-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H0bvYXZo+85PMzMh7JJ6nqxmmdojCpyQo4OtofaL7ZmMWLfAbH1l6NcDRe7ksF+5 /69WpcrfWu2RaTPP40xjkQ== 0000083125-01-500015.txt : 20010821 0000083125-01-500015.hdr.sgml : 20010821 ACCESSION NUMBER: 0000083125-01-500015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MONTAUK FINANCIAL CORP CENTRAL INDEX KEY: 0000083125 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 221737915 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06729 FILM NUMBER: 1719485 BUSINESS ADDRESS: STREET 1: 328 NEWMAN SPRINGS RD STREET 2: PKWY 109 OFFICE CTR CITY: RED BANK STATE: NJ ZIP: 07701 BUSINESS PHONE: 7328424700 MAIL ADDRESS: STREET 1: 328 NEWMAN SPRINGS RD STREET 2: PKWY 109 OFFICE CTR CITY: RED BANK STATE: NJ ZIP: 07701 FORMER COMPANY: FORMER CONFORMED NAME: MCC PRESIDENTIAL INC DATE OF NAME CHANGE: 19871203 FORMER COMPANY: FORMER CONFORMED NAME: PRESIDENTIAL APARTMENTS INC DATE OF NAME CHANGE: 19740327 FORMER COMPANY: FORMER CONFORMED NAME: RENAULT WINERY INC DATE OF NAME CHANGE: 19740725 10-Q 1 edgar10qjune30.txt FORM 10-Q FOR QUARTER ENDED 6/30/01 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 June 30, 2001 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 ------------------------ - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. 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 --- --- 8,747,485 Common Shares, no par value, were outstanding as of August 20, 2001. Page 1 of 11 FIRST MONTAUK FINANCIAL CORP. FORM 10-Q JUNE 30, 2001 INDEX Page PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Consolidated Statements of Financial Condition as of June 30, 2001 and December 31, 2000 .................. 3 Consolidated Statements of Income for the Six Months Ended June 30, 2001 and 2000 .................... 4 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and 2000 .................... 5 Notes to Financial Statements .............................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .................. 7-9 PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security-Holders ... 10 Item 5. Other Information...................................... 10 Item 6. Exhibits and Reports on Form 8-K....................... 10 Signatures ..................................................... 11 FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30 December 31, 2001 2000 ASSETS Cash and cash equivalents $ 1,624,361 $ 3,701,010 Due from clearing firms 3,276,719 2,405,666 Commissions receivable 12,529 39,200 Trading and investment account securities 3,537,778 3,975,309 Employee and broker receivables 1,967,858 1,609,666 Global leases receivable 37,991 174,661 Notes receivable - 18,000 Due from officers 205,885 175,068 Property and equipment - net 2,053,044 2,304,533 Deferred income taxes - net 2,440,258 1,721,262 Other assets 1,087,554 788,688 ----------- ----------- Total assets $ 16,243,977 $ 16,913,063 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deferred income $ 3,733,333 $ 3,933,333 Securities sold, but not yet purchased, at market 932,915 386,459 Notes payable 388,563 559,179 Commissions payable 2,746,183 1,637,733 Accounts payable 413,359 450,974 Accrued expenses 841,379 840,578 Income taxes payable 7,111 875,786 Other liabilities 903,453 519,630 ----------- ------------ Total liabilities 9,966,296 9,203,672 ----------- ------------ Temporary equity - stock subject to redemption 6,500 6,500 Commitments and contingencies (See Notes) Stockholders' equity Preferred Stock, 4,375,000 shares authorized, $.10 par value, no shares issued and outstanding respectively; stated at liquidation value - - Series A Convertible Preferred Stock, 625,000 shares authorized, $.10 par value, 349,511 shares issued and outstanding, respectively; liquidation preference: $1,655,950 33,119 34,951 Common Stock, no par value, 30,000,000 shares authorized,8,859,035 and 9,309,309 shares issued, 8,747,485 and 8,822,409 outstanding, respectively 3,507,674 4,063,397 Additional paid-in capital 4,173,221 4,253,765 Retained earnings (accumulated deficit) (1,219,957) 230,921 Less: Deferred compensation (204,824) (393,120) Less: Treasury stock (18,052) (487,023) ------------- ------------ Total stockholders' equity 6,271,181 7,702,891 ------------- ------------ Total liabilities and stockholders' equity $ 16,243,977 $ 16,913,063 ============= ============ See notes to financial statements.
