<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 28, 1996
-------------------------------------------------
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)
McDonald Investment Center, 800 Superior Avenue, Cleveland, Ohio 44114-2603
- --------------------------------------------------------------------------------
(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:
8,937,473 shares of Common Stock, par value $1.00 per share, were
outstanding on August 5, 1996.
(1)
<PAGE> 2
McDONALD & COMPANY INVESTMENTS, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
Item 1. Financial Statements -
Consolidated statements of financial condition (unaudited)-
June 28, 1996 and March 29, 1996....................................................... 3
Consolidated statements of income (unaudited)-
Fiscal three months ended June 28, 1996
and June 30, 1995...................................................................... 4
Consolidated statements of cash flows (unaudited)
Fiscal three months ended June 28, 1996 and
June 30, 1995.......................................................................... 5
Notes to consolidated financial statements (unaudited)-
June 28, 1996.......................................................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................................... 8
PART II - OTHER INFORMATION
- ---------------------------
Item 5. Other Information.................................................................. 12
Item 6. Exhibits and Reports on Form 8-K................................................... 12
SIGNATURES........................................................................................ 13
EXHIBIT INDEX..................................................................................... 14
</TABLE>
(2)
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MCDONALD & COMPANY INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
<TABLE>
<CAPTION>
June 28, March 29,
1996 1996
-------- ---------
(In thousands)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 5,021 $ 12,376
Receivable from customers 174,174 175,973
Receivable from brokers and dealers 48,435 59,219
Securities purchased under agreements
to resell 121,283 50,052
Securities owned 144,660 102,202
Other receivables 32,953 18,368
Furniture, equipment and leasehold
improvements, at cost, less accumulated
depreciation and amortization 17,401 15,719
Other assets 39,327 37,192
--------- ---------
$ 583,254 $ 471,101
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Short-term borrowings $ 88,786 $ 77,024
Payable to customers 61,763 71,722
Payable to brokers and dealers 9,922 15,547
Securities sold under agreements to
repurchase 102,864 67,135
Securities sold but not yet purchased 106,182 29,216
Accrued compensation 21,618 28,665
Accounts payable, accrued expenses
and other liabilities 28,608 25,969
Long-term borrowings 25,000 25,000
--------- ---------
$ 444,743 $ 340,278
--------- ---------
Stockholders' equity
Preferred Stock, without par value;
200,000 shares authorized;
none issued
Common Stock, par value $1.00 per
share; 15,000,000 shares
authorized; (11,733,288 and 11,620,857
shares issued, respectively) 11,733 11,621
Additional paid-in capital 53,670 51,663
Retained earnings 99,506 93,808
Less treasury stock, at cost
(2,683,815 and 2,691,495 shares, (26,398) (26,269)
respectively) --------- ---------
138,511 130,823
--------- ---------
$ 583,254 $ 471,101
========= =========
</TABLE>
See Notes to consolidated financial statements (unaudited).
(3)
<PAGE> 4
<TABLE>
<CAPTION>
MCDONALD & COMPANY INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Fiscal Three Months Ended
----------------------------------
June 28, 1996 June 30, 1995
(13 weeks) (13 weeks)
-------------- -------------
<S> <C> <C>
(In thousands, except for share and per share amounts)
Revenues:
Underwriting and investment banking $ 21,246 $ 10,270
Principal transactions 15,237 14,922
Commissions 19,101 14,774
Investment management fees 5,576 4,549
Interest and dividends 4,658 4,035
Other 1,514 1,438
---------- ----------
$ 67,332 $ 49,988
---------- ----------
Expenses:
Employee compensation and benefits $ 39,960 $ 29,446
Interest 2,200 1,828
Communications 3,649 3,260
Occupancy and equipment 4,337 3,325
Promotion and development 2,440 1,894
Floor brokerage and clearance 593 646
Taxes, other than income taxes 1,836 1,741
Other operating expenses 2,259 1,884
---------- ----------
$ 57,274 $ 44,024
---------- ----------
Income before income taxes $ 10,058 $ 5,964
Provision for income taxes 3,600 2,200
---------- ----------
Net income $ 6,458 $ 3,764
========== ==========
Net income per share $ .71 $ .41
========== ==========
Dividends per share $ .085 $ .08
========== ==========
Average number of shares and share equivalents
outstanding 9,135,000 9,114,000
========== ==========
</TABLE>
See Notes to consolidated financial statements (unaudited).
