<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 March 31, 1999
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 March 31,
1999: 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 - March 31, 1999 and
September 30, 1998 3-4
Consolidated Statements of Operations -
Three Months Ended March 31, 1999 and
March 31, 1998 5
Consolidated Statements of Operations -
Six Months Ended March 31, 1999 and
March 31, 1998 6
Consolidated Statements of Cash Flows -
Six Months Ended March 31, 1999 and
March 31, 1998 7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11-13
PART II. Other Information
-----------------
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote
of Shareholders 15
Item 5. Other Information 15-17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
2
<PAGE>
Part I. Financial Information(Unaudited)
- -----------------------------------------
Item 1. Financial Statements
- -----------------------------
H.D. VEST, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
(Unaudited)
March 31, September 30,
1999 1998
---------- ------------
Current assets:
Cash and cash equivalents $ 9,408,433 $ 9,204,362
Commissions and accounts
receivable 7,833,332 9,201,486
Notes receivable-
related parties - 97,159
Receivable from affiliate 249,499 138,496
Prepaid and other assets 818,884 739,061
----------- -----------
Total current assets 18,310,148 19,380,564
----------- -----------
Property and equipment, net
of accumulated depreciation
of $3,072,660 at March 31,
1999 and $2,194,457 at
September 30, 1998 7,054,206 6,313,281
Notes receivable - related parties,
net of current portion - 349,409
Intangible and other assets, net
of accumulated amortization of
$1,079,955 at March 31,
1999 and $906,545 at
September 30, 1998 3,570,808 3,067,772
----------- -----------
$28,935,162 $29,111,026
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements
3
<PAGE>
H.D. VEST, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES AND SHAREHOLDERS' INVESTMENT
(Unaudited)
March 31, September 30,
1999 1998
----------- -------------
Current liabilities:
Accounts payable and accrued
expenses $ 6,000,155 $ 8,629,878
Amounts due on clearing
transactions 328,130 469,462
Commissions payable 7,601,314 4,889,130
----------- -----------
Total current liabilities 13,929,599 13,988,470
----------- -----------
Obligations under capital leases,
excluding current installments 2,545,691 2,506,506
Other noncurrent liabilities 3,611,122 2,946,702
Unearned revenues 487,678 1,279,410
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 5,154,934
Retained earnings 1,434,569 1,463,435
----------- -----------
Total shareholders' investment 8,361,072 8,389,938
----------- -----------
$28,935,162 $29,111,026
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements
4
<PAGE>
H.D. VEST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
-----------------------------
1999 1998
-------------- -------------
Revenues:
Commissions $27,401,565 $22,160,476
Portfolio management fees 5,378,402 3,895,130
Marketing and education fees 2,165,536 1,109,993
Facility and service fee from
affiliate 108,114 50,700
Interest and other 241,354 261,793
----------- -----------
Total revenues 35,294,971 27,478,092
----------- -----------
Expenses:
Commissions 20,283,391 15,874,083
Portfolio management fees 3,840,807 2,570,910
General and administrative 8,796,383 6,343,493
Representative development 2,040,374 1,629,187
Representative recruiting 475,626 411,631
Interest 104,193 73,702
----------- -----------
Total expenses 35,540,774 26,903,006
----------- -----------
Income (loss) before taxes (245,803) 575,086
Income taxes (recovery) (101,351) 275,226
----------- -----------
Net income (loss) $ (144,452) $ 299,860
=========== ===========
Net income (loss) per
common share-basic and diluted $(0.03) $0.05
=========== ===========
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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended March 31,
-------------------------
1999 1998
----------- ------------
Revenues:
Commissions $53,082,045 $41,529,974
Portfolio management fees 10,097,930 7,508,518
Marketing and education fees 5,858,971 4,301,403
Facility and service fee from
affiliate 278,742 397,350
Interest and other 512,670 526,859
----------- -----------
Total revenues 69,830,358 54,264,104
----------- -----------
Expenses:
Commissions 39,395,570 29,515,112
Portfolio management fees 7,129,442 4,911,279
General and administrative 17,234,841 13,339,482
Representative development 4,713,727 4,048,691
Representative recruiting 1,089,089 882,373
Interest 198,835 112,209
----------- -----------
Total expenses 69,761,504 52,809,146
----------- -----------
Net income before taxes 68,854 1,454,958
Income taxes 33,952 588,240
----------- -----------
Net income $ 34,902 $ 866,718
=========== ===========
Net income(loss)per common share
- basic $ (0.01) $ 0.15
