FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 25, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition from to period
Commission file number 1-9109
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RAYMOND JAMES FINANCIAL, INC.
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(Exact name of registrant as specified in its charter)
Florida No. 59-1517485
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
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(Address of principal executive offices) (Zip Code)
(727) 573-3800
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(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 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 the number of shares outstanding of each of the registrant's classes
of common stock, as of the close of the latest practicable date.
47,335,329 shares of Common Stock as of August 2, 1999
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
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Form 10-Q for the Quarter Ended June 25, 1999
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INDEX
PART I. FINANCIAL INFORMATION PAGE
---------------------
Item 1. Financial Statements
Consolidated Statement of Financial Condition as of
June 25, 1999 (unaudited) and September 25, 1998 2
Consolidated Statement of Operations (unaudited) for the
three and nine month periods ended June 25, 1999 and
June 26, 1998 3
Consolidated Statement of Cash Flows (unaudited) for the
nine months ended June 25, 1999 and June 26, 1998 4
Notes to Consolidated Financial Statements (unaudited) 5
Item 2. Management's Financial Discussion and Analysis 7
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Computation of Earnings Per Share 10
Exhibit 27: Financial Data Schedule - EDGAR version only
(filed electronically)
(b) Reports on Form 8-K: None
All other items required in Part II have been previously filed or
are not applicable for the quarter ended June 25, 1999.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
---------------------------------------------
(in thousands, except share amounts)
June 25, September 25,
1999 1998
----------- -------------
(Unaudited)
ASSETS
- ------
Cash and cash equivalents $ 276,740 $ 296,817
Assets segregated pursuant to Federal Regulations:
Cash and cash equivalents - 1
Securities purchased under agreements to resell 981,357 946,723
Securities owned:
Trading and investment account securities 197,996 105,892
Available for sale securities 348,981 385,676
Receivables:
Clients, net 1,399,888 893,839
Stock borrowed 1,399,304 852,744
Brokers, dealers and clearing organizations 59,652 112,838
Other 62,995 62,722
Investment in leveraged leases 23,823 23,297
Property and equipment, net 89,190 81,372
Deferred income taxes, net 37,729 32,841
Deposits with clearing organizations 26,532 21,206
Intangible assets 35,487 817
Prepaid expenses and other assets 56,847 35,952
----------- -----------
$4,996,521 $3,852,737
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Loans payable $ 229,617 $ 44,767
Payables:
Clients 2,384,689 2,126,699
Stock loaned 1,479,628 828,102
Brokers, dealers and clearing organizations 32,366 43,227
Trade and other 118,182 99,690
Trading account securities sold but not yet
purchased 50,730 30,841
Accrued compensation and commissions 150,944 158,539
Income taxes payable 8,806 10,974
----------- -----------
4,454,962 3,342,839
=========== ===========
Commitments and contingencies - -
Shareholders' equity:
Preferred stock; $.10 par value; authorized
10,000,000 shares; issued and outstanding
-0- shares - -
Common stock; $.01 par value; authorized
100,000,000 shares; issued 48,997,995 shares 490 490
Additional paid-in capital 57,615 57,777
Accumulated other comprehensive income:
Unrealized gain (loss) on securities
available for sale, net of deferred taxes (690) 114
Retained earnings 511,947 459,099
----------- -----------
569,362 517,480
Less: 1,672,848 and 730,118 common shares
in treasury, at cost (27,803) (7,582)
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541,559 509,898
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$4,996,521 $3,852,737
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See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
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(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------ ------------------
June 25, June 26, June 25, June 26,
1999 1998 1999 1998
-------- -------- -------- --------
Revenues:
Securities commissions and fees $203,568 $162,981 $553,157 $465,471
Investment banking 18,971 22,892 46,320 82,501
Investment advisory fees 23,189 22,947 66,416 56,944
Interest 58,104 51,693 162,933 146,489
Correspondent clearing 1,242 1,078 3,527 3,297
Net trading profits 4,771 697 15,263 5,606
Financial service fees 11,117 7,587 29,512 20,949
Other 3,428 5,916 10,960 14,376
-------- -------- -------- --------
Total revenues 324,390 275,791 888,088 795,633
-------- -------- -------- --------
Expenses:
Employee compensation and benefits 201,542 166,288 545,566 477,941
Communications and
information processing 13,080 11,369 37,453 31,971
Occupancy and equipment 9,631 8,441 28,876 23,875
Clearing and floor brokerage 4,015 2,865 10,142 8,661
Interest 37,988 33,465 107,505 94,152
