<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d)
- ---
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1998
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 No. 0-19614
H.D. VEST, INC.
(Exact name of registrant as specified in its charter)
Texas 75-2154244
------------------------------- ---------------------
(State or other jurisdiction of (IRS Employer ID.)
incorporation or organization)
6333 North State Highway 161, Fourth Floor, Irving, Texas 75038
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (972) 870-6000
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such requirements for the
past 90 days.
Yes X No
----- -----
Number of shares of the registrant's Common Stock outstanding as of July 30,
1998: 5,423,341.
1
<PAGE>
H.D. VEST, INC.
INDEX
PART I. Financial Information (Unaudited) Page(s)
--------------------- -------
Item 1. Financial Statements
Consolidated Statements of Financial Position -
June 30, 1998 and September 30, 1997 3-4
Consolidated Statements of Operations - Three
Months Ended June 30, 1998 and June 30, 1997 5
Consolidated Statements of Operations - Nine
Months Ended June 30, 1998 and June 30, 1997 6
Consolidated Statements of Cash Flows - Nine
Months Ended June 30, 1998 and June 30, 1997 7
Notes to Unaudited Consolidated
Financial Statements 8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 10-12
PART II. Other Information
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote
of Shareholders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
- -----------------------------------------
H.D. VEST, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
June 30, September 30,
1998 1997
(Unaudited)
----------- -------------
Current assets:
Cash and cash equivalents $ 9,240,894 $ 6,384,992
Commissions and accounts
receivable 7,569,912 6,642,200
Notes receivable-
related parties 85,003 590,320
Receivable from affiliate 202,195 142,145
Prepaid and other assets 916,114 503,738
----------- -----------
Total current assets 18,014,118 14,263,395
----------- -----------
Property and equipment, net
of accumulated depreciation
of $1,785,248 at June 30,
1998, and $1,485,366 at
September 30, 1997 5,835,299 2,755,457
Notes receivable - related parties 349,409 2,127,613
Other assets 2,425,176 601,166
----------- -----------
$26,624,002 $19,747,631
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements
3
<PAGE>
H.D. VEST, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES AND SHAREHOLDERS' INVESTMENT
June 30, September 30,
1998 1997
(Unaudited)
----------- -------------
Current liabilities:
Accounts payable and accrued
expenses $ 5,381,443 $ 3,930,651
Amounts due on clearing
transactions 387,885 539,538
Commissions payable 6,766,208 4,738,908
----------- -------------
Total current liabilities 12,535,536 9,209,097
----------- -------------
Obligations under capital leases,
excluding current installments 2,580,495 1,016,257
Other noncurrent liabilities 2,334,819 1,323,375
Unearned revenues 168,764 1,150,341
Shareholders' investment:
Preferred stock, $6 par value;
250,067 shares outstanding 1,500,402 1,500,402
Common stock, $.05 par value;
100,000,000 shares authorized;
5,423,341 issued and outstanding 271,167 271,167
Additional paid-in capital 5,154,934 5,113,334
Retained earnings 2,077,885 163,658
----------- -------------
Total shareholders' investment 9,004,388 7,048,561
----------- -------------
$26,624,002 $ 19,747,631
=========== =============
The accompanying notes are an integral part of these consolidated
financial statements
4
<PAGE>
H.D. VEST, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
---------------------------
1998 1997
------------- ------------
Revenues:
Commissions $ 28,456,687 $ 18,832,707
Portfolio management fees 4,573,678 2,783,414
Marketing and education fees 1,831,259 1,215,930
Interest and other 367,011 439,573
------------- ------------
Total revenues 35,228,635 23,271,624
------------- ------------
Expenses:
Commissions 20,255,527 12,994,593
Portfolio management fees 3,028,732 1,893,681
General and administrative 6,993,840 4,644,370
Representative development 2,238,045 2,329,942
Representative recruiting 698,446 581,745
Interest 78,868 15,343
------------- ------------
Total expenses 33,293,458 22,459,674
------------- ------------
Income before taxes 1,935,177 811,950
Income taxes 792,016 368,757
------------- ------------
Net income $ 1,143,161 $ 443,193
============= ============
Net income per common share-basic $ 0.20 $ 0.08
============= ============
Net income per common share-diluted $ 0.20 $ 0.08
============= ============
Weighted average number of
common shares outstanding 5,423,341 5,423,341
============= ============
The accompanying notes are an integral part of these consolidated
financial statements
5
<PAGE>
H.D. VEST, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended June 30,
--------------------------
1998 1997
------------ ------------
Revenues:
Commissions $ 69,980,594 $ 49,612,295