=========== ===========
Net income(loss)per common share
- diluted $ (0.01) $ 0.14
=========== ===========
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.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended March 31,
---------------------------
1999 1998
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 34,902 $ 866,718
Noncash items included in income:
Depreciation and amortization 1,051,613 597,169
Loss on disposal of assets 6,792 63,073
Deferred rent 68,814 -
Changes in assets and liabilities:
Commissions and accounts receivable 1,368,154 (469,928)
Receivable from affiliate (111,003) (66,620)
Prepaid and other assets (79,823) (197,429)
Amounts due on clearing transactions (141,332) 124,163
Accounts payable and accrued expenses (2,830,285) 424,638
Commissions payable 2,712,184 2,016,516
Unearned revenues (791,732) (997,894)
----------- -----------
Net cash provided by operating activities 1,288,284 2,360,406
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (241,529) (975,448)
Proceeds from sale of assets - 48,670
Costs to acquire/develop software (1,267,063) (1,361,933)
Additions to other assets (2,200) (82,512)
----------- -----------
Net cash used for investing activities (1,510,792) (2,371,223)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividends (63,768) (63,768)
Proceeds from deferred compensation plan 676,295 522,844
Payments on deferred compensation plan (78,122) -
Advances on notes receivable
-related parties - (424,205)
Payments received on notes receivable
-related parties 446,568 751,172
Payments on capital lease
obligations (554,394) (321,200)
----------- -----------
Net cash provided by financing activities 426,579 464,843
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 204,071 454,026
CASH AND CASH EQUIVALENTS,
September 30, 1998 and 1997 9,204,362 6,384,992
----------- -----------
CASH AND CASH EQUIVALENTS,
March 31, 1999 and 1998 $ 9,408,433 $ 6,839,018
=========== ===========
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/A for the year ended September 30, 1998. 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 March 31, 1999, and September 30, 1998, the results of
operations for the three and six month periods ended March 31, 1999 and 1998,
and the cash flows for the six month periods ended March 31, 1999 and 1998.
Results of operations for the interim period ended March 31, 1999, are not
necessarily indicative of the results that may be expected for the year ended
September 30, 1999. For additional information, refer to the consolidated
financial statements and footnotes included in the Company's annual report on
Form 10-K/A for the year ended September 30, 1998.
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
Herb D. Vest, Chairman of the Board of Directors, Chief Executive Officer and
President of H.D. Vest, Inc. (the Company), purchased approximately 1.4 million
shares of the Company's common stock from Barbara Hancock, the Company's
Executive Manager of Representative Relations and a member of the Board of
Directors. With the acquisition (completed during April 1999), Mr. Vest owns
over 4 million of approximately 5.4 million currently outstanding shares, or
approximately 75% of the Company's issued and outstanding common stock.
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 six months
ended March 31, 1999 and 1998, 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
8
<PAGE>
three and six months ended March 31, 1999 and 1998 was 5,423,341 and 5,555,439,
respectively.
Options to purchase 53,948 shares of common stock at prices ranging from $7.63
to $8.50 per share were outstanding during the three and six months ended March
31, 1999. Options to purchase 95,454 shares of common stock at $8.50 per share
were outstanding during the three and six months ended March 31, 1998 and March
31, 1999. 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 Non-voting Series A Convertible Preferred Stock
outstanding during the three and six months ended March 31, 1999, that were not
included in the number of shares used to compute diluted EPS for the period
because the conversion had an anti-dilutive effect on EPS. The 250,067 shares
of Non-voting Series A Convertible Preferred Stock were included in the
computation of diluted EPS for the three and the six months ended March 31,
1998.
4) Commitments and Contingencies
Beginning in September 1997, claims were made and litigation was initiated
against the Company or its subsidiary, H.D. Vest Investment Securities, Inc., in
regard to the activities of a former Registered Representative. As of September
30, 1998, claimants sought recovery for alleged out-of-pocket losses totaling
approximately $990,000. During the six months ended March 31, 1999, additional
claims of approximately $350,000 were made against the Company or H.D. Vest
Investment Securities, Inc.