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) Six months ended June 30, Three months ended June 30, 2001 2000 2001 2000 Revenues: Commissions $ 19,883,033 $ 27,642,745 $ 11,113,406 $ 10,678,167 Principal transactions 4,002,077 6,804,621 2,200,622 1,367,369 Investment banking 357,509 1,778,826 322,262 547,649 Interest and other income 2,078,465 1,606,974 972,247 753,075 ------------ ------------ ----------- ------------ 26,321,084 37,833,166 14,608,537 13,346,260 ------------ ------------ ----------- ------------ Expenses: Commissions, employee compensation and benefits 21,532,140 27,645,742 12,012,905 10,063,240 Clearing and floor brokerage 1,704,312 2,399,675 846,481 1,004,545 Communications and occupancy 1,456,014 1,481,633 778,114 770,076 Legal matters and related costs 776,943 322,860 428,318 90,355 Other operating expenses 2,887,129 2,505,633 1,662,845 1,146,991 Interest 74,909 114,456 33,169 66,512 ------------ ------------ ----------- ------------ 28,431,447 34,469,999 15,761,832 13,141,719 ------------ ------------ ----------- ------------ Income (loss) before income taxes (income tax benefit) (2,110,363) 3,363,167 (1,153,295) 204,541 Income taxes (income tax benefit) (707,790) 1,331,000 (370,174) 60,694 ------------ ------------ ----------- ------------ Net income (loss) before extraordinary items (1,402,573) 2,032,167 (783,121) 143,847 Extraordinary loss-extinguishment of debt, net of tax - (34,200) - (34,200) ------------ ------------ ----------- ------------ Net income (loss) $ (1,402,573) $ 1,997,967 (783,121) 109,647 ============ ============ =========== ============ Net income (loss) applicable to common stockholders $ (1,450,878) $ 1,946,888 (807,961) 84,107 ============ ============ =========== ============ Per share of Common Stock: Basic: Before extraordinary loss $ (0.17) $ 0.20 (0.09) 0.01 Extraordinary loss - - ------------ ------------ ----------- ------------ Net income $ (0.17) 0.20 (0.09) 0.01 ============ ============ =========== ============ Diluted: Before extraordinary loss $ (0.17) $ 0.18 (0.09) 0.01 Extraordinary loss - - ------------ ------------ ----------- ------------ Net income $ (0.17) $ 0.18 (0.09) 0.01 ============ ============ =========== ============ Number of common shares used in basic income (loss) per share 8,775,042 9,644,264 8,770,064 10,005,903 ============ ============ =========== ============ Number of common shares used in diluted income (loss) per share 8,775,042 11,405,344 8,770,064 11,612,328 ============ ============ =========== ============ See notes to financial statements.
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30, 2001 2000 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash flows from operating activities: Net income (loss) $ (1,402,573) $ 1,997,967 ------------- ------------ Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 313,727 311,564 Amortization 122,334 122,506 Reserves and allowances 200,000 149,640 Increase (decrease) in cash attributable to changes in assets and liabilities Due from clearing firms (871,053) 5,307,892 Trading and investment account securities 437,531 (2,268,143) Commissions receivable 26,671 287,153 Due from officers (30,817) 2,148 Employee and broker receivables (358,192) (564,849) Deferred income taxes (718,996) (185,628) Other assets (298,866) 163,637 Deferred income (200,000) - Securities sold but not yet purchased 546,456 201,921 Commissions payable 1,108,450 (1,134,093) Accounts payable (37,614) 120,982 Accrued expenses 801 215,077 Income taxes payable (868,675) 941,430 Other liabilities (214,871) (112,712) ------------- ------------ Total adjustments (843,114) 3,558,525 ------------- ------------- Net cash provided by (used in) operating activities (2,245,687) 5,556,492 ------------- ------------- Cash flows from investing activities: Collection of notes receivable 18,000 2,007 Collection of Global leases receivable 136,670 374,562 Additions to property and equipment (179,347) (643,095) Dispositions of property and equipment - 12,851 ------------- -------------- Net cash used in investing activities (24,677) (253,675) ------------- -------------- Cash flows from financing activities: Payment of notes payable (181,415) (699,981) Payment of subordinated notes payable - (50,000) Proceeds from capital lease financing 606,195 - Payments of capital lease (94,176) (59,925) Exercise of stock options - 20,720 Payments toward purchase of treasury stock (88,584) (742,039) Payments of preferred stock dividends (48,305) (51,078) ------------- ---------------- Net cash provided by (used in) financing activities (193,715) (1,582,303) ------------- ---------------- Net decrease in cash and cash equivalents (2,076,649) 3,720,514 Cash and cash equivalents at beginning of period 3,701,010 686,980 ------------- ---------------- Cash and cash equivalents at end of period 1,624,361 4,407,494 ============= ================ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 74,909 $ 82,794 ============= ================ Income taxes $ 894,331 $ 2,952 ============= ================ Property and equipment financed under capital leases $ 662,290 $ - ============= ================ See notes to financial statements.
