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. 0-6729
FIRST MONTAUK FINANCIAL CORP
(Exact name of registrant as specified in its charter)
New Jersey 22-1737915
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Parkway 109 Office Center, 328 Newman Springs Rd., Red Bank, NJ 07701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 842-4700
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
9,900,343 Common Shares, no par value, were outstanding as of May 14, 1999.
<PAGE>
FIRST MONTAUK FINANCIAL CORP.
FORM 10-Q
MARCH 31, 1999
INDEX
Page
----
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statement of Financial Condition
as of March 31, 1999 and December 31, 1998 .................... 3
Consolidated Statement of Income for the
Three Months Ended March 31, 1999 and 1998 .................... 4
Consolidated Statement of Cash Flows for the
Three Months Ended March 31, 1999 and 1998 .................... 5-6
Notes to Financial Statements .................................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................... 8-10
PART II. OTHER INFORMATION:
Item 5. Other Information ......................................... 11
Item 6. Exhibits and Reports on Form 8-K ........................ 12
Signatures ....................................................... 13
2
<PAGE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, December 31,
ASSETS 1999 1998
Cash $ 371,456 $ 613,513
Due from clearing firm 2,915,907 2,876,202
Securities owned, at market 3,720,042 2,685,879
Securities owned, not readily marketable,
at estimated market value 10,197 47,381
Commissions receivable 186,599 250,803
Employee and broker receivables 523,706 598,212
Furniture, equipment and leasehold
improvements-net 2,121,978 2,074,470
Notes receivable 620,461 477,729
Due from officers 132,258 131,501
Other assets 803,489 1,087,289
Deferred tax asset-net 700,755 700,755
-------------- --------------
Total assets $ 12,106,848 $ 11,543,734
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Securities sold, but not yet purchased,
at market $ 484,203 $ 327,047
Notes payable-bank 220,863 244,844
Subordinated notes payable 150,000 200,000
Bonds payable 477,146 473,625
Capital lease payable 346,552 373,579
Commissions payable 1,997,519 1,531,644
Accounts payable 491,639 802,497
Accrued expenses 629,380 905,154
Other liabilities 328,971 461,717
-------------- --------------
Total liabilities 5,126,273 5,320,107
-------------- --------------
Common stock issued with guaranteed
selling price - no par value, 18,000 shares
issued and outstanding 36,500 36,500
Stockholders' equity
Preferred Stock, 5,000,000 shares authorized,
$.10 par value, no shares issued and
outstanding - -
Common Stock, no par value, 30,000,000 shares
authorized, 9,850,727 and 9,629,044 shares
issued and outstanding 5,038,048 4,980,977
Additional paid-in capital 2,991,178 2,979,831
Retained earnings (Accumulated deficit) (544,501) (1,192,471)
Less: Deferred compensation (540,650) (581,210)
-------------- --------------
Total stockholders' equity 6,944,075 6,187,127
-------------- --------------
Total liabilities and
stockholders' equity $ 12,106,848 $ 11,543,734
============== ==============
See notes to financial statements.
3
<PAGE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three months ended March 31,
1999 1998
Revenues:
Commissions $ 9,777,468 $ 7,627,770
Principal transactions 2,266,084 2,343,443
Investment banking 77,024 266,204
Interest and other income 400,724 378,537
-------------- --------------
12,521,300 10,615,954
-------------- --------------
Expenses:
Commissions, employee compensation
and benefits 9,490,279 8,235,819
Clearing and floor brokerage 1,108,935 846,483
Communications and occupancy 641,035 596,991
Legal matters and related costs 46,558 300,574
Other operating expenses 540,845 571,314
Interest 42,727 28,570
-------------- --------------
11,870,379 10,579,751
-------------- --------------
Income before income taxes 650,921 36,203
Income taxes 2,952 16,025
-------------- --------------
Net income $ 647,969 $ 20,178
============== ==============
Per share of Common Stock:
Basic $ 0.07 $ 0.00
============== ==============
Diluted $ 0.06 $ 0.00
============== ==============
Number of common shares used in
basic earnings per share 9,836,442 9,609,080
Incremental shares from assumed
conversion of options 726,468 1,058,084
-------------- --------------
Number of common shares used in
diluted earnings per share 10,562,910 10,667,164
============== ==============
See notes to financial statements.
