<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 28, 1996
-------------------------------
Commission file number 0-14140
First Albany Companies Inc.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 22-2655804
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 South Pearl St., Albany, NY 12207
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(518) 447-8500
- ----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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 (1) No
-------- --------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
4,737,154 Shares of Common Stock were outstanding as of the
close of business on June 24, 1996.
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
PAGE
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Financial
Condition at June 28, 1996 and
September 29, 1995....................... 3
Condensed Consolidated Statements of Operations
for the Three Months and Nine Months Ended
June 28, 1996 and June 30, 1995........... 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended June 28, 1996
and June 30, 1995.......................... 5
Notes to Condensed Consolidated Financial
Statements.... ......................... 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 9-15
Part II - Other Information
Item 1. Legal Proceedings......................... 16
Item 4. Submission of matters to a vote of
security holders.......................... 16
Item 6. Exhibits and Reports on Form 8-K.. ....... 17-19
</PAGE>
<PAGE>
[CAPTION]
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE> <C> <C>
June 28, September 29,
<S> 1996 1995
(In thousands of dollars) (Unaudited)
- ------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 3,362 $ 3,253
Securities borrowed 288,902 376,919
Receivables from
Brokers, dealers and clearing agencies 5,765 1,889
Customers 120,186 88,610
Others 6,377 4,965
Securities owned 128,454 56,025
Office equipment and leasehold
improvements, net 6,997 6,062
Other assets 11,325 5,532
- ------------------------------------------------------------------------
Total assets $571,368 $543,255
========================================================================
Liabilities and Stockholders' Equity
Liabilities
Short-term bank loans $136,033 $53,288
Securities sold under agreement to
repurchase 4,975
Securities loaned 298,211 388,523
Payables to
Brokers, dealers and clearing agencies 2,895 3,104
Customers 36,191 38,335
Others 26,867 4,135
Securities sold but not yet purchased 5,758 3,892
Accounts payable 1,963 1,696
Accrued compensation 9,824 8,108
Accrued expenses 3,327 4,191
Note payable 5,156 1,791
- -------------------------------------------------------------------------
Total liabilities 531,200 507,063
- -------------------------------------------------------------------------
Commitments and Contingencies
Stockholders' Equity
Common stock $ 51 $ 49
Additional paid-in-capital 23,287 20,257
Retained earnings 19,416 17,822
Less treasury stock at cost (2,586) (1,936)
- -------------------------------------------------------------------------
Total stockholders' equity 40,168 $36,192
- -------------------------------------------------------------------------
Total liabilities and stockholders' equity $571,368 $543,255
=========================================================================
</TABLE>
See notes to the condensed consolidated financial statements.
</PAGE>
<PAGE>
[CAPTION]
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<S> <C> <C>
Three Months Ended Nine Months Ended
(In thousands of dollars <C> <C> <C> <C>
except for per share June 28, June 30, June 28, June 30,
and outstanding share amounts) 1996 1995 1996 1995
- --------------------------------------------------------------------------
Revenues
Commissions $ 11,199 $ 8,484 $ 31,982 $ 22,409
Principal transactions 17,557 11,408 46,067 32,976
Investment banking 4,329 4,039 14,059 9,841
Interest 6,739 7,144 21,317 19,192
Fees and other 2,389 1,685 6,482 5,051
- --------------------------------------------------------------------------
Total revenues 42,213 32,760 119,907 89,469
Interest expense 5,173 5,681 16,758 14,405
- --------------------------------------------------------------------------
Net revenues 37,040 27,079 103,149 75,064
- --------------------------------------------------------------------------
Expenses (excluding interest)
Compensation and benefits 24,998 18,459 69,776 51,849
Clearing, settlement and
brokerage costs 722 609 1,970 1,610
Communications and data processing 2,784 2,037 7,562 5,678
Occupancy and depreciation 1,980 1,699 5,678 4,977
Selling 1,972 1,166 5,039 3,469
Other 2,004 1,524 5,205 3,900
- --------------------------------------------------------------------------
Total expenses (excluding interest) 34,460 25,494 95,230 71,483
- --------------------------------------------------------------------------
Income before income taxes 2,580 1,585 7,919 3,581
- --------------------------------------------------------------------------
Income tax expense 995 592 3,027 1,234
- --------------------------------------------------------------------------
Net income $ 1,585 $ 993 $ 4,892 $ 2,347
==========================================================================
Net income per common and
common equivalent share:
Primary $ 0.31 $ 0.20 $ 0.95 $ 0. 48
Fully diluted 0.31 0.20 0.95 0. 48
==========================================================================
Weighted average common
and common equivalent
shares outstanding:
Primary 5,106,666 4,966,541 5,125,407 4,925,094
Fully diluted 5,106,666 4,966,541 5,147,025 4,926,236
===========================================================================
Dividend per common share
outstanding $ 0.05 $ 0.05 $ 0.15 $ 0.15
===========================================================================
</TABLE>
See notes to the condensed consolidated financial statements.