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 June 30, 2001 and 2000. 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, 2000, as filed with the Securities and Exchange Commission on Form 10-K. The results reflected for the six-month and three-month periods ended June 30, 2001 are not necessarily indicative of the results for the entire fiscal year to end on December 31, 2001. 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 stock options and the deemed conversion of preferred stock and convertible debt. NOTE 3 - SHARE REPURCHASE During the six months ended June 30, 2001, the Company repurchased 114,550 shares of its common stock for $88,584 under a share repurchase program authorized by the board of directors. NOTE 4 - PREFERRED STOCK During the six months ended June 30, 2001, a total of 18,321 shares of Series A Preferred Stock were converted into 36,642 shares of common stock. NOTE 5 - SALE/LEASEBACK During the six months ended June 30, 2001, the Company entered into two capital leases under a sale/leaseback arrangement with a leasing company. The transactions resulted in a gain of approximately $45,000, which has been deferred and will amortized over the related lease terms. The leases, totaling $662,000, are together payable in 36 monthly installments of $21,000 and an additional 12 installments of $3,900. NOTE 6 - AMENDED AND RESTATED FISERV FINANCIAL AGREEMENT In May 2000, the Company's broker-dealer subsidiary ("FMSC") entered into a ten year clearing agreement with Fiserv Securities, Inc. ("Fiserv"). In connection with the clearing agreement, FMSC and Fiserv also entered into a financial agreement under which Fiserv was to provide cash advances to FMSC under certain terms and conditions. Upon the conversion of FMSC's accounts to Fiserv in November 2000, it received the initial cash advance of $4,000,000. As of February 1, 2001, the Company and FMSC amended and restated the financial agreement with Fiserv. Under the restated terms, the Company, rather than FMSC, will be the recipient of any additional cash advances payable under the financial agreement. The Company has further assumed FMSC's obligation with respect to the initial payment received in November 2000, and will be solely responsible for any performance and early termination penalties. In consideration of FMSC's release from its obligations under the financial agreement and to secure Fiserv's interest, the Company has granted to Fiserv a first priority lien in all of the outstanding shares of FMSC that it owns. NOTE 7 - SUBSEQUENT EVENT - LEGAL SETTLEMENT Subsequent to the quarter ended June 30, 2001, the Company resolved a previously disclosed customer claim in which the customer sought damages in excess of $19 million. The settlement is not anticipated to have a material affect on the Company's financial condition, operations or cash flows. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended June 30, 2001 (The "2001 Period") vs. June 30, 2000 (The "2000 Period") The financial markets continued to reflect the economic uncertainty and decline in investor confidence during the second quarter of 2001. Corporate earnings did not meet Wall Street expectations and unemployment continued to rise as investors remained skeptical of the stock market. Notwithstanding these negative indicators, the Company's revenues increased by $1,262,000, to $14,609,000 during the 2001 period. The Company's chief source of revenue is from commissions generated on listed and over-the-counter securities and other agency transactions. These revenues decreased to $5,443,000 (37% of total revenues) during 2001, from $6,545,000 (49% of total revenues) during the 2000 period. Commission revenues from the sale of mutual funds, insurance products, and fees from managed accounts increased by $1,732,000, to $5,253,000, (36% of total revenues) for the 2001 period from $3,520,000 (26% of total revenues) for 2000. The increase in this category is primarily attributable to $2,425,000 in commissions from the sale of variable annuities. Insurance commissions are expected to return to historic levels in subsequent periods. Revenues from mutual funds declined during the 2001 period, to $1,602,000, from $2,297,000 during the 2000 period. Gains from proprietary trading and market-making activities increased 61%, or $833,000, over the 2000 period. A large part of this increase is the net change in the unrealized profit on securities held in the Company's proprietary trading accounts. Investment banking revenues decreased during the 2001 period by $225,000, or 41%, to $322,000, when compared with the 2000 period. This reflects the continued decline of new offerings coming to the market in which the Company participates. The Company has hired a new Director of Corporate Finance to bring new sources of corporate finance opportunities to the Company. These efforts have generated $202,000, of the total $322,000, of investment banking fees during the 2001 period. Compensation and benefits increased during the 2001 period from $10,063,000 to $12,013,000, an increase of 19%. Commission expense was the biggest contributor to this increase. Commission expense increased by $1,373,000 (67% of total revenues) to $9,734,000, as compared to $8,361,000 (63% of total revenues) in the 2000 period. The percentage increase in commission payout is primarily attributable to insurance revenues