FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSMISSION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period
from_______________________to_________________________
Commission file number: 0-14684
RYAN, BECK & CO., INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1773796
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 Main Street, West Orange, New Jersey 07052
(Address of principal executive offices)
201-325-3000 (Issuer's telephone number)
___________________________________________________________________________
_____ (Former name, former address and former fiscal year, if changed since
last report)
Indicate by check (x) whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 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__________
APPLICABLE ONLY TO CORPORATE ISSUERS:
At November 7, 1995 there were 3,098,304 shares of Common Stock, par value
$.10 per share, outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
The following consolidated financial statements of Ryan, Beck & Co., Inc.
(the "Company") as of September 30, 1995 and for the three and nine months
ended September 30, 1995 and 1994 reflect all material adjustments and
disclosures which, in the opinion of management, are necessary for a fair
statement of results for the interim period. Certain information and
footnote disclosures required under generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these consolidated financial
statements be read in conjunction with the year-end consolidated financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 as filed with the Securities
and Exchange Commission.
The results of operations for the three and nine month periods ended
September 30, 1995 are not necessarily indicative of the results to be
expected for the entire fiscal year or any other period.
RYAN, BECK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except per share data)
September 30,
December 31,
1995 1994
(Unaudited)
ASSETS
Cash $ 67 $ 64
Cash segregated under federal and other regulations 11 11
Receivable from:
Customers - 20
Brokers, dealers and clearing organizations 5,886 42
Accrued revenues 214 51
Other 107 338
Securities owned, at market value 18,089 18,688
Deferred income taxes 620 433
Property and equipment, at cost, less accumulated
depreciation and amortization 749 508
Other assets 232 241
Total assets $ 25,975 $ 20,396
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to clearing broker $ 4,299 $ 1,284
Securities sold, but not yet purchased, at market value 5,358
891
Accrued employee compensation and benefits 2,016 2,163
Accounts payable and other accrued expenses 1,400 1,460
Income taxes payable 10 1,495
ESOP loan obligation 709 846
Total liabilities 13,792 8,139
Stockholders' equity:
Preferred stock - $.10 par value
Authorized - 2,000,000 shares
Issued and outstanding - 414,955 shares September 30, 1995
444,180 shares December 31, 1994 41 44
Common stock - $. 10 par value
Authorized - 30,000,000 shares
Issued and outstanding - 3,110,274 shares September 30, 1995
3,081,049 shares December 31, 1994 311 308
Additional paid-in capital 10,925 10,907
Retained earnings 2,090 2,323
Unearned compensation - restricted stock grants (484) (488)
Unearned ESOP compensation (700) (837)
Total stockholders' equity 12,183 12,257
Total liabilities and stockholders' equity $ 25,975 $ 20,396
See accompanying notes to consolidated financial statements.
RYAN, BECK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Revenues:
Principal transactions $3,664 $2,717 $10,713 $ 9,021
Commissions 826 509 2,091 1,911
Investment banking 1,655 2,682 5,417 7,823
Interest and dividends 205 179 621 470
Other 88 59 217 171
Total revenues: 6,438 6,146 19,059 19,396
Operating expenses:
Compensation and benefits 3,864 3,437 11,336 10,576
Communications 309 280 901 806
Occupancy and equipment rental and depreciation 248 197
720 610
Floor brokerage, exchange and clearance fees 500 356
1,291 764
Interest 81 58 233 132
Other 622 536 1,765 1,485
Total operating expenses 5,624 4,864 16,246 14,373
Income before provision for income taxes 814 1,282 2,813
5,023
Provision for income taxes 306 505 1,058 2,013
Net income $ 508 $ 777 $1,755 $3,010
Earnings per common share:
Primary $ .15 $ .24 $ .52 $ .90
Fully diluted $ .15 $ .23 $ .52 $ .87
Weighted average number of shares:
Primary 3,103 2,905 3,092 3,182
Fully diluted 3,403 3,385 3,403 3,454
See accompanying notes to consolidated financial statements.