4
<PAGE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31,
1999 1998
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net income $ 647,969 $ 20,178
Adjustments to reconcile net income to
net cash used in operating activities:
Tax benefit related to exercise of
stock options - 37,213
Depreciation and amortization 97,359 84,615
Amortization of deferred compensation 51,908 64,521
Amortization of bond discount 3,521 -
Other - 22,000
Increase (decrease) in cash attributable to
changes in assets and liabilities
Due from clearing firm (39,705) 18,826
Securities owned - at market (1,034,163) (989,917)
Securities owned-not readily marketable 37,184 397,203
Commissions receivable 64,204 170,909
Other assets 283,800 (815,597)
Deferred income taxes - (179,986)
Securities sold but not yet purchased 157,156 (76,172)
Commissions payable 465,875 167,464
Accounts payable (310,858) 449,433
Accrued expenses (275,774) 9,954
Other liabilities (132,749) 675,646
-------------- --------------
Total adjustments (632,242) 36,112
-------------- --------------
Net cash provided by (used in)
operating activities 15,727 56,290
-------------- --------------
Cash flows from investing activities:
Due from officers (757) 6,076
Employee and broker receivables 74,506 154,621
Issuance of notes receivable (167,000) (759,816)
Repayment of notes receivable 24,268 182,987
Capital expenditures (144,865) (392,101)
-------------- --------------
Net cash used in investing
activities (213,848) (808,233)
-------------- --------------
Cash flows from financing activities:
Payment of notes payable-bank (23,981) (23,981)
Payment of subordinated notes payable (50,000) (50,000)
Payment of capital lease payable (27,027) -
Proceeds from rights offering - 1,382,751
Registration costs - (113,518)
Proceeds from exercise of common stock
options 57,072 157,100
-------------- --------------
Net cash provided by (used in)
financing activities (43,936) 1,352,352
-------------- --------------
Net increase (decrease) in cash (242,057) 600,409
Cash at beginning of year 613,513 789,883
-------------- --------------
Cash at end of period $ 371,456 $ 1,390,292
============== ==============
See notes to financial statements.
5
<PAGE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Three months ended March 31,
1999 1998
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 42,727 $ 28,570
Income taxes $ 2,952 $ -
See notes to financial statements.
6
<PAGE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - MANAGEMENT REPRESENTATION
The accompanying financial statements are unaudited for the interim period,
but include all adjustments (consisting only of normal recurring accruals) which
management considers necessary for the fair presentation of results at March 31,
1999 and 1998. The preparation of financial statements in conformity with GAAP
requires the Company to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period. Actual results
could vary from these estimates. These financial statements should be read in
conjunction with the Company's Annual Report at, and for the year ended December
31, 1998, as filed with the Securities and Exchange Commission on Form 10-K.
The results reflected for the three-month period ended March 31, 1999, are
not necessarily indicative of the results for the entire fiscal year to end on
December 31, 1999.
NOTE 2 - EARNINGS PER SHARE
Basic EPS is computed by dividing net income by the weighted-average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution from the exercise or conversion of other securities into common stock.
NOTE 3 - NOTES RECEIVABLE
The Company has advised Global Financial Corp. (Global) that as of April
30, 1999 it will no longer provide financial assistance to Global. The Company
has developed a buy-out plan for leaseholders holding Global leases on May 1,
1999. The plan, as proposed, would be structured as an exchange offering,
whereby the Company would issue shares of a 6% Convertible Preferred Stock in
exchange for an assignment of the Global leases. The preferred shares would be
convertible into two shares of the Company's common stock. At the present time,
the Company cannot provide assurance as to either the acceptability of the
proposal among leaseholders, or the overall collectibility of lease investments
that would be assigned to the Company in the exchange.
NOTE 4 - INCOME TAXES
The effective tax rate for the three months ended March 31, 1999 was less
than 1% compared to 44% in the comparable 1998 quarter. The 1999 provision
reflects minimum state taxes only. Tax expense accrued at regular statutory
rates on 1999 income was entirely offset by the reduction of deferred tax
valuation allowances established in fiscal 1998. For income tax purposes, the
Company has sufficient net operating loss carryforwards available to offset
taxable income generated to date.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the three months ended March 31, 1999, total revenues were a record
$12,521,000, an increase of 18% as compared to $10,616,000 for the same period
in 1998. Net income for the 1999 first quarter was $648,000, or $.07 and $.06
per basic and diluted share, respectively, as compared to $20,000, or $.00 per
basic and diluted share, in the first quarter of 1998. The significant increase
in both revenues and earnings is primarily attributable to the continuation of
strong securities markets in the United States, and the Company's ability to
capitalize on the record volume of securities transactions generated by existing
and newly added registered representatives.
Commission revenues from the sale of listed and over-the-counter
securities, mutual funds, fees from managed accounts and other agency
transactions increased to $9,266,000 (74% of total revenues) during the first
quarter 1999 as compared to $7,228,000 (68% of total revenues) in the first
quarter of 1998. This increase resulted primarily from agency equity and mutual
fund transactions as retail investment volume continued at strong levels during
the 1999 quarter.