Business development 9,364 8,393 28,082 23,014
Other 10,781 8,629 28,819 22,257
-------- -------- -------- --------
Total expenses 286,401 239,450 786,443 681,871
-------- -------- -------- --------
Income before provision for
income taxes 37,989 36,341 101,645 113,762
Provision for income taxes 14,499 13,550 38,807 43,526
-------- -------- -------- --------
Net income $ 23,490 $ 22,791 $ 62,838 $ 70,236
======== ======== ======== ========
Net income per share-basic $ .50 $ .47 $ 1.32 $ 1.46
======== ======== ======== ========
Net income per share-diluted $ .49 $ .46 $ 1.30 $ 1.41
======== ======== ======== ========
Cash dividends declared per
common share $ .07 $ .06 $ .21 $ .18
======== ======== ======== ========
Weighted average common shares
outstanding-basic 47,278 48,351 47,698 48,086
======== ======== ======== ========
Weighted average common and common
equivalent shares outstanding
-diluted 48,084 49,954 48,566 49,889
======== ======== ======== ========
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENT OF CASH FLOWS
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(UNAUDITED)
(in thousands)
Nine Months Ended
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June 25, June 26,
1999 1998
----------- -----------
Cash flows from operating activities:
Net income $ 62,838 $ 70,236
Adjustments to reconcile net income ----------- -----------
to net cash provided by operating
activities:
Depreciation and amortization 13,998 11,641
(Increase) decrease in assets:
Available for sale investments 36,695 (30,455)
Deposits with clearing organizations (5,326) 1,241
Receivables:
Clients, net (506,049) (197,756)
Stock borrowed (546,560) (205,360)
Brokers, dealers and clearing organizations 53,186 (3,336)
Other (273) (572)
Trading account securities, net (72,215) (18,377)
Deferred income taxes (4,888) (6,230)
Prepaid expenses and other assets (56,091) (3,597)
Increase (decrease) in liabilities:
Payables:
Clients 257,990 330,524
Stock loaned 651,526 186,631
Brokers, dealers and clearing organizations (10,861) 97
Trade and other 18,492 6,340
Accrued compensation (7,595) (10,277)
Income taxes payable (2,168) (10,081)
----------- ------------
Total adjustments (180,139) 50,433
----------- ------------
Net cash (used in) provided by
operating activities (117,301) 120,669
----------- ------------
Cash flows from investing activities:
Additions to property and equipment, net (21,816) (47,435)
----------- ------------
Cash flows from financing activities:
Borrowings from banks and financial institutions 291,285 73,000
Repayments on loans (106,435) (14,355)
Exercise of stock options and employee stock
purchases 6,264 8,736
Purchase of treasury stock (27,149) -
Proceeds from other capital stock transactions 502 -
Cash in lieu of fractional shares - (15)
Cash dividends on common stock (9,990) (8,675)
Unrealized (loss) on securities
available for sale, net (803) (124)
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Net cash provided by financing activities 153,673 58,567
----------- -----------
Net increase in cash and cash equivalents 14,556 131,801
Cash and cash equivalents at beginning of period 1,243,541 888,780
----------- -----------
Cash and cash equivalents at end of period $1,258,097 $1,020,581
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 103,665 $ 58,199
=========== ===========
Cash paid for taxes $ 45,863 $ 59,837
=========== ===========
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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June 25, 1999
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Basis of Consolidation
The consolidated financial statements include the accounts of Raymond
James Financial, Inc. and its consolidated subsidiaries (the "Company"). All
material intercompany balances and transactions have been eliminated in
consolidation. These statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for the
interim periods presented. All such adjustments made are of a normal,
recurring nature. The nature of the Company's business is such that the
results of any interim period are not necessarily indicative of results for a
full year.
On May 28, 1999, the Company purchased Roney & Co., a wholly-owned broker-
dealer subsidiary of Bank One Corporation for $70 million and the assumption of
approximately $10 million in deferred compensation liabilities. The results of
Roney & Co. for the month ended June 25, 1999 are included in the Company's
consolidated financial statements for the current quarter.
Commitments and Contingencies
The Company has committed to lend to, or guarantee other debt for, Raymond
James Tax Credit Funds, Inc. ("RJTCF") up to $25 million upon request. RJTCF,
a wholly-owned subsidiary of the Company, is a sponsor of limited partnerships
qualifying for low income housing tax credits. The borrowings are secured by
properties under development. The commitment expires in November 1999, at
which time any outstanding balances will be due and payable. At June 25, 1999,
there were loans of $6,226,654 and guarantees of $1,530,800 outstanding.
The Company has guaranteed lines of credit for their various foreign joint
ventures as follows: 2 lines of credit totaling $6 million in Turkey, 2 lines
of credit not to exceed $5 million in Argentina and a $5 million line of credit
in India.