RYAN, BECK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except per share data)
(Unaudited)
Unearned
Additional Compensation Unearned Total
CommonPreferred Paid-in Retained Restricted ESOP
Stockholders'
Stock Stock Capital Earnings Stock Grants Compensation
Equity
Nine Months Ended September 30, 1994
Balance at January 1, 1994$352$ -$10,896$936 $(122) $ - $12,062
Conversion of Common Stock to
Preferred Stock (635,789 shares) (63) 63 - - - -
- -
Exchange offering costs - - - (110) - - (110)
Unearned compensation -
restricted stock grants - - - - (116) - (116)
Unearned compensation related to
Preferred stock purchased by ESOP - - - - - (994)
(994)
Amortization of restricted stock grants -
unearned compensation - - - - 70 - 70
Conversion of Preferred Stock to
Common Stock (10,810 shares) 1 (1) - - - - 0
Amortization of ESOP
unearned compensation - - (2) - - 40 38
Issuance of 625 shares through
exercised stock options - - 2 - - - 2
Net income - - - 3,010 - - 3,010
Dividends declared: Common stock - - - (2,395) - -
(2,395)
Preferred stock - -
- - (146) - - (146)
Balance at September 30, 1994 $290$ 62$10,896$1,295 $(168) $ (954)
$11,421
Nine months ended September 30, 1995
Balance at January 1, 1995$308 $44$10,907$2,323 $(488) $(837) $12,257
Unearned compensation -
restricted stock grants - - - - (166) - (166)
Amortization of restricted stock grants -
unearned compensation - - - - 170 - 170
Amortization of ESOP
unearned compensation - - 18 - - 137 155
Conversion of Preferred Stock
to common stock (29,225 shares)3 (3) - - - - 0
Net Income - - - 1,755 - - 1,755
Dividends declared: Common stock - - - (1,853) - -
(1,853)
Preferred stock - - -
(135) - - (135)
Balance at September 30, 1995 $ 311$ 41$10,925$ 2,090 $ (484)$ (700)
$12,183
See accompanying notes to consolidated financial statements.
RYAN, BECK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
1995 1994
Cash flows from operating activities:
Net income $1,755 $3,010
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 202 113
Amortization of restricted stock grants 170 69
Amortization of ESOP unearned compensation 155 38
Deferred income taxes (187) -
(Increase) decrease in assets:
Receivables -
Customers 20 (122)
Brokers, dealers and clearing organizations (5,844)
75
Accrued revenues (163) (913)
Other 231 208
Securities owned, at market value 599 3,501
Other assets 9 (143)
Increase (decrease) in liabilities:
Payables -
Payable to clearing broker 3,015 (3,725)
Securities sold, but not yet purchased
at market value 4,467 481
Accrued employee compensation and benefits (147) 347
Accounts payable and other accrued expenses (60) 27
Income taxes payable (1,485) (177)
Total adjustments 982 (221)
Net cash provided by operating activities 2,737 2,789
RYAN, BECK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(In thousands)
(UNAUDITED)
Nine Months Ended
September 30,
1995 1994
Cash flows from investing activities:
Capital expenditures $ (443) $(120)
Net cash (used) investing activities (443) (120)
Cash flows from financing activities:
Dividends paid
Common (1,853) (2,394)
Preferred (135) (146)
Principal payments of ESOP obligation (137) (103)
Proceeds from exercised stock options - 2
Common stock repurchased for restricted stock grants (166) (116)
Exchange offering costs - (111)
Net cash (used) in financing activities (2,291) (2,868)
Net increase (decrease) in cash 3 (199)
Cash at beginning of period 75 475
Cash at end of period $ 78 $ 276
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 231 $ 593
Income taxes 2,678 2,655
Disclosure of accounting policy:
For purposes of the consolidated statements of cash flows, the Company
includes in cash all cash and securities segregated in compliance with
federal and other regulations.
See accompanying notes to consolidated financial statements.
RYAN, BECK & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary to present fairly the
financial position of Ryan, Beck & Co., Inc., (the "Company") as of
September 30, 1995, and the results of its operations and cash flows for
the three and nine month periods ended September 30, 1995 and 1994. All
such adjustments are of a normal and recurring nature.
