U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to __________
Commission File Number 0-23410
M. H. MEYERSON & CO., INC.
(Name of Small Business Issuer in its charter)
NEW JERSEY 13-1924455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
525 Washington Blvd., Jersey City, New Jersey 07310
(Address of principal executive offices) (Zip Code)
(201) 459-9515
(Issuer's telephone number, including area code)
30 Montgomery Street, Jersey City, New Jersey 07302
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No .
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 4,993,335
<PAGE>
M. H. Meyerson & Co., Inc.
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance sheets, July 31, 1996 and 1995 . . . . . . . .1
Statements of operations, three and six
months ended July 31, 1996 and 1995 . . . . . . .2
Statement of changes in stockholders' equity
six months ended July 31, 1996 . . . . . . . . .3
Statement of cash flows, six months ended
July 31, 1996 and 1995 . . . . . . . . . . . . .4
Notes to financial statements. . . . . . . . . . . . .5
Item 2. Management's Discussion and Analysis . . . .6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . .8
<PAGE>
<TABLE>
M. H. Meyerson & Co., Inc.
Balance Sheets
(Unaudited)
<CAPTION>
July 31, July 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Due from clearing brokers - available
for immediate withdrawal $ 13,535,074 $ 8,583,625
Cash at banks and on hand 977,883 167,217
Securities-trading-long at market 10,382,231 8,927,489
Other current assets 282,780 928,335
TOTAL CURRENT ASSETS 25,177,968 18,606,686
Investments 524,855 504,573
Fixed Assets net of accumulated
depreciation 1,270,681 433,615
TOTAL ASSETS $ 26,973,504 $ 19,544,874
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Securities-trading-short at market $ 5,551,899 $ 4,213,933
Sales commission payable 4,948,291 3,299,371
Other liabilities and accrued items 2,440,593 516,623
TOTAL CURRENT LIABILITIES 12,940,783 8,029,927
STOCKHOLDERS' EQUITY
Common stock 49,933 51,451
Additional paid-in-capital 7,753,797 8,040,190
Loans to officers for purchase of
Company Stock (30,000) (57,500)
Treasury Stock 0 (227,257)
Retained earnings 6,258,991 3,708,063
TOTAL STOCKHOLDERS' EQUITY 14,032,721 11,514,947
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 26,973,504 $ 19,544,874
See notes to financial statements
</TABLE>
<PAGE>
M. H. Meyerson & Co., Inc.
<TABLE>
Condensed Statements of Operations
Three and Six Months Ended July 31,
(Unaudited)
