U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ X ] ANNUAL REPORT UNDER SECTION 13
or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended January 31, 1997
[ ] 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.)
Newport Tower, 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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $0.01 per share
(Title of Class)
Redeemable Warrants
(Title of Class)
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
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year: $ 41,886,595
At April 17, 1996: (a) 5,030,335 shares of Common Stock, $0.01 par value,
of the registrant (the "Common Stock") were outstanding; (b) 2,236,135 shares of
Common Stock were held by non-affiliates; and (c) the aggregate market value of
the Common Stock held by non-affiliates was $13,137,293 based on the closing
average price of $5.875 per share on April 17, 1996.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
M. H. Meyerson & Co., Inc., a securities firm originally founded in 1960,
conducts its business in seven (7) separate divisions. These are Wholesale
Trading, Investment Banking, Retail Services, Institutional Sales, Syndicate,
Fixed Income, and Correspondent Service. These seven (7) divisions are
functionally supported by the Compliance Department and the Back Office
Department (operations).
As of March 31, 1997, the Company had one hundred sixty one employees
(161), one hundred eight (108) of which were registered representatives,
including thirty (30) registered principals, licensed by the National
Association of Securities Dealers ("NASD") and various state securities
commissions. The balance of the Company's employees, which number fifty-three
(53), are support staff.
The Company's largest division (in revenue contribution) is wholesale
market making, which means engaging in principal transactions on behalf of its
proprietary trading accounts in what are usually dealer to dealer transactions.
The Company employs thirty-six (36) securities traders and twenty-five (25)
assistant traders who, with management supervision, conduct the Company's high
volume trading operations. The Company's traders are compensated by receiving
a fixed percentage of the profits from trading after deduction of general
expenses. The traders are party to employment contracts which provide for
individual liability for any funds owed the Company relating to losses, if any,
incurred from trading activities. Pursuant to these employment contracts, the
individual traders are restricted to Company imposed limits as to the extent of
the trading positions they are permitted by the Company to maintain. Traders
are also required by the Company to maintain a reserve, the size of which is a
factor by which the trading position limit is determined. This reserve is also
available to offset trading losses, if any, suffered by the individual trader in
his trading account. The Company endeavors to observe high standards of
commercial honor and just and equitable principles of trade in conducting its
business.
In its market making function, the Company carries long or short trading
positions in various securities. The Company currently trades over one hundred
million shares of common stock, preferred stocks and warrants per month. The
Company's clearing agent for market making and trading activities is Spear,
Leeds & Kellogg, Inc., members of the New York and other principle stock
exchanges, of New York City, New York. The Company has contracted with an
information services provider to supply trading information regarding securities
in which the Company has an investment interest. The Company obtains daily
printouts that inform the traders regarding financial and market information on
a current basis. As of March 1997, the Company was a market maker in
approximately two thousand eight hundred (2,800) securities.
The Company's trading activities have substantially increased with the
addition of several automated trading systems such as Instinet, ACT, Selectnet,
BNET, and the automated ticketless Brass trading program. The Brass system,
which, in effect, makes trading "paperless", enhances the ability of the traders
to focus on market conditions by eliminating the prior administrative burden
incumbent in trading. The Selectnet and Instinet networks link the Company with
trading partners throughout the United States, including other brokerage firms,
block trading desks and specialists on the regional exchanges. These systems
provide the Company with access into every major securities exchange on a
worldwide basis. The Company also employs the Autex electronic volume
monitoring system. Through Autex, the Company can determine the percentage of
the Company's relative trading volume in a specific security.
The Company's Correspondent Services division provides competitive
execution services primarily to retail securities firms who utilize the Company
to fill buy or sell orders in over-the-counter and listed securities for their
respective retail customers. The Company's Correspondent Service facilitates
large retail firms, including discount brokers and banks, in obtaining instant
execution of their respective customers' orders.
The Company's Retail Sales division consists of forty-two (42) registered
representatives, including nine (9) registered principals, who collectively
maintain the majority of the Company's retail securities accounts. The
Company's retail customer accounts are carried on a "fully disclosed" basis by
Bear, Stearns Securities Corp., members of the New York and other principle
stock exchanges, pursuant to a clearing agreement. This agreement provides
that customer securities positions and credit balances are insured up to
$50,000,000 by Securities Investors Protection Corp. ("SIPC") and supplementary
private insurance coverage. All customer credit balances are subject to
immediate withdrawal from Bear, Stearns Securities Corp., at the discretion of
the customer.
The Company's Investment Banking division consists of four (4)
professionals. The primary function of this department is to conceptualize,
plan and execute capital formation for small, growing companies which have the
potential, in the Company's judgement, to become successful public companies.
The Department is engaged in the structuring, management and participation in
public offerings and private placements of primarily equity securities. It also
advises its clients in connection with mergers, acquisitions and divestitures.
The Company also serves as the managing underwriter or co-underwriter in
initial public offerings and private placements of primarily equity securities.
Since 1990, the Company has been the managing or co-managing underwriter of
twenty-four (24) initial public offerings and five (5) private placements which
raised in excess of two hundred forty million dollars ($240,000,000). The
Company generally underwrites small capitalization growth companies in their
relatively fast growth stage. These companies are generally in information
technologies, such as software, medical products and pharmaceuticals. The
Company has also been a syndicate or selling group member in approximately one
hundred fifty-two (152) underwritings.