(4)
<PAGE> 5
MCDONALD & COMPANY INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Fiscal Three Months Ended
--------------------------------------
June 28, 1996 June 30, 1995
------------- -------------
(In thousands)
OPERATING ACTIVITIES:
- ---------------------
<S> <C> <C>
Net Income $ 6,458 $ 3,764
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,878 1,206
Deferred compensation 256 122
Deferred income taxes (358) 213
Decrease in receivable from customers 1,799 25,062
(Increase) decrease in receivable from brokers and dealers 10,784 (792)
Increase in securities owned (42,458) (6,805)
Increase in other receivables (14,585) (1,137)
Decrease in payable to customers (9,959) (2,251)
Decrease in payable to brokers and dealers (5,625) (13,094)
Increase (decrease) in securities sold but not yet purchased 76,966 (2,569)
Decrease in accrued compensation (4,852) (3,825)
Increase (decrease) in accounts payable, accrued expenses and other liabilities 2,383 (2,527)
--------- ---------
Net cash provided by operating activities $ 22,687 $ 2,421
========= =========
INVESTING ACTIVITIES:
- ---------------------
Purchase of furniture, equipment and leaseholds $ (3,396) $ (875)
Increase in other assets (1,941) (964)
--------- ---------
Net cash used for investing activities $ (5,337) $ (1,839)
========= =========
FINANCING ACTIVITIES:
- ---------------------
(Increase) decrease in securities purchased under agreement to resell $ (71,231) $ 20,692
Increase in short-term borrowings 11,762 5,281
Increase (decrease) in securities sold under agreements to repurchase 35,729 (22,971)
Cash dividends (760) (716)
Purchase of treasury stock (420) (444)
Proceeds from issuance of treasury stock 215 55
--------- ---------
Net cash provided by (used for) financing activities $ (24,705) $ 1,897
--------- ---------
Increase (decrease) in cash and cash equivalents (7,355) 2,479
Cash and cash equivalents at beginning of period 12,376 2,850
--------- ---------
Cash and cash equivalents at end of period $ 5,021 $ 5,329
========= =========
</TABLE>
See Notes to consolidated financial statements (unaudited).
(5)
<PAGE> 6
McDONALD & COMPANY INVESTMENTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 28, 1996
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 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
- ------ --------------------
The Company's principal subsidiary, 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
- ------ --------------------
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.
NOTE D - CONTINGENCIES
- ------ -------------
McDonald Securities is a defendant in Stephanie Tubbs Jones et. al. v. McDonald
& Co. Securities, Inc., et. al., (the "Jones Litigation") a lawsuit currently
pending in Cuyahoga County Common Pleas Court. The action arose out of losses
allegedly incurred by Cuyahoga County's Secured Assets Fund Earnings Program
("SAFE"). McDonald Securities and six other defendants have been named in the
lawsuit. The complaint alleges that, in breach of various legal duties allegedly
owed to the plaintiff, McDonald Securities and/or the other defendants enabled,
facilitated and/or assisted the County's investment staff to engage in
unsuitable and inappropriate investment and trading activities and practices.
The plaintiff seeks to hold each of the defendants liable for an unspecified
amount of compensatory and consequential damages. In addition, the complaint
contains allegations of fraud and negligent misrepresentation against McDonald
Securities and another defendant arising out of their respective roles as
underwriters of two issuances of tax and current revenue anticipation notes
("TANS/CRANS") during 1993 and 1994. The plaintiff seeks to hold McDonald
Securities and the other defendant that participated as an underwriter of the
TANS/CRANS offerings liable for an unspecified amount of compensatory,
consequential and punitive damages. In February 1996, the Ohio Supreme Court
disqualified all Cuyahoga County Common Pleas judges from hearing the Jones
Litigation and appointed an out-of-county judge to hear the case. In June 1996,
the court denied motions to dismiss the plaintiff's claims filed by McDonald
Securities and various other defendants. Only limited discovery has been made
to date and no trial date has been set. Based on the facts known to date, the
Company believes that the plaintiff's claims against McDonald Securities are
without merit, and intends to contest vigorously the allegations in the
complaint.
