IN
FINANCING ACTIVITIES (9,550,576) (6,859,005) (5,526,223)
__________ __________ __________
CASH FLOWS FROM INVESTING
ACTIVITIES:
Increase in Investment
in Subsidiary - (1,997,000) (3,655,783)
Cash Dividends Received
From Subsidiaries 10,750,000 2,000,000 2,000,000
__________ __________ __________
NET CASH PROVIDED BY
(USED IN) INVESTING
ACTIVITIES 10,750,000 3,000 (1,655,783)
__________ __________ __________
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 4,815,945 (9,519,361) 5,961,761
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE YEAR 1,479,038 10,998,399 5,036,638
__________ __________ __________
CASH AND CASH
EQUIVALENTS AT THE
END OF THE YEAR $6,294,983 $1,479,038 $10,998,399
__________ __________ ___________
__________ __________ ___________
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash Paid During the Year for:
Interest $ 1,153 $ - $ 10,562
Income Taxes 351,077 609,750 526,682
Noncash Financing and Investing
Activities:
Issuance of Common Stock
Pursuant to Acquisition $ - $ 1,947 $7,735,340
Five Percent Stock
Dividends Paid - 32,609,074 -
<F1>
See Notes to Condensed Financial Information.
</TABLE>
Schedule I
(Page 4)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
THE QUICK & REILLY GROUP, INC.
(Parent Company Only)
NOTES TO CONDENSED FINANCIAL INFORMATION
NOTE 1 - DIVIDENDS RECEIVED FROM SUBSIDIARIES
The Quick & Reilly Group, Inc. received from its
consolidated subsidiaries cash dividends of $10,750,000 for the
fiscal year ended February 28, 1995, and $2,000,000 for each of the
fiscal years ended February 28, 1994 and 1993, respectively.
NOTE 2 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The condensed financial information of The Quick & Reilly,
Group, Inc. (Parent Company Only) should be read in conjunction
with the consolidated financial statements of The Quick & Reilly
Group, Inc. and Subsidiaries and the notes thereto incorporated by
reference in this report.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Quick & Reilly Group, Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in The
Quick & Reilly Group, Inc. and Subsidiaries' annual report to
shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated April 17, 1995. Our audits were
made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed in the index on page 24 is
the responsibility of the Company's management and is presented
for the purpose of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
Arthur Andersen LLP
New York, New York
April 17, 1995
<PAGE>
<TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Selected Financial Highlights
<CAPTION>
Fiscal Year Ended the Last Day of February
----------------------------------------------------------
1995 1994 1993 1992 1991
----------------------------------------------------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Revenues $315,171 $265,196 $195,934 $154,019 $110,946
Net Revenues 231,416 226,405 171,696 140,238 95,878
Income Before Provisions
For Income Taxes 80,402 79,897 52,196 42,036 20,915
Net Income 41,461 42,491 28,695 22,684 11,755
Net Income Per Share (1) 3.73 3.79 2.63 2.22 1.14
Cash Dividends
Per Share (1) 0.65 0.57 0.42 0.35 0.25
Total Assets 2,581,880 2,476,855 1,376,965 1,029,611 435,143
Total Liabilities 2,345,012 2,271,897 1,207,639 891,190 330,433
Total Shareholders'
Equity 236,868 204,958 169,326 138,422 104,711
Book Value Per Share (1) 21.39 18.35 15.18 12.72 10.31
<F1>
(1) All per share data have been restated to reflect the two five
percent stock dividends declared during the fiscal year ended
February 28, 1994.
<PAGE>
</TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Management's Discussion and Analysis of Results of
Operations And Financial Condition
Description of Business
The Quick & Reilly Group, Inc. (the "Company") was originally
incorporated in New York on June 25, 1981 and changed its state of incorporation
to Delaware on April 24, 1987. The Company is a holding company owning all the
capital stock of its primary operating subsidiaries: Quick & Reilly, Inc.,
U.S. Clearing Corp., and JJC Specialist Corp.
Quick & Reilly, Inc. ("Q&R") was incorporated in New York on March 1, 1974.
Q&R became a member organization of the New York Stock Exchange ("NYSE")
on May 2, 1974, and became the first member organization to offer
substantially discounted commission rates to individual investors following
the elimination of fixed commission rates by the Securities and Exchange
Commission ("SEC") on May 1, 1975.
U.S. Clearing Corp. ("U.S. Clearing") was incorporated in New
York on December 22, 1978, and began clearing customer trades in March
1979. In 1992, U.S. Clearing established its institutional sales
operation.
JJC Specialist Corp. ("JJC Specialist") was incorporated in
New York as a subsidiary of the Company on September 10, 1982, and
conducts specialist operations on the floor of the NYSE. JJC Specialist
Partners was a wholly owned subsidiary of JJC Specialist and was
liquidated on March 1, 1994; its net assets merged into the assets and
liabilities of JJC Specialist.
Q&R, U.S. Clearing and JJC Specialist are member organizations
of the NYSE and are registered as broker-dealers with the SEC. Q&R
and U.S. Clearing are members of the National Association of Securities
Dealers. U.S. Clearing is also a member of the American Stock Exchange,
Boston Stock Exchange, Pacific Stock Exchange, Philadelphia Stock
Exchange, Chicago Stock Exchange and Chicago Board Options Exchange.