Investment banking revenues declined in the first quarter of 1999 to
$77,000, from $266,000 in the 1998 quarter. The Company expects to increase its
participation in syndications of both private placements and public offerings
during the fiscal year.
During the 1999 quarter the Company paid commissions, employee compensation
and employee benefits of $9,490,000 (76% of total revenues) as compared to
$8,236,000 (78% of total revenues) in 1998. This category includes salaries,
commission expense, payroll taxes and fringe benefits for salaried employees.
The Company paid salaries of $1,148,000 for management, operations and clerical
personnel, as compared to $1,033,000 in 1998. This increase was due in part to
the addition of various management and clerical personnel during the latter part
of 1998, as well as an overall increase in employee salaries.
Commissions paid to registered representatives for the first quarter 1999
was $7,973,000 (64% of total revenues) as compared to $6,860,000 (65% of total
revenues) in 1998. Commission compensation is directly related to the level of
revenues generated from firm principal and agency trading, as well as the
commission payout percentage to individual registered representatives.
Commission expense as a percentage of total revenues will fluctuate within a
narrow range depending upon the product mix of commission-based business and
principal transactions. This percentage will also fluctuate based upon the
contribution to revenues from the Company's in-house brokers and affiliate
offices. In-house brokers usually receive a lower commission payout than
independent affiliates but are not generally required to pay their own overhead.
Clearing costs increased in 1999 to $1,109,000 (9% of total revenues) from
$846,000 (8% of total revenues) in 1998. The increase in clearing costs was
attributable to a larger number of overall transactions by the firm's registered
representatives. The percentage of clearing costs to gross revenues can
fluctuate depending upon the product mix. Some transactions, such as options and
bonds, have a higher execution and clearing cost than others.
Communications and occupancy costs rose by $44,000, or 7%, to $641,000
during the 1999 quarter. The modest increase is due to the overall expansion of
the Company's headquarters and the addition of market data services for new
hires. Management expects this expense category to level off in terms of the
percentage to total revenues.
The Company incurred a total of $47,000 in legal costs during the 1999
quarter, as compared to $300,000 for legal settlements and related costs for the
1998 quarter. Through enhanced supervision and compliance measures, the Company
has succeeded in reducing its exposure from customer claims arising out of
broker-related activities. However, the Company is a respondent in several
customer arbitrations and litigations related to its securities business, which
have been pending since the prior fiscal year. These claims are in various
stages of progress and are being vigorously contested. Management is unable to
derive a meaningful estimate of the amount or range of possible loss that may
arise out of pending litigation (including legal costs) in any particular
subsequent quarter or annual period, or in the aggregate. However, it is
possible that the financial condition, results of operation or cash flows of the
Company in subsequent quarterly or annual periods could be materially affected
by the ultimate outcome of such pending litigation. The Company has filed suit
against one of its insurance carriers to compel coverage of several settled
claims. There can be no assurance that the Company will be successful in its
efforts to recover funds from its insurers on settled claims, or that monetary
losses, if any, from future claims, settlements or adverse awards or judgments
will be covered under the Company's existing insurance policies.
8
<PAGE>
Other operating expenses decreased to $541,000 (4% of total revenues) in
1999 from $571,000 (5% of total revenues) in 1998. Cost containment in this
category was achieved by the reduction in advertising costs. The advertising and
marketing campaigns, which were completed and expensed in 1998, should continue
to produce results in registered representative recruitment and name
recognition, without the continuation of additional development costs. However,
the Company expects the cost for advertisement to increase for the remainder of
the fiscal year, as it launches its advertising and business development
campaign for the Company's Century Discount Investments division.
The effective tax rate for the three months ended March 31, 1999 was less
than 1% compared to 44% in the comparable 1998 quarter. The 1999 provision
reflects minimum state taxes only. Tax expense accrued at regular statutory
rates on 1999 income was entirely offset by the reduction of deferred tax
valuation allowances established in fiscal 1998. For income tax purposes, the
Company has sufficient net operating loss carryforwards available to offset
taxable income generated to date.
Operating results will continue to be dependant upon general economic and
securities market conditions, and management's ability to continue to recruit
successful registered representatives and contain administrative costs.
Liquidity and Capital Resources
The Company maintains a highly liquid balance sheet with 60% of the
Company's assets consisting of cash and cash equivalents, securities owned, and
receivables from the Company's clearing firm and other broker-dealers.
