UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from....................to.....................
Commission file number 0-15105
SCOTT & STRINGFELLOW FINANCIAL, INC.
(Exact name of Registrant as specified in its charter)
Virginia 54-1315256
State or other jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
909 East Main Street Richmond, Virginia 23219
(Address of principal executive offices) (zip code)
(804) 643-1811
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ....
On November 10, 1995, there were 2,123,552 shares of Scott & Stringfellow
Financial, Inc. Common stock, par value $.10, issued and outstanding.
SCOTT & STRINGFELLOW FINANCIAL, INC.
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition -
September 29, 1995 (unaudited) and June 30, 1995 3
Consolidated Statements of Income (unaudited) -
Three months ended September 29, 1995
and September 30, 1994 4
Consolidated Statements of Cash Flows (unaudited) -
Three months ended September 29, 1995
and September 30, 1994 5
Notes to Consolidated Financial Statements 6
SIGNATURES 7
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
September 29, June 30,
1995 1995
ASSETS
Cash and cash equivalents $ 5,276,625 $ 3,761,381
Cash segregated under Federal regulations 3,819 5,803
Receivable from brokers, dealers and
clearing organizations 3,711,788 2,325,615
Receivable from customers 69,188,836 64,968,861
Trading and investment securities,
at market value 11,847,309 13,366,267
Exchange memberships, at adjusted cost 838,100 838,100
Equipment and leasehold improvements,
less depreciation and amortization 2,135,596 2,162,680
Deferred income taxes 379,429 325,429
Other assets 6,717,402 5,511,907
Total Assets $ 100,098,904 $ 93,266,043
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Drafts payable $ 2,446,014 $ 1,425,385
Short term bank loans 5,100,000 6,600,000
Payable to brokers, dealers and clearing
organizations 865,837 892,994
Payable to customers 54,314,573 50,782,579
Securities sold, but not yet purchased,
at market value 706,083 570,788
Accounts payable, accrued compensation
and other liabilities 10,230,259 7,756,451
Total Liabilities 73,662,766 68,028,197
Stockholders' Equity
Common stock, $0.10 par value; Authorized
10,000,000 shares; Issued and outstanding
2,123,624 and 2,107,620 shares 212,362 210,762
Additional paid-in capital 10,153,326 9,964,773
Retained earnings 16,070,450 15,062,311
Total Stockholders' Equity 26,436,138 25,237,846
Total Liabilities and Stockholders' Equity $ 100,098,904 $ 93,266,043
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 29, 1995 and September 30, 1994
(Unaudited)
September 29, September 30,
1995 1994
REVENUES
Commissions $ 9,461,983 $ 6,520,830
Principal transactions 2,610,248 2,856,147
Investment banking 2,998,486 1,372,445
Interest and dividends 1,602,005 1,301,710
Advisory and administrative service fees 911,094 644,806
Other 70,578 71,811
Total Revenues 17,654,394 12,767,749
EXPENSES
Employee Compensation and benefits 11,261,163 8,120,442
Communications 792,303 740,068
Occupancy and equipment 741,733 552,349
Advertising and sales promotion 356,535 344,663
Postage, stationery and supplies 488,804 404,869
Brokerage, clearing and exchange fees 312,961 240,460
Data processing 259,384 216,276
Interest 558,041 359,805
Other operating expenses 977,969 863,354
Total Expenses 15,748,893 11,842,286
Income before income taxes 1,905,501 925,463
Income taxes 685,000 336,000
NET INCOME $ 1,220,501 $ 589,463
Earnings per share $0.57 $0.28
Dividends declared per share $0.10 $0.10
Weighted average common shares and
common stock equivalents outstanding 2,124,061 2,099,119
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended September 29, 1995 and September 30, 1994
(Unaudited)
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,220,501 $ 589,463
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 185,808 155,246
Deferred income taxes -54,000 99,000
Changes in assets and liabilities:
Cash segregated under Federal regulations 1,984 8,118
Receivable from brokers, dealers and
clearing organizations -1,386,173 136,877
Receivable from customers -4,219,975 -945,003
Trading securities 1,584,057 -2,921,031
Other assets -1,119,418 -172,724
Payable to brokers, dealers and
clearing organizations -27,157 602,651
Payable to customers 3,531,994 5,322,718
Securities sold, but not yet purchased 135,295 -257,354
Accounts payable, accrued compensation
and other liabilities 2,472,209 -1,082,338
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIE 2,325,125 1,535,623
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in drafts payable 1,020,629 -6,583,783
Net change in short term bank loans -1,500,000 4,800,000
Net change in securities sold
under agreements to repurchase 0 -21,250
Cash dividends paid -210,762 -193,019