Q&R, U.S. Clearing and JJC Specialist are members of the Securities
Investors Protection Corporation, which provides protection for customer
accounts up to $500,000 per customer, with a limitation of $100,000 on
claims for cash balances. U.S. Clearing has also arranged for an
additional $24.5 million protection per customer on securities through the
Aetna Casualty & Surety Co.
Results of Operations
Comparison of 1995 and 1994 Results
Fiscal 1995 Revenues of the Company increased 19% compared with
fiscal 1994, while Net Revenues increased 2%. Commission and Clearance
Income decreased 9% compared with 1994, due to decreased volume in the
securities markets. Interest Income increased 89% primarily due to rising
interest rates, increased customer margin debits and stock borrowing
activities. Interest Expense increased 116% primarily due to rising interest
rates and increased stock lending activities. Specialist Trading and
Commissions increased 7% due to a favorable securities market environment in
market-making activities. Other Revenues increased 24% primarily due to
increased fee income.
Total Expenses Excluding Interest increased 3% for fiscal 1995 compared
with fiscal 1994. Employee Compensation and Benefits increased 4% for
1995 compared with 1994, primarily due to increases in incentive bonuses in
the clearing and specialist subsidiaries. Data Processing and Equipment
Rental increased 8%, primarily due to increased equipment charges related
to the Quick & Reilly branch network system and additional equipment
charges for the subsidiaries' new disaster recovery site. Printing, Postage,
Stationery and Office Supplies decreased 7%, due to the decreased trading
volume. Rent and Other Occupancy increased 8%, primarily due to the opening
of new branch offices and the moving of existing branches in Quick & Reilly,
Inc. Professional Services increased 30%, primarily due to increased
consulting, legal and accounting fees. Amortization of Intangible Assets
decreased 18%, due to the fully amortized goodwill relating to the Conklin,
Cahill & Co. acquisition at the end of February 1994. Other Expenses
increased 5%, primarily due to the expansion of the Q&R branch network and the
increase in institutional operations at U.S. Clearing Corp.
Comparison of 1994 and 1993 Results
Fiscal 1994 Revenues of the Company increased 35% compared with fiscal
1993. Commission and Clearance Income increased 24% compared with
1993, due to increased volume in the securities markets. Interest Income
increased 44%, primarily due to increased customer margin debits
and stock borrowing activities. Interest Expense increased 60%, primarily due
to increased stock lending activities. Specialist Trading and
Commissions increased 98%, primarily due to the acquisition of Stokes,
Hoyt & Co. in December 1992. Other Revenues decreased 13%, primarily due to
decreased fee income.
Total Expenses increased 29% for fiscal 1994 compared with fiscal 1993.
Employee Compensation and Benefits increased 31% for 1994 compared with
1993, primarily due to the acquisition of Stokes, Hoyt & Co. and their
related personnel, as well as increases in incentive compensation.
Brokerage, Exchange and Clearance Fees increased 11% primarily
due to increased trading volume. Data Processing and Equipment Rental
increased 23%, primarily due to the increased trading volume, as did
Printing, Postage, Stationery and Office Supplies, rising 45% for 1994
versus 1993. Rent and Other Occupancy increased 17%, primarily due to the
opening of new branch offices in Quick & Reilly, Inc. Amortization of
Intangible Assets decreased 42%, primarily due to the expiration of certain
covenants and contracts relating to the acquisition of Conklin, Cahill & Co.
Other expenses increased 31%, primarily due to the increased volume,
expansion of the Q&R branch network and the increase in institutional
operations at U.S. Clearing.
Liquidity and Capital Resources
Management of the Company believes that funds generated from operations will
provide it with sufficient resources to meet all present and reasonably
foreseeable future capital needs.
The Company's assets are highly liquid and consist mainly of
cash or assets readily convertible into cash. The Company utilizes
bank borrowings, securities lending activities, customers' free
credit balances and other payables, as well as the Company's equity
capital to finance receivables from customers. The secured financings
are collateralized primarily by customer securities pledged.
Customer receivables are secured by customer securities held as
collateral. The Company can demand payment of outstanding balances at any
time. Receivables and payables with other broker-dealers represent
either current open transactions which usually settle within a few days or
securities lending and borrowing activities which are collateralized and
normally can be closed out within a few days. The Company's primary
subsidiaries are subject to regulatory net capital requirements which are
designed to measure the general financial integrity and liquidity of
broker-dealers. Under the SEC's net capital requirements, Q&R, U.S. Clearing
and JJC may not (a) pay or permit the payment or withdrawal of any
subordinated debt, if payment would cause net capital to fall below certain
specified levels; (b) permit equity capital to be removed if, after giving
effect to such payment, withdrawal or removal, either aggregate indebtedness
of Q&R would exceed 10 times its net capital or net capital of Q&R would
fail to equal 1.2 times its minimum required net capital or for
U.S. Clearing would be less than 5% of its aggregate debit balances
arising from customer transactions or net capital of U.S. Clearing
would fail to equal 1.2 times its minimum required net capital;
or (c) permit equity withdrawals, unsecured loans or advances, to
certain related parties without prior approval of the SEC or its
designated examining authority if the withdrawal would cause net
capital to fall below certain specified levels. Additionally,
JJC Specialist must comply with the net liquid asset requirements of
the NYSE. These restrictions have not had, and are not expected to
have, any impact on the ability of the Company to meet its obligations.
