<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-14772
JW CHARLES FINANCIAL SERVICES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 58-1545984
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
980 North Federal Highway - Suite 310
Boca Raton, Florida 33432
--------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 338-2600
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 last 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.
Class Outstanding at August 15, 1997
--------------------------------------- ------------------------------
Common stock, $.001 par value per share 3,319,021
<PAGE>
JW CHARLES FINANCIAL SERVICES, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Condensed Statements of Financial Condition
at June 30, 1997 and December 31, 1996 3
Consolidated Condensed Statements of Income for the Three
Month and Six Month Periods Ended June 30, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows for the Six Months
Ended June 30, 1997 and 1996 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
1997 1996(*)
---------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 12,967,000 $ 11,836,000
Commissions and other receivables from clearing brokers 6,347,000 2,203,000
Receivable from customers, net 88,385,000 98,610,000
Receivable from brokers and dealers 3,507,000 3,689,000
Securities owned, at market value 7,060,000 5,308,000
Furniture, equipment and leasehold improvements, net of accumulated
depreciation and amortization of $1,320,000 and $1,162,000 1,471,000 1,194,000
Deferred tax asset 1,729,000 1,719,000
Other, net 3,255,000 2,772,000
-------------------------------
$ 124,721,000 $ 127,331,000
===============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Short-term borrowings from banks $ 21,744,000 $ 17,375,000
Accounts payable, accrued expenses and other liabilities 11,067,000 10,441,000
Payable to customers 28,226,000 50,898,000
Payable to brokers and dealers 37,418,000 24,136,000
Securities sold, not yet purchased, at market value 2,843,000 450,000
Notes payable to affiliate 5,613,000 8,625,000
Income taxes payable 217,000 34,000
-------------------------------
107,128,000 111,959,000
-------------------------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value - authorized 5,000,000 shares no shares issued
or outstanding - -
Common stock, $.001 par value - authorized 9,056,000 shares; issued
and outstanding 3,319,021 and 3,230,436 3,000 3,000
Additional paid-in capital 821,000 821,000
Retained earnings 16,769,000 14,548,000
-------------------------------
Total stockholders' equity 17,593,000 15,372,000
-------------------------------
$ 124,721,000 $ 127,331,000
===============================
</TABLE>
* - Derived from audited financial statements contained in
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
3<PAGE>
JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
Revenues:
Commissions $ 10,528,000 $ 13,226,000 $ 22,066,000 $ 23,394,000
Market making and principal transactions, net 5,399,000 7,048,000 10,045,000 12,484,000
Interest 2,781,000 2,322,000 5,115,000 4,482,000
Clearing fees 2,573,000 2,672,000 4,381,000 4,985,000
Other 724,000 810,000 2,530,000 1,541,000
--------------------------- --------------------------
22,005,000 26,078,000 44,137,000 46,886,000
--------------------------- --------------------------
Expenses:
Commissions and clearing costs 10,927,000 14,666,000 22,485,000 25,974,000
Employee compensation and benefits 4,114,000 3,697,000 8,269,000 7,270,000
Selling, general and administrative 4,056,000 4,487,000 7,905,000 8,130,000
Interest 1,077,000 1,055,000 2,062,000 1,933,000
--------------------------- --------------------------
20,174,000 23,905,000 40,721,000 43,307,000
--------------------------- --------------------------
Income before income taxes 1,831,000 2,173,000 3,416,000 3,579,000
Provision for income taxes 622,000 827,000 1,195,000 1,371,000
--------------------------- --------------------------
Net income $1,209,000 $ 1,346,000 $ 2,221,000 $ 2,208,000
=========================== ==========================
Earnings per common share:
Net income $ 0.34 $ 0.25 $ 0.63 $ 0.37
============================ ==========================
Weighted average common shares outstanding 3,530,000 5,448,000 3,511,000 5,903,000
============================ ==========================
</TABLE>
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
4<PAGE>
JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1997 1996
----------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,221,000 $ 2,208,000
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 158,000 125,000
Change in operating assets and liabilities:
Commissions and other receivables from clearing brokers (4,144,000) (3,442,000)
Receivable from customers 10,225,000 (23,129,000)
Receivable from brokers and dealers 182,000 (7,001,000)
Securities owned (1,752,000) 2,711,000
Deferred tax asset (10,000) (4,000)
Other assets (483,000) 266,000
Accounts payable, accrued expenses and other liabilities 626,000 1,657,000
Payable to customers (22,672,000) 11,784,000
Payable to brokers and dealers 13,282,000 5,512,000
Securities sold, not yet purchased 2,393,000 3,499,000
Income taxes payable 183,000 378,000
------------------------------
