SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/ x / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-9305
STIFEL FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1273600
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 N. Broadway, St. Louis, Missouri 63102-2188
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-342-2000
(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 / /
Shares of common stock outstanding at September 30, 1994: 3,891,419 par
value $.15.
Exhibit Index is on page 16.
<PAGE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition --
September 30, 1994 and December 31, 1993 3-4
Consolidated Statements of Operations --
Three Months Ended September 30, 1994 and
September 24, 1993 5
Consolidated Statements of Operations --
Nine Months Ended September 30, 1994 and
September 24, 1993 6
Consolidated Statements of Cash Flows--
Nine Months Ended September 30, 1994 and
September 24, 1993 7-8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
<TABLE>
PART 1. FINANCIAL CONDITION
Item 1. Financial Statements
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
September 30, 1994 December 31, 1993
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 5,350,104 $ 6,542,052
Cash and U.S. Government securities segregated
for the exclusive benefit of customers 1,164,633 1,261,480
Receivable from brokers and dealers 34,825,665 16,462,295
Receivable from customers (less allowance
for doubtful accounts of $1,080,006 at
September 30, 1994 and $1,435,058 at
December 31, 1993) 135,772,204 153,373,372
Securities owned, at market value 19,039,022 86,510,135
Membership in exchanges, at cost (approximate
market value: $1,740,500 at September 30,
1994 and $1,514,000 at December 31, 1993) 513,015 513,015
Office equipment, leasehold improvements, and
building, at cost (less allowances for de-
preciation and amortization of $13,759,652
at September 30, 1994 and $12,973,124 at
December 31, 1993), respectively 4,496,698 4,760,453
Non-securities receivable from employees 5,476,037 2,754,086
Goodwill and other intangible assets 4,359,048 4,590,998
Miscellaneous other assets 9,658,737 11,435,070
------------- -------------
$ 220,655,163 $ 288,202,956
============= =============
</TABLE>
NOTE: The Consolidated Statement of Financial Condition at December 31, 1993
has been derived from the audited financial statements at that date.
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
<CAPTION>
September 30, 1994 December 31, 1993
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings from banks $ 64,600,000 $136,950,000
Payable to brokers and dealers 44,444,825 24,522,655
Payable to customers 27,335,402 36,323,885
Market value of securities sold, but not
yet purchased 7,363,375 3,906,547
Drafts payable 10,551,265 14,376,402
Employee compensation 7,613,711 8,987,033
Obligation under capital lease 423,271 931,274
Accounts payable and accrued expenses 8,566,992 10,835,943
Long-term debt 10,760,000 10,760,000
------------ ------------
Total Liabilities 181,658,841 247,593,739
Stockholders' equity
Common stock 617,886 617,886
Additional paid-in capital 17,332,733 17,268,905
Retained earnings 22,950,209 24,161,663
------------ ------------
40,900,828 42,048,454
Less:
Cost of stock in treasury 1,795,064 1,240,452
Unamortized expense of restricted stock
awards 109,442 198,785
------------ ------------
Total Stockholders' Equity 38,996,322 40,609,217
------------ ------------
$220,655,163 $288,202,956
============ ============
</TABLE>
NOTE: The Consolidated Statement of Financial Condition at December 31, 1993
has been derived from the audited financial statements at that date.