(6)
<PAGE> 7
McDONALD & COMPANY INVESTMENTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 28, 1996
The Company is a defendant in various other lawsuits incidental to its
securities business. In view of the number and diversity of claims against the
Company and the inherent difficulty of predicting the outcome of litigation and
other claims, the Company cannot state with certainty what the eventual outcome
of pending litigation or other claims will be. The Company provides for costs
relating to these matters when a loss is probable and the amount can be
reasonably estimated. The effect of the outcome of these matters on the
Company's future results of operations cannot be predicted because any such
effect depends on future results of operations and the amount and timing of the
resolution of such matters. While it is not possible to predict with certainty,
management believes that the ultimate resolution of such matters, including the
Jones Litigation, will not have a material adverse effect on the consolidated
financial position, liquidity, or results of operations of the Company.
(7)
<PAGE> 8
ITEM 2.5 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.
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 90% of the Company's assets at June 28, 1996. These assets are
financed by a number of sources, including the Company's capital and short-term
borrowings.
At June 28, 1996, 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.
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 $300,000,000, of which $218,056,000 was unused at June 28,
1996. 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 28, 1996, McDonald Securities was in compliance with the Uniform
Net Capital Rules and had net capital of $76,556,000, which was $72,443,000 in
excess of the minimum required.
(8)
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
FISCAL THREE MONTH PERIOD ENDED JUNE 28, 1996
- ---------------------------------------------
Total revenues for the fiscal quarter ended June 28, 1996 were $67,332,000, an
increase of $17,344,000, or 35%, from revenues of $49,988,000 for the fiscal
quarter ended June 30, 1995.
Net income for the fiscal quarter ended June 28, 1996 was $6,458,000, or $.71
per share, compared with net income of $3,764,000, or $.41, per share, for the
fiscal quarter ended June 30, 1995, which represents an increase in net income
of 72%.
The average number of shares and share equivalents outstanding were 9,135,000,
for the fiscal three months ended June 28, 1996 compared to 9,114,000, for the
fiscal three months ended June 30, 1995.
Revenues from underwriting and investment banking increased $10,976,000, or
107%, for the quarter when compared to the same period in the prior fiscal year.
Revenues from corporate underwriting and investment banking increased
$11,549,000, or 127%, for the first quarter. The increase in revenues from
corporate underwriting and investment banking for the three month period is due
primarily to increased revenues from public offerings of debt and equity
securities of $2,595,000, or 80%, increased revenues from private placements of
$6,828,000, or 245%, and increased revenues from mergers and other fee income of
$1,968,000, or 265%. These increases reflect improved market conditions for both
the public and private offering of securities. Included in private placement
revenues during the first quarter of fiscal 1997 were fees of $9,336,000 from a
single $500 million private placement of debt and equity securities.
Additionally, merger fees included a fee of $1,750,000 from a single
transaction. Revenues from municipal finance decreased $573,000, or 49%, for the
quarter ended June 28, 1996 when compared to the same period in the prior fiscal
year, due to a lower level of public finance offerings.
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 banking firms 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.
Revenues from principal transactions increased $315,000, or 2%, for the first
quarter of fiscal 1997 when compared to the same period in the prior fiscal
year. Revenues from principal transactions in equity securities increased
$903,000, or 16%, for the first quarter primarily due to a strong NASDAQ market
and continued expansion of the Company's sales force. Revenues from trading
taxable fixed-income securities, including corporate bonds, United States
government bonds and mortgage-backed securities, decreased $936,000, or 13%, for
the first quarter of fiscal 1997. 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 a volatile interest rate
environment and competition from the strong equity markets. Revenues from
trading municipal bonds increased $348,000, or 16%, for the first quarter. The
increase in revenues from trading municipal bonds for the first three months of
fiscal 1997 was due primarily to increased individual investor interest in
municipal bonds due to higher interest rates.