</PAGE>
<PAGE>
[CAPTION]
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
Nine Months Ended
<S> June 28, June 30,
(In thousands of dollars) 1996 1995
<C> <C>
- ------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 4,892 $ 2,347
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 2,212 1,687
(Increase) decrease in operating assets:
Cash and securities segregated under
federal regs. (300)
Net receivable from customers (33,720) (4,198)
Net receivables from brokers and dealers (4,085)
Securities owned, net (70,564) (22,338)
Other assets (5,792) (2,026)
Increase (decrease) in operating liabilities:
Securities loaned, net (2,295) 15,705
Net payable to brokers, dealers, and
clearing agencies (2,594)
Net payable to others 21,320 16,902
Accounts payable and accrued expenses 1,119 (1,235)
- --------------------------------------------------------------------------
Net cash provided by (used in) operating
activities (86,913) 3,950
- --------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of furniture, equipment, and
leaseholds (3,147) (2,304)
- --------------------------------------------------------------------------
Net cash used in investing activities (3,147) (2,304)
- --------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds (payments) of short-term bank
loans 82,745 (3,408)
Proceeds (payments) of notes payable 3,365 1,875
Securities sold under agreement to
repurchase 4,975
Payments for purchases of common stock for
treasury (1,245)
Proceeds from issuance of common stock from
treasury 263 242
Proceeds from issuance of restricted stock 737 203
Dividends paid (671) (600)
- ---------------------------------------------------------------------------
Net cash (used in) provided by financing
activities 90,169 (1,688)
- ---------------------------------------------------------------------------
Decrease in cash 109 (42)
Cash at beginning of the year 3,253 3,165
- ---------------------------------------------------------------------------
Cash at end of period $ 3,362 $ 3,123
===========================================================================
</TABLE>
Supplemental disclosures of cash flow information: Income tax payments
totaled $3,424 in 1996 and $831 in 1995. Interest payments totaled $16,078
in 1996 and $13,317 in 1995.
See notes to the condensed consolidated financial statements.
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, including only normal, recurring
adjustments, necessary for a fair presentation of results for such periods.
The results for any interim period are not necessarily indicative of those for
the full year. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These consolidated financial
statements should be read in conjunction with financial statements and notes for
the year ended September 29, 1995.
2. Securities Owned
In April 1996, the Company entered into an agreement for the purchase of
stock of Mechanical Technology Incorporated (MTI). On May 7, 1996, the Company
acquired 909,091 shares of MTI, raising its percentage of ownership in MTI from
4% to 29%. A private placement in June 1996 reduced the Company's percentage
of ownership in MTI to 21%.
3. Payables to Others
Amounts payable to others as of:
<TABLE>
- ---------------------------------------------------------------------------
<C> <C>
<S> June 28, September 29,
(In thousands of dollars) 1996 1995
===========================================================================
Adjustment to record securities owned on
a trade date basis, net $22,237 $ 773
Others 4,630 3,362
- ---------------------------------------------------------------------------
Total $26,867 $4,135
===========================================================================
</TABLE>
For proprietary securities transactions, amounts receivable and payable for
securities transactions that have not reached their contractual settlement date
are recorded net on the statement of financial condition.
