<PAGE> 1
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 June 27, 1997
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 June 27, 1997: 4,692,189
par value $.15.
Exhibit Index is on page 17.
<PAGE> 2
Stifel Financial Corp. And Subsidiaries
Form 10-Q Index
June 27, 1997
PAGE
PART I. FINANCIAL CONDITION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition --
June 27, 1997 and December 31, 1996 3-4
Consolidated Statements of Operations --
Three Months Ended June 27, 1997 and June 28, 1996 5
Consolidated Statements of Operations --
Six Months Ended June 27, 1997 and June 28, 1996 6
Consolidated Statements of Cash Flows--
Six Months Ended June 27, 1997 and June 28, 1996 7-8
Notes to Consolidated Financial Statements 9-10
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 11-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE> 3
PART I. FINANCIAL CONDITION
Item 1. Financial Statements (Unaudited)
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED) (In thousands)
June 27, December 31,
1997 1996
-------- ------------
ASSETS
Cash and cash equivalents $ 6,853 $ 7,960
Cash segregated for the exclusive
benefit of customers 260 483
Receivable from brokers and dealers 17,817 14,836
Receivable from customers, net of
allowance for doubtful accounts of
$579 and $582, respectively 310,530 235,216
Securities owned, at fair value 20,055 18,913
Membership in exchanges, at cost 513 513
Office equipment and leasehold
improvements, at cost, net of
allowances for depreciation and
amortization of $10,300 and
$10,125, respectively 2,407 2,233
Goodwill, net of accumulated
amortization of $1,261 and $1,107,
respectively 4,334 4,488
Notes receivable from and advances to
officers and employees, net of
allowance for doubtful receivables
of $2,166 and $2,552, respectively 3,239 3,373
Refundable income taxes 862 358
Deferred tax asset 2,950 3,671
Other assets 7,623 9,005
-------- --------
$377,443 $301,049
======== ========
See Notes to Consolidated Financial Statements.
<PAGE> 4
STIFEL FINANCIAL CORP. AND SECURITIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
(UNAUDITED) (In thousands)
June 27, December 31,
1997 1997
-------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Short-term borrowings from banks $180,575 $132,400
Payable to brokers and dealers 89,683 47,148
Payable to customers 21,452 32,095
Securities sold, but not yet purchased,
at fair value 3,507 3,229
Drafts payable 11,488 15,287
Accrued employee compensation 12,716 14,756
Obligations under capital leases 598 581
Accounts payable and accrued expenses 7,371 7,801
Convertible debt 10,000 10,000
-------- --------
Total Liabilities 337,390 263,297
Stockholders' Equity
Preferred stock -- $1 par value; authorized
3,000,000 shares; none issued
Common stock -- $.15 par value;
authorized 10,000,000 shares; issued
4,767,715 shares; outstanding
4,692,189 and 4,632,260 shares,
respectively 715 715
Additional paid-in capital 21,106 21,403
Retained earnings 19,017 16,733
-------- --------
40,838 38,851
Less treasury stock, at cost 75,526
and 135,455 shares, respectively 614 892
Less unamortized expense of restricted
stock awards 171 207
-------- --------
Total Stockholders' Equity 40,053 37,752
-------- --------
$377,443 $301,049
======== ========
See Notes to Consolidated Financial Statements.
<PAGE> 5
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
June 27, 1997 June 28, 1996
------------- -------------
REVENUES
Commissions $ 11,879 $ 11,496
Principal transactions 4,850 5,229
Investment banking 4,028 3,837
Interest 6,002 3,369
Other 3,901 6,776
--------- ---------
30,660 30,707
EXPENSES
Employee compensation and benefits 17,380 18,192
Commissions and floor brokerage 739 667
Communications and office supplies 1,787 1,659
Occupancy and equipment rental 1,905 1,792
Interest 4,132 2,065
Other operating expenses 3,153 4,091
--------- ---------
29,096 28,466
--------- ---------
INCOME BEFORE INCOME TAXES 1,564 2,241
Provision for income taxes 643 880
--------- ---------
NET INCOME $ 921 $ 1,361
========= =========
Net income per share:
Primary $ 0.19 $ 0.28
Fully diluted $ 0.16 $ 0.25
Dividends declared per share $ 0.03 $ 0.03
Average common equivalent shares
outstanding:
Primary 4,875 4,796
Fully Diluted 6,433 6,248
See Notes to Consolidated Financial Statements.
