<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 24, 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 1-8526
----------------------
McDonald & Company Investments, Inc.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1391950
- - -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 Superior Ave., Suite 2100, Cleveland, Ohio 44114
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code (216) 443-2300
---------------------------------------------------------------------------
Not Applicable
- - -------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
9,361,588 shares of Common Stock, par value $1.00 per share, were
outstanding on July 29, 1994.
(1)
<PAGE> 2
<TABLE>
McDONALD & COMPANY INVESTMENTS, INC.
INDEX
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
- - ------------------------------
Item 1. Financial Statements -
Consolidated statements of financial condition (unaudited)-
June 24, 1994 and March 25, 1994 3
Consolidated statements of income (unaudited)-
Fiscal three months ended June 24, 1994
and June 25, 1993 4
Consolidated statements of cash flows (unaudited)-
Fiscal three months ended June 24, 1994 and
June 25, 1993 5
Notes to condensed consolidated financial statements (unaudited)-
June 24, 1994 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II - OTHER INFORMATION
- - ---------------------------
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
EXHIBIT INDEX 13
</TABLE>
(2)
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
MCDONALD & COMPANY INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
<CAPTION>
June 24, March 25,
1994 1994
------------ -----------
(In thousands)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 13,726 $ 6,765
Receivable from customers 107,316 124,294
Receivable from brokers and dealers 27,014 30,915
Securities purchased under agreements
to resell 451,380 216,263
Other receivables 8,781 12,087
Securities owned 88,393 152,690
Furniture, equipment and leasehold
improvements, at cost, less accumulated
depreciation and amortization 9,416 9,987
Other assets 37,084 37,577
-------- --------
$743,110 $590,578
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Short-term borrowings $ 63,893 $ 90,731
Payable to customers 18,803 28,220
Payable to brokers and dealers 7,885 23,527
Securities sold under agreements to
repurchase 401,308 198,730
Securities sold but not yet purchased 74,497 64,644
Accrued compensation and profit
sharing contribution 11,137 24,586
Accounts payable, accrued expenses
and other liabilities 30,559 27,735
Long-term borrowings 25,000 25,000
-------- --------
$633,082 $483,173
-------- --------
Stockholders' equity
Preferred Stock, without par value;
authorized 200,000 shares;
none issued
Common Stock, par value $1.00 per
share; 15,000,000 shares
authorized; (11,359,889 and 11,176,129
shares issued, respectively) 11,360 11,176
Additional paid-in capital 47,195 44,916
Retained earnings 67,492 66,239
Less treasury stock, at cost
(1,977,718 and 1,915,138 shares, (16,019) (14,926)
respectively) -------- --------
110,028 107,405
-------- --------
$743,110 $590,578
======== ========
<FN>
See Notes to consolidated financial statements (unaudited).
</TABLE>
(3)
<PAGE> 4
<TABLE>
MCDONALD & COMPANY INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>
Fiscal Three Months Ended
-----------------------------
June 24, 1994 June 25, 1993
(13 weeks) (13 weeks)
-------------- --------------
<S> <C> <C>
(In thousands, except for share and per share amounts)
Revenues:
Underwriting and
investment banking $ 9,306 $ 13,037
Principal transactions 10,872 14,963
Commissions 12,508 12,210
Investment management fees 4,000 3,261
Interest and dividends 3,128 3,609
Other 1,001 637
---------- ---------
$ 40,815 $ 47,717
---------- ---------
Expenses:
Employee compensation
and benefits $ 24,552 $ 27,010
Interest 1,515 2,326
Communications 3,062 2,610
Occupancy and equipment 3,046 2,610
Promotion and development 1,672 1,630
Floor brokerage and
clearance 648 749
Taxes, other than income
taxes 1,623 1,317
Other operating expenses 1,505 1,354
---------- ---------
$ 37,623 $ 39,606
---------- ---------
Income before income taxes $ 3,192 $ 8,111
Provision for income taxes 1,250 3,000
---------- ---------
Net income $ 1,942 $ 5,111
========== =========
Net income per share
Primary $ .20 $ .59
========== =========
Fully diluted $ .20 $ .54
========== =========
Dividends per share $ .075 $ .0625
========== =========
Average number of shares
and share equivalents
outstanding 9,461,000 8,600,000
========== =========
<FN>
See Notes to consolidated financial statements (unaudited).
</TABLE>
(4)
<PAGE> 5
<TABLE>
MCDONALD & COMPANY INVESTMENTS, INC.