4. Note Payable
The note payable consists of a note for $5,156,000, which is collateralized
by fixed assets and is payable in monthly principal payments of $114,583 plus
interest. The interest rate varies with the 90-day United States Treasury
Securities Rate (4.99% plus 2.5% on June 28, 1996). The note matures April 30,
2000.
5. Contingencies
In the normal course of business, the Company has been named a defendant, or
otherwise has possible exposure, in several claims. Certain of these are class
actions which seek unspecified damages that could be substantial. Although
there can be no assurance as to the eventual outcome of litigation in which the
Company has been named as a defendant or otherwise has possible exposure, the
Company has provided for those actions most likely to result in adverse
dispositions. Although further losses are possible, the
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
opinion of management, based upon the advice of its attorneys and general
counsel, is that such litigation, in the aggregate, will not, have a material
adverse effect on the Company's liquidity or financial position, although it
could have a material effect on quarterly or annual operating results in the
period in which it is resolved.
6. Stockholders' Equity
On October 26, 1995, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the fourth quarter, ended September 29, 1995,
along with a 5% stock dividend. Both were payable on November 22, 1995, to
shareholders of record on November 8, 1995.
On February 1, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the first quarter, ended December 31, 1995,
payable on February 23, 1996, to shareholders of record on February 9, 1996.
On March 26, 1996, the Company repurchased 124,050 shares of its common stock
for $1.2 million. When appropriate, the Company will consider making additional
purchases.
On April 26, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the second quarter, ended March 29, 1996, along
with a 5% stock dividend. Both were payable on May 20, 1996, to shareholders
of record on May 6, 1996.
On July 25, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the third quarter, ended June 28, 1996, payable
on August 23, 1996, to shareholders of record on August 9, 1996.
7. Net Income Per Common and Common Equivalent Share
Net income per common and common equivalent share for both the primary and
fully diluted computation have been based upon the weighted average number of
common shares and the dilutive common stock equivalents outstanding. The
dilutive effect of the common stock equivalents was determined using the
treasury stock method.
Net income per common and common equivalent share, along with both the primary
and fully dilutive weighted average common and common equivalent shares
outstanding, have been adjusted to reflect all of the 5% stock dividends
declared.
8. Net Capital Requirements
The Company's broker-dealer subsidiary, First Albany Corporation, is subject
to the Securities and Exchange Commission's Uniform Net Capital Rule which
requires the maintenance of a minimum net capital as calculated and defined by
the Rule. As of June 28, 1996, the broker-dealer subsidiary had aggregate net
capital, as defined, of $14,098,000--exceeding the required net capital by
$11,569,000.
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
9. Market Value of Financial Instruments
The financial instruments of the Company are reported on the Statement of
Financial Condition at market or fair value or at carrying amounts that
approximate fair value with the exception of securities not readily marketable
owned by First Albany Companies Inc., which are recorded at cost of
approximately $1,225,000. The market value of securities which are carried at
cost approximates $4,900,000. The fair value of other financial assets and
liabilities (consisting primarily of receivable from and payable to brokers
dealers, clearing agencies, customers, securities borrowed and loaned, and bank
loans payable) are considered to approximate the carrying value due to the
short-term nature of the financial instruments.
10. New Accounting Pronouncements
The Financial Accounting Standards Board recently issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (FAS 123). FAS 123 establishes a fair value-based method of
accounting for stock-based compensation plans. Entities may either adopt
FAS 123 or elect to continue accounting for the issuance of stock under
compensation plans in accordance with APB Opinion No. 25, "Accounting for
Stock Issued to Employees." The Company has not yet selected the accounting
method it will use to account for stock-based compensation plans and has not
measured the impact of changing its method from APB Opinion No. 25 to FAS 123.
</PAGE>
<PAGE>
[CAPTION]
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF 1995 VS. 1996
<TABLE>
<C>
1996 vs.