Portfolio management fees 12,082,196 7,815,932
Marketing and education fees 5,487,087 4,196,880
Interest and other 1,282,823 1,208,202
------------ ------------
Total revenues 88,832,700 62,833,309
------------ ------------
Expenses:
Commissions 49,770,639 34,504,202
Portfolio management fees 7,940,011 5,023,849
General and administrative 19,654,096 13,232,613
Representative development 6,292,339 5,454,223
Representative recruiting 1,580,819 1,141,872
Interest 191,077 57,181
------------ ------------
Total expenses 85,428,981 59,413,940
------------ ------------
Income before taxes 3,403,719 3,419,369
Income taxes 1,393,840 1,591,100
------------ ------------
Net income $ 2,009,879 $ 1,828,269
============ ============
Net income per common share-basic $ 0.35 $ 0.32
============ ============
Net income per common share-diluted $ 0.34 $ 0.32
============ ============
Weighted average number of
common shares outstanding 5,423,341 5,423,341
============ ============
The accompanying notes are an integral part of these consolidated
financial statements
6
<PAGE>
H.D. VEST, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
---------------------------
1998 1997
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,009,879 $ 1,828,269
Noncash items included in income -
Depreciation and amortization 968,875 652,232
Loss on sale of assets 164,996 11,830
Deferred tax provision - 20,198
Net changes in certain working
capital and other components
Commissions and accounts receivable (927,712) (383,727)
Receivable from affiliate (60,050) 13,760
Prepaid and other assets (412,376) (275,997)
Payable to officers and directors - (74,994)
Amounts due on clearing transactions (151,653) 92,341
Accounts payable and accrued expenses 841,173 129,062
Commissions payable 2,027,300 821,601
Unearned revenues (981,577) (510,709)
----------- -----------
Net cash provided by operating activities 3,478,855 2,323,866
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,318,862) (595,314)
Purchases of short term investments - (250,000)
Proceeds from sale of assets 48,670 40,098
Costs to acquire/develop software (1,905,309) (135,090)
Additions to other assets (210,282) (120,213)
----------- -----------
Net cash used for investing activities (3,385,783) (1,060,519)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution 41,600 -
Preferred stock dividends (95,652) (95,652)
Proceeds from deferred compensation plan 1,092,740 416,875
Advances on notes receivable
-related parties (473,514) (397,805)
Payments received on notes receivable
-related parties 2,757,035 347,402
Payments on capital lease
obligations (559,379) (276,129)
----------- -----------
Net cash provided by (used for)
financing activities 2,762,830 (5,309)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,855,902 1,258,038
CASH AND CASH EQUIVALENTS,
September 30, 1997 and 1996 6,384,992 6,484,846
----------- -----------
CASH AND CASH EQUIVALENTS,
June 30, 1998 and 1997 $ 9,240,894 $ 7,742,884
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements
7
<PAGE>
H.D. VEST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1) Basis of Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
in accordance with Rule 10-01 of Regulation S-X, "Interim Financial Statements,"
and accordingly do not include all information and footnotes required under
generally accepted accounting principles for complete financial statements. The
financial statements have been prepared in conformity with the accounting
principles and practices as disclosed in the Company's annual report on Form 10-
K for the year ended September 30, 1997. In the opinion of management, these
interim financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the Company's
financial position as of June 30, 1998 and September 30, 1997, the results of
operations for the three and nine month periods ended June 30, 1998 and 1997 and
the cash flows for the nine month periods ended June 30, 1998 and 1997. Results
of operations for the interim period ended June 30, 1998, are not necessarily
indicative of the results that may be expected for the year ended September 30,
1998. For additional information, refer to the consolidated financial statements
and footnotes included in the Company's annual report on Form 10-K for the year
ended September 30, 1997.
Certain reclassifications have been made to prior years' statements in order for
the amounts to be comparable with the current year presentation.
2) Related-Party Transactions
In June 1998, Herb D. Vest, Chairman of the Board of Directors, CEO and
principal common shareholder, purchased options to acquire 64,000 shares of the
Company's restricted common stock with exercise prices between $2.38 and $7.63
from two Directors of the Company's Board of Directors. Generally accepted
accounting principles require that equity transactions of this type involving an
entity's principal shareholder be recorded on the entity's financial statements.