------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------
<CAPTION>
Fiscal Three Months Ended
---------------------------------
June 24, 1994 June 25, 1993
------------- -------------
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
- - --------------------
Net Income $ 1,942 $ 5,111
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,098 946
Deferred compensation 255 62
Deferred income taxes (177) (16)
(Increase) decrease in receivable from customers 16,978 (26,914)
Decrease in receivable from brokers and dealers 3,901 11,616
(Increase) decrease in securities owned 64,297 (40,099)
(Increase) decrease in other receivables 3,306 (162)
Increase (decrease) in payable to customers (9,417) 8,804
Increase (decrease) in payable to brokers and dealers (15,642) 18,561
Increase in securities sold but not yet purchased 9,853 41,231
Decrease in accrued compensation and profit sharing (10,946) (3,403)
Increase in accounts payable, accrued expenses and other 2,569 1,822
--------- ---------
Net cash provided by operating activities $ 68,017 $ 17,559
========= =========
INVESTING ACTIVITIES:
- - --------------------
Purchase of furniture, equipment and leaseholds $ (379) $ (351)
Decrease in other assets 522 242
--------- ---------
Net cash provided by (used for) investing activities $ 143 $ (109)
========= =========
FINANCING ACTIVITIES:
- - --------------------
Increase in securities purchased under
agreement to resell $(235,117) $(173,567)
Increase (decrease) in short-term borrowings (26,838) 30,793
Increase in securities sold under
agreements to repurchase 202,578 123,762
Cash dividends (689) (517)
Purchase of treasury stock (1,418) (1,006)
Proceeds from issuance of treasury stock 285 194
--------- ---------
Net cash used for financing activities $ (61,199) $ (20,341)
--------- ---------
Increase (decrease) in cash and cash equivalents 6,961 (2,891)
Cash and cash equivalents at beginning of period 6,765 7,482
--------- ---------
Cash and cash equivalents at end of period $ 13,726 $ 4,591
========= =========
<FN>
See notes to consolidated financial statements (unaudited).
</TABLE>
(5)
<PAGE> 6
McDONALD & COMPANY INVESTMENTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 24, 1994
NOTE A - BASIS OF PRESENTATION
- - ------ ---------------------
The consolidated financial statements include the accounts of McDonald &
Company Investments, Inc. and its subsidiaries, collectively referred to as the
"Company". All significant intercompany accounts and transactions are
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments, consisting only of normal and recurring
adjustments, considered necessary for a fair presentation of the financial
condition and results of operations for the periods presented have been
included.
NOTE B - LONG-TERM BORROWINGS
- - ------ --------------------
McDonald & Company Securities, Inc., ("McDonald Securities") has outstanding
$25,000,000 in aggregate principal amount of 8.24% Subordinated Notes due
January 15, 2002. McDonald Securities is required to prepay principal amounts
of $5,000,000 on January 15 in each year beginning in 1998. The notes are
subordinated in right of payment to all senior indebtedness of McDonald
Securities. The principal amount of the notes has been approved by the New
York Stock Exchange, Inc. for inclusion in the regulatory capital of McDonald
Securities.
NOTE C - NET INCOME PER SHARE
- - ------ --------------------
Primary net income per share is based on the average number of share and share
equivalents outstanding during the periods. Share equivalents represent the
effect of shares issuable under the Company's stock option plans. For the
fiscal quarter ended June 25, 1993, fully diluted net income per share
includes, in addition to the above, the effect of the assumed conversion of the
Company's 8% convertible subordinated debentures.
On July 27, 1993, the Company declared a 20% stock dividend payable August 20,
1993 to stockholders of record August 10, 1993. Share and per share
information have been restated to reflect the effect of the stock dividend as
if it had occurred at the beginning of the fiscal 1994 period.
On October 29, 1993 the Company redeemed $197,000 aggregate principal amount of
its 8% convertible subordinated debentures due March 1, 2011 at a price of
102.4% of the principal amount plus accrued interest to October 29, 1993, for a
total cash payment of $204,310. A total of $12,008,000 principal amount of
debentures were converted into 993,694 shares of the Company's Common Stock at
a conversion price of $12.08 per share.
NOTE D - CONTINGENCIES
- - ------ -------------
The Company is a defendant in various lawsuits incidental to its securities
business, and in the opinion of management, liability, if any, resulting from
such litigation, will not have a material adverse effect on the Company's
financial condition.
(6)
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
BUSINESS ENVIRONMENT
- - --------------------
McDonald & Company Investments, Inc. (the "Company") operates a full-service
regional investment banking, investment advisory and brokerage business through
its principal subsidiary, McDonald & Company Securities, Inc. ("McDonald
Securities"). The Company is involved in the origination, underwriting,
distribution, trading and brokerage of fixed income and equity securities, and
provides investment advisory services.