Three Months Ended 1995 Percentage
<S> June 28, June 30, Increase Increase
(In thousands of dollars) 1996 1995 (Decrease) (Decrease)
<C> <C> <C> <C>
- ----------------------------------------------------------------------------
Revenues
Commissions $ 11,199 $ 8,48 $ 2,715 32%
Principal transactions 17,557 11,408 6,149 54%
Investment banking 4,329 4,039 290 7%
Interest income 6,739 7,144 (405) (6)%
Fees and others 2,389 1,685 704 42%
- ----------------------------------------------------------------------------
Total revenues 42,213 32,760 9,453 29%
Interest expense 5,173 5,681 (508) (9)%
- ----------------------------------------------------------------------------
Net revenues 37,040 27,079 9,961 37%
- ----------------------------------------------------------------------------
Expenses (excluding interest)
Compensation and benefits 24,998 18,459 6,539 35%
Clearing, settlement and
brokerage cost 722 609 113 19%
Communications and data
processing 2,784 2,037 747 37%
Occupancy and depreciation 1,980 1,699 281 17%
Selling 1,972 1,166 806 69%
Other 2,004 1,524 480 31%
- ----------------------------------------------------------------------------
Total expenses (excluding
interest) 34,460 25,494 8,966 35%
- ----------------------------------------------------------------------------
Income before income taxes 2,580 1,585 995 63%
- ----------------------------------------------------------------------------
Income tax expense 995 592 403 68%
- ----------------------------------------------------------------------------
Net income $ 1,585 $ 993 $ 592 60%
============================================================================
Net interest income
Interest income $ 6,739 $ 7,144 $ (405) (6)%
Interest expense 5,173 5,681 (508) (9)%
- ----------------------------------------------------------------------------
Net interest income $ 1,566 $ 1,463 $ 103 7%
============================================================================
</TABLE>
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and results of
operations during the periods included in the accompanying condensed
consolidated financial statements.
Business Environment
- --------------------
First Albany Corporation, a wholly owned subsidiary of First Albany Companies
Inc. (the Company), is a full service investment banking and brokerage firm.
Its primary business includes the underwriting, distribution, and trading of
fixed income and equity securities. The investment banking and brokerage
business earns revenues in direct correlation with the general level of trading
activity in the stock and bond markets. This level of activity cannot be
controlled by the Company; however, many of the Company's costs are fixed.
Therefore, the Company's earnings, like those of others in the industry, reflect
the activity in the markets and can fluctuate accordingly.
Results of Operations
- ---------------------
Three Months Periods Ended June 28, 1996 and June 30, 1995
- ----------------------------------------------------------
Net Income
- ----------
Net income for the quarter ended June 28,1996 was $1.6 million or $0.31 per
share compared to $1.0 million or $0.20 per share a year ago. This quarter's
gains reflect a significant increase in both the firm's institutional and retail
revenues in the third quarter of fiscal 1996 compared to the third fiscal
quarter of 1995. Revenues in the equity capital markets division and fixed
income capital markets division increased over 50%, while revenues in the retail
division increased nearly 40%.
Commissions
- -----------
Commission revenues increased $2.7 million or 32% in this year's third quarter
reflecting active trading in all major markets. Revenues from listed and over-
the-counter agency stock commissions increased $1.5 million or 29% while mutual
fund commission revenues increased $1.1 million or 49%.
Principal Transactions
- ----------------------
Principal transactions increased $6.1 million or 54% in this year's third
quarter. This was comprised of an increase in equity securities of $3.8
million, an increase in taxable fixed income of $1.3 million and an increase
in municipal bonds of $1.0 million.
Fees and Others
- ---------------
Fees and other revenues increased $0.7 million or 42% reflecting increased
service charge income and financial service revenues.
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF 1996 VS. 1995
Compensation and Benefits
- -------------------------
Compensation and benefits increased $6.5 million or 35% due primarily to
the increase in revenues. Sales-related compensation increased $5.6 million,
salaries increased $.6 million, and benefits increased $0.3 million.
Communications and Data Processing
- ----------------------------------
Communications and data processing expenses increased $0.7 million or 37%
in the third quarter. Communication expense increased $0.5 million due mainly to
more personnel and higher sales activity especially in the firm's equity capital
market division. Data processing expense increased $0.2 million due primarily
to higher transaction volumes.