<CAPTION>
Three months ended Six months ended
July 31, July 31,
<S> <C> <C> <C> <C>
1996 1995 1996 1995
REVENUE
Trading profit $ 13,572,092 $ 5,385,999 $ 22,349,235 $ 8,720,453
Commission 643,654 631,959 1,211,250 1,054,343
Underwriting 1,024,879 938,498 2,096,299 968,698
Interest and other 115,453 71,311 74,068 140,897
TOTAL REVENUE 15,356,078 7,027,767 25,730,852 10,884,391
EXPENSES
Clearing charges 2,278,967 1,160,678 3,652,180 2,109,598
Salesmens' draw &
commissions 5,839,445 2,507,946 9,767,930 3,798,262
Other personnel costs 2,205,284 1,016,096 3,858,950 1,875,517
Rent and office 1,201,778 814,821 2,263,439 1,415,803
Legal & Professional 330,951 156,973 552,044 252,214
Interest Expense 0 0 0 0
Other Expenses 1,263,984 699,031 2,312,474 1,271,060
TOTAL EXPENSES 13,120,409 6,355,545 22,407,017 10,722,454
Income before income taxes 2,235,669 672,222 3,323,835 161,937
Income taxes 927,056 256,108 1,383,751 97,994
Net income $ 1,308,613 $ 416,114 $ 1,940,084 $ 63,943
Earnings per common share $ 0.24 $ 0.08 $ 0.36 $ 0.01
Weighted average number
of shares 5,396,454 5,313,470 5,391,885 5,366,053
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
M. H. Meyerson & Co., Inc.
Statement of Changes in Shareholders' Equity
(Unaudited)
Six Months ended July 31, 1996
<CAPTION>
LOANS TO
OFFICERS
FOR
COMMON PURCHASE
STOCK ADDITIONAL OF
$0.01 PAR PAID-IN RETAINED TREASURY COMPANY
VALUE CAPITAL EARNINGS STOCK STOCK
<S> <C> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY
FEBRUARY 1, 1996 $49,833 $7,743,897 $4,318,907 $ 0 $(57,500)
Net income for
period 1,940,084
ESOP exercise 100 9,900
Loan to officers
repayment 27,500
SHAREHOLDERS' EQUITY
JULY 31, 1996 $49,933 $7,753,797 $6,258,991 $ 0 $(30,000)
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
M. H. Meyerson & Co., Inc.
Statement of Cash Flows
(Unaudited)
Six Months ended July 31,
<CAPTION>
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,940,084 $ 63,943
Adjustments to reconcile net income to net
cash provided by(used in) operating activites
Depreciation 302,017 76,703
Changes in assets and liabilities
(Increase)decrease in:
Receivable from clearing brokers (5,202,488) (2,344,826)
Securities owned (1,614,406) (369,374)
Other current assets (25,760) 20,129
Increase(decrease) in:
Securities sold, but not yet purchased 2,681,683 215,831
Sales commission payable 1,381,938 106,620
Other liabilities and accrued items 1,552,314 233,331
Net cash provided by (used in)
operating activities 1,015,382 (1,997,643)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments (7,781) 100,018
Fixed assets (885,815) (51,577)
Net cash provided by (used in)
investing activities (893,596) 48,441
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of Employee Stock Option 10,000 0
Repayments of loans to officers 27,500 110,000
Treasury stock purchased 0 (338,078)
Net cash provided by (used in)
financing activities 37,500 (228,078)
NET INCREASE(DECREASE) IN CASH 159,286 (2,177,280)
Cash, beginning of period 818,597 2,344,497
Cash, end of period $ 977,883 $ 167,217
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 677,300 $ 0
Interest paid $ 0 $ 0
See notes to financial statements
</TABLE>
<PAGE>
M. H. Meyerson & Co., Inc.
Notes to Financial Statements
(Unaudited)
Note 1. Presentation of Financial Statements
The balance sheet as of July 31, 1996 and 1995, the statements of operations for
the three months ended July 31, 1996 and 1995, the statement of changes in
stockholders' equity for the six month period ended July 31, 1996, and the
statement of cash flows for the six months ended July 31, 1996 and 1995 have
been prepared by the Company without audit. In the opinion of management, all
adjustments and accruals (which include only normal recurring items) necessary
to present fairly the financial positions, results of operations, and cash flows
at July 31, 1996 and 1995 have been made.
The difference between the effective tax rate shown on the Condensed Statements
of Operations for the quarter and six months ended July 31, 1996 and 1995 and
nominal rates is due mainly to the partial non-deductibility of entertainment
related expenses.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes to financial
statements included in the Company's January 31, 1996 Annual Report to
Shareholders. The results of the periods ended July 31, 1996 and 1995 are not
necessarily indicative of the operating results for the full year.
Note 2. Earnings Per Common Share
Earnings per common share is calculated using the weighted average
number of common shares outstanding during the period. Shares issuable upon the
exercise of stock options and warrants, that are dilutive, have been included in
the computation of earnings per share based on the modified treasury stock
method.
<PAGE>
M. H. Meyerson & Co., Inc.
Item 2. Management's Discussion and Analysis
General
The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the Financial Statements and
Notes thereto appearing elsewhere in this Quarterly Report on Form 10-QSB.
Results of Operations
The following table sets forth for the periods indicated the percentage of
total revenue represented by certain line items in the Company's Statement of
Operations:
PERCENT OF TOTAL REVENUES
Six Months Ended July 31,
1996 1995
Net gain on securities transactions . . . . 86.9 80.1
Commissions . . . . . . . . . . . . . . . . 4.7 9.7
Underwriting. . . . . . . . . . . . . . . . 8.1 8.9
Interest and other. . . . . . . . . . . . . 0.3 1.3
TOTAL . . . . . . . . . . . . . . . . 100.0 100.0
Clearing charges. . . . . . . . . . . . . . 14.2 19.4
Compensation and benefits . . . . . . . . . 53.0 52.1
Rent and office . . . . . . . . . . . . . . 8.8 13.0
Professional fees . . . . . . . . . . . . . 2.1 2.3
Interest and other operating expenses . . . 9.0 11.7
TOTAL EXPENSES . . . . . . . . . . . . 87.1 98.5
INCOME(LOSS) BEFORE INCOME TAXES . . . 12.9 1.5
PROVISION FOR TAX EXPENSE(BENEFIT) . . 5.4 0.9
NET INCOME(LOSS) . . . . . . . . . . . 7.5 0.6
Calculation of Earnings Per Share
The calculation of earnings per share on the financial statements included
in this report are based on the weighted average number of shares outstanding,
as calculated.