(9)
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
FISCAL THREE MONTH PERIOD ENDED JUNE 28, 1996 (cont.)
- -----------------------------------------------------
Commissions revenue increased $4,327,000, or 29%, in the current quarter
compared to the same period in fiscal 1996. Of this amount, commissions revenues
from agency transactions in listed and over-the-counter stocks increased
$2,341,000, or 24%, for the quarter. Revenues from the sale of non-proprietary
mutual funds increased $1,297,000, or 45%, for the first quarter of fiscal 1997.
Revenues from the sale of proprietary mutual funds increased $492,000, or 39%.
These increases reflect the strong equity markets during the period.
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 $ 1,027,000, or 23%, for the fiscal quarter ended June
28, 1996 when compared to the comparable fiscal 1996 period. Of these amounts,
increased revenues from advisory fees related to individually managed accounts
represented $881,000, or 86%, of the total increase for the fiscal three month
period.
Interest and dividend income increased $623,000, or 15%, for the fiscal three
month period ended June 28, 1996 when compared to the same period in the prior
fiscal year. The increase was due primarily to an increase in interest earned on
margin accounts resulting from the expansion of the retail sales force and
strong equity markets.
Other income increased $76,000, or 5%, for the current quarter ended June 28,
1996. The increase represents primarily higher transfer agent and other fees
related to the Company's proprietary mutual funds.
Operating expenses (total expenses before interest) increased $12,878,000, or
31%, for the first quarter of fiscal 1997 when compared to the same period in
the prior fiscal year.
Employee compensation and benefits increased $10,514,000, or 36%, for the first
quarter. Commission and other sales compensation expense increased $2,887,000,
or 18%, for the quarter, primarily because of increased revenues from
commissions and principal sales credits. Other clerical and administrative
expenses increased $1,327,000, or 15%, for the quarter. The increase in clerical
and administrative expenses reflects the compensation and other benefits costs
related to the increase in professional and support staff necessitated by the
continued expansion of the business. For the fiscal quarter ended June 28, 1996,
incentive compensation and profit sharing accruals increased $6,300,000, or 137%
which are directly related to the increase in profitability. The significant
increase in incentive compensation and profit-sharing accruals of $6,300,000, or
137%, reflects compensation in investment banking areas due to the high level of
finance private placement and fee revenues during the period. Correspondingly,
sales compensation decreased from 34.4% of operating revenues in the first
quarter of fiscal 1996 to 29.8% of operating revenues in the first quarter of
fiscal 1997, reflecting lower sales compensation related to the investment
banking and private placement fee income.
All other operating expenses increased $2,364,000, or 19%, for the first quarter
of fiscal 1997 when compared to the first quarter of fiscal 1996. Communications
expenses increased $389,000, or 12%, for the current quarter. Of this increase,
approximately $255,000 represents expenses related to the Company's headquarter
office and technology renovation. The remaining increase reflects higher
telecommunications, quotation and information services costs due to both higher
volume and higher employee headcount. Occupancy and equipment costs increased
$1,012,000, or 30%, for the current quarter. Of this increase, approximately
$736,000 represented expenses related to the Company's current technology
renovation. Without regard to these items, occupancy and equipment costs
increased 8% reflecting increased costs related to headcount increases.
(10)
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
FISCAL THREE MONTH PERIOD ENDED JUNE 28, 1996 (cont.)
- -----------------------------------------------------
Interest expense increased $372,000, or 20%, for the fiscal three month period
when compared to the same period in fiscal 1996 due to higher levels of average
short-term borrowings.