M. H. Meyerson & Co., Inc. is currently registered for retail distribution
in the following jurisdictions:
Alabama Kentucky Ohio
Alaska Louisiana Oklahoma
Arizona Maine Oregon
California Maryland Pennsylvania
Colorado Massachusetts Rhode Island
Connecticut Michigan South Carolina
Delaware Minnesota South Dakota
District of Columbia Mississippi Tennessee
Florida Missouri Texas
Georgia Montana Utah
Hawaii Nebraska Vermont
Illinois Nevada Virginia
Indiana New Hampshire Washington
Iowa New Jersey West Virginia
Kansas New York Wisconsin
North Carolina Wyoming
Government Regulation
The securities industry in the United States is subject to extensive
regulation under both federal and state laws. The Securities and Exchange
Commission ("SEC") is the federal agency responsible for the administration of
the federal securities laws. The Company is registered as a broker/dealer with
the SEC. Much of the regulation of broker/dealers has been delegated to self-
regulated organizations, principally the NASD and national securities exchanges
such as NASDAQ. These self-regulatory organizations adopt rules (subject to
approval by the SEC) that govern the industry and conduct periodic examinations
of the Company's operations. Securities firms are also subject to regulation by
state securities administrators in those states in which they conduct business.
The Company is currently registered as a broker/dealer in 46 states and the
District of Columbia.
Broker/dealers are subject to regulation covering all aspects of the
securities business, including sales method, trade practices among
broker/dealers, use and safekeeping of customers' funds and securities, capital
structure of securities firms, record-keeping and the conduct of directors,
officers and employees. Additional legislation, changes in rules promulgated by
the SEC and self-regulatory organizations, or changes in the interpretation or
enforcement of existing laws and rules may directly affect the mode of operation
and profitability of broker/dealers. The SEC, self-regulatory organizations and
state securities commissions may conduct administrative proceedings which can
result in censure, fine, the issuance of cease-and-desist orders or the
suspension or expulsion of a broker/dealer, its officers or employees. The
principal purpose of regulation and discipline of broker/dealers is the
protection of customers and the securities markets, rather than protection of
creditors and stockholders of broker/dealers.
Competition
The Company encounters intense competition in all aspects of the securities
business and competes directly with other securities firms, a significant number
of which have substantially greater capital and other resources and many of
which offer a wider range of financial services. In addition to competition
from firms currently in the securities business there has recently been
increasing competition from other sources such as commercial banks and insurance
companies offering financial services and from other investment alternatives.
The Company believes that the principal competitive factors in the securities
industry are the quality and ability of professional personnel and relative
prices of services and products offered. The Company and its competitors also
employ direct solicitation of potential customers as methods of increasing
business. The Company and its competitors also furnish investment research
publications in an effort to hold and attract existing and potential clients.
ITEM 2. DESCRIPTION OF PROPERTIES
Facilities
The Company currently leases approximately 30,000 sq. ft. of space in an
office building known as the Newport Office Tower located at 525 Washington
Blvd., Jersey City, New Jersey. The lease is in effect through July 31, 2011.
The Company also leases space at its previous location, through April 30, 1997.
Rent charges on these offices for the years ended January 31, 1997 and January
31, 1996 were $429,459 and $240,659, respectively.
In addition, the Company also pays maintenance charges for additional space
in Aventura, Florida, under an agreement with Martin H. Meyerson, who owns the
property in question. This space is primarily used for entertainment and
investment banking purposes. The total maintenance charges for the years ending
January 31, 1997 and 1996 were $17,977 and $11,687, respectively. The Company
also pays rent for space in New York City, New York which is leased in the name
of Martin H. Meyerson. This property is also used primarily for entertainment
and investment banking purposes. The total rent paid on this space for the
years ended January 31, 1997 and 1996 were $31,310 and $28,348, respectively.
The maintenance charges paid on the Florida property are the actual maintenance
charges billed each month, and the rent paid on the New York property is the
actual rent specified in the lease between Martin H. Meyerson and the building's
landlord. The Company believes that it is similar to what would be paid for a
comparable property leased on an arm's length basis by the Company. Neither of
these properties is the permanent residence of Martin H. Meyerson.
It is the opinion of management that all these properties are adequately
covered by the Company's insurance policies.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation which would have a material
adverse impact on the Company or its operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the Company
during the fourth quarter of fiscal 1997.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
In connection with its initial public offering consummated January 18,
1994, the Company sold an aggregate of 2,300,000 units of securities for $4.00
per unit, each unit consisting of one share of Common Stock and one Redeemable
Common Stock Purchase Warrant (the "Warrants") exercisable at $4.50, and
received net proceeds of $7,580,948 therefrom. As of April 17, 1997, none of
the Warrants have been exercised.
From January 19, 1994 to March 17, 1994, the Company's securities were
traded on the "Small Capitalization" market of NASDAQ. Since March 18, 1994, the
Company's Common Stock has been traded on the NASDAQ - National Market System
(NMS). The Company's Warrants remain on the Small Capitalization market.
The following sets forth for the fiscal quarters as indicated the high and
low bid closing quotations for the Company's Common Stock on the NMS from
February 1, 1996 through January 31, 1997, and the high and low bid closing
quotations for the Company's Warrants on the NASDAQ Small Capitalization market
for the period February 1, 1996 through January 31, 1997. Such information
reflects interdealer quotations, without retail mark-up, mark-down or
commissions, and may not necessarily represent actual transactions.
Common Stock Warrants
High Low High Low
Fiscal Year 1997
1st Quarter $2.53 $1.78 $0.53 $0.28
2nd Quarter $4.31 $2.47 $1.50 $0.58
3rd Quarter $3.75 $2.88 $1.31 $0.75
4th Quarter $4.06 $2.38 $1.63 $0.78
The number of shareholders of record of the Company's Common Stock on March
31, 1997 was approximately 50, and the number of beneficial holders of the
Company's Common Stock is estimated by management to be an additional 900
holders.