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30, 1994 September 24, 1993
<S> <C> <C>
REVENUES
Commissions $ 5,822,828 $ 6,419,618
Principal transactions 6,500,298 6,372,703
Investment banking 2,742,977 8,003,794
Interest 2,810,076 2,345,412
Sale of investment company shares 2,139,823 3,158,853
Sale of insurance products 536,423 511,508
Sale of unit investment trusts 434,772 1,155,707
Other 2,585,802 1,470,330
----------- -----------
23,572,999 29,437,925
EXPENSES
Employee compensation & benefits 14,643,573 17,914,213
Commissions & floor brokerage 524,253 560,350
Communication & office supplies 2,106,994 1,880,586
Occupancy & equipment rental 2,293,566 2,038,464
Promotional 677,559 757,183
Interest 1,533,933 937,375
Other operating expenses 2,473,718 2,496,670
----------- -----------
24,253,596 26,584,841
----------- -----------
(LOSS) INCOME BEFORE INCOME TAXES (680,597) 2,853,084
(Benefit) Provision for income taxes (260,281) 1,127,502
----------- -----------
NET (LOSS) INCOME $ (420,316) $ 1,725,582
Net (loss) income per share:
Primary $ (0.10) $ 0.42
Fully diluted $ (0.10) $ 0.36
Dividends declared per share $ 0.03 $ 0.025
Average common equivalent shares
outstanding:
Primary 4,004,628 4,091,376
Fully Diluted 5,229,518 5,316,266
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30, 1994 September 24, 1993
<S> <C> <C>
REVENUES
Commissions $19,155,029 $20,527,255
Principal transactions 16,659,807 17,852,737
Investment banking 9,930,380 22,904,797
Interest 7,939,749 6,591,731
Sale of investment company shares 7,758,169 9,020,800
Sale of insurance products 1,720,256 1,476,933
Sale of unit investment trusts 1,773,286 2,868,982
Other 7,209,062 4,439,439
----------- -----------
72,145,738 85,682,674
EXPENSES
Employee compensation & benefits 46,066,914 53,230,228
Commissions & floor brokerage 1,550,351 1,820,773
Communication & office supplies 5,784,508 5,264,184
Occupancy & equipment rental 6,663,790 5,764,504
Promotional 2,208,903 2,283,412
Interest 4,312,391 3,431,419
Other operating expenses 7,174,534 5,692,286
----------- -----------
73,761,391 77,486,806
----------- -----------
(LOSS) INCOME BEFORE INCOME TAXES (1,615,653) 8,195,868
(Benefit) Provision for income taxes (643,638) 3,042,708
----------- -----------
NET (LOSS) INCOME $ (972,015) $ 5,153,160
Net (loss) income per share:
Primary $ (0.24) $ 1.28
Fully diluted $ (0.24) $ 1.07
Dividends declared per share $ 0.06 $ 0.075
Average common equivalent shares
outstanding:
Primary 4,097,105 4,036,504
Fully Diluted 5,321,995 5,280,319
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30, 1994 September 24, 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (972,015) $ 5,153,160
Non-cash items included in earnings:
Depreciation and amortization 1,872,214 1,548,963
Bonus notes amortization 567,158 336,228
Deferred compensation 353,656 335,304
Provision for litigation and bad debt 839,597 1,212,198
Unrealized (gains) losses on investments (403,317) 349,938
Amortization of restricted stock awards 89,853 177,277
------------ ------------
2,347,146 9,113,068
Decrease (increase) in operating receivables:
Customers 17,601,168 (9,554,715)
Brokers and dealers (18,363,370) (1,747,750)
(Decrease) increase in operating payables:
Customers (8,988,483) (6,406,378)
Brokers and dealers 19,922,170 6,759,129
Decrease in other receivables and assets:
Cash & U.S. Government securities
segregated for the exclusive benefit
of customers 96,847 3,696,719
Securities owned 67,471,113 87,454,565
Other assets 834,543 1,336,310
Increase (decrease) in liabilities:
Securities sold not yet purchased 3,456,828 2,049,783
Securities sold under repurchase agreement - - (36,906,900)
Drafts payable, accrued expenses, and
employee compensation (7,827,181) (9,847,234)
------------ ------------
Cash Provided By Operating Activities $ 76,550,781 $ 45,946,597
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30, 1994 September 24, 1993
<S> <C> <C>
Cash Provided By Operating Activities -
from previous page $ 76,550,781 $ 45,946,597
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments for short-term borrowings
from banks (72,350,000) (47,515,000)
Proceeds from:
Employee stock purchase plan 611,688 627,587
Exercised stock options 58,424 239,930
Dividend reinvestment plan 423 - -
Payments for:
Purchase of treasury stock (1,252,807) (1,314,314)
Restricted Stock Awards - - (61,086)
Principal payments under capital leases (508,003) (455,027)
Cash Dividends (239,104) (282,455)
------------ ------------
Cash Used For Financing Activities (73,679,379) (48,760,365)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of investments 7,048 53,414
Sale of office equipment and leasehold
improvements 5,411 7,084
Payments for:
Acquisition of office equipment, leasehold
improvements and building (1,355,459) (1,148,377)
Acquisition of investments (84,888) (993,215)
Bonus notes (2,635,462) (857,530)
------------ ------------
Cash Used For Investing Activities (4,063,350) (2,938,624)
Decrease in cash and cash equivalents (1,191,948) (5,752,392)
Cash and cash equivalents - beginning
of period 6,542,052 12,436,988
------------ ------------
Cash and Cash Equivalents - end of period $ 5,350,104 $ 6,684,596
============ ============
Supplemental disclosure of cash flow
information:
Income tax payments $ 118,396 $ 3,651,357
Interest payments $ 4,566,281 $ 3,334,922
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Stifel
Financial Corp. and its subsidiaries (collectively referred to as the
Company). The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do 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 of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
nine months ended September 30, 1994 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1994.
