SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: September 30, 2003
Commission File No. 0-5703
Siebert Financial Corp.
(Exact name of registrant as specified in its charter)
| New York | 11-1796714 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
885 Third Avenue, New York, NY 10022
(Address of principal executive offices) (Zip Code)
(212) 644-2400
(Registrant's telephone number, including area code)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the exchange Act).
Yes ¨No x
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of November 5, 2003, there were 22,257,200 shares of Common Stock, par value $.01 per share, outstanding.
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Unless the context otherwise requires, the “Company” shall mean Siebert Financial Corp. and its wholly owned subsidiaries and “Siebert” shall mean Muriel Siebert & Co., Inc., a wholly owned subsidiary of the Company.
Certain statements contained in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below and elsewhere in this document, as well as oral statements that may be made by the Company or by its officers, directors or employees acting on the Company’s behalf, that are not statements of historical or current fact constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties and known and unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward looking statements, including, without limitation: changes in general economic and market conditions; fluctuations in volume an d prices of securities; demand for brokerage and investment banking services; competition within and without the discount brokerage business, including the offer of broader services; competition from electronic discount brokerage firms offering lower rates on commissions than the Company; the prevalence of a flat fee environment; decline in participation in equity or municipal finance underwritings; limited trading opportunities; the method of placing trades by the Company’s customers; computer and telephone system failures; the level of spending by the Company on advertising and promotions; trading errors and the possibility of losses from customer non-payment of amounts due; other increases in expenses and changes in net capital or other regulatory requirements. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date when such statements were made or to reflect th e occurrence of unanticipated events. An investment in the Company involves various risks, including those mentioned above and those which are detailed from time to time in the Company’s Securities and Exchange Commission filings.
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S.E.C. FORM 10-Q
September 30, 2003
INDEX
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Part I - FINANCIAL INFORMATION
Item 1.
Financial Statements.
|
Siebert Financial
Corp. & Subsidiaries |
| September 30, 2003 (Unaudited) |
December 31, |
|||||||||||
| ASSETS |
||||||||||||
| Cash and cash equivalents |
$ | 21,746,000 | $ | 22,498,000 |
||||||||
| Cash equivalents – restricted |
1,300,000 |
1,300,000 |
||||||||||
| Receivable from clearing brokers |
1,610,000 |
1,100,000 |
||||||||||
| Advance to clearing broker |
1,500,000 |
— |
||||||||||
| Securities owned, at market value |
3,924,000 |
5,225,000 |
||||||||||
| Furniture, equipment and leasehold improvements, net |
2,048,000 |
2,616,000 |
||||||||||
| Investment in and advances to equity investee |
3,049,000 |
2,748,000 |
||||||||||
| Intangibles, net |
2,563,000 |
2,302,000 |
||||||||||
| Prepaid expenses and other assets Deferred tax asset |
1,531,000 |
1,816,000 846,000 |
||||||||||
| $ |
40,151,000 |
$ |
40,451,000 |
|||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Accounts payable and accrued liabilities |
4,950,000 |
4,784,000 |
||||||||||
|
4,950,000 |
4,784,000 | |||||||||||
| Commitments and contingent liabilities |
||||||||||||
| Stockholders’ equity: |
||||||||||||
| Common
stock, $.01 par value; 49,000,000 shares authorized, |
||||||||||||
| 22,395,767 shares outstanding at December 31, 2002 |
229,000 |
229,000 |
||||||||||
| Additional paid-in capital |
17,916,000 |
17,880,000 |
||||||||||
| Retained earnings |
20,444,000 |
20,377,000 |
||||||||||
|
Less: 721,803 and 572,400 shares of treasury stock, at cost |
||||||||||||
| at September 30, 2003 and December 31, 2002, respectively |
(3,388,000 | ) | (2,819,000 | ) | ||||||||
|
35,201,000 |
35,667,000 |
|||||||||||
| $ |
40,151,000 |
$ |
40,451,000 |
|||||||||
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Siebert Financial Corp. & Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended |
Nine Months Ended |
|||||
September 30, |
September 30, |
|||||
|
2003 |
2002 |
2003 |
2002 |
|||
|
Revenues: |
||||||
|
Commissions and fees |
$5,256,000 |
$4,671,000 |
$14,643,000 |
$14,968,000 |
||
|
Investment banking |
213,000 |
408,000 |
931,000 |
1,210,000 |
||
|
Trading profits |
213,000 |
92,000 |
617,000 |
619,000 |
||
|
Income from equity investee |
241,000 |
397,000 |
1,704,000 |
1,023,000 |
||
|
Interest and dividends |
85,000 |
129,000 |
328,000 |
470,000 |
||
|
6,008,000 |
5,697,000 |
18,223,000 |
18,290,000 |
|||
|
Expenses: |
||||||
|
Employee compensation and benefits |
2,025,000 |
2,193,000 |
6,454,000 |
6,772,000 |
||
|
Clearing fees, including floor brokerage |
1,057,000 |
954,000 |
2,963,000 |
2,823,000 |
||
|
Advertising and promotion |
300,000 |
915,000 |
963,000 |
2,009,000 |
||
|
Communications |
605,000 |
568,000 |
2,096,000 |
1,710,000 |
||
|
Occupancy |
277,000 |
223,000 |
842,000 |
684,000 |
||
|
Interest |
— |
— |
1,000 |
1,000 |
||
|
Other general and administrative |
1,569,000 |
2,053,000 |
4,815,000 |
6,550,000 |
||
|
5,833,000 |
6,906,000 |
18,134,000 |
20,549,000 |
|||
|
Income (loss) before income taxes |
175,000 |
(1,209,000) |
89,000 |
(2,259,000) |
||
|
|
||||||
|
Provision (benefit) for income taxes |
60,000 |
(483,000) |
22,000 |
(922,000) |
||
|
Net income (loss) |
$ 115,000 |
$ (726,000) |
$ 67,000 |
$(1,337,000) |
||
|
Net income (loss) per share of common
stock - |
$ ..01 |
$ (.03) |
$ — |
$ (.06) |
||
|
Weighted average shares outstanding - - |
||||||
|
Basic |
22,258,686 |
22,415,907 |
22,324,135 |
22,393,771 |
||
|
Weighted average shares outstanding - - |
||||||
|
Diluted |
22,484,506 |
22,415,907 |
22,484,020 |
22,393,771 |
||
See notes to consolidated financial statements.
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| Siebert Financial Corp. & Subsidiaries Consolidated Statements of Cash Flows (Unaudited) |
| Nine Months Ended | ||||||
|
|
September 30, | |||||
| 2003 | 2002 | |||||
| Cash flows from operating activities: | ||||||
| Net income (loss) |
$ | 67,000 |
$ | (1,337,000 |
) | |
| Adjustments
to reconcile net income (loss) |
||||||