As of the last day of February 1995 and 1994, the Company's
principal subsidiaries had aggregate net capital of $176,176,000 and
$138,376,000, respectively, which exceeded their aggregate minimum
net capital requirements by $145,850,000 and $108,425,000.
Effects of Inflation
The Company's assets are not significantly affected by inflation because
they are primarily monetary and liquid. In addition, large investments
in fixed assets are not required because the nature of the Company's
business is to provide services. Management believes that the replacement
costs of furniture, equipment and leasehold improvements in the Company's
principal and branch offices would not materially affect operations. However,
the rate of inflation affects the Company's expenses, such as employee
compensation, rent, communications and other expenses which may not be
readily recoverable in the prices of services offered by the Company.
To the extent inflation results in rising interest rates and has other
adverse effects upon the securities markets, it may adversely affect the
Company's financial position.
<TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(In Thousands, Except Share Amounts)
<CAPTION>
February 28, February 28,
1995 1994
---------------------------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $40,863 $41,824
Receivable From Brokers, Dealers
and Clearing Organizations 1,606,210 1,610,695
Receivable From Customers- Net of
Allowance for Doubtful Accounts
of $4,571 in 1995 and
$4,569 in 1994 800,884 731,353
Securities Owned- At Market Value
U.S. Government 8,382 8,991
Municipal 83,120 43,797
Equities and Other 14,914 11,998
Exchange Memberships- At Cost
(Market Value $10,362 in 1995
and $9,000 in 1994) 3,908 3,908
Furniture, Equipment and Leasehold
Improvements- At Cost Less
Accumulated Depreciation and
Amortization of $7,155 in
1994 and $7,837 in 1994 6,340 5,923
Other Assets 17,259 18,366
------------------------------------
TOTAL ASSETS $2,581,880 $2,476,855
====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Money Borrowed from Banks $7,797 $38,003
Drafts Payable 34,522 46,552
Payable to Brokers, Dealers and
Clearing Organizations 1,821,151 1,758,738
Payable to Customers 409,560 376,569
Securities Sold, But Not Yet
Purchased- At Market Value 12,918 8,059
Income Taxes Payable 3,643 1,702
Accrued Expenses and Other
Liabilities 55,421 42,274
--------------------------------
TOTAL LIABILITIES 2,345,012 2,271,897
--------------------------------
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock, $.01 par value;
authorized 1,000,000 shares, none
issued and outstanding - -
Common Stock, $.10 par value;
authorized 20,000,000 shares,
issued 11,237,475 in 1995 and
in 1994 1,124 1,124
Paid-in Capital 74,179 74,179
Retained Earnings 165,837 131,585
---------------------------------
241,140 206,888
Less: Common Stock in Treasury,
at Cost - 162,400 shares in
1995 and 69,400 shares in 1994 (4,272) (1,930)
---------------------------------
TOTAL SHAREHOLDERS' EQUITY 236,868 204,958
---------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,581,880 $2,476,855
=================================
<F1>
The accompanying notes are an integral part of these statements.
<PAGE>
</TABLE>
<TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
<CAPTION>
Fiscal Year Ended February 28,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
REVENUES
Commission and Clearance Income $139,779 $154,168 $123,949
Interest 128,988 68,337 47,334
Specialist Trading and Commissions 40,414 37,870 19,083
Other 5,990 4,821 5,568
------------------------------------------
Total Revenues 315,171 265,196 195,934
Interest Expense 83,755 38,791 24,238
------------------------------------------
Net Revenues 231,416 226,405 171,696
------------------------------------------
TOTAL EXPENSES EXCLUDING INTEREST
Employee Compensation and Benefits 82,785 79,546 60,676
Data Processing and Equipment Rental 17,736 16,467 13,437
Brokerage, Exchange
and Clearance Fees 12,821 12,793 11,507
Printing, Postage, Stationery
and Office Supplies 6,208 6,686 4,619
Rent and Other Occupancy 5,838 5,381 4,614
Advertising 5,218 6,226 6,011
Communication 3,043 2,826 3,140
Professional Services 2,881 2,220 2,098
Amortization of Intangibles 2,081 2,545 4,398
Other 12,403 11,818 9,000
------------------------------------------
Total Expenses Excluding Interest 151,014 146,508 119,500
------------------------------------------
Income Before Provision for
Income Taxes 80,402 79,897 52,196
Provision for Income Taxes 38,941 37,406 23,501
-------------------------------------------
NET INCOME $41,461 $42,491 $28,695
===========================================
Earnings Per Share $3.73 $3.79 $2.63
<F1>
The accompanying notes are an integral part of these statements.
<PAGE>
</TABLE>
<TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Consolidated Statement of Changes in Shareholders'Equity
(In Thousands, Except Share Amounts)
<CAPTION>
Common Stock Paid-in Retained Treasury
Total Shares Amount Capital Earnings Stock
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDERS'
EQUITY-
FEBRUARY 29,
1992 $138,422 9,873,868 $988 $33,642 $103,792 -
Cash Dividends
on Common Stock (4,588) - - - (4,588) -
Purchase of
Treasury Stock (1,167) - - - - (1,167)
Issuance of
Common Stock Under
Stock Option Plan
and Related
Tax Benefits 229 10,000 1 228 - -
Issuance of Common
Stock Pursuant to
Stokes, Hoyt & Co.