For further information, refer to the financial statements and notes thereto
included in the Company's annual report on Form 10-K for the five-month
transition period ended December 31, 1993.
NOTE B - NET CAPITAL REQUIREMENT
As a registered broker-dealer and member of the New York Stock Exchange,
the Company's brokerage subsidiary, Stifel, Nicolaus & Company, Incorporated
(SN & Co.), is subject to the Securities and Exchange Commission's (SEC)
uniform net capital rules. The broker-dealer subsidiary has elected to
operate under the alternative method of the rule, which prohibits a broker-
dealer from engaging in any securities transactions when its net capital is
less than 2% of its aggregate debit balances, as defined, arising from
customer transactions. The SEC may also require a member firm to reduce its
business and restrict withdrawal of subordinated capital if its net capital is
less than 4% of aggregate debit balances, and may prohibit a member firm from
expanding its business and declaring cash dividends if its net capital is less
than 5% of aggregate debit balances. At September 30, 1994, SN & Co. had net
capital of $23,244,122 which was 16% of its aggregate debit balances and
$20,273,529 in excess of the 2% net capital requirement.
NOTE C - INCOME TAXES
Effective August 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS ) No. 109, "Accounting for Income Taxes." This
statement requires, among other provisions, that deferred taxes be adjusted to
reflect current rates. The adoption of SFAS No. 109 did not have a material
effect on the Company's financial condition or result of operations.
NOTE D - SUBSEQUENT EVENT
On October 18, 1994, the board of directors declared a regular quarterly
dividend of $0.03 per share, payable on November 15, 1994 to stockholders of
record November 1, 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(all dollars in thousands, except per share amounts)
Results of Operations
In 1993, the Company changed its fiscal year-end from the last Friday in
July to a calendar year-end. The five-month transition period ended December
31, 1993 has been presented in the transition period From 10-K. As a result
of this fiscal year-end change, 1993 has been recast for comparative purposes.
Three months ended September 1994 and September 1993
The Company recorded a net loss of $420 for the three months ended
September 30, 1994, compared to net income of $1,726, for the three months
ended September 24, 1993, a decrease of $2,146. The primary loss per share
was $0.10 compared to the previous year's primary earnings per share of
$0.42, a decrease of $0.52. The decline was primarily attributable to sharply
reduced investment banking fee income and a decrease in commissionable
revenues.
Total revenues, for the three months ended September 30, 1994, decreased
$5,865 (19.9%) to $23,573 from $29,438, from the year earlier quarter.
Investment banking revenues decreased $5,261 (65.7%), from the same period one
year earlier, principally due to decreased municipal bond offerings, most of
which were refundings of existing issues. Municipal refunding activity had
been unusually robust during the past two years as interest rates were
declining. As rates began to rise, industry wide refunding activity has
slowed considerably causing the sharp comparative declines. Management
believes that retail investors' uncertainty over the current market conditions
has caused the commission revenues to decline $2,311 (20.6%). Agency
commission, sale of investment company shares, and sale of unit investment
trusts decreased $597 (9.3%), $1,019 (32.3%), and $721 (62.4%), respectively.