As of September 30, 1998, the Company paid approximately $260,000 in settlement
of approximately $550,000 of the pending claims, and paid an additional $45,000
in settlement of an estimated $270,000 in unasserted claims. During the six
months ended March 31, 1999, the Company paid approximately $592,000 to settle
approximately $790,000 in pending claims, and paid approximately $52,000 in
settlement of an estimated $140,000 in unasserted claims. On April 14, 1999, the
Company paid approximately $45,000 to settle an additional claim of
approximately $104,000 related to this matter. These settlements disposed of
the pending litigation and pending claims related to the matter described above.
The Company is unable to determine whether additional material claims arising
from this Registered Representative's conduct will be asserted against the
Company or its subsidiaries. Although the Company believes that a defense to
any additional claims exists, and could vigorously defend such claims if
necessary, the Company could be adversely impacted if additional claims arise.
9
<PAGE>
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.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Liquidity and Capital Resources
At March 31, 1999, the Company had net working capital of $4,380,549 compared to
net working capital of $5,392,094 at September 30, 1998. The $1,011,545
decrease is primarily a result of costs incurred for the continued acquisition
and development of computer systems for transaction processing and costs
incurred for the ongoing implementation of other operating and marketing related
computer systems. These other operating systems include programs such as the
Company's new Representative contact management system and enhancements to the
Company's Internet site. In addition to these internally developed systems, the
Company incurred costs related to the implementation of new accounting and human
resource systems.
During the first six months of fiscal 1999, the Company dedicated much of its
capital to the continued development of a new information system infrastructure.
Management believes the dedication to information systems will provide the
Company more capacity to manage its current growth and support future growth.
In December 1998, Barbara Vest, Executive Manager of Representative Relations,
reduced to zero the outstanding principal balance, together with the accrued
interest, of her revolving line of credit from the Company. At March 31, 1999,
Ms. Vest had no outstanding principal or accrued interest due on this line.
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.
11
<PAGE>
Results of Operations
Revenues
The Company's revenues for the three months ended March 31, 1999, were
$35,294,971, a 28% increase over the Company's revenues for the three months
ended March 31, 1998. The Company's revenues for the six months ended March 31,
1999, were $69,830,358, a 29% increase over the Company's revenues for the six
months ended March 31, 1998. Management believes that the increase in revenues
is due in part to the continued strength in overall financial markets.
Management believes the Company's ability to maintain or increase revenues in
periods of short-term market fluctuation is due in part to the Company's
commitment to training Representatives in diversification and long-term
investment activities. In addition, Management believes that the number of
Representatives and their experience in the financial planning and sales
industry directly impacts revenues.
Due to the declining industry-wide 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. Fee-based programs produce revenue based
on quarterly charges to clients for the management of their accounts, whereas
commission-based services produce revenue based primarily on one-time front-end
sales charges for the purchase of products. Some clients may prefer fee-based
programs as opposed to more traditional commission-based services. The Company
hopes to maximize revenue by making both fee-based and commission-based services
available to customers. For the three months ended March 31, 1999, Portfolio
management fees from these programs were $5,378,402, a 38% increase from the
three months ended March 31, 1998. Portfolio management fees were $10,097,930
for the six months ended March 31, 1999, a 34% increase over portfolio
management fees for the six months ended March 31, 1998.
Net Income
The Company had a net loss of $144,452 for the three months ended March 31,
1999, compared to net income of $299,860 for the three months ended March 31,
1998. Net income for the six months ended March 31, 1999, was $34,902, a
decrease of $831,816 compared to net income of $866,718 for the six months ended
March 31, 1998.
Net income for the three months ended March 31, 1999, decreased from the prior
year due in part to a 28% increase in commission expense and a 49% increase in
portfolio management fee expense. Net income for the six months ended March 31,
1999, decreased from the comparable period in the prior year due in part to a
33% increase in commission expense and a 45% increase in portfolio management
fee expense. Commission and portfolio management fee expense increased at a
faster rate than the related revenue due primarily to Representatives moving
into higher payout categories as well as increased production from
Representatives in higher payout categories. Management believes that in periods
of short-term economic fluctuations, established
12
<PAGE>
Representatives have an advantage over less experienced Representatives in
selling investment products. As the Company recruits and trains Representatives
in lower payout categories, the revenue generated by these Representatives will
help to offset increased revenue by Representatives in higher payout categories.