The accounting policies followed by the Company are set forth in the
notes to the Company's consolidated financial statements as set forth in
the Company's Annual Report on Form 10-K for the year ended December 31,
1994. Certain reclassifications have been made to prior years'
consolidated financial statements to conform to the current year's
presentation.
2. The results of operations for the three month and nine month periods
ended September 30, 1995 are not necessarily indicative of the results to
be expected for the entire fiscal year or any other period.
3. Securities owned are stated at market value. Securities in the Company's
trading accounts consisted of the following:
September 30, 1995 December 31,
(Unaudited) 1994
(In
thousands)
States and municipalities $ 8,502 $13,604
Corporate equity 8,486 1,913
Corporate debt 860 2,956
U.S. Government and agency 241 215
Other - -
Total $18,089 $18,688
4. The Company is subject to the net capital provisions of Rule 15c3-1
under the Securities Exchange Act of 1934, which requires that the
Company's aggregate indebtedness shall not exceed 15 times net capital as
defined under such provision. Additionally, the Company, as a market
maker, is subject to supplemental requirements of rule 15c3-1(a)4, which
provides for a minimum net capital based on the number and price of
issues in which markets are made by the Company, not to exceed
$1,000,000. At September 30, 1995 and December 31, 1994, the Company's
net capital was approximately $7,265,000 and $9,106,000, respectively,
which exceeded minimum net capital requirements by $6,265,000 and
$8,106,000, respectively.
5.Primary earnings per share are computed by deducting preferred dividends
from net income in order to determine net income attributable to common
stockholders. This amount is then divided by the weighted average number
of common shares outstanding and common stock equivalents arising from
stock options.
Fully diluted earnings per share are computed by dividing net income by
the weighted average number of common shares outstanding during the year
after giving effect for common stock equivalents arising from stock
options and preferred stock assumed converted to common stock, excluding
125,851 unallocated and unreleased issued shares held by the ESOP trust.
6. On July 10, 1995, the Company filed amended Federal tax returns for
years ended December 31, 1994, 1993 and 1992. In October, the Company
received refunds totaling $241,000 of which $18,000 represented interest
on these refunds. During the fourth quarter the Company will determine
if restatement of prior years' earnings is required. If restatement is
required, the proforma increase to earnings per share for the nine month
periods ending September 30, 1994, 1993 and 1992 would be $.019 per
share, $.021 per share and $.007 per share respectively.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
a. Results of Operations
Nine Months Ended September 30, 1995 Compared With
Nine Months Ended September 30, 1994
Net income for the nine months ended September 30, 1995 was $1,755,000
compared to $3,010,000 during the same period ending September 30, 1994.
On a fully diluted basis, earnings per share decreased to $.52 per share
for the nine months ending September 30, 1995 from $.87 per share during
the same period in 1994.
Total revenues decreased $337,000 or 1.7% to $19,059,000 in the nine months
ended September 30, 1995 from $19,396,000 in the prior year period.
Revenues from principal transactions increased $1,692,000 or 18.8% to
$10,713,000 in the 1995 period from $9,021,000 in the prior year. This
resulted from an increase of $640,000 in revenues from trading corporate
debt securities, an increase of $616,000 in revenues from trading equity
securities and an increase of $436,000 from trading tax-exempt securities.
The increase in revenues attributable to trading corporate debt securities
reflected increased research coverage and purchase recommendations,
favorable market conditions and greater participation of the sales force in
the entire product line. The increase in revenues attributable to trading
equity securities primarily reflects increased activity due to the
favorable environment for bank securities and an increase in the number of
equity securities traded. The increase in revenues attributable to trading
tax-exempt securities reflected favorable market conditions and larger
inventory positions.