representing a larger portion of total revenues as compared to the same period of 2000. The payout percentage for these products is typically higher than the percentage payout for other products. The other expenses in this category include salaries, payroll taxes and fringe benefits for salaried employees. Employee compensation and employee benefits increased $576,000, or 25%, to $2,278,000 in the 2001 period as compared to $1,702,000 in the 2000 period. Continuing the hiring practice that began during the first quarter of 2001, the Company has increased its support staff primarily in sales and business development. The Company has benefited from this increase with the addition of approximately 145 registered representatives during 2001. These new reps have generated approximately $1,200,000 of the total commissions generated during the 2001 period. By the same token, the Company is also evaluating reductions in this category in light of declines in revenues and trading volume. Clearing costs decreased during the 2001 period. This cost, which is directly associated with the level of transaction volume, decreased by $158,000 to $879,000 (6% of total revenues) from $1,004,000 (8% of total revenues) during the 2000 period. These clearing costs can and do fluctuate depending upon the product mix. Some transactions, such as options and bonds, have a higher execution and clearing cost than mutual funds and insurance. Communications and occupancy costs were $778,000 (5% of total revenues) for the 2001 period as compared to $770,000 (5% of total revenues) for the 1999 period. The Company expects this category to increase as a result of the two new leases for branch offices in Boca Raton, Florida and New York City entered into in 2001. Other operating expenses increased by $516,000 to $1,663,000 (11% of total revenues) during the 2001 period when compared to the 2000 period. The increase is due primarily to higher customer and broker bad debt reserves. Legal fees and related settlements of arbitrations or suits increased to $428,000 from $90,000, an increase of $338,000 over the same period for the prior year. During the quarter ended June 30, 2001, several legal matters were resolved or settled resulting in the payment or accrual of claims. The Company is currently a respondent in various customer arbitrations and lawsuits arising in the normal course of its securities business; however, none of these claims is expected to have a material impact on its financial condition or operating results. The effective income tax rates for the six months ended June 30, 2001 and 2000 were (33.5%) and 39.58%, respectively. The lower effective rate in the 2001 period resulted primarily from the establishment of valuation allowances against deferred tax assets relating to stock-based compensation. These reserves partially offset the benefits of net operating losses incurred in 2001 to date. For the 2001 period, the Company reported a net loss of $808,000, or ($.09) per basic and diluted share, as compared to a net income of $84,000, or $.01 per basic and diluted share for the 2000 period. Liquidity and Capital Resources The Company maintains a highly liquid balance sheet with more than 50% of the Company's assets consisting of cash and cash equivalents, securities owned, and receivables from the Company's clearing firm and other brokers-dealers. Market-making and other securities dealer activities require the Company to carry significant levels of securities inventories in order to meet customer and internal trading needs. Accordingly, the Company's liquidity can and does fluctuate significantly from day to day, depending largely upon general economic and market conditions, daily trading activity, customer demand 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. Net cash used in operating activities for the six months was $2,226,000. The net loss of $1,403,000, as well as an increase in the amount owed by the clearing firm of $871,000 and deferred income taxes of $719,000, contributed to the decrease. The increase in commissions' payable of $1,108,000 was an offsetting factor. Investing activities used cash of $25,000 over the last six months. Additions to capital assets of $179,000 were partially offset by collections of notes and global lease receivables of $155,000. The Company projects additional investments in technology to be approximately $200,000 for the remainder of fiscal 2001. Financing activities provided cash of $194,000 during the first six months of 2001. A total of $606,000 of proceeds was received from capital lease financing. This was offset by notes and capital lease repayments of $276,000 and dividend payments to preferred shareholders of $48,000. A total of $89,000 was used to repurchase 114,550 of the Company's outstanding shares pursuant to a stock repurchase program. In May 2000, the Company's broker-dealer subsidiary ("FMSC") entered into a 10-year clearing agreement with Fiserv Securities, Inc. ("Fiserv"). In connection with the clearing agreement, FMSC and Fiserv also entered into a financial agreement under which Fiserv was to provide cash advances to FMSC under certain terms and conditions. Upon the conversion of FMSC's accounts to Fiserv in November 2000, it received the initial cash advance of $4,000,000. As of February 1, 2001, the Company and FMSC amended and restated the financial agreement with