General and administrative expenses increased 39% to $8,796,383 for the three
months ended March 31, 1999 compared to the prior year. For the six months ended
March 31, 1999, general and administrative expenses increased by 29% to
$17,234,841, 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. As the Company implements new computer systems, work
must be processed both in the existing systems and the new systems being
developed. Management believes that as the new systems enter production and the
need to process in two systems is eliminated, those costs should return to
normal operating levels.
Representative development costs for the three months ended March 31, 1999 were
$2,040,374, a 25% increase compared to the prior year. For the six months ended
March 31, 1999, Representative development costs were $4,713,727, a 16% increase
over development costs of $4,048,691 for the six months ended March 31, 1998.
The increase in Representative development costs is mainly due to increased
participation by Representatives and the expansion of staff necessary to support
participation in these programs. The increase in participation by
Representatives and the related costs is directly related to the increased
recruitment of new Representatives. As additional Representatives are recruited,
the Company expects participation and the related costs to continue to increase
in development programs.
Representative recruiting costs for the three months ended March 31, 1999, were
$475,626, a 16% increase compared to the prior year. For the six months ended
March 31, 1999, recruiting costs were $1,089,089, a 23% increase compared to
recruiting costs of $882,373 for the six months ended March 31, 1998. 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.
13
<PAGE>
PART II OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
- ---------------------------
Beginning in September 1997, claims were made and litigation was initiated
against the Company or its subsidiary, H.D. Vest Investment Securities, Inc., in
regard to the activities of a former Registered Representative. As of September
30, 1998, claimants sought recovery for alleged out-of-pocket losses totaling
approximately $990,000. During the six months ended March 31, 1999, additional
claims of approximately $350,000 were made against the Company or H.D. Vest
Investment Securities, Inc.
As of September 30, 1998, the Company paid approximately $260,000 in settlement
of approximately $550,000 of the pending claims, and paid an additional $45,000
in settlement of an estimated $270,000 in unasserted claims. During the six
months ended March 31, 1999, the Company paid approximately $592,000 to settle
approximately $790,000 in pending claims, and paid approximately $52,000 in
settlement of an estimated $140,000 in unasserted claims. On April 14, 1999, the
Company paid approximately $45,000 to settle an additional claim of
approximately $104,000 related to this matter. These settlements disposed of
the pending litigation and pending claims related to the matter described above.
The Company is unable to determine whether additional material claims arising
from this Registered Representative's conduct will be asserted against the
Company or its subsidiaries. Although the Company believes that a defense to
any additional claims exists, and could vigorously defend such claims if
necessary, the Company could be adversely impacted if additional claims arise.
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.
14
<PAGE>
Item 4. Submission of Matters to a Vote of Shareholders
- ---------------------------------------------------------
None.
Item 5. Other Information
- ---------------------------
The Company recognizes the need to ensure that its operations will not be
adversely impacted by "Year 2000" systems failures. Year 2000 issues arise
because some computer software and hardware systems were designed to handle only
a two-digit year, not a four-digit year (e.g. 1997 is seen by the computer as
"97"). When the year 2000 begins, these computer systems may interpret "00" as
the year 1900 and not 2000, and could either stop processing date-related
computations or process them incorrectly.
In order to minimize the impact of the Year 2000 on the Company, a Year 2000
plan has been established for the assessment and mitigation of risks associated
with material Year 2000 issues. The plan includes a review of material computer
systems that the Company currently has in place and remediation of such systems
if required. The Company has made inquiries to third-party providers with whom
the Company has material business relationships as to their state of readiness
for potential Year 2000 issues and the development of contingency plans in the
event of material Year 2000 issues. Plans have been developed for addressing
unexpected failures or unsuccessful remediation efforts of material computer
systems and unexpected inability of third parties to provide services due to
lack of Year 2000 readiness.
As of March 31, 1999, the Company has identified material computer systems and
completed testing of approximately 90% of such systems. The Company anticipates
completing all testing and any required modifications or replacements by
September 30, 1999. As of March 31, 1999, the Company has expended
approximately $100,000 to address potential Year 2000 issues, exclusive of costs
associated with previously scheduled modifications or replacements unrelated to
Year 2000 issues. The Company anticipates spending approximately $55,000 for
additional testing, modification and replacement related to Year 2000 during the
fiscal year ending September 30, 1999.