<PAGE>
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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 Annual Report on Form 10-KSB
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
Year Ended January 31,
1997 1996
Net gain on securities transactions 82 85
Underwriting 11 5
Commissions 6 9
Interest and other 1 1
100 100
Compensation and benefits 53 54
Clearance charges 16 18
Communications 8 9
Professional fees 3 2
Occupancy and equipment costs 1 2
Other operating expenses 11 10
Total expenses 92 95
Income before income taxes 8 5
Provision for income taxes 3 2
Net income 4 3
Representing less than 1%
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.
Fiscal Year 1997 Compared with Fiscal Year 1996
Total revenues in fiscal year 1997 increased to $41,886,595 from
$24,945,121, or 67.9%. This is attributable mainly to a 62.2% increase in
trading revenues and a 281.1% increase in underwriting revenue, along with
smaller increases in commissions, and interest and other revenue.
Compensation and benefits increased from $13,466,583 to $22,226,110, a
change of 65.0%. This resulted primarily from higher draws and commissions to
retail representatives and brokers due to the higher revenue.
Clearing charges increased from $4,536,060 to $6,467,259, representing an
increase of approximately 42.6%. This was attributable to the increase in
trading volume.
Communications charges increased from $2,244,565 to 3,260,963. This
represents an increase of 45.3% and was also primarily attributable to
increased volume.
Other operating expenses, comprising professional fees, research fees,
occupancy, and various other operating costs increased from $3,588,437 to
$6,666,435, an increase of 85.7%. Components of this increase were expenses for
professional fees, and miscellaneous other expenses.
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 83% and 92% of
total assets at January 31, 1997 and January 31, 1996 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>
Selected Financial Data
The historical selected financial data set forth below for the three years
ended January 31, 1997 are derived from the Company's Financial Statements
included elsewhere in this Annual Report on Form 10-KSB and should be read in
conjunction with those financial statements and notes thereto. Those financial
statements have been audited by Vincent R. Vassallo, independent certified
public accounts, whose report with respect thereto appears elsewhere in this
report.
January 31,
1997 1996 1995
Balance Sheet Data:
Assets $23,702,300 $19,379,985 $19,153,227
Liabilities 9,759,700 7,324,848 7,474,145
Shareholders' Equity 13,942,600 12,055,137 11,679,082
Statement of Operations Data:
Year Ended January 31,
1997 1996 1995
Revenues
Net gain on sec. transactions $34,214,505 $21,088,570 $14,466,377
Underwriting 4,811,399 1,262,448 4,405,005
Commissions 2,396,754 2,263,490 1,276,943
Interest and other revenue 463,937 330,613 437,377
Total Revenues 41,886,595 24,945,121 20,585,702
Expenses
Compensation and benefits 22,226,110 13,466,583 11,422,283
Clearance charges 6,467,259 4,536,060 4,119,228
Communications 3,260,963 2,244,565 1,936,361
Professional fees 1,416,519 537,443 710,173
Occupancy and equipment costs 461,874 630,145 537,398
Other operating expenses 4,788,042 2,390,849 2,579,983
Total Expenses 38,620,767 23,805,645 21,305,426
Income (Loss) Before Taxes 3,265,828 1,139,476 (719,724)
Provision For Income Taxes 1,445,865 464,689 (121,870)
Net Income $ 1,819,963 $ 674,787 $ (597,854)
ITEM 7 FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Public Accountants . . . . . . . . . . 9
Statements of Financial Condition
at January 31, 1997 and 1996 . . . . . . . . . . . . . . 10
Statements of Operations for the years
ended January 31, 1997 and 1996 . . . . . . . . . . . . . 11
Statements of Stockholders' Equity for the years
ended January 31, 1997 and 1996 . . . . . . . . . . . . . 12
Statements of Cash Flows for the years
ended January 31, 1997 and 1996 . . . . . . . . . . . . . 13
Notes to Financial Statements. . . . . . . . . . . . . . . . . 14
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
M. H. Meyerson & Co., Inc.
We have audited the accompanying statements of financial condition of M.
H. Meyerson & Co., Inc. as of January 31, 1997 and 1996, and the related
statements of operations, changes in shareholders' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of M. H. Meyerson & Co., Inc.,
as of January 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
VINCENT R. VASSALLO, CPA
Sea Cliff, New York
March 26, 1997
M. H. MEYERSON & CO., INC.
STATEMENT OF FINANCIAL CONDITION
JANUARY 31,
ASSETS 1997 1996
Cash $ 2,184,301 $ 818,597
Receivable from clearing brokers (Note 3) 3,019,947 8,332,586
Securities owned - at market value (Notes 2 and 3) 13,536,044 8,767,825
Income tax refunds receivable (Notes 2 and 5) 939,566 -
Investments - not readily marketable (Note 2) 1,699,084 330,221
Property and equipment, net (Notes 2 and 3) 1,760,588 686,883
Other assets 562,770 443,873
TOTAL ASSETS $ 23,702,300 $19,379,985
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Securities sold, but not yet purchased - at market value
(Notes 2 and 3) $ 3,493,713 $ 2,870,217
Payable to trading representatives 4,671,539 3,566,353
Income taxes payable - 501,869
Other liabilities and accrued expenses (Note 3) 1,594,448 386,409
TOTAL LIABILITIES 9,759,700 7,324,848
COMMITMENTS (Note 6)
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value, 25,000,000
shares authorized, 4,993,335 and 4,983,335
shares issued and 4,993,335 and 4,983,335
shares outstanding at January 31, 1997 and 1996 49,933 49,833
Additional paid-in capital 7,753,797 7,743,897
Retained earnings 6,138,870 4,318,907
Loans to officers for purchase of Company Stock - (57,500)
TOTAL SHAREHOLDERS' EQUITY 13,942,600 12,055,137
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 23,702,300 $19,379,985
The accompanying notes are an integral part of this statement.