Market-making and other securities dealer activities require the Company to
carry significant levels of securities inventory in order to meet customer and
internal trading needs. The balances in the Company's cash, inventory and
clearing firm accounts can and do fluctuate significantly from day to day,
depending on market conditions, daily trading activity, and investment
opportunities. The Company monitors these accounts on a daily basis in order to
ensure compliance with regulatory capital requirements and to preserve
liquidity.
Operating activities contributed cash of $15,700 during the 1999 quarter.
During the quarter, inventory positions of securities held by the Company
increased by $1,034,000, while securities sold but not yet purchased increased
by $157,000. Accounts payable, accrued expenses and other liabilities decreased
by $719,000.
Investing activities required cash of $214,000 during the first quarter of
1999. Additions to capital expenditures consumed $145,000, most of which was for
the renovation of the newly acquired space at the headquarters complex and the
upgrading of existing, and the purchase of additional computers. The Company
projects expenditures for technology and other capital needs to be approximately
$450,000 for the remainder of fiscal 1999.
From June 1997 through April 1999, the Company, through its wholly-owned
subsidiary Montauk Advisors Inc., ("MAI"), made various loans to Global
Financial Corp. ("Global"). These loans have a balance as of May 12, 1999 of
$2,255,000 before reserves. In the first quarter 1999, the amount loaned to
Global was $148,584. Global is a lease servicing company that sold leases
through MAI. These loans were made for the purpose of assisting Global in
meeting cash flow deficiencies arising from the nonpayment of scheduled monthly
installments on certain delinquent, canceled and non-performing leases. The
loans, some of which bear interest at 8% per annum and were due at various times
during 1998, are currently in default. In 1998 management undertook a full
review of the loans to evaluate their collectibility and determined that, based
on various events and circumstances, including the default status of the loans,
that the loans had been impaired and a reserve for uncollectibility was
required. Accordingly, the loans as of March 31, 1999 are stated net of a
$1,775,000 reserve established during fiscal 1998.
In April 1999, the Company advised Global that it would no longer be making
loans effective April 30, 1999. The Company has developed a buy-out plan for
leaseholders holding Global leases on May 1, 1999. The plan, which will be in
the form of an exchange offering, will offer to purchase all Global leases in
exchange for a newly created, unregistered series of the Company's preferred
stock, which will pay a cash dividend of 6% per annum. The preferred stock will
be convertible into two shares of the Company's common stock. The exchange
offering will be based upon the lease payments owing to each leaseholder as of
April 30, 1999, at the 60% payment plan implemented by Global as of August 15,
1998.
9
<PAGE>
All leaseholders who accept the exchange offer will be required to assign
all rights in any leases or lease payments that they have in all Global leases,
and must sign a general release and assignment of claims to the Company. The
Company will then become the recipient of all paying leases that it acquires in
the exchange. There is no assurance as to the dollar amount or collectibility of
any lease payments that may be acquired by the Company as a result of the
exchange offering.
Financing activities used cash of $44,000 during the 1999 period. The
Company received proceeds of $57,000 from the exercise of 39,250 stock options.
This was offset by payments on loans during the quarter of $51,000, and the
second principal payment of $50,000 to National Guardian Life Insurance Company
under the terms of a subordinated loan agreement.
Management believes that operating income will satisfy the Company's
liquidity needs, at least through the current fiscal year.
Year 2000 Issue
The onset of the year 2000 brings challenges to companies who use and rely
on computers and technology as a function of their businesses. Many existing
computer programs were designed and developed without considering the impact of
the upcoming change in the century. If not corrected, many computer applications
could fail or create erroneous results by or at the year 2000.
The Company has reviewed its compliance with what has come to be known as
the Year 2000 Issue ("Y2K"). The Company does not create or develop its own
proprietary computer programs. Rather, it is reliant on outside vendors or
providers for verification of the compliance of their applications, which are
utilized by the Company. The Company has currently identified 17 programs and
applications that were purchased/licensed by the Company for various departments
as mission critical systems requiring compliance with Y2K. We have requested
each vendor to supply verification that the program and/or application utilized
by the firm is, or will be, Y2K compliant before the Year 2000. To date, none of
these vendors have failed to provide a statement of compliance. The most
significant of these outside vendors is the Company's clearing firm, Schroder &
Co., Inc. Schroder & Co. has been mandated by the NYSE to participate in
industry testing of all computer interfaces relating to securities processing.
These tests have been ongoing since early Spring 1999. To date, the Company has
not been advised of any problems relating to the clearing firm's compliance with
Y2K readiness. The Company voluntarily agreed to participate with Schroder in
point to point testing of the interfaces and applications provided by them. We
anticipate that such tests will be completed by August 31, 1999.