Net cash provided (used) by operating activities 209,000 (5,436,000)
------------------------------
INVESTING ACTIVITIES
Purchases of furniture, equipment and leasehold improvements (435,000) (9,000)
------------------------------
FINANCING ACTIVITIES
Short-term borrowings from banks 4,369,000 8,936,000
Repayment of notes payable to affiliate (3,012,000) (500,000)
Cash flow distributions and redemptions of common stock - (1,155,000)
------------------------------
Net cash provided by financing activities 1,357,000 7,281,000
------------------------------
Net increase in cash and cash equivalents 1,131,000 1,836,000
Cash and cash equivalents at beginning of period 11,836,000 8,597,000
------------------------------
Cash and cash equivalents at end of period $ 12,967,000 $ 10,433,000
===============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 964,000 $ 968,000
===============================
Cash paid during the period for interest $ 2,062,000 $ 1,933,000
===============================
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Repurchase of mandatorily redeemable common stock by issuance of $6,125,000
of notes payable to affiliate in 1996.
</TABLE>
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
5
<PAGE>
JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The interim financial information included herein is unaudited;
however, such information reflects all adjustments, which are, in
the opinion of management, necessary for a fair presentation of
the periods indicated.
The accompanying consolidated condensed financial statements
include the accounts of the Company and its subsidiaries. Certain
information and footnote disclosures normally included in
financial statements prepared in conformity with generally
accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and
Exchange Commission. These consolidated condensed financial
statements should be read in conjunction with the consolidated
financial statements and related notes contained in the Company's
1996 Annual Report on Form 10-K.
Because of seasonal and other factors, the results of operations
for the three month and six month periods ended June 30, 1997 are
not necessarily indicative of the results of operations to be
expected for the fiscal year ending December 31, 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The accompanying consolidated condensed financial statements include the
accounts of JW Charles Financial Services, Inc. and its subsidiaries
which are: Corporate Securities Group, Inc. ("CSG"), JW Charles
Securities, Inc. ("JWC Securities"), JW Charles Clearing Corp.
("JWC Clearing"), CMG Capital Corp., First Investors Life Agency,
Inc., DMG Securities, Inc. ("DMG") and Discount Securities Group,
Inc. All significant intercompany transactions have been
eliminated in consolidation.
RECLASSIFICATIONS
Certain amounts in the prior period's consolidated condensed financial
statements have been reclassified to conform to the current period's
presentation. These reclassifications are not material to the
consolidated condensed financial statements.
6
<PAGE>
3. CONTINGENCIES
The Company is involved in various claims and possible actions
arising out of the normal course of its business. Although the
ultimate outcome of these claims cannot be ascertained at this
time, it is the opinion of the Company, based on knowledge of
facts and advice of counsel, that the resolution of such actions
will not have a material adverse effect on the Company's
financial condition and results of operations.
4. NET CAPITAL
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-1 under the Securities Exchange Act of
1934. This rule requires that aggregate indebtedness, as
defined, not exceed fifteen times net capital, as defined. Rule
15c3-1 also provides for an "alternative net capital requirement"
which, if elected, requires that net capital be equal to the
greater of $250,000 or two percent of aggregate debit items
computed in applying the formula for determination of reserve
requirements. The New York Stock Exchange, Inc. ("NYSE") may
require a member organization to reduce its business if its net
capital is less than four percent of aggregate debit items and
may prohibit a member firm from expanding its business if its net
capital is less than five percent of aggregate debit items. At
June 30, 1997, the net capital positions of the Company's broker-
dealer subsidiaries were as follows:
JWC Clearing (alternative method elected):
Net capital as a percent of aggregate debit items 10.1%
Net capital $10,097,000
Required net capital $2,009,000
CSG:
Ratio of aggregate indebtedness to net capital 1.62
Net capital $2,144,000
Required net capital $250,000
7<PAGE>
4. NET CAPITAL (cont.)
JWC Securities:
Ratio of aggregate indebtedness to net capital 2.12
Net capital $1,925,000
Required net capital $272,000
DMG:
Ratio of aggregate indebtedness to net capital .59
Net capital $386,000
Required net capital $100,000
5. NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the FASB issued SFAS No. 128, "Earnings Per
Share", which is effective for financial statements ending after
December 15, 1997. SFAS No. 128 simplifies the guidance for
computing earnings per share ("EPS") and replaces the
presentation of primary and fully diluted EPS with basic and
diluted EPS.