Selling
- -------
Selling expense increased $0.8 million or 69% primarily reflecting greater
promotional related expenses.
</PAGE>
<PAGE>
[CAPTION]
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF 1996 VS. 1995
<TABLE>
1996 vs.
Nine Months Ended 1995 Percentage
<S> June 28, June 30, Increase Increase
(In thousands of dollars) 1996 1995 (Decrease) (Decrease)
<C> <C> <C> <C>
- ------------------------------------------------------------------------------
Revenues
Commissions $ 31,982 $ 22,409 $ 9,573 43%
Principal transactions 46,067 32,976 13,091 40%
Investment banking 14,059 9,841 4,218 43%
Interest income 21,317 19,192 2,125 11%
Fees and others 6,482 5,051 1,431 28%
- ------------------------------------------------------------------------------
Total revenues 119,907 89,469 30,438 34%
Interest expense 16,758 14,405 2,353 16%
- ------------------------------------------------------------------------------
Net revenues 103,149 75,064 28,085 37%
- ------------------------------------------------------------------------------
Expenses (excluding interest)
Compensation and benefits 69,776 51,849 17,927 35%
Clearing, settlement and
brokerage cost 1,970 1,610 360 22%
Communications and data
processing 7,562 5,678 1,884 33%
Occupancy and depreciation 5,678 4,977 701 14%
Selling 5,039 3,469 1,570 45%
Other 5,205 3,900 1,305 33%
- ------------------------------------------------------------------------------
Total expenses (excluding
interest) 95,230 71,483 23,747 33%
- ------------------------------------------------------------------------------
Income before income taxes 7,919 3,581 4,338 121%
- ------------------------------------------------------------------------------
Income tax expense 3,027 1,234 1,793 145%
- ------------------------------------------------------------------------------
Net income $ 4,892 $ 2,347 $ 2,545 108%
==============================================================================
Net interest income
Interest income $ 21,317 $ 19,192 $ 2,125 11%
Interest expense 16,758 14,405 2,353 16%
- ------------------------------------------------------------------------------
Net interest income $ 4,559 $ 4,787 $ (228) (5)%
==============================================================================
</TABLE>
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Nine Months Periods Ended June 28, 1996 and June 30, 1995
- ---------------------------------------------------------
Net Income
- ----------
Net income for the nine months ended June 28,1996, was $4.9 million or $0.95
per share compared to $2.3 million or $0.48 per share a year ago.
Commissions
- -----------
Commission revenues increased $9.6 million or 43% in this year's nine-month
period reflecting active trading in all major markets. Revenues from listed and
over-the-counter agency commissions increased $5.7 million or 36% while mutual
fund commission revenues increased $3.5 million or 49%.
Principal Transactions
- ----------------------
Principal transactions increased $13.1 million or 40% in this year's first
nine-months. This was comprised of an increase in equity securities of $8.5
million, an increase in taxable fixed income of $3.8 million and an increase
in municipal bonds of $0.8 million.
Investment Banking
- ------------------
Investment banking revenues increased $4.2 million or 43% in this year's first
nine months. Revenues from selling concessions were up $3.0 million (equities
increased $1.3 million, municipals increased $1.1 million and taxable fixed
income increased $0.6 million), underwriting fees increased $1.2 (both equities
and municipals increased $0.6 million, respectively), and investment banking
fees remained stable.
Fees and Others
- ---------------
Fees and other revenues increased $1.4 million or 28% reflecting increased
service charge income and financial service revenues.
Compensation and Benefits
- -------------------------
Compensation and benefits increased $17.9 million or 35% due primarily to
greater revenues. Sales-related compensation increased $14.9 million, salaries
increased $2.3 million, and benefits increased $0.7 million.
Communications and Data Processing
- ----------------------------------
Communications and data processing expenses increased $1.9 million or 33%
in this year's first nine months. Communication expense increased $1.4 million
due mainly to increased sales activity in the firm's equity capital market
division. Data processing expense increased $0.5 million due primarily to a
greater number of transactions.