Revenues from investment banking services decreased $2,406,000 or 30.8% to
$5,417,000 in the 1995 period from $7,823,000 in the comparable 1994
period. This was due to a $2,299,000 decrease in revenues related to
consulting, placement and valuation fees and a decrease in revenues from
underwriting tax-exempt debt securities of $473,000, which was partially
offset by an increase in revenues from underwriting equity securities of
$219,000 and an increase in revenues from underwriting taxable debt
securities of $147,000. The decrease in consulting, placement and valuation
fees resulted primarily from reduced income from merger and acquisition
advisory services during the first nine months of 1995, which was partially
offset by increased income from thrift conversions, including mutual
holding company formations. The decline in merger and acquisition advisory
fees resulted in part from the decline in financial institution stock
prices during the late third and fourth quarters of 1994, which reduced
merger and acquisition activity early in 1995 and the smaller size of many
of the Company's merger and acquisition transactions in 1995. There is
expected to be greater uncertainty in the future with respect to revenues
resulting from thrift conversions and mutual holding company formations
because of increased competition and potential changes in federal
regulatory policy regarding thrift conversions. The decrease in revenue
from underwriting tax-exempt debt securities reflects reduced levels of
issuance of new municipal securities and reduced spreads. The increase in
revenues from underwriting equity securities is due to the closing of an
equity underwriting for a financial institution seeking additional capital
and the closing of the Ryan, Beck Banking Opportunity Trust, Series 2. The
increase in revenues from underwriting taxable debt securities is due to
the larger size of the taxable debt underwriting closed in 1995 versus
1994.
Commission revenue increased $180,000 or 9.4% to $2,091,000 in 1995 from
$1,911,000 in 1994, largely reflective of increased mutual fund sales and
increased trading activity.
Revenue from interest and dividends increased $151,000 or 32.1% to $621,000
in 1995 from $470,000 in 1994. The increase in revenue from interest and
dividends is a result of increased levels of inventory carried during 1995.
Total operating expenses increased $1,873,000, or 13.0% to $16,246,000 in
1995 from $14,373,000 in 1994. This increase is primarily attributable to
increases in compensation and benefits of $760,000, floor brokerage,
exchange and clearance fees of $527,000, other operating expenses of
$280,000, occupancy and equipment expense of $110,000, interest expense of
$101,000 and communications expense of $95,000. The increase in
compensation and benefits is mainly attributed to an increase in salary
expense and an increase in commission expense. The increase in salary
expense is reflective of normal salary increases, increased personnel added
in an effort to increase revenues by the opening of a branch office in
Florida and the activation of Ryan, Beck Planning and Insurance Agency,
Inc. and an increase in expense related to the Company's Employee Stock
Ownership Plan and restricted stock compensation. The increase in
commission expense is attributed to increased trading volume. The increase
in floor brokerage, exchange and clearance fees is a result of the 1994
expense being reduced by a rebate of certain clearance costs incurred in
connection with transferring to a new clearing agent. In addition, the
1995 trading activity was 30% greater than the activity during 1994. The
increase in other operating expenses is primarily a result of an increase
in the legal reserve and an increase in other expenses.
b. Results of Operations
Three Months Ended September 30, 1995 Compared With
Three Months Ended September 30, 1994
Net income for the three months ended September 30, 1995 was $508,000,
compared to $777,000 during the same period ending September 30, 1994. On
a fully diluted basis, earnings per share decreased to $.15 per share for
the three months ended September 30, 1995 from $.23 per share during the
same period in 1994.
Total revenues increased $292,000 or 4.8% to $6,438,000 in the three months
ended September 30, 1995 from $6,146,000 in the three months ended
September 30, 1994.
Revenues from principal transactions increased $947,000 or 34.9% to
$3,664,000 in the 1995 period from $2,717,000 in the 1994 period. This
revenue increase resulted from increases of $696,000 from trading equity
securities, $176,000 from trading tax-exempt debt securities and $75,000
from trading corporate debt securities. The increase in revenues attributed
to trading equity securities reflected increased activity due to a
favorable environment for bank securities. The increase in revenues
attributable to trading tax-exempt debt securities reflected volatility in
the marketplace over uncertainty as to the Federal Reserve's monetary
policy causing larger spreads and higher trading profits. The increase in
revenues attributable to trading corporate debt securities reflected
increased research coverage and purchase recommendations, favorable market
conditions and greater participation of the sales force in the entire
product line.
Revenues from investment banking services decreased $1,027,000 or 38.3% to
$1,655,000 in the 1995 third quarter from $2,682,000 in the 1994 period.