<PAGE> 6
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Six Months Ended
June 27, 1997 June 28, 1996
------------- -------------
REVENUES
Commissions $ 23,299 $ 22,538
Principal transactions 10,117 10,017
Investment banking 11,723 5,050
Interest 10,047 6,559
Other 7,318 9,980
-------- --------
62,504 54,144
EXPENSES
Employee compensation and benefits 37,595 32,718
Commissions and floor brokerage 1,434 1,332
Communications and office supplies 3,445 3,356
Occupancy and equipment rental 3,347 3,612
Interest 6,483 4,008
Other operating expenses 5,884 6,619
-------- --------
58,188 51,645
-------- --------
INCOME BEFORE INCOME TAXES 4,316 2,499
Provision for income taxes 1,748 988
-------- --------
NET INCOME $ 2,568 $ 1,511
======== ========
Net income per share:
Primary $ 0.53 $ 0.32
Fully diluted $ 0.44 $ 0.30
Dividends declared per share $ 0.06 $ 0.06
Average common equivalent shares
outstanding:
Primary 4,868 4,757
Fully Diluted 6,434 6,233
See Notes to Consolidated Financial Statements.
<PAGE> 7
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(In thousands)
Six Months Ended
June 27, 1997 June 28, 1996
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,568 $ 1,511
Noncash items included in earnings:
Depreciation and amortization 775 788
Provision for litigation and bad debts 467 1,561
Net gains on investments (47) (13)
Bonus notes amortization 578 500
Deferred compensation 439 293
Deferred tax provision (benefit) 721 (288)
Amortization of restricted stock awards 57 27
-------- --------
5,558 4,379
(Increase) decrease in operating receivables:
Customers (75,314) (5,866)
Brokers and dealers (2,981) 8,982
(Decrease) increase in operating payables:
Customers (10,643) (10,673)
Brokers and dealers 42,535 39,469
Decrease (increase) in assets:
Cash segregated for the exclusive
benefit of customers 223 296
Securities owned (1,142) (5,201)
Notes receivable from officers and employees (468) (878)
Other assets 1,573 (1,005)
Increase (decrease) in liabilities:
Securities sold, not yet purchased 278 (473)
Drafts payable, accounts payable and
accrued expenses, and accrued employee
compensation (6,716) (7,390)
-------- --------
Cash (Used For) Provided By
Operating Activities $(47,097) $ 21,640
-------- --------
See Notes to Consolidated Financial Statements.
<PAGE> 8
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)(In thousands)
Six Months Ended
June 27, 1997 June 28, 1996
Cash (Used For) Provided By Operating
Activities - from previous page $(47,097) $ 21,640
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net 48,175 (21,225)
Proceeds from:
Temporary subordinated debt 8,000 - -
Employee stock purchase plan 727 617
Exercised stock options 53 - -
Dividend reinvestment plan 3 7
Payments for:
Temporary subordinated debt (8,000) - -
Settlement of long-term debt - - (760)
Purchases of stock for treasury (1,110) (95)
Principal payments under capital
lease obligation (208) (154)
Cash dividends (284) (269)
-------- --------
Cash Provided By (Used For)
Financing Activities 47,356 (21,879)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of office equipment and
leasehold improvements 3 8
Sale of investments - - 3,510
Payments for:
Acquisition of office equipment and
leasehold improvements (571) (178)
Acquisition of investments (798) (751)
-------- --------
Cash (Used For) Provided By
Investing Activities (1,366) 2,589
-------- --------
(Decrease) increase in cash and
cash equivalents (1,107) 2,350
Cash and cash equivalents -
beginning of period 7,960 6,344
-------- --------
Cash and Cash Equivalents - end of period $ 6,853 $ 8,694
======== ========
Supplemental disclosure of cash flow
information:
Income tax payments $ 1,864 $ 884
Interest payments $ 5,866 $ 4,084
Schedule of noncash investing and
financing activities:
Fixed assets acquired under capital lease $ 292 $ 240
Employee stock ownership plan shares issued $ 287 - -
Assumption of debt for investment - - $ 150
See Notes to Consolidated Financial Statements.
<PAGE> 9
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
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 six months ended June 27, 1997 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the
financial statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1996.
Where appropriate, prior years' financial information has been
reclassified to conform with the current year presentation.
NOTE B - NET CAPITAL REQUIREMENT
The Company's principal subsidiary, Stifel, Nicolaus &
Company, Incorporated ("SN & Co."), is subject to the Uniform Net
Capital Rule 15c3-1 under the Securities Exchange Act of 1934
(the "rule"), which requires the maintenance of minimum net
capital, as defined. SN & Co. has elected to use the alternative
method permitted by the rule which requires maintenance of
minimum net capital equal to the greater of $250,000 or 2 percent
of aggregate debit items arising from customer transactions, as
defined. The rule also provides that equity capital may not be
withdrawn or cash dividends paid if resulting net capital would
be less than 5 percent of aggregate debit items.