M. H. MEYERSON & CO., INC.
STATEMENT OF OPERATIONS
YEAR ENDED JANUARY 31,
REVENUES
1997 1996
Net gain on securities transactions $ 34,214,505 $ 21,088,570
Underwriting 4,811,399 1,262,448
Commissions 2,396,754 2,263,490
Interest 380,752 286,462
Net gain on investments and disposal
of assets 83,185 44,151
TOTAL REVENUES 41,886,595 24,945,121
EXPENSES
Compensation and benefits 22,226,110 13,466,583
Clearance charges 6,467,259 4,536,060
Communications 3,260,963 2,244,565
Professional fees 1,416,519 537,443
Occupancy and equipment costs
(Notes 4 and 6) 461,874 630,145
Other operating expenses 4,788,042 2,390,849
TOTAL EXPENSES 38,620,767 23,805,645
INCOME BEFORE INCOME TAXES 3,265,828 1,139,476
Provision for taxes(Notes 2 and 5) 1,445,865 464,689
NET INCOME $ 1,819,963 $ 674,787
EARNINGS PER SHARE OF
COMMON STOCK (Note 2) $ 0.33 $ 0.13
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 5,521,016 5,277,148
The accompanying notes are an integral part of this statement.
M. H. MEYERSON & CO., INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
YEAR ENDED JANUARY 31, 1997 AND 1996
Common Loans to
Stock Additional Officers for
$0.01 par Paid-in Retained Treasury Purchase of
value capital earnings stock Company stock
Shareholders'
Equity Feb. 1 1995 $52,686 $8,186,151 $3,644,120 $(26,375) $(167,500)
Purchase of treasury
stock (371,232)
Retirement of
treasury stock (2,853) (432,254) 397,607
Officer loan repayment 110,500
Net income for year 674,787
Shareholders'
Equity Jan. 31, 1996 49,833 7,743,897 4,318,907 0 (57,500)
Officer loan repayment 57,500
Options exercised 100 9,900
Net income for year 1,819,963
Shareholders'
Equity Jan. 31, 1997 49,933 7,753,797 6,138,870 0 0
The accompanying notes are an integral part of this statement.
M. H. MEYERSON & CO., INC.
STATEMENT OF CASH FLOWS
YEAR ENDED JANUARY 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,819,963 $ 674,787
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation 535,592 239,848
Change in assets and liabilities:
(Increase) decrease in:
Receivable from clearing brokers 5,312,639 (2,093,787)
Securities owned (4,768,219) (209,710)
Income taxes receivable (939,566) 615,587
Other assets (118,897) (110,976)
Increase (decrease) in:
Securities sold, but not yet purchased 623,496 (1,127,885)
Payable to trading representatives 1,105,186 373,602
Income taxes payable (501,869) 501,869
Other liabilities and accrued expenses 1,208,038 103,117
Net cash provided by (used in)
operating activities 4,276,363 (1,033,548)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments (1,368,863) 274,370
Purchase of property and equipment (1,609,296) (467,990)
Net cash used in investing activities (2,978,159) (193,620)
CASH FLOW FROM FINANCING ACTIVITIES:
Purchase of treasury stock - (408,732)
Options exercised 10,000 -
Loans to officers repayment 57,500 110,000
Net cash provided by (used in)
financing activities 67,500 (298,732)
NET INCREASE(DECREASE) IN CASH 1,365,704 (1,525,900)
CASH, BEGINNING OF YEAR 818,597 2,344,497
CASH, END OF YEAR $ 2,184,301 $ 818,597
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 2,887,300 $ -
Interest paid $ - $ -
The accompanying notes are an integral part of this statement.
M. H. MEYERSON & CO., INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 AND 1996
1. ORGANIZATION
The Company is a registered broker-dealer under the Securities and Exchange
Act of 1934 which provides securities trading, underwriting, investment
banking and brokerage services.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Transactions
Customers' securities transactions are recorded on a settlement date basis,
which is generally three business days after trade date with related revenues
and expenses recorded on a trade date basis. The Company's securities
transactions are recorded on a trade date basis. Securities traded on a
national securities exchange are valued at the last sales price on January 31,
1997 and 1996. Securities traded on the over-the-counter market are valued at
the bid price for securities owned and at the ask price for securities sold
but not yet purchased. Unrealized gains and losses on security transactions
are reflected in income.
Underwriting Revenues
Underwriting fees are recorded at the time the underwriting is completed.
Investments - Not Readily Marketable
Investments not readily marketable are valued at estimated fair value as
determined by management. Investments not readily marketable include
restricted securities which cannot be publicly offered or sold unless
registration has been effected under the Securities Act of 1933 or unless the
applicable provisions of Rule 144 of the Securities Act are met.
Property and Equipment
Property and equipment is stated at cost. Office furniture, equipment and
vehicles are depreciated over the estimated useful lives, ranging from 3 to 7
years using accelerated methods. Leasehold improvements are amortized over
the shorter of the remaining life of the lease or the estimated economic life
of the improvements. The same methods are used for tax purposes.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 109 "Accounting for Income Taxes". There are no temporary differences
between tax and financial reporting.