The declines were partially offset by the $25 (4.9%) increase in the sale of
insurance products. Other revenues increased $1,115 (75.9%) as a result of
the trade date commission adjustment and the investment advisory fees produced
by the late 1993 acquisition of Todd Investment Advisors, Inc. ("Todd").
Net interest income decreased $132 (9.4%) to $1,276 from $1,408, of the
prior year. The interest revenue increase was due to increased margin
interest revenues of $949, resulting from increased borrowing by customers
coupled with higher interest rates.
Total expenses for the quarter decreased $2,331 (8.8%), primarily due to
reduced compensation and other expenses which vary directly with revenue
production. Compensation & benefits and commission & floor brokerage
decreased $3,271 (18.3%) and $36 (6.4%), respectively. The majority of the
compensation decreases were in incentive compensation, Investment Executive
compensation, and other variable compensation which in the aggregate decreased
$4,035 (32.0%), consistent with the overall revenue and profit decreases.
Occupancy, equipment, communication and supplies expenses increased $482, a
result of expanding the retail branch system and the addition of Todd. Retail
office locations increased by 11 (15.9%) to a total of 80. These increases
were partially offset by a decrease in promotional expenses of $80 (10.5%).
Nine months ended September 1994 and September 1993
The Company incurred a net loss, for the nine months ended September 30,
1994 of $972. This compares to net income of $5,153 for the nine months
ended September 24, 1993. Per share amount decreased $1.52 to a loss of $0.24
per primary share from earnings per primary share of $1.28 in 1993. The
diminished results were primarily attributable to lower commission activity, a
substantial decline in investment banking activity, and decreased trading
profits.
Total revenues decreased $13,537 (15.8%) to $72,146 from $85,683 from the
prior year's nine-month period, mostly as a result of decreased investment
banking revenues, which decreased $12,974 (56.6%) to $9,931 from $22,905, from
the year earlier period. This decline was principally due to sharply
decreased municipal underwriting activity. Principal transactions decreased
$1,193 (6.7%) to $16,660 from the $17,853 recorded in the prior year, due to
lower profits on trading inventories and decreased availability of municipal
bond product. Commissionable revenues decreased $3,488 (10.3%) of which
agency commission, sale of investment company shares, and sale of unit
investment trusts decreased $1,372 (6.7%), $1,263 (14.0%), and $1,096 (38.2%),
respectively. These decreases were partially offset by the increased sale of
insurance products of $243 (16.5%).
Other revenues increased $2,770 (62.4%) resulting from gains in investments
of $407, compared to unrealized losses of $343, in the year earlier period.
Investment advisory fees climbed to $1,929 over last year's $763, an increase
of $1,166 (152.9%), virtually all of which was attributed to Todd.
Net interest income increased $467 (14.8%) to $3,627 from $3,160 of the
prior year. The increase resulted from an increase in margin interest
revenues of $1,944, due to increased borrowing by customers coupled with
higher interest rates.
Total expenses, for the nine months ended, decreased $3,725 (4.8%) to
$73,761 compared to $77,487 for the prior year's comparable period, primarily
due to reduced compensation and other expenses which vary with revenue
production. Employee compensation & benefits and commission & floor brokerage
decreased $7,163 (13.5%) and $270 (14.9%), respectively. Incentive
compensation, Investment Executive compensation, and other variable
compensation in the aggregate decreased $9,900 (26.6%), primarily because of
decreases in commissionable revenues, investment banking revenues, and overall
company profitability. The remaining employee compensation and benefits
increased $2,737 (17.1%) due to increased staffing required for the newly
opened retail brokerage offices, the addition of Todd, normal cost of living
increases, and increased cost of health care benefits.