At June 27, 1997, SN & Co. had net capital of $26,501,000
which was 8.08% of its aggregate debit items and $19,944,000 in
excess of the minimum required net capital.
<PAGE> 10
NOTE C - RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued SFAS 128,
"Earnings per Share," and SFAS 129, "Disclosure of Information
about Capital Structure," which are to be implemented by
companies whose fiscal year ends after December 15, 1997. The
adoption of these accounting standards will not have a material
impact on the Company's reported earnings per share or
consolidated financial statements.
Additionally, the Financial Accounting Standards Board has
issued SFAS 130, "Reporting Comprehensive Income," and SFAS 131,
"Disclosures about Segments of an Enterprise and Related
Information," which are to be implemented by companies whose
fiscal year begins after December 15, 1997. Management has not
determined the impact, if any, of the accounting standards
adoption on the Company's consolidated financial statements.
NOTE D - SUBSEQUENT EVENT
On July 22, 1997, the Company's Board of Directors declared a
regular quarterly dividend of $0.03 per share, payable on August
19, 1997 to stockholders of record August 5, 1997.
******
<PAGE> 11
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Results of Operations
Three months ended June 1997 and June 1996
The Company recorded net earnings of $921,000, or $0.19 per
primary share on total revenues of $30,660,000 for the second
quarter ended June 27, 1997, compared to net earnings of
$1,361,000 or $0.28 per primary share on total revenues of
$30,707,000 for the same period one year earlier.
Net income for the same quarter in the previous year included
a gain on investment, which contributed additional net income of
$1,042,000, or $0.22 per share. The gain resulted from the
exercise of warrants generated by the corporate finance
department related to an underwriting and the ultimate sale of
the shares received for the exercise of the warrants. Net income
for the second quarter of 1996, without the contribution from the
gain on investment, was $319,000, or $0.06 per share. Excluding
the gain on investment, the Company's net income for the second
quarter of 1997 increased 188.7 percent over the same quarter in
1996.
Total revenues decreased $47,000 (0.2%) from $30,707,000 to
$30,660,000. All categories of revenue remained relatively
unchanged except for interest revenue and other revenue.
Interest revenue increased $2,633,000 (78.2%) from $3,369,000
to $6,002,000 primarily as a result of increased borrowings by
individual investors. The average customer receivables increased
$144,621,000 (94.9%) from $152,417,000 for the quarter ended June
28, 1996 to $297,038,000 for the quarter ended June 27, 1997, due
largely to increases in borrowings by certain customers.
Other revenue decreased $2,875,000 (42.4%) from $6,776,000 to
$3,901,000 principally due to the gain on an investment of
$3,297,000 recorded in 1996 as previously discussed with no like
revenue in 1997. The decrease in the other revenue was partially
offset by continued growth of the managed account fees and money
market distribution fees which increased $464,000 and $217,000,
respectively.
Total expenses increased $630,000 (2.2%) from $28,466,000 to
$29,096,000.
Employee compensation and benefits decreased $812,000 (4.5%)
from $18,192,000 to $17,380,000. The variable component of
compensation and benefits decreased $1,430,000 (10.4%) from
$13,768,000 to $12,338,000 as a result of the decrease in
compensation associated with the gain included in other revenue
previously mentioned. This decrease was partially offset by the
increase in the fixed portion of compensation and benefits, which
increased $618,000 (14.0%) from $4,424,000 to $5,042,000,
resulting from increased staffing and normal year-to-year pay
increases.
<PAGE> 12
Interest expense increased $2,067,000 (100.1%) from $2,065,000
to $4,132,000 as a result of increased borrowings for customer
trading activity and increased borrowings by the firm for
underwriting activity and increased level of securities owned.
Average borrowings for the firm increased $110,507,000 (168.0%)
from $65,777,000 for the second quarter of 1996 to $176,284,000
for the second quarter of 1997.
Other expenses decreased $938,000 (22.9%) from $4,091,000 to
$3,153,000 predominantly as a result of the reduction of legal
expenses and settlements for litigation.
Six months ended June 1997 and June 1996
The Company recorded net earnings of $2,568,000, or $0.53 per
primary share on total revenues of $62,504,000 for the first six
months ended June 27, 1997, compared to net earnings of
$1,511,000 or $0.32 per primary share on total revenues of
$54,144,000 for the same period one year earlier.