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.
3. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
Cash
Cash represents funds on deposit in interest bearing and non-interest bearing
checking accounts.
Receivable from Clearing Brokers
Receivable from clearing brokers is from trading activity and funds deposited
and is unsecured. The funds are available for immediate withdrawal and are
drawn upon as needed. Interest is paid on these funds at fluctuating rates.
Securities Owned
Approximately ninety-nine percent of securities owned consist of over-the-
counter stocks.
Property and Equipment
Property and equipment consists of the following:
January 31,
1997 1996
Office furniture and equipment $ 1,244,733 $ 885,171
Leasehold improvements 734,035 373,052
Vehicles 128,797 128,797
2,107,565 1,387,020
Less accumulated depreciation and amortization 346,977 700,137
$ 1,760,588 $ 686,883
Securities Sold, but not yet Purchased
Securities sold but not yet purchased represent obligations of the Company to
deliver the specified securities at some point in the future, thereby creating
a liability to purchase these securities at prevailing market prices in effect
at that time. Approximately ninety-nine percent of securities sold, but not
yet purchased consist of over-the-counter stocks.
There is a market risk associated with these securities if the security price
increases and the securities have to be purchased at a higher price to cover
the positions. There is no margin requirement for these transactions. The
Company seeks to control the risks associated with these positions by closely
monitoring the market fluctuations of the prices for these securities.
Payable to Trading Representatives
Payable to trading representatives represents commissions earned by market
makers and retail representatives. Market makers are required to maintain a
balance with the Company equivalent to approximately twenty-five percent of
their net trading positions. The remaining balance of commissions is
available for immediate withdrawal.
<PAGE>
Other Liabilities and Accrued Expenses
Other liabilities and accrued expenses consist of:
January 31,
1997 1996
Accrued salaries, taxes and fringe benefits $ 116,145 $ 47,203
Other accrued liabilities 1,478,302 339,206
$ 1,594,447 $ 386,409
4. RELATED PARTY TRANSACTIONS
Transactions with related parties are summarized as follows:
Year ended January 31,
1997 1996
Maintenance charges paid on space owned by
the principal shareholder
(included in rent expense) 17,977 11,687
Rent for space which is leased in the name
of the principal shareholder 31,310 28,348
5. INCOME TAXES
The provision for income taxes is as follows:
Year ended January 31,
1997 1996
Current tax expense(benefit)
Federal $ 1,120,057 $ 394,254
State 325,808 70,435
$ 1,445,865 $ 464,689
A reconciliation from the statutory federal income tax rate to the effective
tax rate is as follows:
Year ended January 31,
1997 1996
U.S. statutory rate 34.0% 34.0%
State taxes, net of federal benefit 6.6 5.6
Other 3.7 1.2
44.3% 40.8%
6. COMMITMENTS
Lease Commitments
The Company leases office space, under two lease agreements, which are in the
name of MHM Leasing Co., Inc. (a company which is owned by the principal
shareholder) that expire on April 30, 1997.
The Company signed a 15 year lease for new office space, effective August 1,
1996, and added additional space effective March 15, 1997. In addition, the
Company also pays rent for additional space under agreements with the
principal shareholder.
Minimum annual rental and lease commitments for all office space with a
remaining term of one year or more at January 31, 1997 are as follows:
Year ending January 31,
1998 $720,633
1999 793,040
2000 793,040
2001 793,040
2002 824,725
Remainder through July 31, 2011 8,320,475
Net minimum lease payments $ 12,244,953
Rent expense for the years ended January 31, 1997 and 1996 was $429,459 and
$240,659 respectively.
Employment Agreements
The Company has employment agreements with Martin H. Meyerson, Chairman and
Chief Executive Officer, and Michael Silvestri, President and Chief Operations
Officer. The agreements provide for base annual compensation of $600,000 and
$200,000 respectively. The agreements are each for a three (3) year period
from October, 1993 and will renew automatically for succeeding periods of one
year unless sooner terminated. In the event the Company terminates, without
cause, the employees, the employee shall receive an amount equal to one year's
base salary plus accrued benefits and incentive compensation.
7. NET CAPITAL REQUIREMENT
As a registered broker-dealer, the Company is subject to the requirements of
Rule 15c3-1 (the net capital rule) under the Securities Act of 1934. The
basic concept of the rule of liquidity is to require the broker-dealer to have
at all times sufficient liquid assets to cover its current indebtedness.
Specifically, the rule prohibits a broker-dealer from permitting its
"aggregate indebtedness" from exceeding fifteen times its net capital as those
terms are defined.
The Company's aggregate indebtedness and net capital were $ 6,265,987 and $
6,908,273 on January 31, 1997 and $ 4,454,631 and $ 9,060,921 on January 31,
1996 respectively, with ratios of .91 and .49 to 1.00.
8. STOCK OPTIONS AND WARRANTS
The Company established an employee stock option plan administered by the
Board of Directors. Under the plan, options may be granted to employees of
the Company and other qualified individuals up to an aggregate of 1,500,000
shares of Common stock. As of January 31, 1997, 1,178,000 options have been
granted under this plan, 1,075,500 of which became exercisable as of January
31, 1997 and the balance will become exercisable at varying times through
January, 1999. The outstanding options have exercise prices of $1.00 to $3.50
per share. 10,000 options were exercised on May 8, 1996 at $1.00.