Acquistion 7,735 293,069 29 7,706 - -
Net Income 28,695 - - - 28,695 -
-------------------------------------------------------------
SHAREHOLDERS'
EQUITY-FEBRUARY 28,
1993 169,326 10,176,937 1,018 41,576 127,899 (1,167)
Five Percent
Common Stock
Dividends Declared
in April and
December 1993 0 1,041,071 104 32,505 (32,609) -
Common Stock Issued
Pursuant to Stokes,
Hoyt & Co.
Acquisition 0 19,467 2 (2) - -
Cash Dividends on
Common Stock (6,196) - - - (6,196) -
Purchase of
Treasury Stock (1,785) - - - - (1,785)
Sale of Treasury
Stock Under Stock
Option Plan and
Related Tax
Benefits 1,122 - - 100 - 1,022
Net Income 42,491 - - - 42,491 -
------------------------------------------------------------
SHAREHOLDERS'
EQUITY-
FEBRUARY 28,
1994 204,958 11,237,475 1,124 74,179 131,585 ($1,930)
Cash Dividends
on Common Stock (7,209) - - - (7,209) -
Purchase of
Treasury Stock (2,342) - - - - (2,342)
Net Income 41,461 - - - 41,461 -
-----------------------------------------------------------
SHAREHOLDERS'
EQUITY-
FEBRUARY 28,
1995 $236,868 11,237,475 $1,124 $74,179 $165,837 ($4,272)
=============================================================
<F1>
The accompanying notes are an integral part of these statements.
<PAGE>
</TABLE>
<TABLE>
The Quick & Reilly Group, Inc.and Subsidiaries
Consolidated Statements of Cash Flow
(In Thousands)
<CAPTION>
Fiscal Year Ended February 28,
----------------------------------------------
1995 1994 1993
----------------------------------------------
<S> <C> <C> <C>
CASH FLOWS
FROM OPERATING ACTIVITIES:
Net Income $41,461 $42,491 $28,695
Adjustments to Reconcile
Net Income to Net Cash
Provided By Operating
Activities:
Depreciation and
Amortization 3,503 3,971 5,435
Decreases (Increases)
in Operating Assets:
Receivable From Brokers,
Dealers and Clearing
Organizations 4,485 (907,325) (228,900)
Receivable From Customers (69,531) (189,532) (89,464)
Securities Owned (41,630) (8,952) (1,749)
Other Assets (980) 2,867 330
Increases (Decreases) in
Operating Liabilities:
Money Borrowed From Banks (30,206) 9,953 25,500
Drafts Payable (12,030) 254 15,493
Payable to Brokers,
Dealers and Clearing
Organizations 62,413 952,570 235,495
Payable to Customers 32,991 97,626 30,218
Securities Sold,
But Not Yet Purchased 4,859 (3,841) 4,650
Income Taxes Payable 1,941 (5,287) 1,410
Accrued Expenses and
Other Liabilities 13,147 12,983 698
------------------------------------------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 10,423 7,778 27,811
-------------------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Dividends Paid on
Common Stock (7,209) (6,196) (4,588)
Purchase of Treasury Stock (2,342) (1,785) (1,167)
Proceeds From Issuance of
Common Stock Under Stock
Option Plan - - 229
Proceeds From Sale of
Treasury Stock Under
Stock Option Plan - 1,122 -
Cash Acquired Related to
Issuance of Common Stock
for Stokes, Hoyt & Co.
Acquisition - - 1,754
------------------------------------------------
NET CASH FLOWS USED IN
FINANCING ACTIVITIES (9,551) (6,859) (3,772)
------------------------------------------------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Payment for Purchase
of Exchange Membership - (575) (500)
Payments for Purchase
of Furniture, Equipment
and Leasehold Improvements (1,833) (1,251) (5,123)
Payments for Acquisitions - (3,500) -
Payment for Intangible
Assets Acquired Related to
Stokes, Hoyt & Co. Acquisition - - (1,500)
-----------------------------------------------
NET CASH USED IN
INVESTING ACTIVITIES (1,833) (5,326) (7,123)
------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (961) (4,407) 16,916
------------------------------------------------
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE YEAR 41,824 46,231 29,315
------------------------------------------------
CASH AND CASH EQUIVALENTS
AT THE END OF THE YEAR $40,863 $41,824 $46,231
================================================
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash Paid During the Year for-
Interest $74,602 $38,273 $26,222
Income Taxes 29,569 34,181 22,461
Noncash Financing and
Investing Activities-
Issuance of Common Stock
for Noncash Net Assets and
Intangible Assets Pursuant
to Stokes, Hoyt & Co.
Acquisition - - 5,981
Five Percent Stock Dividends
Paid - 32,609 -
Issuance of Common Stock
Pursuant to Stokes, Hoyt
& Co. Acquisition - 2 -
<F1>
The accompanying notes are an integral part of these statements.