This was due to a $695,000 decrease in revenues related to consulting,
placement and valuation fees, a decrease in revenues from underwriting tax-
exempt debt securities of $276,000 and a decrease in revenues from
underwriting equity securities of $204,000. These decreases were partially
offset by an increase in revenues from underwriting taxable debt securities
of $148,000. The decrease in consulting, placement and valuation fees
results from reduced fee income from merger and acquisition advisory
services during the three month period, which was partially offset by
increased income from thrift conversions, including mutual holding company
formations. The decline in merger and acquisition advisory fees is due to
the smaller size of many of the Company's merger and acquisition
transactions in 1995. The decrease in revenues from underwriting tax-
exempt debt securities reflects reduced levels of issuance of new
municipal securities. The decrease in revenues from underwriting equity
securities reflects the timing of an underwriting transaction for a
financial institution which closed in the 1994 third quarter. The increase
in revenues from underwriting taxable debt securities reflects the larger
size of the taxable debt underwriting closed in 1995 versus 1994.
Commission revenue increased $317,000 or 62.3% to $826,000 in 1995 from
$509,000 in 1994, largely reflective of increased mutual fund sales and
increased trading activity.
Total operating expenses increased $760,000 or 15.6% to $5,624,000 in 1995
from $4,864,000 in 1994. This increase is primarily attributable to an
increase in compensation and benefits of $427,000, an increase in floor
brokerage, exchange and clearance fees of $144,000, an increase in other
operating expenses of $86,000 and an increase in occupancy and equipment
expense of $51,000. The increase in compensation and benefits is mainly
attributable to an increase in commission expense and an increase in salary
expense. The increase in commission expense is attributed to increased
trading volume. The increase in salary expense is reflective of normal
salary increases as well as personnel added in an effort to increase
revenues by the opening of a branch office in Florida and the activation of
Ryan, Beck Planning and Insurance Agency, Inc. The increase in floor
brokerage, exchange and clearance fees is mainly attributed to increased
trading volume. The increase in other operating expenses is mainly
attributed to an increase in legal reserves and an increase in other
operating expenses.
Liquidity and Capital Funds
As of September 30, 1995, the Company's Consolidated Statement of
Financial Condition reflects an essentially liquid financial position, with
most of the Company's assets consisting of cash or assets readily
convertible into cash. The Company's securities positions (both long and
short) are, in most instances, readily marketable.
The Company finances its business through a number of sources,
consisting primarily of capital, funds generated by operations and short-
term secured borrowings. The Company maintains a facility pursuant to which
it may borrow from its clearing broker at prevailing brokers' call rates
plus one-half of one percent. The amount available for borrowing under this
facility is related to the level of securities inventory at the clearing
broker which may be pledged as collateral.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Set forth below is information concerning certain litigation
matters to which the Company is a party and in which there have been
developments of a material nature during the quarter ended September 30,
1995. For information concerning other legal proceedings involving the
Company, please see the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
On December 13, 1991, an action was filed in the United States
District Court for the District of New Jersey under the caption Schiffli
Embroidery Workers Pension Fund v. Ryan. Beck & Co.. Inc. et al. (Civ. Act.
No. 91-5433) alleging that the Company and one of its former account
executives had engaged in violations of federal securities laws, the
Employee Retirement Income Security Act ("ERISA"), the Racketeering
Influenced and Corrupt Practices Act ("RICO"), and various common law
claims in connection with the purchase of securities. The plaintiff seeks
compensatory damages in excess of $1,400,000, punitive damages, treble
damages, interest, attorneys' fees and expenses. On February 20, 1992,
the Company filed a Motion to Dismiss this action, and on September 25,
1992, the court dismissed the Plaintiff's RICO claims. All other claims
remain pending. The Company has also filed crossclaims against the trustees
of the Pension Fund. On May 5, 1995, the Magistrate Judge entered a
scheduling order and discovery has continued. In addition, certain
defendants, other than the Company, have added the former legal counsel to
the Pension Fund as a third-party defendant to the action. The matter is
listed for a pre-trial conference on December 15, 1995.
Although the outcome of litigation is inherently uncertain, and no
assurances regarding the final outcome of this matter can be given, the
Company believes that it has meritorious defenses in this action and
intends to contest this matter vigorously. However, assuming no
significant contribution from the other defendants, a judgment in an amount
equal to or greater than the damages sought by plaintiff could have a
material adverse effect on the Company's financial condition.