The Company is a defendant or co-defendant in various lawsuits incidental
to its securities business. The Company is contesting the allegations in these
cases and believes that there are meritorious defenses in each of these
lawsuits. In view of the number and diversity of claims against the Company,
the number of jurisdictions in which litigation is pending and the inherent
difficulty of predicting the outcome of litigation and other claims, the
Company cannot state with certainty what the eventual outcome of pending
litigation or other claims will be. In the opinion of management, based on
discussions with counsel, the outcome of these matters will not result in a
material adverse effect on the financial position or results of operations.
The Securities and Exchange Commission, the Internal Revenue Service and
the National Association of Securities Dealers, Inc. continue their
investigation with respect to the mark-ups charged by investment banking firms
for securities purchased by municipalities in connection with advance refunding
transactions. Along with other participants, the Company continues to
cooperate in this investigation and does not anticipate that the resolution
will have a material effect on its business or operations.
Capital Transactions
The Company's Board of Directors has, from time to time, adopted
resolutions authorizing the Company to repurchase its common stock for the
funding of its incentive stock option and stock purchase plans and other
corporate purposes. As of June 25, 1999, management has Board authorization to
purchase up to 2,500,000 shares.
At their meeting on May 20, 1999, the Board of Directors of the Company
declared
a quarterly cash dividend of $.07 per share.
Net Capital Requirements
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-under the Securities Exchange Act of 1934. This rule
requires that aggregate indebtedness, as defined, shall not exceed fifteen
times net capital, as defined. Rule 15c3-1 also provides for an "alternative
net capital requirement" which, if elected, requires that net capital be equal
to the greater of $250,000 or two percent of aggregate debit items computed in
applying the formula for determination of reserve requirements. The New York
Stock Exchange may require a member organization to reduce its business if its
net capital is less than four percent of aggregate debit items and may prohibit
a member firm from expanding its business and declaring cash dividends if its
net capital is less than five percent of aggregate debit items. The net
capital positions of the Company's broker-dealer subsidiaries at June 25, 1999
were as follows (dollar amounts in thousands):
Raymond James & Associates, Inc.:
---------------------------------
(alternative method elected)
Net capital as a percent of aggregate debit items 16.97%
Net capital $194,425
Required net capital $22,914
Raymond James Financial Services, Inc.:
---------------------------------------
Ratio of aggregate indebtedness to net capital 110%
Net capital $21,513
Required net capital $1,585
Roney & Co.:
------------
(alternative method elected)
Net capital as a percent of aggregate debit items 12.74%
Net capital $27,009
Required net capital $4,239
Comprehensive Income
Total comprehensive income for the three and nine months ended June 25,
1999 and June 26, 1998 is as follows (in thousands):
Three Months Ended Nine Months Ended
------------------- -------------------
June 25, June 26, June 25, June 26,
1999 1998 1999 1998
-------- -------- -------- --------
Net income $23,490 $22,791 $62,838 $70,236
Other comprehensive income:
Unrealized gains on securities (438) (110) (804) (125)
-------- -------- -------- --------
Total comprehensive income $23,052 $22,681 $62,034 $70,111
======== ======== ======== ========
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
(Any statements containing forward looking information should be read in
conjunction with Management's Discussion and Analysis of Results of Operations
and Financial Condition in the Company's Annual Report on Form 10-K for the
year ended September 25, 1998).
Results of Operations - Three months ended June 25, 1999 compared with
- --------------------- three months ended June 26, 1998.
Revenues in the third quarter increased to a record high of $324,390,000,
an 18% increase over revenues of $275,791,000 in the comparable quarter last
year. Net income was $23,490,000, a 3% increase from $22,791,000 in 1998. The
prior year's quarter included the impact of the sale of the RJ Properties real
estate portfolio management operations, which contributed $2.7 million to net
income. Exclusive of this transaction, net income rose 17%, commensurate with
the growth in revenues. The inclusion of one month's operations of Roney & Co.
added $8.7 million to revenues, but had a nominal impact on earnings.
Active equity markets led to record quarterly transaction volume and
resultant commission revenues, with the latter increasing 25% over last year's
quarter. A 12% increase in the number of Financial Advisors (excluding the
addition of 328 brokers from the Roney acquisition) was complemented by
increased productivity to achieve the overall increase.
Although underwriting activity has increased over the past several
quarters, it has not yet returned to the levels we experienced in the previous
two years. This quarter's investment banking revenues were 17% below the same
quarter in the prior year. The Company managed or co-managed 11 deals raising
$1.2 billion vs. 17 deals raising $1.6 billion in the quarter ended June 1998.