Purchase and retirement of common stock 0 -323,043
Issuance of common stock 190,153 136,841
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES -499,980 -2,184,254
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of not readily
marketable securities 29,166 36,421
Purchases of not readily marketable securities -94,265 -9,625
Proceeds from disposition of investment real estate 0 804,638
Proceeds from disposition of equipment 0 2,170
Purchases of equipment and leasehold improvements -165,130 -157,055
Repayment of loans receivable 46,532 196,259
Increase in loans receivable -126,204 -380,000
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES -309,901 492,808
Net increase (decrease) in cash and cash equivalents 1,515,244 -155,823
Cash and cash equivalents at beginning of period 3,761,381 2,410,867
Cash and cash equivalents at end of period $ 5,276,625 $ 2,255,044
Cash paid during the period for interest $ 574,310 $ 372,061
Cash paid during the period for income taxes 388,481 170,234
See notes to consolidated financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
September 29,1995
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Scott & Stringfellow Financial, Inc. and its subsidiaries (collectively the
"Company"), Scott & Stringfellow, Inc. ("S&S"), Scott & Stringfellow Capital
Management, Inc. ("SSCM"), and Scott & Stringfellow Realty, Inc. S&S, the
Company's principal subsidiary, is a broker-dealer registered under the
Securities Exchange Act of 1934. SSCM is an investment advisor registered
under the Investment Advisors Act of 1940.
These interim consolidated financial statements are unaudited; however, such
information reflects all normal recurring adjustments which, in the opinion
of management, are necessary for a fair presentation of the results for the
period in accordance with generally accepted accounting principles. The
nature of the Company's business is such that the results of any interim
period are not necessarily indicative of the results which might be expected
for the full fiscal year. The notes included herein should be read in
conjunction with the notes to the consolidated financial statements included
in the Company's annual audited report for the fiscal year ended June 30,
1995.
2. NET CAPITAL REQUIREMENTS
As a registered broker-dealer and a member of the New York Stock Exchange
("NYSE"), the Company's wholly-owned subsidiary, S&S, is subject to the
Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1).
S&S has elected to utilize the alternative method of the Rule, which
prohibits a broker-dealer from engaging in any transactions which would
cause its "net capital" to be less than 2% of its "aggregate debit balances"
arising from customer transactions, as those terms are defined in the Rule.
The NYSE may also impose restrictions on S&S's business if its net capital
falls below 5% of aggregate debit balances. At September 29, 1995, S&S's
net capital of $16,684,701 was 23% of its aggregate debit balances and was
$15,240,375 in excess of its minimum regulatory requirement.
3. COMMON STOCK
During the quarter ended September 29, 1995, the Company issued 1,800 shares
of common stock pursuant to the exercise of employee stock options for net
proceeds of $17,626. The Company also issued 14,204 shares of common stock
to the Employee Stock Purchase Plan for net proceeds of $169,014. The
Company repurchases its common shares in the open market under a plan
approved by the Board of Directors. During the quarter, there were no
repurchases of shares under the Company's stock repurchase program. The
Company had remaining authority to repurchase 314,811 shares at September
29, 1995. All per share items for the comparative prior period have been
adjusted to reflect the effect of a 6:5 stock split which was distributed
as a 20% stock dividend to shareholders on August 26, 1994.
4. LEGAL PROCEEDINGS
The Company and its subsidiaries are from time to time named as defendants
in legal actions incidental to its securities brokerage and investment
banking activities. Management believes that all pending claims and
lawsuits of which it has knowledge will be resolved with no material adverse
effect on the overall financial condition of the Company, although the
resolution of such matters might have a material adverse impact on the
operating results for any given quarterly accounting period.
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.
SCOTT & STRINGFELLOW FINANCIAL, INC.
(Registrant)
Signatures Date
/S/ William P. Schubmehl November 27, 1995
- ------------------------------
William P. Schubmehl
President and Chief Executive Officer
(Principal Executive Officer)
/S/ Steven C. DeLaney November 27, 1995
- ------------------------------
Steven C. DeLaney
First Vice President and Chief Financial Officer
(Principal Financial Officer)<PAGE>