Accordingly, the Company has recorded a capital contribution, net of tax effect,
and expense of a like amount to reflect this transaction.
In June 1998, Herb D. Vest repaid in full the outstanding principal balance,
together with the accrued interest, of his revolving line of credit from the
Company.
8
<PAGE>
3) Earnings Per Share
Basic earnings per share (basic EPS) is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding.
The number of shares used to compute basic EPS for the three and nine months
ended June 30, 1998 and 1997 was 5,423,341. Diluted earnings per share (diluted
EPS) is computed similar to the computation of basic EPS except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential dilutive common shares had been
issued. The number of shares used to compute diluted EPS for the three and nine
months ended June 30, 1998 and 1997 were 5,621,897 and 5,435,826, respectively.
Options to purchase 95,454 shares of common stock at $8.50 per share were
outstanding during the three and nine months ended June 30, 1998. Options to
purchase 377,454 shares of common stock at prices ranging from $4.63 to $8.50
per share were outstanding during the three and nine months ended June 30, 1997.
These options were not included in the computation of diluted EPS because the
options' exercise price was greater than the average market price of outstanding
common shares.
There were 250,067 shares of convertible preferred stock outstanding during the
three months and nine months ended June 30, 1998 and 1997 not included in the
computation of diluted EPS because the conversion had an anti-dilutive effect on
EPS.
4) Commitments and Contingencies
Litigation and Contingencies In September 1997, litigation was initiated
against the Company and its subsidiary, H.D. Vest Investment Securities, Inc.,
in regard to the activities of a former Registered Representative. As of June
30, 1998, plaintiffs seek recovery for alleged out-of-pocket losses totaling
approximately $900,000. In addition, plaintiffs seek recovery for treble and
punitive damages as well as recovery for pain and suffering. The Company
believes it has a defense against all claims and intends to vigorously defend
them. The Company is currently unable to determine the likelihood that
additional material claims arising from the Registered Representative's conduct
will be made or the likelihood that an unfavorable outcome will occur in this
matter. Although the Company believes that a defense to any additional claims
exists, and intends to vigorously defend such claims if necessary, a negative
result in multiple claims could have a material adverse impact on the Company.
The Company is subject to other legal proceedings and claims, which have arisen
in the ordinary course of its business and have not been finally adjudicated.
Management believes, based on the advice of legal counsel responsible for such
matters, that these actions, when finally concluded and determined, will not
have a material adverse effect upon the financial position of the Company.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
Liquidity and Capital Resources
At June 30, 1998, the Company's financial position remains strong. The Company's
net working capital at June 30, 1998 was $5,478,582 compared to net working
capital of $5,054,298 at September 30, 1997. The $424,284 increase, for the
nine months ended June 30, 1998, is primarily a result of (i) strong cashflows
provided by operations (ii) proceeds from deferred compensation plan and (iii)
repayment of notes receivable from officers. The Company's primary uses of cash
for the nine months was attributable to (i) purchase of property and equipment
and (ii) acquisition and development of internal computer software.
During the first nine months of 1998 the Company dedicated much of its capital
to the relocation of its headquarters and the development of an information
system infrastructure. Management believes the dedication to information
systems and the new corporate headquarters will provide the Company more
capacity to manage its current growth and support future growth. Approximately
$3.7 million of the Company's funding for information systems and property and
equipment came from operating and capital leases. The Company has dedicated
$1.8 million of proceeds from the deferred compensation plan and the remainder
from operating income to the purchase and development of its information systems
and the purchase of property and equipment.
In June 1998, Herb D. Vest repaid in full the outstanding principal balance,
together with the accrued interest, of his revolving line of credit from the
Company.
Management believes that, in addition to external financial resources (primarily
bank leases), the Company's cash flow is sufficient to maintain its current
operations as well as its continued growth plan.
10
<PAGE>
Results of Operations
Revenues
The Company's revenues for the three months ended June 30, 1998, were
$35,228,635, a 51% increase over the Company's revenues for the three months
ended June 30, 1997. Revenues for the nine months ended June 30, 1998 were
$88,832,700, a 41% increase over revenues for the nine months ended June 30,
1997. Management believes that the increase in revenues is due in part to
continued strength in overall financial markets and to the Company's commitment
to train Representatives in diversification and long-term investment activities.