<PAGE>
</TABLE>
THE QUICK & REILLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1- ORGANIZATION AND SIGNIFICANT ACCOUNTING
POLICIES
The consolidated financial statements include the accounts of The
Quick & Reilly Group, Inc. (the "Company") and its wholly owned
subsidiaries which include Quick & Reilly, Inc., a broker-dealer
providing discount brokerage services; U.S. Clearing Corp., a
broker-dealer providing securities clearance for Quick & Reilly, Inc. and
JJC Specialist Corp., as well as for other correspondent
broker-dealers; and JJC Specialist Corp., a broker-dealer that is a
specialist on the floor of the New York Stock Exchange, Inc. (the "primary
subsidiaries"). All material intercompany transactions have been
eliminated.
Securities transactions are recorded on a settlement date basis,
except for proprietary transactions, commission and clearance
revenues and the related expenses, which are recorded on a trade date basis.
Securities owned and securities sold, but not yet purchased, are
valued at market and the resulting unrealized gains and losses are
reflected in the consolidated statements of income.
Intangible assets are being amortized on a straight-line basis
over three to fifteen years. Office furniture and equipment are
depreciated on a straight-line basis over three to eight years.
Leasehold improvements are amortized over the lives of the related
leases.
The Company considers short-term, highly liquid investments to be
cash equivalents.
Certain amounts have been restated for the fiscal years ended
February 28, 1994 and 1993, to conform with the February 28, 1995
presentation.
The number of Common Stock shares outstanding, and related
dollar amounts of Common Stock, Paid-in Capital and Retained Earnings, as
shown on the Consolidated Statements of Changes in Shareholders'
Equity for the fiscal years ended on the last day of February 1993
and 1992, have not been retroactively restated to reflect the two five
percent stock dividends paid during the fiscal year ended February
28, 1994.
<PAGE>
NOTE 2- ACQUISTIONS
During the fiscal year ended February 28, 1994, Quick & Reilly,
Inc. acquired the assets of a broker-dealer for cash. The major portion
of the purchase price has been allocated to customer lists, goodwill, and
covenants not to compete ("Intangible Assets") which are reflected in Other
Assets at $3,002,000 and $3,229,000, net of accumulated amortization of
$398,000 and $171,000, at February 28, 1995, and February 28, 1994,
respectively.
During the fiscal year ended February 28, 1993, JJC Specialist
Corp. acquired through merger the specialist firm of Stokes, Hoyt
& Co., and renamed it JJC Specialist Partners. The Company issued shares of
its common stock to the sellers valued as of the closing date of the
transaction in December 1992. The major portion of the purchase price has
been allocated to goodwill and covenants not to compete. Goodwill and covenants
not to compete are reflected in Other Assets in the amounts of $3,389,000
and $417,000, net of accumulated amortization of $2,592,000 and $1,083,000,
respectively, at February 28, 1995, and $4,585,000 and $917,000,
net of accumulated amortization of $1,390,000 and $583,000, respectively,
at February 28, 1994. JJC Specialist Partners was liquidated on March
1, 1994 and its net assets merged into the assets and liablilities of JJC
Specialist Corp.
During the period March 1, 1988, through February 29, 1992, the
Company acquired the retail businesses of several broker-dealers and the
operations of two specialist firms. Included in Other Assets at February 28,
1995, and 1994, are amounts of approximately $35,000 and $163,000, net of
accumulated amortization of approximately $25,273,000 and $25,144,000,
respectively, from such activity.
The acquisitions were accounted for under the purchase method
of accounting and the consolidated financial statements include the
results of operations of the businesses acquired from the date of
acquisition.
<PAGE>
NOTE 3-RECEIVABLE FROM AND PAYABLE TO BROKERS, DEALERS AND
CLEARING ORGANIZATIONS
<TABLE>
Amounts receivable from and payable to brokers, dealers and
clearing include (in thousands):
<CAPTION>
February 28, February 28,
1995 1994
--------------------------------
<S> <C> <C>
Receivable:
Securities Borrowed $1,554,300 $1,546,291
Securities Failed to Deliver 12,539 13,262
Clearing Organizations and Other 39,371 51,142
--------------------------------
$1,606,210 $1,610,695
================================
Payable:
Securities Loaned $1,807,747 $1,716,025
Securities Failed to Receive 6,972 11,241
Clearing Organizations and Other 6,432 31,472
-------------------------------
$1,821,151 $1,758,738
================================
<F1>
As these amounts are short-term in nature, their carrying
amounts are reasonable estimates of fair market value.
<PAGE>
</TABLE>
NOTE 4- RECEIVABLE FROM AND PAYABLE TO CUSTOMERS
The amounts shown represent the dollar
balances receivable from and payable to
customers in connection with securities, cash
and margin transactions. Customer receivables
are collateralized by securities, the
value of which is not reflected in the consolidated
financial statements. As these amounts are
short-term in nature, their carrying amounts are
reasonable estimates of fair market value.
NOTE 5- MONEY BORROWED FROM BANKS
Money borrowed from banks includes $7,797,000
and $38,003,000, at February 28, 1995, and 1994,
respectively, which is fully collateralized by securities
owned by customers and noncustomers. These loans
are payable on demand and generally bear interest at
the brokers' call rate. The weighted average borrowings
during fiscal 1995 and 1994 were $10,572,000
and $8,540,000, respectively. The weighted
average interest rates during fiscal 1995 and
1994 were 5.18% and 3.60%, respectively.