The Underwriter was granted an option to purchase 200,000 Units at $6.60 per
Unit in connection with the Company's initial public offering. Each Unit
consists of one share of the Company's Common Stock and one Redeemable Common
Stock Purchase Warrant exercisable at $4.50. The options are exercisable
during a three year period commencing January 18, 1996.
In connection with the initial public offering, the Company issued 2,300,000
Redeemable Common Stock Purchase Warrants. Each Warrant entitles the holder
to purchase one share of Common Stock at a price of $4.50. The Warrants are
exercisable any time through January 17, 1999 unless redeemed by the Company.
The Warrants are redeemable by the Company, upon 30 days prior written notice,
provided the closing bid price for the Company's Common Stock exceeds $9.60
per share for ten consecutive business days ending within five days of the
redemption period.
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers, directors and key employees of the
Company are as follows:
Name Age Position with Company
Martin H. Meyerson 66 Chairman, Chief Executive Officer, Chief
Financial Officer and Director
Michael Silvestri 49 President, Chief Operating Officer and
Director
Kenneth J. Koock 54 Vice Chairman and Director
Linda Antosiewicz 45 Senior Vice President, Director of
Compliance, and Director
Jeffrey E. Meyerson 31 Vice President, Foreign Trading, and
Director(1)
Joelle A. Meyerson 58 Treasurer and Director(2)
Eugene M. Whitehouse 38 Vice President, Controller, and Director
Bertram Siegel, Esq. 59 Director
Martin Leventhal, CPA 60 Director
Alfred T. Duncan 53 Director
(1) Jeffrey E. Meyerson is the son of Martin H. Meyerson
(2) Joelle A. Meyerson is the spouse of Martin H. Meyerson
<PAGE>
Biographical Information
Martin H. Meyerson, Chairman, Chief Executive Officer and Chief Financial
Officer
Martin H. Meyerson is the Chairman, Chief Executive Officer,
Chief Financial Officer and a director of the Company and was its President
until 1984. Mr. Meyerson was also the President and a director of Bio
Recovery Technology, Inc., a research and development company involved in
microbiological and pollution control products, from 1984 through 1986. He
was also the chairman of the board of Bio Metallics, Inc., also involved in
pollution control products, from 1987 through 1990. Mr. Meyerson graduated
from Packard College in 1952, majoring in Business Administration.
Michael Silvestri, President, Chief Operating Officer and Director
Michael Silvestri joined the Company in 1978 as Manager and
Cashier and has been President and Chief Operating Officer of the Company
since 1984. He has been actively involved in the securities business for
twenty-five (25) years. His previous experience at Fahnstock & Company
enabled him to expand his operational expertise in all trading areas. He has
established new compliance and accounting procedures for the Company. Mr.
Silvestri received a sociology and business degree from Brooklyn College in
1974. Mr. Silvestri became a Director in 1993.
Kenneth J. Koock, Vice Chairman and Director
Kenneth Koock has been with the Company since 1977. In
1993, Mr. Koock became a Director of the Company. Mr. Koock received his B.A.
degree from Duke University in 1963 and a law degree in 1966 from St. John's
University. He was president of Bio Metallics, Inc. from 1987 through 1990
and is a member of the New York State Bar Association.
Linda Antosiewicz, Senior Vice President, Director of Compliance, and Director
Ms. Antosiewicz joined the Company as Office Manager in
1983. She became the cashier and a Vice President in 1984. Ms. Antosiewicz
became a director of the Company in 1993, and the firm's Senior Vice President
and Director of Compliance in 1995. She was previously employed by Merrill
Lynch, Pierce, Fenner & Smith for eleven (11) years in its operations
department and as a training specialist in the agency clearing department.
Jeffrey E. Meyerson, Vice President, Foreign Trading and Director
Jeffrey E. Meyerson has been with the Company since 1987.
He became Vice President of the Foreign Trading Department in 1989. He
received an Economics/Management degree from Ithaca College in 1987. Mr.
Meyerson became a Director of the Company in 1993.
Joelle A. Meyerson, Treasurer and Director
Joelle A. Meyerson actively joined the Company in 1979 as a
Financial Principal and became a Director in 1994. She received a B.A. degree
in Economics from Brooklyn College in 1960, and a Masters degree in Economics
from Brooklyn College in 1962.
Eugene M. Whitehouse, Vice President, Controller, and Director
Eugene M. Whitehouse has been associated with the firm
since 1983, became a Vice President and the Company's Controller in
1994, and became a Director in 1996. He received a B.B.A. degree from
Pace University in 1982, and an M.B.A. from St. Peter's College with a
concentration in MIS in 1994, and a concentration in International
Business in 1997.
<PAGE>
Bertram Siegel, Esq., Director
Bertram Siegel became a Director of the Company in 1994.
Mr. Siegel is a partner in the law firm of Siegel and Siegel, and was a member
of the Board of Directors of Bio Metallics, Inc., from 1987 through 1990. He
is a member of the New Jersey and Bergen County Bar Associations, and received
his Juris Doctor degree from Rutgers, the State University of New Jersey in
1963.
Martin Leventhal, CPA, Director
Martin Leventhal graduated from Brooklyn College in 1958 and
became a Certified Public Accountant in 1963. With the exception of time
spent in military service, he has been actively involved in public accounting
since his graduation. In 1971, he founded the firm now known as Martin
Leventhal & Company, a CPA firm with approximately 25 employees. He is a
member of the American Institute of Certified Public Accountants and the New
York Society of Certified Public Accountants, for which he served on numerous
committees. He has also held a principal's license in the securities
industry.