Fiserv. Under the restated terms, the Company, rather than FMSC, will be the recipient of any additional cash advances payable under the financial agreement. It is anticipated that the Company will receive an additional cash advance of $1,250,000 in November 2001, provided the Company achieves certain performance criteria and subject to certain other conditions. The Company has further assumed FMSC's obligation with respect to the initial payment received in November 2000, and will be solely responsible for any performance and early termination penalties. Subsequent to the quarter ended June 30, 2001, the Company resolved a previously disclosed customer claim in which the customer sought damages in excess of $19 million. The settlement is not anticipated to have a material affect on the Company's financial condition, operations or cash flows. Management believes that operating income, along with the anticipated cash advance from Fiserv, will satisfy the Company's liquidity needs, at least through the current fiscal year. Factors Affecting "Forward-Looking Statements" From time to time, the Company may publish "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements which could affect the cost of doing business, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international, (vii) changes in the rate of inflation and related impact on securities markets, (viii) competition from existing financial institutions and other new participants in competition from existing financial institutions and other new participants in the securities markets, (ix) legal developments affecting the litigation experience of the securities industry, and (x) changes in federal and state tax laws which could affect the popularity of products sold by the Company. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. The reader is referred to the Company's previous filings on Form 10-Q for the period ended March 31, 2001 and the Form 10-K for the year ended December 31, 2000. PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders. At the Company's Annual Meeting of Shareholders on June 22, 2001, shareholders holding a majority of the voting shares approved the following: 1) A majority of votes entitled to vote elected the following Class II Directors to serve for a term of 3 years to the Board of Directors: Class II Votes Cast For Withhold Authority to Vote -------- -------------- -------------------------- Norma Doxey 6,440,275 16,000 Barry D. Shapiro 6,435,475 16,000 Item 5. Other Information. During the quarter ended June 30, 2001, the Company repurchased 40,400 shares of its common stock for $17,747.70 under a share repurchase program authorized in 1999. 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. 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: August 20, 2001 /s/ William J. Kurinsky ------------------------------- William J. Kurinsky Secretary/Treasurer Chief Financial Officer and Principal Accounting Officer /s/ Herbert Kurinsky ------------------------------- Herbert Kurinsky President First Montauk Financial Corp. Computation of Earnings Per Share Six months ended June 30, Three months ended June 30, 2001 2000 2001 2000 Numerator: Basic: Income (loss) before extraordinary loss $(1,402,573) $ 2,032,167 $ (783,121) $ 143,847 Extraordinary loss - (34,200) - (34,200) ----------- ------------ -------------- ------------- Net income (loss) (1,402,573) 1,997,967 (783,121) 109,647 Deductions: Preferred stock dividends (48,305) (51,079) (24,840) (25,540) ----------- ------------ -------------- ------------- Net income (loss) for basic computation $(1,450,878) $ 1,946,888 $ (807,961) $ 84,107 =========== ============ ============== ============= Diluted: Net income (loss) for basic computation $(1,450,878) $ 1,946,888 $ (807,961) $ 84,107 Additions: Preferred stock dividends - 51,079 - 25,540 Interest on convertible debt, net of taxes - 21,595 - 7,549 ----------- ------------ -------------- ------------- Net income (loss) for diluted computation $(1,450,878) $ 2,019,562 $ (807,961) $ 117,196 =========== ============ ============== ============= Denominator: Basic: Weighted average common shares outstanding 8,775,042 9,644,264 8,770,064 10,005,903 =========== ============ ============== ============= Diluted: Weighted average common shares outstanding-basic 8,775,042 9,644,264 8,770,064 10,005,903 Additions: Incremental shares from assumed conversion of stock options and warrants using the treasury stock method - 463,463 - 435,473 Incremental shares from assumed conversion of convertible debt and preferred stock using the if-converted method - 1,297,617 - 1,170,952 ----------- ------------ -------------- -------------- Weighted average common and common equivalent shares outstanding-diluted 8,775,042 11,405,344 8,770,064 11,612,328 =========== ============ ============== ============== Per share: Basic: Before extraordinary loss $ (.17) 0.20 $ (.09) $ 0.01 Extraordinary loss - - - - ----------- ------------ -------------- -------------- Net income (loss) $ (.17) $ 0.20 $ (.09) $ 0.01 =========== ============ ============== ============== Diluted Before extraordinary loss $ (.17) $ 0.18 $ (.09) $ 0.01 Extraordinary loss - - - - ----------- ------------ -------------- -------------- Net income (loss) $ (.17) $ 0.18 $ (.09) $ 0.01 =========== ============ ============== ==============
-----END PRIVACY-ENHANCED MESSAGE-----