As these borrowings are short-term in nature and
bear market rates of interest, their carrying amounts are
reasonable estimates of fair market value.
<PAGE>
NOTE 6- COMMITMENTS AND CONTINGENCIES
The Company and its primary subsidiaries occupy office premises
under noncancellable leases expiring at various dates through April 2005.
Future minimum aggregate rentals, excluding escalations, under the leases
are $3,520,000, $3,460,000, $3,069,000, $2,358,000 and $2,083,000 for
each of the fiscal years ending the last day of February 1996 through 2000,
and $5,040,000, thereafter. The leases contain provisions for rent
escalations based on increases in costs incurred by the lessor. Rental expense
under the leases was $3,780,000, $3,412,000 and $2,902,000, for the fiscal
years ended February 28, 1995, 1994 and 1993, respectively.
Margin requirements of $56,200,000 with a clearing corporation
at February 28, 1995, have been satisfied by obtaining letters of credit with
face amounts totaling $56,500,000. These letters of credit are secured by
customers' margin securities.
In the ordinary course of their securities business, certain of
the Company's primary subsidiaries have been named as defendants in a
number of legal actions. In the opinion of management, based on discussions
with counsel, the resolution of such actions will not have a material adverse
effect on the consolidated financial condition of the Company or on its
results of operations.
<PAGE>
NOTE 7- SECURED DEMAND NOTES
The notes, which have a face value of $410,000
and are included in Other Assets, have been
contributed pursuant to secured demand note collateral
agreements and are subordinated to the claims
of general creditors of U.S. Clearing Corp.
The loans bear interest at rates of 7% to
8% per annum, and mature on March 31, 1996.
The loans are fully collateralized by
marketable securities of approximately
$600,000, which are available to the Company
to utilize in its securities finanacing
activities. The loans have automatic
renewal options unless written notice is
given by either party prior to seven months
preceding the stated maturity dates.
The loans are available to U.S. Clearing
Corp. in computing its net capital pursuant
to Rule 15c3-1 of the Securities and
Exchange Commission ("SEC"). The notes can
be repaid only if, after giving effect to
such repayment, U.S. Clearing Corp. meets
the SEC's net capital regulations governing
the withdrawal of subordinated debt.
<PAGE>
NOTE 8- EARNINGS PER SHARE
Earnings per share have been calculated by dividing
net income by the weighted average number of shares
outstanding for the fiscal year. Stock options
issued pursuant to The Quick & Reilly Stock Option
Plan are common stock equivalents. For the fiscal
years ended on the last day of February 1995, 1994
and 1993, earnings per share have not been adjusted
for the effect of any outstanding stock options, as
the impact is immaterial; however, they have been
retroactively adjusted to reflect the two five
percent stock dividends declared during the fiscal
year ended February 28, 1994. The weighted average
shares outstanding was 11,106,129, 11,207,713 and
10,911,146, for the fiscal years ended the last day
of February 1995, 1994 and 1993, respectively.
<PAGE>
<TABLE>
NOTE 9- INTEREST
<CAPTION>
Interest Income is comprised of the following (in thousands):
Fiscal Year Ended February 28,
-------------------------------------
1995 1994 1993
-------------------------------------
<S> <C> <C> <C>
Interest on Customer Margin Balances $54,273 $35,548 $28,249
Interest on Securities Borrowed 70,212 30,097 16,974
Other Interest Income 4,503 2,692 2,111
-------------------------------------
$128,988 $68,337 $47,334
=====================================
</TABLE>
<TABLE>
Interest Expense is comprised of the following (in thousands):
<CAPTION>
Fiscal Year Ended February 28,
-------------------------------------
1995 1994 1993
-------------------------------------
<S> <C> <C> <C>
Interest on Securities Loaned $73,853 $33,717 $20,578
Interest on Customer Credit Balances 9,158 4,562 3,199
Interest on Bank Loans 714 398 396
Other Interest Expense 30 114 65
-------------------------------------
$83,755 $38,791 $24,238
=====================================
<PAGE>
</TABLE>
NOTE 10- PENSION AND PROFIT SHARING PLANS
The Company and its primary subsidiaries have adopted defined
contribution pension and profit sharing plans covering all
full-time employees who have completed one year of service. The pension
plans provide for the employer to contribute an amount based on a
percentage of compensation as defined in the plan agreements. The profit
sharing plans provide for the employer to contribute an amount out of its
current profits, as defined in the plan agreements, or accumulated
earned surplus as determined by its Board of Directors. Voluntary
contributions from the participants may not exceed ten percent of
compensation paid to them during the plan year. For the fiscal
years ended February 28, 1995, 1994 and 1993, the Company and its primary
subsidiaries contributed, in the aggregate $3,365,000, $2,982,000
and $2,633,000, respectively, to the plans. The Company and its
primary subsidiaries also have noncontributory 401(k) plans covering all
full-time employees.
The Company and its primary subsidiaries participate in The
Quick & Reilly Group, Inc. Employee Benefit Plan (the "Benefit Plan"). The
Benefit Plan, established on September 1, 1992, provides health
benefits to eligible employees and their families. The Benefit
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). For the fiscal years ended February
28, 1995, 1994 and 1993, the Company and its primary subsidiaries
contributed, in the aggregate, $2,276,000 and $1,825,000 and
$575,000, respectively, to the plan.