Quarter Ended July 31, 1996 compared with Quarter Ended July 31, 1995
Total revenues for the quarter ended July 31, 1996 were $15,356,078, a
118.5% increase from the $7,027,767 reported for the quarter ended July 31,
1995. This increase is attributable mainly to an increase in trading activity
resulting from the increased activity in the markets in general. Trading revenue
was up $8,186,093 (152.0%) from the second quarter last year, as a result of
significantly increased volume. Retail services revenue was steady, increasing
1.9% from $631,959 to $643,654. There was an increase of $86,381 (9.2%) in
underwriting revenue, and an increase of $44,142 (61.9%) in interest and other
revenue.
<PAGE>
Clearing charges increased from $1,160,678 to $2,278,967, a change of
96.3%. This is attributable to the increase in the Company's trading volume.
Compensation and benefits increased from $3,524,042 to $8,044,729,
representing an increase of 128.3%. This was the result of the increased trading
volume during the second quarter of fiscal 1997, which increases those costs
based on percentages of profits in trading accounts.
Occupancy expenses increased $386,957 (47.5%), due to expenses related to
the move to new, larger facilities to accomodate the Company's continued growth.
Legal and professional fees increased from $156,973 to $330,951, a change
of 110.8%, due also mainly to the move.
Viability of Operating Results
The Company, like other securities firms, is directly affected by general
economic conditions and market conditions, including fluctuations in volume and
price levels of securities, changes in levels of interest rates and demand for
the Company's investment banking services. All of these factors have an impact
on the Company's net gain from securities transactions, underwriting, and
commission revenues. In periods of reduced market activity, profitability is
adversely affected because certain expenses, consisting primarily of non-officer
compensation and benefits, communications and occupancy and equipment remain
relatively fixed.
Liquidity and Capital Resources
The Company's statements of financial position reflect a liquid financial
position as cash and assets readily convertible to cash represent 92% and 90% of
total assets at July 31, 1996 and July 31, 1995 respectively.
The Company finances its operations primarily with existing capital, and
funds generated from operations. The Company believes that existing capital and
cash flow from operations will be sufficient to meet its cash requirements.
<PAGE>
M. H. Meyerson & Co., Inc.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Index of Exhibits as required by Item 601 of Regulation S-B.
Exhibit Number Description of Exhibit
11 Calculation of Earnings per
Share of the Company pg. 9
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the second
quarter of fiscal year 1997.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
M. H. MEYERSON & CO., INC.
(registrant)
Date: Sept. 5, 1996 By: /s/ Michael Silvestri
Michael Silvestri
President and Chief Operating Officer
Date: Sept. 5, 1996 By: /s/ Eugene M. Whitehouse
Eugene M. Whitehouse
Vice President and Controller
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This schedule contains summary financial information extracted from
SEC Form 10-QSB and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JAN-31-1997 JAN-31-1996
<PERIOD-END> JUL-31-1996 JUL-31-1995
<CASH> 977883 167217
<RECEIVABLES> 13535074 8583625
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 10382231 8927489
<PP&E> 1270681 433615
<TOTAL-ASSETS> 26973504 19544874
<SHORT-TERM> 0 0
<PAYABLES> 7388884 3815994
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 5551899 4213933
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 49933 51451
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 26973504 19544874
<TRADING-REVENUE> 13572092 5385999
<INTEREST-DIVIDENDS> 115453 71311
<COMMISSIONS> 643654 631959
<INVESTMENT-BANKING-REVENUES> 1024879 938498
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 8044729 3524042
<INCOME-PRETAX> 2235669 672222
<INCOME-PRE-EXTRAORDINARY> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1308613 416114
<EPS-PRIMARY> .26 .08
<EPS-DILUTED> .24 .08
</TABLE>