Basic EPS excludes dilution related to incremental shares and is
computed by dividing net income available to common stockholders
by the weighted-average number of common shares outstanding for
the period. Diluted EPS includes incremental shares.
Presented below is basic and diluted EPS under SFAS No. 128
compared with primary and fully diluted EPS for the three month
and six month periods ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
Pro Forma SFAS No. 128: Three Months Ended June 30, Six Months Ended June 30,
1997 1996 1997 1996
--------------------------- -------------------------
<S> <C> <C> <C> <C>
Basic $0.36 $0.27 $0.67 $0.41
Diluted $0.34 $0.25 $0.63 $0.37
As Currently Reported:
Earnings Per Share $0.34 $0.25 $0.63 $0.37
</TABLE>
8
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Certain statements included or incorporated by reference in this Form
10- Q may constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Any such forward-looking statements contained herein should be read in
conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 1997 (THE "1997 PERIOD")
VS. 1996 (THE "1996 PERIOD")
<TABLE>
<CAPTION>
Three Months Ended June 30,
----------------------------------------------------------
1997 1996 1995
(000's) % Change (000's) % Change (000's)
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions $10,528 -20 $13,226 29 $10,232
Market making and principal
transactions, net 5,399 -23 7,048 50 4,707
Interest 2,781 20 2,322 63 1,423
Clearing fees 2,573 -4 2,672 28 2,089
Other 724 -11 810 56 518
---------------------------------------------------------
$22,005 -16 $26,078 37 $18,969
=========================================================
Three Months Ended June 30,
---------------------------------------------------------
1997 1996 1995
(000's) % Change (000's) % Change (000's)
---------------------------------------------------------
Expenses:
Commissions and clearing costs $10,927 -25 $14,666 37 $10,736
Employee compensation and benefits 4,114 11 3,697 15 3,218
Selling, general and administrative 4,056 -10 4,487 34 3,346
Interest 1,077 2 1,055 71 618
---------------------------------------------------------
$20,174 -16 $23,905 33 $17,918
=========================================================
Three Months Ended June 30,
1997 % Change 1996 % Change 1995
---------------------------------------------------------
Clearing Factor 69% -4 72% 0 72%
=========================================================
</TABLE>
9
<PAGE>
Total revenues of $22,005,000 recorded in the 1997
Period decreased by 16% compared to last year's $26,078,000.
In particular, commissions, market making and principal
transactions, net and other decreased by 20%, 23% and 11%,
respectively from the results for the corresponding period of
1996. The decrease in these revenue categories was a result of
the exceptional market conditions experienced during the 1996
Period, which established quarterly Company records for
commissions and market making and principal transactions and also
resulted in record clearing activity, with May, 1997 establishing
a new record for monthly transactions processed.
Commissions and clearing costs, which represent the portion
of fee income payable by the Company to registered representatives
or other broker-dealers as a result of securities transactions
(and the related costs associated with the execution of such
trades) decreased, reflecting the decrease in second
quarter 1997 commissions and marketing making and principal
transactions, net. Commissions and clearing costs as a
percentage of commissions and market making and principal
transactions, net (the "Clearing Factor") decreased slightly to
approximately 69% in the 1997 Period as compared to 72% in the
1997 Period. The decrease is primarily attributable to an
increase of the percentage of the Company's business conducted
through its in-house employee registered representatives as a
result of the expansion of it's New York City facilities. In
addition, during the 1996 Period many of the Company's registered
representatives were paid a higher rate of commission as a result
of the recordation of a substantial increase in commission
revenues.
Employee compensation and benefits increased by 11% from
$3,697,000 to $4,114,000. This increase is primarily the result
of two factors: (i) expansion of the Company's New York City
branch office in the first quarter of 1997 and (ii) increase in
the cost of certain employee benefits, primarily health
insurance.
Interest income consists primarily of interest earned on receivables
from customers, securities owned and customer money market fund balances.