<PAGE>
NOTE 11 - INCOME TAXES
The Company and its subsidiaries file a consolidated federal tax
return. Each subsidiary is charged or credited with an amount equal
to its separate tax liablility or benefit as if it were filing on
an individual company basis.
In 1994, the Company adopted the provisions of the Statement
of Financial Accounting Standards, "Accounting fo Income Taxes"
("SFAS No. 109"), which requires that an asset and liability
approach be applied in accounting for income taxes and that deferred tax
assets and liabilities be adjusted currently using tax rates expected to
be in effect when taxes are expected to be paid or recovered. The
implementation of SFAS No. 109 did not have a material impact on
the financial condition of the Company or on its results of
operations.
The effective tax rates differ from the federal statutory rate
applied to income before taxes for the following reasons:
<TABLE>
Fiscal Year Ended February 28,
-----------------------------------
1995 1994 1993
-----------------------------------
<S> <C> <C> <C>
Federal Statutory Income Tax Rate 35% 35% 34%
State & Local Taxes, Net of
Federal Tax Benefits 14% 14% 10%
Other (-1%) (-2%) 1%
-----------------------------------
Effective Income Tax Rate 48% 47% 45%
===================================
Income taxes consist of the following (in thousands):
Federal $23,681 $24,096 $15,670
State & Local 15,260 13,310 7,831
------------------------------------
$38,941 $37,406 $23,501
===================================
The deferred income tax provision (benefit) consists of
the following (in thousands):
Fiscal Year Ended February 28,
-----------------------------------
1995 1994 1993
-----------------------------------
Valuation of Securities Owned ($264) ($150) $164
Reserves Not Currently Deductible (46) (956) 186
------------------------------------
($310) ($1,106) $350
====================================
The following deferred tax assets are reflected in
Other Assets (in thousands):
February 28,
------------------------
1995 1994
------------------------
Deferred Tax Assets
Valuation of Securities Owned $383 $116
Reserves not Currently Deductible 1,322 1,279
------------------------
Total Deferred Assets $1,705 $1,395
========================
<PAGE>
</TABLE>
NOTE 12- CAPITAL REQUIREMENTS
As registered broker-dealers and member firms of the New York
Stock Exchange, Inc. (the"NYSE"), the primary subsidiaries
are subject to certain capital rules of both the SEC and the
NYSE. These rules require registrants to maintain minimum
levels of net capital, as defined, and may require a member
to reduce its business or prohibit a member from expanding
its business and declaring dividends as its net capital
approaches specified levels. As of February 28, 1995, and
1994, the primary subsidiaries had net capital, in the
aggregate, of $176,176,000 and $138,376,000, respectively,
which exceeded aggregate minimum net capital requirements by
$145,850,000 and $108,425,000, respectively. While the
primary subsidiaries' aggregate equity capital is includible
in net capital, $58,978,000 is not available for payment of
cash dividends and advances to the Company. As of February
28, 1995, this limitation does not restrict the Company from
declaring its regular dividends to its shareholders.
<PAGE>
NOTE 13- STOCK OPTION PLAN
On June 25, 1991, the Company amended the JJC Stock Option
Plan to (a) change its name to the Quick & Reilly Stock
Option Plan(the "Plan"); (b) expand the Plan participants to cover
directors, officers and employees of the Company and each of
its wholly owned subsidiaries, and (c) increase the number
of shares of common stock to 1,500,000. Pursuant to the Plan,
all options are granted at not less than fair market value on
the date of grant and for not more than a five-year time
period. All options outstanding on the last day of February
1995, 1994 and 1993 are exercisable. An officer of a
subsidiary will be granted on June 23 and December 23, 1995,
options to purchase 15,000 shares of the Company's common stock.
<TABLE>
<CAPTION>
STOCK OPTION Market Price
Number of -------------------------
Shares Per Share Total
--------------- -------------------------
<S> <C> <C> <C>
Outstanding at February 29, 1992 117,625 $27.24 $3,204,000
Granted at $20.99 per share* 55,125 $18.25 1,006,000
Granted at $31.05 per share 10,000 $22.38 224,000
Granted at $31.77 per share 10,000 $27.63 276,000
Less:
Exercised at $17.63 per share (10,000) $28.50 285,000
---------------
Outstanding at February 28, 1993 182,750 $24.19 4,420,000
Cancelled at $31.05 per share (10,000) $25.75 258,000
Cancelled at $31.77 per share (10,000) $25.75 258,000
Granted at $33.38 per share* 55,125 $30.48 1,680,000
Less:
Exercised at $13.79 per share (35,000) $27.13 950,000
Exercised at $13.79 per share (17,500) $33.00 578,000
---------------
Outstanding at February 28, 1994 165,375 $28.38 4,693,000
Granted at $27.25 per share* 55,125 $26.13 1,440,000
Granted at $36.50 per share 30,000 $27.63 829,000
---------------
Outstanding at February 28, 1995 250,500 $35.00 $8,768,000
===============
Available for Grant at
February 28, 1995 503,000
===============
<F1>
* The quantity of stock options granted as well as the
related exercise prices have been retroactively adjusted
to reflect the two five percent stock dividends declared during
the fiscal year ended February 28, 1994.