The increase in the first six months net income of 1997 over
the first six months net income of 1996 can be attributed
primarily to the increase in revenues. Total revenues increased
$8,360,000 (15.4%) from $54,144,000 to $62,504,000 as retail
investor activity remained strong coupled with a solid investment
banking performance.
Investment banking revenues increased $6,673,000 (132.1%) from
$5,050,000 to $11,723,000 as a result of underwriting a number of
secondary offerings of trust preferred stocks for financial
institutions and REITs for mortgage banking companies.
Interest revenues increased $3,488,000 (53.2%) from $6,559,000
to $10,047,000 primarily as a result of increased secured
borrowings by individual investors, as noted in the three months
ended discussion. The average customer receivables increased
$106,541,000 (70.8%) from $150,457,000 for the six months ended
June 28, 1996 to $256,998,000 for the six months ended June 27,
1997, due largely to increases in borrowings by certain
customers.
Other revenue decreased $2,662,000 (26.7%) from $9,980,000 to
$7,318,000 principally due to the gain on an investment, as noted
in the three months ended discussion.
Total expenses increased $6,543,000 (12.7%) from $51,645,000
to $58,188,000, primarily as a result of increased compensation
and benefits which increased $4,877,000 (14.9%) from $32,718,000
to $37,595,000. The variable component of compensation and
benefits increased $4,028,000 (16.8%) from $23,929,000 to
$27,957,000 correspondingly to increased revenue production and
increased profitability. The fixed portion of compensation and
benefits increased $849,000 (9.7%) from $8,789,000 to $9,638,000
due principally to normal year to year salary adjustments and
increased staffing levels.
<PAGE> 13
Interest expense increased $2,475,000 (61.8%) from $4,008,000
to $6,483,000 as a result of increased borrowings for customer
trading activity and increased borrowings by the firm for
underwriting activity and increased level of securities owned.
Average borrowings for the firm increased $67,285,000 (100.8%)
from $66,729,000 for the first half of 1996 to $134,014,000 for
the first half of 1997.
Other expenses decreased $735,000 (11.1%) from $6,619,000 to
$5,884,000 predominantly as a result of the reduction of legal
expenses and settlements for litigation. Occupancy and equipment
rental decreased $265,000 (7.3%) from $3,612,000 to $3,347,000,
primarily as a result of a renegotiated long-term office space
lease which had been previously recognized as an expense.
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, underwriting activity, and levels of securities
inventory affect the amount of the Company's financing
requirements. Because of the nature of the Company's business,
the changes in operating assets and liability account balances
relative to net income for any particular accounting period can
be quite large and somewhat arbitrary and therefore are not very
useful indicators of long-term trends in the Company's cash flow
from operations.
In the six months ended June 27, 1997, cash and cash
equivalents decreased $1,107,000 (13.9%) to $6,853,000 from
$7,960,000 at December 31, 1996. The decrease in cash was
substantially a result of cash used by operating activities of
$47,097,000, offset by cash provided by financing activities of
$47,356,000. The cash used for operating activities was
principally attributed to increases in operating receivables and
securities inventory owned of $78,295,000 and $1,142,000,
respectively, and decreases of drafts payable, accounts payable
and accrued expenses, and accrued employee compensation of
$6,716,000. The cash used for operating activities was partly
offset by cash provided by net income, adjusted for noncash
charges, of $5,558,000 and an increase in operating payables of
$31,892,000. The cash provided from financing activity primarily
consisted of proceeds for the short-term borrowings from banks of
$48,175,000. The Company used $1,369,000 for the acquisition of
investments and fixed assets.
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 Consolidated Financial
Statements). At June 27, 1997, SN & Co. had net capital of
$26,501,000 which was 8.08% of its aggregate debit items and
$19,944,000 in excess of the minimum required net capital.
<PAGE> 14
During the first quarter ended March 27, 1997, SN & Co.
obtained and repaid a temporary subordinated note in the amount
of $8,000,000. The subordinated note was used to finance
underwritings.
The first installment of the company's convertible debt is due
September 1, 1997, in the amount of $2,500,000. The holder of
the debt has the option to convert the $2,500,000 installment
into 354,429 shares of common stock. Management believes if the
debt is not converted, funds from operations and available
informal short-term credit arrangements of $79,425,000 at June
27, 1997, will provide sufficient resources to meet the present
and anticipated financing needs.
<PAGE> 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material changes, during the six months ended
June 27, 1997, in the legal proceedings previously reported in
the Company's Annual Report on Form 10-K for the year ended
December 31, 1996. Such information is hereby incorporated by
reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No.