Selling
- -------
Selling expense increased $1.6 million or 45% mainly reflecting higher
promotional related costs due to the greater sales activity in the firm's
equity capital market division.
</PAGE>
<PAGE>
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF 1996 VS. 1995
Other
- -----
Other expense increased $1.3 million or 33% in this year's nine months
partially due to an increase in consulting costs.
</PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
A substantial portion of the Company's assets, similar to other brokerage
and investment banking firms, is liquid, consisting of cash and assets readily
convertible into cash. These assets are financed primarily by the Company's
interest-bearing and non-interest-bearing payables to customers, payables to
brokers and dealers secured by loaned securities, and bank lines-of-credit.
Securities borrowed and securities loaned along with receivables from customers
and payables to customers will fluctuate primarily due to the current level of
business activity in these areas. Securities owned will fluctuate as a result
of changes in the level of positions held to facilitate customer transactions
and changes in market conditions. Short-term bank loans increased due primarily
to an increase in securities owned and receivables from customers. Payables to
others increased primarily because of an increase in the adjustment to record
securities owned on a trade date basis. The Company's broker-dealer
subsidiaries--First Albany Corporation and Northeast Brokerage Services Corp.--
at June 28, 1996 were in compliance with the net capital requirements of the
Securities and Exchange Commission (SEC) and had capital in excess of the
minimum required.
Management believes that funds provided by operations and a variety of
committed and uncommitted bank lines-of-credit--totaling $220,000,000 of which
approximately $99,100,000 were unused as of June 28, 1996--will provide
sufficient resources to meet present and reasonably foreseeable short-term
financing needs.
On October 26, 1995, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the fourth quarter, ended September 29, 1995,
along with a 5% stock dividend, both payable on November 22, 1995, to share-
holders of record on November 8, 1995.
On February 1, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the first quarter, ended December 31, 1995,
payable on February 23, 1996, to shareholders of record on February 9, 1996.
On March 26, 1996, the Company repurchased 124,050 shares of its common
stock for $1.2 million. When appropriate, the Company will consider making
additional purchases.
On April 26, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the second quarter, ended March 29, 1996, along
with a 5% stock dividend. Both were payable on May 20, 1996, to shareholders of
record on May 6, 1996.
On July 25, 1996, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the third quarter, ended June 28,1996, payable
on August 23, 1996, to shareholders of record on August 9, 1996.
The Company believes that funds provided by operations will also provide
sufficient resources for the acquisition of office equipment and leasehold
improvements, current long-term loan repayment requirements, and other
long-term requirements.
</PAGE>
<PAGE>
Part II Other Information
Item 1. Legal Proceedings
- ------------------------
In the normal course of business, the Company has been named a defendant, or
otherwise has possible exposure, in several claims. Certain of these are class
actions which seek unspecified damages that could be substantial. Although
there can be no assurance as to the eventual outcome of litigation in which the
Company has been named as a defendant or otherwise has possible exposure, the
Company has provided for those actions most likely to result in adverse
dispositions. Although further losses are possible, the opinion of management,
based upon the advice of its attorneys and general counsel, is that such
litigation, in the aggregate, will not have a material adverse effect on the
Company's liquidity or financial position, although it could have a material
effect on quarterly or annual operating results in the period in which it is
resolved.
Item 4. Submission of matters to a vote of security holders.
- ------------------------------------------------------------
A. Annual meeting was held on May 30, 1996
B. Elected as Directors: (There were no broker non-votes with respect
to the election of directors).
Votes For Votes Against
------------- -------------
George C. McNamee 4,179,668 41,368
Alan P. Goldberg 4,179,668 41,368
Daniel V. McNamee, III 4,179,668 41,368
J. Anthony Boeckh 4,179,668 41,368
Walter Fiederowicz 4,179,530 41,506
Hugh A. Johnson, Jr. 4,179,668 41,368
Benaree P. Wiley 4,179,402 41,634
Charles L. Schwager 4,179,668 41,368
C. Other matters voted on at Annual Meeting
1. Ratified the selection of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the fiscal year ending
September 27, 1996.