Based on current and anticipated operating needs, many of the Company's material
computer systems are in the process of being replaced with more technologically
advanced versions. Each new system being installed has been reviewed for Year
2000 compliance. The computer systems that have been or are in the process of
being replaced include, but are not limited to, the Company's mutual fund
processing system, accounting system, human resources and payroll system, work
station and network operating systems, and systems used
15
<PAGE>
to communicate with the Company's Representatives. The remaining computer
systems, including but not limited to, phone equipment and general office
equipment, have been reviewed for Year 2000 compliance as part of the overall
plan for testing and modification referenced above.
In addition to reviewing its own computer systems, the Company has communicated
with material third-party providers, including, but not limited to, suppliers,
product sponsors, financial institutions, facility owners and other companies
with which the Company has material business relationships in order to assess
their Year 2000 readiness. The communication requests, among other things,
disclosure of the companies' plans for minimizing the impact of the Year 2000 on
their computer systems and the Company. The Company anticipates receiving from
these third-party service providers assurance of their Year 2000 capability. As
of March 31, 1999, the Company had not received from any third-party provider
with which a material business relationship exists, notice of a material Year
2000 issue or the inability to address material Year 2000 issues prior to the
Year 2000. The Company is generally not in a position to verify whether third-
party service providers are or will become Year 2000 ready apart from such
assurances or until a Year 2000 issue arises.
Management does not anticipate a material effect on business operations as a
result of Year 2000 issues. As a precaution, however, the Company has developed
a contingency plan for business operations in the event material Year 2000
issues arise in either the Company's or third-party computer systems. In the
event material issues arise, the Company is prepared to conduct business,
particularly the processing of investment transactions, utilizing manual
processes, off-site recovery facilities and computer systems and back-up data
routinely archived by the Company. The Company anticipates that the cost of
conducting business utilizing the Company's contingency plans would be higher
than conducting business utilizing current and anticipated operational plans,
although the Company is unable to estimate potential cost increases in this
regard.
In the event the Company receives notice from a material third-party provider as
to a potential Year 2000 issue relating to the Company, or a material Year 2000
issue arises as to a third-party, the Company anticipates minimizing potential
business interruptions by shifting critical functions, including, but not
limited to, products sold or recommended by the Company's subsidiaries, to
third-party providers demonstrating Year 2000 compliance.
16
<PAGE>
To the extent the Company or third-party providers cannot correct material Year
2000 issues, and the Company is unable to efficiently conduct business in
accordance with its anticipated contingency plans, operations of the Company
could be negatively impacted.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
On April 19, 1999, an Item 5 8-K was filed stating that Herb D. Vest, Chairman
of the Board of Directors, Chief Executive Officer and President of H.D. Vest,
Inc. (the Company), purchased approximately 1.4 million shares of the Company's
common stock from Barbara Hancock, the Company's Executive Manager of
Representative Relations and a member of the Board of Directors.
17
<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: May 12, 1999 By: s\ Herb D. Vest
------------------------
Herb D. Vest
Chief Executive Officer,
Chairman of the Board
Date: May 12, 1999 By: s\ Wesley Ted Sinclair
------------------------
Wesley Ted Sinclair
Chief Financial Officer,
Vice President (Principal
Financial and Accounting
Officer)
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 9,408,433
<RECEIVABLES> 7,833,332
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 0
<PP&E> 7,054,206
<TOTAL-ASSETS> 28,935,162
<SHORT-TERM> 0
<PAYABLES> 13,929,599
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 0
<LONG-TERM> 6,644,491
0
1,500,402
<COMMON> 271,167
<OTHER-SE> 6,589,503
<TOTAL-LIABILITY-AND-EQUITY> 0
<TRADING-REVENUE> 0
<INTEREST-DIVIDENDS> 240,446
<COMMISSIONS> 53,082,045
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 10,097,930
<INTEREST-EXPENSE> 198,835
<COMPENSATION> 0
<INCOME-PRETAX> 68,854
<INCOME-PRE-EXTRAORDINARY> 34,902
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,902
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