(Reference to Item 601(b)
of Regulation S-K) Description
------------------------- -----------
11 Computation of
Earnings Per Share
27 Financial Data Schedule
(furnished to the Securities
and Exchange Commission for
Electronic Data Gathering,
Analysis, and Retrieval
[EDGAR] purposes only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended June 27, 1997.
The Company filed a report on Form 8-K dated July 2, 1997.
This report Form 8-K contained information under Item 5. Other
Events. On July 2, 1997, the Company announced that Gregory
F. Taylor, Director, President and Chief Executive Officer of
both Stifel Financial Corp. and Stifel, Nicolaus & Company,
Incorporated (the Registrant's wholly-owned broker-dealer
subsidiary) resigned as of July 31, 1997. A search committee
has been appointed to select the successor CEO and planned to
begin its work immediately after the announcement. In the
interim period, the Company will be managed by its six-person
Operating Committee of which Mr. Lawrence E. Somraty will
serve as Chairman.
<PAGE> 16
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: August 8, 1997 By /s/ George H. Walker III
George H. Walker III
(Chairman of the Board)
Date: August 8, 1997 By /s/ Stephen J. Bushmann
Stephen J. Bushmann
(Principal Financial and
Accounting Officer)
<PAGE> 17
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
EXHIBIT INDEX
June 27, 1997
Exhibit
Number Description
-------- -----------
11 Computation of Earnings Per Share
27 Financial Data Schedule
(furnished to the Securities and Exchange
Commission for Electronic Data
Gathering, Analysis, and Retrieval
[EDGAR] purposes only)
EXHIBIT 11
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Amounts)
(UNAUDITED)
Three Months Ended
June 27, 1997 June 28, 1996
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net income $ 921 $ 921 $1,361 $1,361
After-tax interest savings assuming
conversion of Senior Convertible
Notes (1) - - 128 - - 172
------ ------ ------ ------
Net income adjusted for after-
tax interest savings $ 921 $1,049 $1,361 $1,533
====== ====== ====== ======
Average number of common shares
outstanding during the period 4,704 4,704 4,694 4,694
Additional shares assuming
exercise of stock options (2) 171 311 102 136
Additional Shares assuming conversion
of Senior Convertible Notes (3) - - 1,418 - - 1,418
------ ------ ------ ------
Average number of common shares used
to calculate earnings per share 4,875 6,433 4,796 6,248
====== ====== ====== ======
Net earnings per share $ 0.19 $ 0.16 $ 0.28 $ 0.25
====== ====== ====== ======
Six Months Ended
June 27, 1997 June 28, 1996
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net income $2,568 $2,568 $1,511 $1,511
After-tax interest savings assuming
conversion of Senior Convertible
Notes (1) - - 257 - - 343
------ ------ ------ ------
Net income adjusted for after-
tax interest savings $2,568 $2,825 $1,511 $1,854
====== ====== ====== ======
Average number of common shares
outstanding during the period 4,704 4,704 4,679 4,679
Additional shares assuming exercise
of stock options (2) 164 311 78 136
Additional Shares assuming conversion
of Senior Convertible Notes (3) - - 1,418 - - 1,418
------ ------ ------ ------
Average number of common shares used
to calculate earnings per share 4,868 6,433 4,757 6,233
====== ====== ====== ======
Net earnings per share $ 0.53 $ 0.44 $ 0.32 $ 0.30
====== ====== ====== ======
(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
and assumed purchases of stock from the Employee Stock
Purchase Plan (ESPP). 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 or shares assumed purchased through the ESPP. 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 or
shares assumed purchased through the ESPP.
(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 $7.0536 per
share.
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATED
JUNE 27, 1997 AND THE STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 27, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-27-1997
<CASH> 7,113
<RECEIVABLES> 319,037
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 12,549
<INSTRUMENTS-OWNED> 20,054
<PP&E> 2,407
<TOTAL-ASSETS> 377,443
<SHORT-TERM> 180,575
<PAYABLES> 54,195
<REPOS-SOLD> 0
<SECURITIES-LOANED> 89,113
<INSTRUMENTS-SOLD> 3,507
<LONG-TERM> 10,000
<COMMON> 715
0
0
<OTHER-SE> 39,338
<TOTAL-LIABILITY-AND-EQUITY> 377,443
<TRADING-REVENUE> 10,116
<INTEREST-DIVIDENDS> 10,047
<COMMISSIONS> 23,299
<INVESTMENT-BANKING-REVENUES> 11,723
<FEE-REVENUE> 1,346
<INTEREST-EXPENSE> 6,483
<COMPENSATION> 37,595
<INCOME-PRETAX> 4,316
<INCOME-PRE-EXTRAORDINARY> 4,316
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,568
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.44
</TABLE>