Occupancy, equipment, communication, and supplies expenses increased $1,420
for the same reason explained in the three months results of operations ended
September 1994. Other operating expenses increased $1,482 (26.0%), largely
due to increased professional fees of $1,051 (53.4%) resulting from an ongoing
SEC investigation of certain Oklahoma municipal securities and increased
employment and recruitment fees related to seeking additional sources of
revenue production. The provision for doubtful accounts increased $634,
relating to uncertain collectibility of employment notes receivable.
Liquidity and Capital Resources
The Company's assets are highly liquid, consisting mainly of cash or assets
readily convertible into cash. These assets are financed primarily by the
Company's equity capital, customer credit balances, short-term bank loans,
proceeds from securities lending, long-term senior convertible notes, and
other payables. Changes in securities market volumes, related customer
borrowing demands, and levels of securities inventory affect the amount of the
Company's financing requirements.
For the nine months ended September 30, 1994, cash and cash equivalents
decreased $1,192 (18.2%) to $5,350 from $6,542 at December 31, 1993. Cash
provided by the decrease in securities owned of $67,471, which resulted
principally from lower municipal bond inventories, and cash provided by the
increase in operating payables of $10,934 were used primarily for repayment of
short-term bank borrowings which decreased $72,350, purchase of treasury stock
of $1,253, acquisition of equipment, leasehold improvements and building of
$1,355 and issuance of employment notes of $2,635.
SN & Co. is subject to requirements of the Securities and Exchange
Commission with regard to liquidity and capital requirements (see Note B of
the Notes to unaudited Consolidated Financial Statements). At September 30,
1994, SN & Co. had net capital of $23,244 which exceeded the minimum net
capital requirements by $20,274.
Management believes that funds from operations and available unused
informal and formal short-term credit arrangements of $141,400, at September
30, 1994, will provide sufficient resources to meet the present and
anticipated financial needs.
In addition, SN & Co. has available a revolving subordinated loan from a
financial institution. The subordinated loan will enhance the Company's
ability to obtain temporary capital for underwriting and other commitments, if
the need arises.
Recent market conditions and the low activity for corporate and municipal
underwritings have caused commissions, investment banking revenues and related
principal transaction revenues to vary significantly downward from prior
periods. Correspondingly, variable compensation expense related to the
production of these revenues also varied downward. Management has taken steps
to eliminate fixed costs associated with revenue production, closed
unprofitable branches, and is continuing its effort to grow the number of
Investment Executives to increase retail revenue production. Management
considers the near Southwest region to be a major market and has committed
resources to maintaining the firm's presence there. As a result, the Oklahoma
City office was reorganized and duplicated administrative costs were
eliminated. A regional manager was hired to oversee the retail production in
the region and a new Director of Fixed Income was hired to manage firm-wide
bond underwriting, institutional sales and trading. The firm's previous
executive officer responsible for the Southwest region and the previous
executive officer primarily responsible for the underwriting of municipal
bonds in the Oklahoma City office terminated their employment with SN & Co.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material changes, during the nine months ended September 30
1994, in the legal proceedings previously reported in the Company's Annual
Report on Form 10-K for the year ended December 31, 1993. Such information
is hereby incorporated by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. (Reference to Item 601(b) Sequential
of Regulation S-K) Description Page Number
------------------------------------- --------------- -----------
11 Computation of 17
Earnings Per Share
27 Financial Data Schedule 18
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended September 30,
1994.
<PAGE>
SIGNATURES
Pursuant to the requirement of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
STIFEL FINANCIAL CORP.