The Company, Ryan Beck Financial Corp., a wholly-owned subsidiary
of the Company, and a former account executive of the Company have been
named as third-party defendants in Inrevco Associates v. BDO Seidman, et
al., v. Ryan, Beck & Co., et al., Superior Court of New Jersey, Law
Division, No. MRS-:-2961-94. Inrevco is a New Jersey limited partnership.
Ryan, Beck Financial Corp. (RBFC) is a special limited partner in the
partnership and such former account executive is a limited partner. The
third-party plaintiffs allege that the Company and RBFC breached these
duties and are liable to the third-party plaintiffs for contribution in the
event the plaintiff prevails at trial.
On February 17, 1995, a motion to dismiss filed by the defendants
was granted in favor of RBFC and the former account executive. On March 9,
1995, RBFC and the Company's former account executive were dismissed by
order of the Court. Discovery in this case is proceeding. On September 5,
1995, certain defendants filed a new third-party complaint naming the
Company, RBFC and certain present and former employees and officers of the
Company as third-party defendants. The Company and RBFC must answer or
otherwise respond to this new complaint no later than November 15, 1995.
On or about December 13, 1994, a complaint under the caption
Robert J. Buckley, et al. v. Northwest Savings Bank ("Northwest"), et. al.,
C.A. No 94-340-E (U.S.D.C. W.D. Pa.), was filed in the United States
District Court of the Western District of Pennsylvania. The complaint
alleges violations of the Securities Act of 1933, the Securities Act of
1934, as well as various state law securities and common law claims in
connection with Northwest Savings Bank's reorganization from a mutual state
savings bank to a stock mutual holding company.
The complaint alleges that the Company was retained as a
consultant and advisor to Northwest in connection with such transaction and
engaged in the promotion and sale of Northwest stock. The complaint
further alleges that the Offering Circular prepared in connection with the
initial public offering contained misstatements of material facts and
omitted to state material facts necessary to make the statements contained
in the Offering Circular not misleading, including false statements
representing the appraised valuation and number of shares to be issued in
the initial offering would be increased only if marked and economic
conditions warranted such increase. The complaint alleges that after the
offering was concluded, the appraised value of Northwest was increased and
the offering was diluted by the sale of additional shares and that such
increase in appraised value was not warranted by market or economic
conditions.
The complaint seeks unspecified monetary damages against the
defendants, including the Company, on behalf of all persons who subscribed
for and purchased shares of common stock in Northwest's initial public
offering. In connection with the offering, Northwest executed an agency
and underwriting agreement with the Company whereby Northwest agreed among
other things to indemnify and contribute sums to the Company for losses and
legal fees in connection with the offerings. Pursuant to the Agency
Agreement, Northwest has agreed to indemnify the Company and to advance
reasonable expenses incurred by the Company in connection with the lawsuit.
On March 13, 1995, the plaintiffs filed a Motion for Class
Certification. On March 24, 1995, the Company, as well as all other
defendants, filed a Motion to Dismiss the plaintiff's complaint. By
stipulation on September 5, 1995, the Company and the other defendants are
not required to answer or otherwise respond to the motion for Class
Certification until the Motion to Dismiss has been decided by the Court.
This matter remains in a preliminary stage. Although the outcome of the
litigation is inherently uncertain, the Company believes that it has
meritorious defenses in this action and intends to defend this matter
vigorously.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submissions of Matters to a Vote of Security
Holders
Not applicable.
Item 5. Other Materially Important Events
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) A statement regarding the computation of per share earnings is omitted
because the computation can be determined from the material contained in
this Quarterly Report on Form 10-Q.
(b) No reports on Form 8-K were filed during the period ending September
30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
RYAN, BECK & CO., INC.
By:/sAllen S. Greene
Allen S. Greene
President and
Chief Executive Officer
/s/ Leonard J. Stanley
Leonard J. Stanley
First Vice President
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Dated: November 7, 1995
<TABLE> <S> <C>
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<LEGEND>
This schedule contains summary information extracted from the September 30, 1995
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
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<RECEIVABLES> 6207
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0
41
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<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