Income before income taxes for the fiscal quarter ended June 28, 1996 was
$10,058,000, resulting in a pre-tax return on revenues of 15%. For the fiscal
quarter ended June 30, 1995, income before income taxes was $5,964,000,
resulting in a pre-tax return on revenues of 12%.
(11)
<PAGE> 12
PART II. OTHER INFORMATION
Item 5. Other Information
-----------------
On February 9, 1995, the Company announced the continuation of an
open market repurchase program originally instituted in July,
1987. The current program allows the Company to purchase up to
1,000,000 shares of its Common Stock at an aggregate price not to
exceed $15,000,000. Treasury shares may be used to satisfy options
exercised under the Company's stock option plans and shares
awarded under the Company's 1995 Stock Bonus Plan.
During the fiscal quarter ended June 28, 1996, the Company
purchased 22,100 shares of the Company's Common Stock at an
average price of $18.99 per share. During the fiscal quarter ended
June 28, 1996 the Company utilized 29,780 shares of the Company's
Common Stock held in treasury to satisfy options exercised under
the Stock Option Plan for employees.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
<TABLE>
<CAPTION>
Sequential
Page
----
<S> <C>
Number (a.) The following exhibit is filed as part of this report:
- ------
Exhibit 11 Statement re: Computation of Per Share Earnings............ 15
Exhibit 27 Financial Data Schedule BD ................................ 16
(b.) Reports on Form 8-K:
The Company did not file a Report on Form 8-K during the fiscal quarter ended June 28, 1996.
</TABLE>
* Exhibit 27 is Furnished for Securities and Exchange Commission Purposes Only.
(12)
<PAGE> 13
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 8, 1996 By: /s/ William B. Summers, Jr.
------------------ -------------------------------------
William B. Summers, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 8, 1996 By: /s/ Robert T. Clutterbuck
------------------ -----------------------------------
Robert T. Clutterbuck
Treasurer
(Principal Financial Officer)
(13)
<PAGE> 14
McDonald & Company Investments, Inc.
Report on FORM 10-Q for the Fiscal Quarter ended June 28, 1996
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page
- ----------- ----------- ---------------
<S> <C>
11 Statement Re: Computation of
Per Share Earnings............................................. 15
27 Financial Data Schedule BD ...................................... 16
</TABLE>
* Exhibit 27 is Furnished for Securities and Exchange Commission Purposes Only.
(14)
<PAGE> 1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
- -----------------------------------------------
<TABLE>
<CAPTION>
Fiscal Three Months Ended
-------------------------------
June 28, 1996 June 30, 1995
------------- -------------
PRIMARY
- -------
<S> <C> <C>
Average shares outstanding 8,977,000 8,979,000
Net effect of dilutive stock
options - based on the treasury
stock method using average
market price 158,000 135,000
---------- ----------
TOTAL 9,135,000 9,114,000
========== ==========
Net income $6,458,000 $3,764,000
========== ==========
Net income per share $ .71 $ .41
========== ==========
FULLY DILUTED
- -------------
Average shares outstanding 8,977,000 8,979,000
Net effect of dilutive stock
options - based on the treasury
stock method using greater of
average or period - end market
price 158,000 135,000
---------- ----------
TOTAL 9,135,000 9,114,000
========== ==========
Net income $6,458,000 $3,764,000
========== ==========
Net income per share $ .71 $ .41
========== ==========
</TABLE>
(15)
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION JUNE 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-28-1997
<PERIOD-END> JUN-28-1996
<CASH> 5,021
<RECEIVABLES> 222,609
<SECURITIES-RESALE> 121,283
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 144,660
<PP&E> 17,401
<TOTAL-ASSETS> 583,254
<SHORT-TERM> 88,786
<PAYABLES> 71,685
<REPOS-SOLD> 102,864
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 106,182
<LONG-TERM> 25,000
<COMMON> 11,733
0
0
<OTHER-SE> 126,778
<TOTAL-LIABILITY-AND-EQUITY> 583,284
<TRADING-REVENUE> 15,237
<INTEREST-DIVIDENDS> 4,658
<COMMISSIONS> 19,101
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</TABLE>