For: 4,206,328
Against: 3,901
Abstain: 1,824
Broker Non-Votes: 8,983
2. Approved amendment to the Company's 1989 Stock Incentive Plan
which increased the number of shares of common stock available for
issuance under the Plan. As amended, the Company is authorized
to issue up to 1,753,996 shares under the Plan.
For: 3,192,719
Against: 246,275
Abstain: 28,449
Broker Non-Votes: 753,593
</PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
- ----------------------------------------
(a) Exhibits.
--------
(11) Statement Re: Computations of per share earnings.
(27) Selected Financial Data Schedule BD
(b) Reports on Form 8-K.
-------------------
No Form 8-K was filed during the quarter ended June 28, 1996.
-------------
</PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
First Albany Companies Inc.
---------------------------
(Registrant)
Date: August 12, 1996 /s/ Alan P. Goldberg
- ---------------------- --------------------
Alan P. Goldberg
President/Director
Date: August 12, 1996 /s/ David J. Cunningham
- ---------------------- ------------------------
David J. Cunningham
Vice President and Chief Financial
Officer
(Principal Accounting Officer)
</PAGE>
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-27-1996
<PERIOD-END> JUN-28-1996
<CASH> 3,362
<RECEIVABLES> 132,328
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 288,902
<INSTRUMENTS-OWNED> 128,454
<PP&E> 6,997
<TOTAL-ASSETS> 571,368
<SHORT-TERM> 136,033
<PAYABLES> 65,953
<REPOS-SOLD> 4,975
<SECURITIES-LOANED> 298,211
<INSTRUMENTS-SOLD> 5,758
<LONG-TERM> 5,156
<COMMON> 51
0
0
<OTHER-SE> 40,117
<TOTAL-LIABILITY-AND-EQUITY> 571,368
<TRADING-REVENUE> 46,067
<INTEREST-DIVIDENDS> 21,317
<COMMISSIONS> 31,982
<INVESTMENT-BANKING-REVENUES> 14,059
<FEE-REVENUE> 6,482
<INTEREST-EXPENSE> 16,758
<COMPENSATION> 69,776
<INCOME-PRETAX> 7,919
<INCOME-PRE-EXTRAORDINARY> 4,892
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,892
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
</TABLE>
[CAPTION]
FIRST ALBANY COMPANIES INC. (Exhibit 11)
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
Three Months Ended Nine Months Ended
<S> June 28, June 30, June 28, June 30,
(In thousands of dollars, except 1996 1995 1996 1995
per share amounts) <C> <C> <C> <C>
- ------------------------------------------------------------------------------
Primary:
- ------------------------------------------------------------------------------
Net income $ 1,585 $ 993 $ 4,892 $ 2,347
==============================================================================
Weighted average number of shares
outstanding during the period** 4,737 4,743 4,772 4,725
Incremental shares under stock
options computed under the treasury
stock method using the average market
price of the issuer's stock during
the period 370 224 353 200
- ------------------------------------------------------------------------------
Weighted average shares and common
equivalent shares outstanding 5,107 4,967 5,125 4,925
==============================================================================
Net income per share $ 0.31 $ 0.20 $ 0.95 $ 0.48
==============================================================================
Fully Diluted:
- ------------------------------------------------------------------------------
Net income $ 1,585 $ 993 $ 4,892 $ 2,347
==============================================================================
Weighted average number of shares
outstanding during the period** 4,737 4,743 4,772 4,725
Incremental shares under stock
options computed under the treasury
stock method using the higher of
the average or ending market price
of the issuer's stock at the end
of the period 370 224 375 201
- ------------------------------------------------------------------------------
Weighted average shares and common
equivalent shares outstanding 5,107 4,967 5,147 4,926
==============================================================================
Net income per share $ 0.31 $ 0.20 $ 0.95 $ 0.48
==============================================================================
</TABLE>
**Per share figures and shares outstanding have been
restated for all dividends declared.
</PAGE>