<PAGE>
</TABLE>
NOTE 14- SEGMENT REPORTING
The Company, through its primary subsidiaries,
operates predominantly in the securities industry.
Operations in such securities industry include
agency and principal transactions, and other
securities-related financial services.
<PAGE>
NOTE 15- FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET
RISK AND CONCENTRATIONS OF CREDIT RISK
In the normal course of business, the primary subsidiaries'
securities activities involve execution, settlement and financing
of various securities transactions for a nationwide customer
and noncustomer client base, as well as specialist trading
activities with counterparties. These activities may expose the
primary subsidiaries to risk in the event customers, other
broker-dealers, banks, depositories or clearing organizations are
unable to fulfill contractual obligations.
The primary subsidiaries conduct business with broker-
dealers, clearing organizations and depositories. Banking
activities are conducted mainly with commercial banks throughout
the country primarily to support customer securities activities.
For transactions in which the primary subsidiaries extend
credit to customers and noncustomers, the primary subsidiaries
seek to control the risks associated with these activities by
requiring the maintenance of margin collateral in compliance
with various regulatory and internal guidelines. The primary
subsidiaries monitor required margin levels daily and, pursuant
to such guidelines, request the deposit of additional collateral
or reduce securities positions when necessary. In addition, the
primary subsidiaries' correspondent broker-dealers may be
required to maintain deposits relating to security clearance
activities.
The primary subsidiaries record clearance of securities
transactions on a settlement date basis, which is generally five
business days after trade date. They are therefore exposed to
off-balance-sheet risk of loss on unsettled transactions in the
event customers and other counterparties are unable to fulfill
contractual obligations.
The Company's financing and securities lending activities
require the Company to pledge securities as collateral for
various secured financing sources such as bank loans, securities
loaned and letters of credit. In the event the counterparty is
unable to meet its contractual obligations, the Company may be
exposed to off-balance-sheet risk of acquiring securities
at prevailing market prices. The Company monitors the credit
standing of counterparties with whom it conducts business. Risk
is further controlled by monitoring the market value of
securities pledged on a daily basis and by requiring adjustments
of collateral level in the event of excess market exposure or by
instituting securities buy-in procedures when required.
<PAGE>
NOTE 16 - SUBSEQUENT EVENT
On March 1, 1995, the Company's Board of Directors approved a
three-for-two common stock split. The split becomes effective
on June 7, 1995, for shareholders of record as of May 15,
1995. A total of 5,618,738 shares of common stock are
anticipated to be issued in connection with the split,
including 81,200 shares of common stock held in treasury.
Retroactive application of the split will have several
effects on the financial statements. The number of shares
issued will increase to 16,856,213 as of February 28, 1995
and 1994, and 15,265,406 as of February 28, 1993. Net income
per share will decrease to $2.49, $2.53, $1.75, $1.48, and
$0.76 for the fiscal years ended the last day of February 1995,
1994, 1993, 1992 and 1991, respectively. Book value per share will
decrease to $14.26, $12.23, $10.12, $8.48, and $6.87 as of
the last day of February 1995, 1994, 1993, 1992 and 1991,
respectively.
<PAGE>
<TABLE>
The Quick & Reilly Group, Inc. and Subsidiaries
Quarterly Financial Data
(In thousands, except per share amounts)
<CAPTION>
For the Fiscal Year Ended February 28, 1995
(Unaudited)
------------------------------------------
Quarter
------------------------------------------
First Second Third Fourth
------------------------------------------
<S> <C> <C> <C> <C>
Revenues $75,437 $73,063 $80,003 $86,668
Interest Expense 16,030 19,784 22,806 25,135
------------------------------------------
Net Revenues 59,407 53,279 57,197 61,533
Total Expenses Excluding
Interest 39,479 36,200 37,484 37,851
Income Before Income Taxes 19,928 17,079 19,713 23,682
Net Income 10,320 8,519 10,141 12,481
Net Income Per Share (1) 0.93 0.77 0.91 1.12
For the Fiscal Year Ended February 28, 1994
(Unaudited)
-----------------------------------------
Quarter
-----------------------------------------
First Second Third Fourth
-----------------------------------------
Revenues $60,135 $61,329 $68,699 $75,033
Interest Expense 7,522 8,153 11,139 11,977
------------------------------------------
Net Revenues 52,613 53,176 57,560 63,056
Total Expenses Excluding
Interest 34,070 35,341 37,457 39,641
Income Before Income Taxes 18,544 17,836 20,103 23,414
Net Income 10,224 9,947 10,184 12,136
Net Income Per Share (1) 0.91 0.89 0.90 1.09
<F1>
(1) See Note 8 to Consolidated Financial Statements for the method
of calculating earnings per share.
<PAGE>
</TABLE>
Exhibit 22.1
The Subsidiaries of The Quick & Reilly Group, Inc.
Quick & Reilly, Inc.
U.S. Clearing Corp.
JJC Specialist Corp.
Q&R Charter, Inc.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports dated April 17, 1995 on the
consolidated financial statements (and schedules) of The Quick &
Reilly Group, Inc. and subsidiaries included in this Form 10-K,
into the Company's previously filed Registration Statement on Form
S-3 (No. 33-63950) and Registration Statement on Form S-8 (No. 33-
28345).
Arthur Andersen LLP