Management also attributes the increase in revenues to the Company's dedication
to continued recruiting of new Representatives. The number of Representatives
and their experience in the financial planning and sales industry directly
impacts revenues.
Due to the declining trend of commission revenue as a percentage of gross
product sales, the Company has continued to devote resources to the development
of its fee-based programs. Portfolio management fees were $4,573,678 for the
three months ended June 30, 1998, a 64% increase over portfolio management fees
for the three months ended June 30, 1997. Portfolio management fees were
$12,082,196 for the nine months ended June 30, 1998, a 55% increase over
portfolio management fees for the nine months ended June 30, 1997. As
Representatives switch client investment strategies from front-end sales charge
investments (i.e., mutual funds) to fee-based investments, commission revenue
will be replaced by ongoing portfolio management fees. Although this investment
strategy eliminates commission revenues at the time of the original transaction,
the Company has the potential to earn greater revenues from continued portfolio
management fees. Portfolio management fees are earned quarterly on client funds
that remain invested in fee-based programs, compared to the one-time front-end
sales charge on mutual fund investments.
Net Income
Net income for the three months ended June 30, 1998, was $1,143,161, an increase
of $699,968 compared to net income of $443,193 for the three months ended June
30, 1997. Net income for the nine months ended June 30, 1998 was $2,009,879, an
increase of $181,610 compared to net income of $1,828,269 for the nine months
ended June 30, 1997.
11
<PAGE>
Net income for the nine months ended June 30, 1998 increased from the comparable
period in the prior year due in part to the increase in commission and portfolio
management fee revenues of 43%. The increase in commission and portfolio
management fee revenues was partially offset by the related increase in
commission expense and portfolio management fee expense. Commission expense and
portfolio management fee expense for the nine months ended June 30, 1998
increased 46% from the comparable period in the prior year. Commission and
portfolio management fee expense percentage increase was slightly higher than
commission and portfolio management fee revenue due primarily to Representatives
moving into higher payout categories.
General and administrative expenses increased by $2,349,470 to $6,993,840 for
the three months ended June 30, 1998, compared to the same period for the prior
year. General and administrative expenses increased by $6,421,483 to
$19,654,096 for the nine months ended June 30, 1998, compared to the same period
for the prior year. The increase in general and administrative expenses is
directly related to the increase in revenue, in that additional staffing is
retained to support the revenue growth and projected increases in operating
levels. General and administrative expense is also impacted by increased
noncapitalizable costs to improve the Company's utilization of technology and
nonrecurring costs of $572,000 associated with the relocation of the Company's
corporate headquarters.
Representative development costs for the three months ended June 30, 1998 were
$2,238,045, a 4% decrease related to development costs of $2,329,942 for the
three months ended June 30, 1997. The decrease in Representative development for
the three months ended June 30, 1998 is primarily due to the timing of
Representative development efforts by the Company. Representative development
costs for the nine months ended June 30, 1998 were $6,292,339, a 15% increase
related to development costs of $5,454,223 for the nine months ended June 30,
1997. This increase in Representative development costs is the result of
increased participation by Representatives, the Company's focus on the
development of programs to educate the Company's Representatives as well as the
expansion of staff necessary to support participation in these programs.
Increased costs associated with the Company's national education convention and
the introduction of the Representative mentoring program also contributed to the
increased Representative development costs.
Representative recruiting costs for the three months ended June 30, 1998 were
$698,446, a 20% increase compared to recruiting costs of $581,745 for the three
months ended June 30, 1997. Representative recruiting costs for the nine months
ended June 30, 1998 were $1,580,819, a 38% increase compared to recruiting costs
of $1,141,872 for the nine months ended June 30, 1997. The increase in
recruiting costs is the result of an increase in direct mail and other
recruiting methods used to contact prospective Representatives. To the extent
that the Company decides in the future to devote significant resources to
rapidly expand its Representative base through aggressive recruiting activities,
future profitability would likely be negatively impacted.
12
<PAGE>
PART II OTHER INFORMATION
- --------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
In September 1997, litigation was initiated against the Company and its
subsidiary, H. D. Vest Investment Securities, Inc., in regard to the activities
of a former Registered Representative. As of June 30, 1998, plaintiffs seek
recovery for alleged out-of-pocket losses totaling approximately $900,000. In
addition, plaintiffs seek recovery for treble and punitive damages as well as
recovery for pain and suffering. The Company believes it has a defense against
all claims and intends to vigorously defend them. The Company is currently
unable to determine the likelihood that additional material claims arising from
the Registered Representative's conduct will be made or the likelihood that an
unfavorable outcome will occur in this matter. Although the Company believes
that a defense to any additional claims exists, and intends to vigorously defend
such claims if necessary, a negative result in multiple claims could have a
material adverse impact on the Company.