The Company has designated an individual within the organization to
coordinate the Y2K compliance issues and to communicate with each software and
service provider, to ensure Y2K compliance before the turn of the century. While
management has not finalized an estimate of the cost of internal system
modifications, it does not believe that these costs will have a material impact
on the Company's operations in fiscal 1999.
In addition, FMSC inventoried its computer and systems operations that
could be affected by Y2K issues, including steps to remediate systems requiring
such attention. This has included a review of our facilities, office equipment,
telecommunications systems, market data services and third-party products and
services used by our company, and retention of consultants, where necessary.
During February 1999, FMSC issued a letter to securities account clients
reporting on the progress of its Y2K readiness program. The Company is working
to take the necessary steps to ensure, as far as practicable, that the firm's
systems will function without interruption after the millennium change. FMSC
expects to continue its evaluation process relating to contingency planning.
10
<PAGE>
PART II
OTHER INFORMATION
Item 5. Other Information.
Global Loans and Leaseholder Offering
From June 1997 through April 1999, the Company, through its wholly-owned
subsidiary Montauk Advisors Inc., ("MAI"), made various loans to Global
Financial Corp. ("Global"). These loans have a balance as of May 12, 1999 of
$2,255,000 before reserves. In the first quarter 1999, the amount loaned to
Global was $148,584. Global is a lease servicing company that sold leases
through MAI. These loans were made for the purpose of assisting Global in
meeting cash flow deficiencies arising from the nonpayment of scheduled monthly
installments on certain delinquent, canceled and non-performing leases. The
loans, some of which bear interest at 8% per annum and were due at various times
during 1998, are currently in default. In 1998 management undertook a full
review of the loans to evaluate their collectibility and determined that, based
on various events and circumstances, including the default status of the loans,
that the loans had been impaired and a reserve for uncollectibility was
required. Accordingly, the loans as of March 31, 1999 are stated net of a
$1,775,000 reserve established during fiscal 1998. In April 1999, the Company
advised Global that it would no longer be making loans effective April 30, 1999.
The Company has developed a buy-out plan for leaseholders holding Global
leases on May 1, 1999. Through a private exchange offering, the Company will
offer to purchase all Global leases in exchange for a newly created,
unregistered series of the Company's preferred stock, which will pay a cash
dividend of 6% per annum. The preferred stock will be convertible into two
shares of the Company's common stock. The exchange offering will be based upon
the lease payments owing to each leaseholder as of April 30, 1999, as modified
by Global at the 60% payment plan as of August 15, 1998.
All leaseholders who accept the exchange offer will be required to assign
all rights in any leases and/or lease payments that they have in all leases
serviced by Global, and must sign a general release and assignment of claims to
the Company. The Company will then become the recipient of all paying leases
that it acquires in the exchange. There is no assurance as to the dollar amount
or collectibility of any lease payments that may be acquired by the Company as a
result of the exchange offering.
The securities offered in the exchange offering will not be registered
under the Securities Act and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed.
12
<PAGE>
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.
FIRST MONTAUK FINANCIAL CORP.
(Registrant)
Dated: May 14, 1999 /s/ William J. Kurinsky
-------------------------
William J. Kurinsky
Secretary/Treasurer
Chief Financial Officer and
Principal Accounting Officer
/s/ Herbert Kurinsky
-------------------------
Herbert Kurinsky
President
13
<PAGE>
EXHIBIT INDEX
-------------
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This Schedule contains summary financial information extracted from
Consolidated Statement of Financial Condition at March 31, 1999 and Consolidated
Statement of Income -- Three Months ended March 31, 1999 and is qualified in its
entirety by reference to such financial statements included in Form 10-Q for
March 31, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<CIK> 0000083125
<NAME> First Montauk Financial Corp.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Mar-31-1999
<CASH> 371
<RECEIVABLES> 3,103
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 3,720
<PP&E> 2,122
<TOTAL-ASSETS> 12,107
<SHORT-TERM> 0
<PAYABLES> 3,118
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 484
<LONG-TERM> 1,023
0
0
<COMMON> 5,038
<OTHER-SE> 1,906
<TOTAL-LIABILITY-AND-EQUITY> 12,107
<TRADING-REVENUE> 2,266
<INTEREST-DIVIDENDS> 401
<COMMISSIONS> 9,777
<INVESTMENT-BANKING-REVENUES> 77
<FEE-REVENUE> 0
<INTEREST-EXPENSE> 43
<COMPENSATION> 9,490
<INCOME-PRETAX> 651
<INCOME-PRE-EXTRAORDINARY> 651
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 648
<EPS-PRIMARY> .07
<EPS-DILUTED> .06
</TABLE>