The profitability of the Company is sensitive to many factors, including the
level of securities trading volume and the volatility and general level of
market prices. Many of its activities have high operating costs which do not
decrease with reduced levels of activity. Sustained periods of reduced volume,
or loss of clients, could have adverse effects upon profitability.
The Company faces increasing competition from commercial banks and thrift
institutions as these institutions offer certain investment banking and
corporate and individual financial services traditionally provided only by
securities firms. The Company anticipates regulation of the securities
industry to increase and that compliance with regulations may become more
difficult. At present, the Company is unable to predict the extent of changes
that may be enacted, or the effect on the Company's business.
The Company has formulated a comprehensive strategic plan which is periodically
reviewed and revised as business conditions dictate. The plan emphasizes the
Company's historical roots as a regional brokerage and investment banking firm.
The Company has focused on the Ohio, Michigan and Indiana markets by increasing
the number of sales representatives covering individual investors, as well as
increasing investment banking activities in this region. The Company's
institutional equity and fixed income sales departments cover accounts
throughout the United States and internationally.
On October 4, 1991, Gradison & Company Incorporated ("Gradison"), merged with
McDonald Securities. In connection with the merger, stockholders of Gradison
received a combination of shares of Common Stock and cash having an aggregate
value of approximately $22,723,000. Additional cash consideration of
approximately $3,200,000 will be paid in the third quarter of fiscal 1995 if
certain performance criteria are met. Gradison operated as a full-service
regional brokerage and investment advisory firm headquartered in Cincinnati,
Ohio with a primary market of southwestern Ohio and northern Kentucky.
Subsequent to the merger, Gradison operates as a division of McDonald
Securities.
The merger allowed the Company to increase the size of its retail sales force
and its customer base and gave the Company a strong presence in southwestern
Ohio, and also added significant additional asset management capabilities.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
The majority of the Company's assets are highly liquid and short-term in
nature. Cash and liquid assets, principally receivables from customers,
brokers and dealers, securities purchased under agreements to resell, and
securities owned approximate 94% of the Company's assets at June 24, 1994.
These assets are financed by a number of sources, including the Company's
capital and short-term borrowings.
At June 24, 1994, McDonald Securities had outstanding $25,000,000 in
aggregate principal amount of 8.24% Subordinated Notes due January 15, 2002.
McDonald Securities is required to pay principal amounts of $5,000,000 on
January 15 in each year beginning in 1998. The notes are subordinated in right
of payment to all senior indebtedness and general creditors of McDonald
Securities. In addition to providing long-term financing, the notes have been
approved by the New York Stock Exchange, Inc. for inclusion in McDonald
Securities' regulatory capital.
(7)
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (continued)
-------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (cont.)
- - ---------------------------------------
Changes in the levels of securities owned and in customer and broker
receivables directly affect the Company's financing arrangements. The Company
has available lines of credit of $318,000,000, of which $256,500,000 was unused
at June 24, 1994. Management believes that funds from operations, available
lines of credit, and long-term borrowings provide sufficient resources to meet
present and anticipated financial needs.
Certain minimum amounts of capital must be maintained by the Company's
principal broker/dealer subsidiary, McDonald Securities, to satisfy the
regulatory requirements of the Securities and Exchange Commission and the New
York Stock Exchange. The regulatory requirements represent Uniform Net Capital
Rules designed to measure the general financial integrity and liquidity of
registered broker/dealers and provide minimum acceptable net capital levels to
meet continuing commitments to customers. Net capital, as defined, changes
from day to day. At June 24, 1994, McDonald Securities was in compliance with
the Uniform Net Capital Rules and had net capital of $69,414,000, which was
$67,309,000 in excess of the minimum required.
FISCAL THREE MONTH PERIOD ENDED JUNE 24, 1994 AND JUNE 25, 1993
- - ---------------------------------------------------------------
Total revenues for the fiscal quarter ended June 24, 1994 were $40,815,000, a
decrease of $6,902,000, or 14%, from revenues of $47,717,000 for the fiscal
quarter ended June 25, 1993.
Net income for the fiscal quarter ended June 24, 1994 was $1,942,000, or $.20
per share, compared with net income of $5,111,000, or $.59 per share, for the
fiscal quarter ended June 25, 1993, which represents a decrease in net income
of 62%.
The average number of shares and share equivalents outstanding were 9,461,000
for the fiscal quarter ended June 24, 1994 compared to 8,600,000 for the fiscal
quarter ended June 25, 1993.