The Company is subject to other legal proceedings and claims, which have arisen
in the ordinary course of its business and have not been finally adjudicated.
Management believes, based on the advice of legal counsel responsible for such
matters, that these actions, when finally concluded and determined, will not
have a material adverse effect upon the financial position of the Company.
Reference is made to Item 3 of the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
- --------------------------------------------------------
The annual meeting of shareholders of the Company was held on June 5, 1998 at
the Albuquerque Convention Center, Albuquerque, New Mexico. Matters voted on and
approved by the Company's Shareholders at the meeting included the re-election
of Herb D. Vest as Chairman of the Board of Directors, the re-election of
Barbara Vest, Kenneth E. Reynolds, Jack B. Strong, Jerry M. Prater, Phillip W.
Mayer and Lynn R. Niedermeier as Directors of the Company. Additionally brought
to a vote at this meeting was the approval of Arthur Andersen LLP as the
Company's independent public accountants for the ensuing year. Below is a list
of the items brought to a vote at the annual shareholder meeting and the
distribution of votes.
Matter Voted Voted For Voted Against Abstained Non-vote
- ---------------------------- --------- ------------- --------- --------
Directors
Herb D. Vest 5,223,302 - 10,300 189,739
Barbara Vest 5,223,202 - 10,400 189,739
Jack B. Strong 5,221,502 - 12,100 189,739
Kenneth E. Reynolds 5,222,802 - 10,800 189,739
Jerry M. Prater 5,225,002 - 8,600 189,739
Phillip W. Mayer 5,224,902 - 8,700 189,739
Lynn R. Niedermeier 5,216,739 - 16,863 189,739
13
<PAGE>
Independent Auditors 5,213,764 16,650 3,188 189,739
Item 5. Other Information
- --------------------------
The Company recognizes the need to ensure that its operations will not be
adversely impacted by "Year 2000" software failures. The Year 2000 issue arises
because most computer systems and programs were designed to handle only a two-
digit year, not a four-digit year. When the year 2000 begins, these computers
may interpret "00" as the year 1900 (e.g., 1997 is seen as "97") and could
either stop processing date related computations or process them incorrectly.
Policies and procedures are being established for the evaluation and management
of risks associated with this issue. The Company is in the process of
communicating with suppliers, sponsors, financial institutions and others with
which it does business to identify and determine appropriate action. Management
does not anticipate a material effect on customers or disruption of business
operations as a result of Year 2000 software failure. The Company is currently
upgrading or replacing many of its information systems for operational purposes
and as a result will solve many of its internal Year 2000 issues. The Company
does not anticipate there to be material costs associated with achieving Year
2000 compliance over the cost of normal software upgrades and replacements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
No reports on Form 8-K were filed during the quarter ended June 30, 1998.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
H. D. VEST, INC.
-------------------------
(Registrant)
Date: August 14, 1998 By: s\ Herb D. Vest
-------------------------
Herb D. Vest
Chief Executive Officer,
Chairman of the Board
Date: August 14, 1998 By: s\ Wesley Ted Sinclair
------------------------
Wesley Ted Sinclair
Chief Financial Officer,
Vice President (Principal
Financial and Accounting
Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 9,240,894
<RECEIVABLES> 8,206,159
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 0
<PP&E> 8,260,475
<TOTAL-ASSETS> 26,624,002
<SHORT-TERM> 0
<PAYABLES> 12,535,536
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 0
<LONG-TERM> 5,084,078
0
1,500,402
<COMMON> 271,167
<OTHER-SE> 7,232,819
<TOTAL-LIABILITY-AND-EQUITY> 26,624,002
<TRADING-REVENUE> 0
<INTEREST-DIVIDENDS> 500,639
<COMMISSIONS> 69,980,594
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 12,082,196
<INTEREST-EXPENSE> 191,077
<COMPENSATION> 10,332,623
<INCOME-PRETAX> 3,403,719
<INCOME-PRE-EXTRAORDINARY> 2,009,879
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,009,879
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.34
</TABLE>