Alfred T. Duncan, Director
Alfred T. Duncan has been an independent management
consultant since 1992, specializing in financial management for small
growth firms. Prior to 1992, he held numerous senior positions with
Commodore International, Ltd. including General Manager of Latin
America and Eastern Europe (1990-1991) and General Manager of U. S.
operations (1987-1990). He was President and Chief Executive Officer
of Victor Technologies (1986-1987) and has held financial management
positions with A. M. International, Abbott Laboratories, First
National Bank of Chicago, and Ford Motor Company. He received an
M.B.A. degree from Harvard University in 1972 and a B.S.C.E. degree
from Duke University in 1965.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash
compensation paid by the Company for services rendered in all capacities with
respect to salary earned during the fiscal year ended January 31, 1997 to the
executive officers whose compensation exceeded $100,000 and to all executive
officers as a group.
Name of Individual Total
or Number of Fiscal Cash
Persons in Group Year Salary Bonus(4) Compensation(1)
Martin H. Meyerson, Chairman(5)
1997 $ 600,000 $ 200,000 $ 800,000
1996 600,000 0 600,000
1995 600,000 0 600,000
Kenneth J. Koock, Vice Chairman(2)(5)
1997 1,448,800 0 1,448,800
1996 1,049,800 0 1,049,800
1995 1,299,800 0 1,299,800
Michael Silvestri, President and Chief
Operating Officer(3)(5)
1997 270,111 100,000 370,111
1996 200,000 119,248 319,248
1995 150,000 95,050 245,050
All Executive Officers as a group (3 persons)
1997 2,318,911 300,000 2,618,911
1996 1,849,800 119,248 1,969,048
1995 2,049,800 95,050 2,144,850
(1) Does not include personal benefits which do not exceed 10% of the cash
compensation for all executive officers as a group.
(2) Mr. Koock does not receive a base salary. His compensation is based on
commissions earned.
(3) Mr. Silvestri earns compensation based on commissions earned in addition to
his contracted salary and incentive amounts.
(4) Martin H. Meyerson received a grant of an option for 200,000 shares from
the employee stock option plan in lieu of a cash bonus in
fiscal 1995 and 1996.
(5) Mr. Meyerson, Mr. Koock, and Mr. Silvestri each received grants of an
option for 5,000 shares during fiscal 1997 for serving as
members of the Company's Board of Directors.
DIRECTOR COMPENSATION
As of January 31, 1997, no director was given cash
compensation for their services as directors. Outside directors are given
$300.00 as reimbursement for travel expenses. Outside directors have received
grants under the stock option plan as an incentive to become directors of the
Company, and all directors receive a grant of 5,000 options per year for their
service as directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security ownership of certain beneficial owners known to the issuer to be
the beneficial owner of more than five percent of any class of the issuer's
voting securities, as of April 17, 1997.
Title of Name and Address Amount and Percent of Total
Class of Beneficial Nature of Class Options
Owner Beneficial Granted
Owner
Common Martin H. Meyerson
c/o M. H. Meyerson & Co., Inc.
525 Washington Blvd.
Jersey City, NJ 07310 2,238,190 44.494% 415,000
Common Kenneth J. Koock
c/o M. H. Meyerson & Co., Inc.
525 Washington Blvd.
Jersey City, NJ 07310 304,625 6.056% 10,000
Common The Meyerson Family as a Group(1)
2,397,815 47.667% 445,000
(1) The Meyerson Family as a group includes Martin H. Meyerson, Joelle A.
Meyerson, Jeffrey E. Meyerson, Jill E. Meyerson and Douglas
J. Meyerson
(b) Security ownership of management, as of April 17, 1997.
Title of Name and Address Amount and Percent Total
Class of Beneficial Nature of of Class Options
Owner Beneficial Granted
Owner
Common Martin H. Meyerson
c/o M. H. Meyerson & Co., Inc. 2,238,190 44.494% 415,000
Common Michael Silvestri
c/o M. H. Meyerson & Co., Inc. 77,135 1.533% 15,000
Common Kenneth J. Koock
c/o M. H. Meyerson & Co., Inc. 304,625 6.056% 265,000
Common Linda Antosiewicz
c/o M. H. Meyerson & Co., Inc. 9,625 0.191% 15,000
Common Jeffrey E. Meyerson
c/o M. H. Meyerson & Co., Inc. 34,625 0.688% 15,000
Common Joelle A. Meyerson
c/o M. H. Meyerson & Co., Inc. 100,000 1.988% 15,000
Common Eugene M. Whitehouse
c/o M. H. Meyerson & Co., Inc. 30,000 0.596% 5,000
Common Bertram Siegel, Esq.
c/o M. H. Meyerson & Co., Inc. 0 0.000% 65,000
Common Martin Leventhal, CPA
c/o M. H. Meyerson & Co., Inc. 0 0.000% 65,000
Common Alfred T. Duncan
c/o M. H. Meyerson & Co., Inc. 0 0.000% 10,000
Common All Officers and Directors as
a group (10 people) 2,794,200 55.547% 885,000
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding relationships and related transactions is
disclosed in the notes to financial statements included in Item 7 of this
report.
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Index of Exhibits as required by Item 601 of
Regulations S-B.
Exhibit Number Description of Exhibit
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4.1 Common Stock Specimen (1)
4.2 Warrant Specimen (1)
4.3 Unit Specimen (1)
4.4 Warrant Agreement (1)
10.1 Employment Agreement between
the Company and Martin H. Meyerson(1)
10.2 Employment Agreement between
the Company and Michael Silvestri (1)
11 Calculation of Earnings Per Share
of the Company pg. 28
(1) Incorporated herein by reference from the Registration Statement
number 33-70566 filed by the Company on Form SB-2
(b) Reports on Form 8-K:
A report on Form 8-K, dated December 4, 1996,was filed reporting
the resignation of Howard Blank from the Board of Directors.