(Registrant)
Date: November 11, 1994 By /s/ Gregory F. Taylor
Gregory F. Taylor
(Chief Executive Officer)
Date: November 11, 1994 By /s/ Mark D. Knott
Mark D. Knott
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
------- --------------------------------- -----------
11 Computation of Earnings Per Share 17
27 Financial Data Schedule 18
<TABLE>
EXHIBIT 11
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Amounts)
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30, 1994 September 24, 1993
------------------ ------------------
Fully Fully
Primary Diluted Primary Diluted
<S> <C> <C> <C> <C>
Net (Loss) Income $ (420) $ (420) $ 1,726 $ 1,726
After-tax interest savings assuming
conversion of Senior Convertible
Notes (1) - - 173 - - 174
Net income adjusted for after-tax ------- ------- ------- -------
interest savings $ (420) $ (247) $ 1,726 $ 1,900
======= ======= ======= =======
Average number of common shares
outstanding during the period 3,929 3,929 3,965 3,965
Additional shares assuming exercise
of stock options (2) 76 76 126 126
Additional Shares assuming conversion
of Senior Convertible Notes (3) - - 1,225 - - 1,225
------- ------- ------- -------
Average number of common shares used
to calculate earnings per share 4,005 5,230 4,091 5,316
======= ======= ======= =======
Net (loss) earnings per share $ (0.10) $ (0.10)(4) $ 0.42 $ 0.36
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1994 September 24, 1993
------------------ ------------------
<S> <C> <C> <C> <C>
Net (Loss) Income $ (972) $ (972) $ 5,153 $ 5,153
After-tax interest savings assuming
conversion of Senior Convertible
Notes (1) - - 508 - - 523
------- ------- ------- -------
Net income adjusted for after-tax
interest savings $ (972) $ (464) $ 5,153 $ 5,676
======= ======= ======= =======
Average number of common shares
outstanding during the period 3,970 3,970 3,932 3,932
Additional shares assuming exercise
of stock options (2) 127 127 105 123
Additional Shares assuming conversion
of Senior Convertible Notes (3) - - 1,225 - - 1,225
------- ------- ------- -------
Average number of common shares used
to calculate earnings per share 4,097 5,322 4,037 5,280
======= ======= ======= =======
Net (loss) earnings per share $ (0.24) $ (0.24)(4) $ 1.28 $ 1.07
</TABLE>
(1) Represents the after-tax interest savings resulting from assumed
conversion of $10,000,000 aggregate principal 11.25% Senior Convertible
Notes.
(2) Represents the number of shares of common stock issuable on the exercise
of dilutive employee stock options less the number of shares of common
stock which could have been purchased with the proceeds from the exercise
of such options. For primary earnings per share computations, these
purchases were assumed to have been made at the average market price of
the common stock during the period or that part of the period for which
the option was outstanding. For fully diluted earnings per share
computations, these purchases were assumed to have been made at the
greater of the market price of the common stock at the end of the period
or average market price of the common stock during the period or that part
of the period for which the option was outstanding.
(3) Represents the number of shares of common stock issuable upon conversion
of $10,000,000 aggregate principal 11.25% Senior Convertible Notes at a
conversion price of $8.1640 per share.
(4) Net fully diluted loss per share computes to $0.05 and $0.09 for three
months and nine months ended September 30, 1994, respectively. Since this
is anti-dilutive, fully diluted loss per share is equivalent to primary
loss per share.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATED SEPTEMBER 30, 1994 AND
THE STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
</TABLE>
<TABLE> <S> <C>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 6,514,737
<RECEIVABLES> 172,731,843
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 3,342,063
<INSTRUMENTS-OWNED> 19,039,022
<PP&E> 4,496,698
<TOTAL-ASSETS> 220,655,163
<SHORT-TERM> 64,600,000
<PAYABLES> 56,334,627
<REPOS-SOLD> 42,600,839
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 7,363,375
<LONG-TERM> 10,760,000
<COMMON> 617,886
0
0
<OTHER-SE> 38,378,436
<TOTAL-LIABILITY-AND-EQUITY> 220,655,163
<TRADING-REVENUE> 16,659,807
<INTEREST-DIVIDENDS> 7,939,749
<COMMISSIONS> 30,406,740
<INVESTMENT-BANKING-REVENUES> 9,930,380
<FEE-REVENUE> 1,928,788
<INTEREST-EXPENSE> 4,312,391
<COMPENSATION> 46,066,914
<INCOME-PRETAX> (1,615,653)
<INCOME-PRE-EXTRAORDINARY> (1,615,653)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (972,015)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> (0.24)
[/TEXT]
</DOCUMENT>
</IMS-DOCUMENT>
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