The increase in interest income is primarily a result of: (i) a general
increase in interest rates experienced during 1997, (ii) an increase in
the average outstanding money market balances and (iii) an increase in
average combined customer balances ("margin balances") at JWC Clearing and Bear
Stearns Securities Corp., experienced in 1997.
10<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1997 (THE "1997 PERIOD") VS. 1996 (THE "1996 PERIOD")
Six Months Ended June 30,
----------------------------------------------------------
1997 1996 1995
(000's) % Change (000's) % Change (000's)
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions $22,066 -6 $23,394 30 $17,976
Market making and principal
transactions, net 10,045 -20 12,484 33 9,413
Interest 5,115 14 4,482 60 2,793
Clearing fees 4,381 -12 4,985 23 4,053
Other 2,530 64 1,541 83 844
---------------------------------------------------------
$44,137 -6 $46,886 34 $35,079
=========================================================
Six Months Ended June 30,
1997 1996 1995
(000's) % Change (000's) % Change (000's)
----------------------------------------------------------
Expenses:
Commissions and clearing costs $22,485 -13 $25,974 36 $19,038
Employee compensation and benefits 8,269 14 7,270 9 6,677
Selling, general and administrative 7,905 -3 8,130 25 6,479
Interest 2,062 7 1,933 75 1,106
----------------------------------------------------------
$40,721 -6 $43,307 30 $33,300
==========================================================
Six Months Ended June 30,
1997 % Change 1996 % Change 1995
----------------------------------------------------------
Clearing Factor 70% -3 72% 7 67%
==========================================================
</TABLE>
Total revenues of $44,137,000 recorded in the 1997 Period decreased
by 6% compared to last year's $46,886,000. In particular, commissions,
market making and principal transactions, net and clearing fees decreased
by 6%, 20% and 12%, respectively, over the results for the corresponding
period of 1996. The decrease in these revenue categories was a result of
experiencing the same exceptional market conditions during the six-month
1996 Period that are discussed above with respect to the three-month
1996 Period.
Commissions and clearing costs increased reflecting the Company's
overall business growth. Commissions and clearing costs as a percentage
of commissions and market making and principal transactions, net,
decreased slightly to approximately 70% in the 1997 Period as compared to
72% in the 1997 Period.
Employee compensation and benefits increased by 20% from $7,270,000
to $8,269,000. This increase is primarily the result of two factors: (i)
expansion of the Company's New York City branch office in the first
quarter of 1997 and (ii) increase in the cost of certain employee
benefits, primarily health insurance.
11
<PAGE>
The increase in interest income is primarily a result of the same
factors discussed above for the three-month periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company maintains a highly liquid balance sheet with the
majority of the Company's assets consisting of cash and cash
equivalents, securities owned, which are marked to market, and
receivables from customers, brokers, dealers and clearing brokers
arising from customer related securities transactions.
Receivables from customers consist primarily of collateralized
customer margin loans and securities borrowed, which are
typically secured with marketable corporate debt and equity
securities. The nature of the Company's business as a market
maker and securities dealer requires it to carry significant
levels of securities inventories in order to meet its customer
and internal trading needs. Additionally, the Company's role as
a financial intermediary for customer activities, which it
conducts on a principal basis, results in significant levels of
customer related balances. Accordingly, the Company's total
assets and financial leverage can fluctuate significantly
depending largely upon general economic and market conditions,
volume of activity, customer demand and underwriting commitments.
The Company's ability to support increases in its total assets is
a function of its ability to generate funds internally and obtain
short-term borrowings from banks.
At June 30, 1997, the Company had stockholders' equity of
$17,593,000, representing an increase of $2,221,000 from December 31,
1996, and the Company had cash and cash equivalents of
$12,967,000. At June 30, 1997, the Company had borrowed $1,000,000, and
had an aggregate of $4,000,000 of additional borrowing capacity available,
under its committed bank lines of credit described in its annual report
on Form 10-K for the year ended December 31, 1996.
12<PAGE>
II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings pending or
threatened in which the Company is party or of which the
Company's property is the subject. The Company has been named in
various arbitration and legal proceedings arising in the ordinary
course of its securities brokerage business. Although
arbitration and litigation involves contingencies that cannot be
definitively predicted, including the unpredictability of actions
that might be taken by an arbitration panel or jury on matters
that are submitted to them, the Company expects that the ultimate
disposition of arbitration and litigation arising from the
ordinary course of business will not have a material adverse
impact upon its financial position and results of operations.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
On June 10, 1997, at the Annual Meeting of Shareholders of
JW Charles Financial Services, Inc. (the "Annual Meeting") the
following items were voted on by the Company's shareholders:
ITEM NO. 1 - ELECTION OF DIRECTORS. Messrs. Marshall T.