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)
/s/ Michael Silvestri
Michael Silvestri
President and Chief Operating Officer
Date: April 24, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Martin H. Meyerson and Michael
Silvestri, or any one of them, his attorney-in-fact and agent, with full power
of substitution, for him in any and all capacities, to sign any amendments to
this Annual Report, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
commission, hereby ratifying and confirming that all said attorneys-in-fact,
or their substitutes, may do or cause to be done by virtue hereof.
In accordance with the Exchange Act, this Report has been signed
below by the following persons on behalf of the Registrant and in the
capacities indicated and on the dates indicated.
Signature Title Date
Chairman, Chief Executive
Officer, Chief Financial
/s/ Martin H. Meyerson Officer and Director April 24, 1997
Martin H. Meyerson
President, Chief Operating
/s/ Michael Silvestri Officer and Director April 24, 1997
Michael Silvestri
/s/ Kenneth J. Koock Vice Chairman and Director April 24, 1997
Kenneth J. Koock
Senior Vice President, Director of
/s/ Linda Antosiewicz Compliance and Director April 24, 1997
Linda Antosiewicz
Vice President, Foreign Trading,
/s/ Jeffrey E. Meyerson and Director April 24, 1997
Jeffrey E. Meyerson
/s/ Joelle A. Meyerson Treasurer and Director April 24, 1997
Joelle A. Meyerson
/s/Eugene M. Whitehouse Vice President, Controller, April 24, 1997
Eugene M. Whitehouse and Director
/s/ Bertram Siegel Director April 24, 1997
Bertram Siegel, Esq.
/s/ Martin Leventhal Director April 24, 1997
Martin Leventhal, CPA
/s/ Alfred T. Duncan Director April 24, 1997
Alfred T. Duncan
EXHIBIT 11
M. H. MEYERSON & CO., INC.
STATEMENT OF EARNINGS PER SHARE
Year ended January 31, 1996
Shares outstanding during the year ended January 31, 1996:
5,256,135 shares from February 1 to April 24, 1995 83 days 436,259,205
5,221,135 shares from April 25 to May 9, 1995 15 days 78,317,025
5,215,135 shares from May 10 to May 11, 1995 2 days 10,430,270
5,145,135 shares from May 12 to July 24, 1995 74 days 380,739,990
5,128,935 shares from July 25 to July 25, 1995 1 day 5,128,935
5,023,935 shares from July 26 to August 2, 1995 8 days 40,191,480
5,008,335 shares from August 3 to November 7, 1995 97 days 485,808,495
4,983,335 shares from November 8, 1995 to
January 31, 1996 85 days 423,583,475
365 1,860,458,875
1,860,458,875 shares divided by 365 days = 5,097,148 average shares
outstanding.
Equivalent shares using the modified treasury stock method:
175,500 options, exercise price $1.00 175,500 1.00 $ 175,500
205,000 options, exercise price $1.10 205,000 1.10 $ 225,500
Less: shares assumed to be purchased: (200,500) $(401,000)
180,000 $ 0
Total weighted average outstanding shares: 5,097,148 + 180,000 = 5,277,148
Earnings - year ended January 31, 1996 = $674,787
$674,787 / 5,277,148 = $0.13 earnings per share.
<PAGE>
Year ended January 31, 1997
Shares outstanding during the year ended January 31, 1997:
4,983,335 shares from February 1 to May 7 1996 97 days 483,383,495
4,993,335 shares from May 8, 1996 to January 31, 1997 269 days 1,343,207,115
366 1,826,590,610
1,826,590,610 shares divided by 366 days = 4,990,685 average shares
outstanding.
Equivalent shares using the modified treasury stock method:
268,000 options, exercise price $1.00 268,000 1.00 $ 268,000
205,000 options, exercise price $1.10 205,000 1.10 $ 225,500
90,000 options, exercise price $2.25 90,000 2.25 $ 202,500
200,000 options, exercise price $2.1875 200,000 2.1875 $ 437,500
12,500 options, exercise price $2.50 12,500 2.50 $ 31,250
300,000 options, exercise price $3.50 300,000 3.50 $ 1,050,000
Less: shares assumed to be purchased (545,169) $ (2,214,750)
530,331 $ 0
Total weighted average outstanding shares: 4,990,685 + 530,331 = 5,521,016
Earnings - year ended January 31, 1997 = $1,819,963
$1,819,963 / 5,521,016 = $0.33 earnings per share.
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This schedule contains summary financial information extracted from
SEC Form 10-KSB and is qualified in its entirety by reference to
such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 2184301
<RECEIVABLES> 3959513
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 13536044
<PP&E> 1760588
<TOTAL-ASSETS> 23702300
<SHORT-TERM> 0
<PAYABLES> 6265987
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 3493713
<LONG-TERM> 0
0
0
<COMMON> 49933
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 23702300
<TRADING-REVENUE> 34214505
<INTEREST-DIVIDENDS> 380752
<COMMISSIONS> 2396754
<INVESTMENT-BANKING-REVENUES> 4811399
<FEE-REVENUE> 0
<INTEREST-EXPENSE> 0
<COMPENSATION> 22226110
<INCOME-PRETAX> 3265828
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1819963
<EPS-PRIMARY> .36
<EPS-DILUTED> .33
</TABLE>