Revenues from underwriting and investment banking decreased $3,731,000 or 29%
for the quarter when compared to the same period in the prior fiscal year.
Revenues from corporate underwriting and investment banking decreased
$2,511,000, or 24% for the first quarter due primarily to lower revenues from
managed and co-managed equity originations, which declined approximately
$1,223,000, or 22%, and lower revenues from participations in equity
syndications, which declined $781,000, or 30%. These declines were due to less
favorable market conditions for public offerings of equity securities.
Revenues from municipal finance decreased $1,220,000, or 45%, for the quarter
ended June 24, 1994 when compared to the first quarter of fiscal 1993 due to a
low level of public finance offerings. In the first quarter of the prior
fiscal year, declining interest rates resulted in a higher level of public
finance offerings and refinancings of existing public debt.
Revenues from underwriting and investment banking activities are highly
dependent on general market conditions for such business activities. Market
conditions for underwriting and investment banking services can be affected by
political and economic events both in the United States and abroad. To the
extent future events are unpredictable, uncertainty will be a factor in the
level of McDonald Securities business activity. Also, competitive pressure
from other investment bankers can and will have an effect on the success of
McDonald Securities in obtaining such business and on the prices which can be
charged for investment banking and underwriting services. The management of
McDonald Securities believes it can compete effectively in this segment of its
business activities.
(8)
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (continued)
-------------------------------------
FISCAL THREE MONTH PERIOD ENDED JUNE 24, 1994 AND JUNE 25, 1993 (cont.)
- - -----------------------------------------------------------------------
Revenues from principal transactions decreased $4,091,000, or 27%, for the
first quarter of fiscal 1995 when compared to the same period in the prior
fiscal year. Revenues from trading taxable fixed-income securities, including
corporate bonds, United States government bonds and mortgage-backed securities,
decreased $3,959,000, or 44%, for the first quarter of fiscal 1995. This
decrease in revenues from principal transactions in taxable fixed-income
securities reflects the low level of activity in the taxable fixed income
markets due to uncertainties related to interest rates and the economy. The
decline in revenues from trading taxable fixed income securities includes the
impact of eliminating the Company's fixed income arbitrage area effective as of
the beginning of the current fiscal year. In the quarter ended June 25, 1993,
revenues from fixed income arbitrage trading were $1,092,000, representing 20%
of the total decline. Revenues from trading municipal bonds increased
$464,000, or 26%, for the first quarter due primarily to individual investor
interest in tax-exempt securities due to changes in federal income tax rates.
Revenues from principal transactions in equity securities decreased $596,000,
or 14%, for the first quarter.
Commission revenues increased $298,000, or 2%, in the current quarter when
compared to the same period in fiscal 1994. The increase in commission
revenues was primarily due to increased commissions from the sale of annuities
and life insurance products, which increased $208,000, or 53%. Commission
revenues from agency transaction in listed and over-the-counter stock were
comparable to the prior year's first quarter.
Revenues from investment management fees include advisory fees from the
Company's mutual funds and money market funds and investment management fees
earned related to individually managed accounts. Revenues from investment
management fees increased $739,000, or 23%, for the fiscal quarter ended June
24, 1994 when compared to the fiscal quarter ended June 25, 1993.
Interest and dividend income decreased $481,000, or 13%, for the fiscal three
month period ended June 24, 1994 when compared to the same period in the prior
fiscal year. The decrease was due to a lower level of securities owned in the
current period when compared to the same period in the prior fiscal year.
Other income increased $364,000, or 57%, for the current quarter due primarily
to higher transfer agency and other fees related to proprietary mutual funds.
Operating expenses (total expenses before interest) decreased $1,172,000, or
3%, for the first quarter of fiscal 1995, when compared to the same period in
the prior fiscal year. Employee compensation and benefits decreased
$2,458,000, or 9%, for the current quarter. Commission and other sales
compensation expense decreased $616,000, or 4%, for the quarter, primarily
because of decreased revenues from principal transactions and other sales
credits. Although operating revenues decreased $6,421,000, or 15%, commissions
and other sales compensation declined only $616,000, or 4%. This was due to
the change in the mix of revenues during the periods. For the quarter ended
June 24, 1994, trading losses related to fixed income and equity inventory
trades were $342,000, compared to trading profits of $3,155,000 in the prior
year's first quarter, resulting in significantly higher sales compensation in
these areas. Additionally, management fees and other non-commission revenues
in finance areas declined $2,066,000, or 40% for the current quarter when
compared to the same quarter in fiscal 1994. This resulted in higher sales
compensation relative to finance revenues. Other clerical and administrative
expenses increased $1,188,000, or 16%, for the quarter. The increase in other
clerical and administrative expenses represents compensation and employee
benefit costs related to an increase in the professional and support staff in
the current periods when compared to the same period in the prior fiscal year.