Leeds, Joel E. Marks, Wm. Dennis Ferguson, Gregg S.
Glaser, Stephen W. Cropper, John R. Faiella, Joseph P.
Robilotto and Michael B. Weinberg each were elected as a
director to serve a term that continues until the next
annual meeting and until their successor, if there is to
be one, is duly elected and qualified. The number of
shares voted for, or withheld from, each candidate is set
forth in the table below.
<TABLE>
<CAPTION>
Number of Number of Number of
Votes Votes Votes
Nominee For Election Withheld Not Voted
----------------- ------------ --------- ---------
<S> <C> <C> <C>
Marshall T. Leeds 2,906,247 12,900 399,874
Joel E. Marks 2,906,247 12,900 399,874
Wm. Dennis Ferguson 2,906,247 12,900 399,874
Gregg S. Glaser 2,906,247 12,900 399,874
Stephen W. Cropper 2,906,247 12,900 399,874
John R. Faiella 2,906,247 12,900 399,874
Joseph P. Robilotto 2,906,247 12,900 399,874
Michael B. Weinberg 2,906,247 12,900 399,874
</TABLE>
ITEM NO. 2 - AMENDMENT TO 1990 STOCK OPTION PLAN. An
amendment to increase the number of shares available for issuance
under the Company's 1990 Stock Option Plan by 400,000 from
1,200,000 to 1,600,000 was approved by the Company's
shareholders at the Annual Meeting.
ITEM NO. 3 - 1997 EMPLOYEE STOCK PURCHASE PLAN. A
proposal to adopt the JW Charles Financial Services, Inc. 1997
Employee Stock Purchase Plan was approved by the Company's
shareholders at the Annual Meeting.
The number of shares voted for, against or not voted for each of
Items No. 2 and 3 is set forth in the table below.
13<PAGE>
Number Number
of Votes Number of Votes
In of Votes Not
Favor Against Voted
----- -------- ---------
Item No. 2 1,852,131 386,924 1,079,966
Item No. 3 2,048,600 174,655 1,095,766
ITEM 5. OTHER INFORMATION
On August 19, 1997, the Company issued a press release, filed
a Schedule 14D-1 with the Commission, and published a summary advertisement
in the Southeastern and Florida editions of THE WALL STREET JOURNAL to
announce its commencement of an exchange tender offer (the "Exchange
Offer") for all (but not less than 51%) of the outstanding shares of
common stock of The American Growth Fund, Inc. ("AGRO Shares") not
already owned by the Company. Pursuant to the Exchange Offer, the
Company will exchange .431 shares of its common stock for each validly
tendered and not withdrawn AGRO Share. There are 1,265,100 AGRO Shares
outstanding, 326,550 of which are already owned by the Company. If all of
the other 938,550 AGRO Shares were so tendered in the Exchange Offer, the
Company would issue an aggregate of approximately 404,515 shares of its
common stock. The Exchange Offer will expire, unless extended in
accordance with its terms, on September 22, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
None.
(c) Press Release dated August 19, 1997.
14<PAGE>
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.
JW CHARLES FINANCIAL SERVICES, INC.
Date: August 19, 1997 /s/ Joel E. Marks
(Joel E. Marks, Senior Vice President)
(Duly Authorized Officer)
Date: August 19, 1997 /s/ Joel E. Marks
(Joel E. Marks, Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000741557
<NAME> JW CHARLES FINANCIAL SERVICES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 12,967
<SECURITIES> 7,060
<RECEIVABLES> 98,239
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,471
<DEPRECIATION> 1,320
<TOTAL-ASSETS> 124,721
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3
<OTHER-SE> 17,590
<TOTAL-LIABILITY-AND-EQUITY> 124,721
<SALES> 0
<TOTAL-REVENUES> 44,137
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 38,659
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,062
<INCOME-PRETAX> 3,416
<INCOME-TAX> 1,195
<INCOME-CONTINUING> 2,221
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,221
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.63
</TABLE>