The remaining decrease in employee compensation
(9)
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (continued)
-------------------------------------
FISCAL THREE MONTH PERIOD ENDED JUNE 24, 1994 AND JUNE 25, 1993 (cont.)
- - -----------------------------------------------------------------------
and benefits of $3,030,000, represents decreases in incentive compensation and
profit sharing accruals which are directly related to the decline in
profitability.
All other operating expenses increased $1,286,000, or 13%, for the current
quarter. The increase in all other operating costs represents communications,
occupancy and equipment, promotional and other costs related to the expansion
of the Company's business.
Interest expense decreased $811,000, or 35%, for the fiscal three month period
in the current fiscal year when compared to the same period in fiscal 1994.
This decrease reflects a lower level of average short-term borrowings due to a
decrease in the level of securities owned.
Income before income taxes for the fiscal quarter ended June 24, 1994 was
$3,192,000, resulting in a pre-tax return on revenues of 8%. For the fiscal
quarter ended June 25, 1993, income before income taxes was $8,111,000,
resulting in a pre-tax return on revenues of 17%.
(10)
<PAGE> 11
PART II. OTHER INFORMATION
Item 5. Other Information
-----------------
On July 27, 1993, the Company announced the continuation of an
open market repurchase program originally announced in July, 1987.
The current program, which expires July 31, 1996, allows the
Company to purchase up to 1,200,000 shares of its Common Stock at
an aggregate price not to exceed $20,000,000. Treasury shares may
be used to satisfy options exercised under the Company's stock
option plans and 1993 Restricted Stock Bonus Plan.
During the fiscal quarter ended June 24, 1994, the Company
purchased 103,250 shares of the Company's Common Stock at an
average price of $13.70 per share. During the fiscal quarter
ended June 24, 1994 the Company utilized 40,940 shares of the
Company's Common Stock held in treasury to satisfy options
exercised under the Stock Option Plan for employees.
<TABLE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
<CAPTION>
(a.) The following exhibit is filed as part Sequential
of this report: Page Number
-----------
<S> <C> <C>
Exhibit 11 Statement re: Computation of
Per Share Earnings . . . . . . . . . . . . . 14
</TABLE>
(11)
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
McDonald & Company Investments, Inc.
------------------------------------
(Registrant)
Date: August 3, 1994 By: /s/ William B. Summers, Jr.
----------------------- ------------------------------------
William B. Summers, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 3, 1994 By: /s/Robert T. Clutterbuck
----------------------- ------------------------------------
Robert T. Clutterbuck
Treasurer
(Principal Financial and Accounting
Officer)
(12)
<PAGE> 13
<TABLE>
McDonald & Company Investments, Inc.
Report on FORM 10-Q for the Fiscal Quarter ended June 24, 1994
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit No. Description Sequential Page
- - ----------- ----------- ---------------
<S> <C> <C>
11 Statement Re: Computation of
Per Share Earnings . . . . . . . . . . . . . . . . 14
</TABLE>
(13)
<PAGE> 1
<TABLE>
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
- - -----------------------------------------------
<CAPTION>
Fiscal Quarter Ended
------------------------------
June 24, 1994 June 25, 1993
------------- -------------
<S> <C> <C>
PRIMARY
- - -------
Average shares outstanding 9,281,000 8,373,000
Net effect of dilutive stock
options - based on the treasury
stock method using average
market price 180,000 227,000
---------- ----------
TOTAL 9,461,000 8,600,000
========== ==========
Net income $1,942,000 $5,111,000
========== ==========
Net income per share $ .20 $ .59
========== ==========
FULLY DILUTED
- - -------------
Average shares outstanding 9,281,000 8,373,000
Net effect of dilutive stock
options - based on the treasury
stock method using greater of
average or period - end market
price 180,000 227,000
Assumed conversion of 8%
convertible subordinated
debentures 1,080,000
---------- ----------
TOTAL 9,461,000 9,680,000
========== ==========
Net income $1,942,000 $5,111,000
Add interest on 8% convertible
subordinated debentures, net of
federal tax effect --- 173,000
---------- ----------
TOTAL $1,942,000 $5,284,000
========== ==========
Net income per share $ .20 $ .54
========== ==========
</TABLE>
(14)