Somewhat offsetting the lower underwriting fees and commissions, merger &
acquisition fees were up substantially from the same quarter in the prior year.
Excluding the prior year's recognition of $3.8 million of performance fees
related to the sale of RJ Properties' real estate portfolio management
operations, investment advisory fees have increased 21% as a result of
increased assets under management.
June 25, June 26, % Increase
1999 1998 (Decrease)
----------- ----------- ----------
Assets Under Management (000's):
Eagle Asset Management, Inc. $ 5,489,370 $ 5,237,693 5%
Heritage Family of Mutual Funds 4,617,771 3,740,000 23%
Investment Advisory Services 2,974,235 1,861,430 60%
Awad Asset Management 626,467 828,453 (24%)
----------- -----------
Total Financial Assets Under
Management $13,707,843 $11,667,576 17%
=========== ===========
Net interest income of $20.1 million established a quarterly record and
was 10% higher than the prior year quarter. Growth in customer deposit and
margin loan balances continue to account for most of the increase.
The increase in principal trading profits reflects a return to more
normalized results as compared to the aberrationally poor results, primarily in
OTC equity trading, in the quarter ended June 1998.
Financial service fees continue to increase with the growth in the number
of accounts which generate administrative or transaction fees for the Company
such as IRA annual account fees, transaction fees in Passport (wrap fee)
accounts, and money market distribution fees.
Other revenues in the prior year quarter included $1.7 million from the
sale of certain assets in conjunction with the aforementioned disposition of RJ
Properties' real estate portfolio and property management operations.
The largest portion of the increase in employee compensation continues to
be in Financial Advisor compensation, a direct result of increased securities
commissions. In addition, the current year administrative and clerical
compensation has increased over 20% as support and backoffice staff have been
added to accommodate growth.
The increase in communications and information processing is the aggregate
result of several factors arising from the Company's general growth, including
increased telephone, higher postage, increased cost of market quotation
services, and computer maintenance.
Occupancy and equipment costs reflect the addition of several branch
offices, expansion of several branch offices and, most significantly, the
opening of the third tower at the Company's headquarters complex effective May
1, 1998. The latter factor increased costs by approximately $500,000 per
month.
Increased business development expenses include additional advertising for
brand recognition and recruiting purposes, travel expenses, and various costs
associated with general overall growth.
The increase in other expenses is primarily attributable to increased
legal expenses, settlements and accruals.
Results of Operations - Nine months ended June 25, 1999 compared with nine
- ----------------------- months ended June 26, 1998.
Revenues for the nine months ended June 25, 1999, were up 12% to
$888,088,000 from $795,633,000, while net income declined 11% to $62,838,000
from $70,236,000. Decreased margins are a combined result of the decline in
high margin investment banking revenues and increased administrative and
support costs.
The underlying reasons for the variances to the prior year period are
substantially the same as the comparative quarterly discussion above and the
statements contained in such foregoing discussion also apply to the nine month
comparison.
The year to date principal trading profits include profits of $4 million
in the Company's own investment accounts. Although the Company has not
invested in equity securities for its own account frequently, it did acquire
several positions, primarily in the securities industry, during the market
downturn at the beginning of the fiscal year and realized significant profits
on these positions.
Segment Information
- -------------------
The Company's reportable segments are: retail distribution, institutional
distribution, investment banking, asset management and other. Segment data
include charges allocating corporate overhead to each segment. Intersegment
revenues and charges are eliminated between segments. The Company has not
disclosed asset information by segment as the information is not produced
internally.
Information concerning operations in these segments of business is as
follows:
Three Months Ended Nine Months Ended
-------------------- --------------------
June 25, June 26, June 25, June 26,
1999 1998 1999 1998
--------- -------- --------- ---------
Revenues: (000's)
Retail distribution $226,558 $185,214 $605,410 $522,268
Institutional distribution 39,431 33,385 123,053 108,208
Investment banking 8,935 11,305 21,529 40,593
Asset management 24,196 20,829 69,096 58,765
Other 25,270 25,058 69,000 65,799
--------- -------- --------- --------
Total $324,390 $275,791 $888,088 $795,633
========= ======== ========= ========
Pre-tax Income: (000's)
Retail distribution $ 26,160 $ 18,605 $ 65,426 $ 57,623
Institutional distribution 3,071 2,360 12,809 13,615
Investment banking 1,808 3,516 1,722 16,472
Asset management 5,137 5,297 15,114 14,595
Other 1,813 6,563 6,574 11,457
--------- -------- --------- --------
Total $ 37,989 $ 36,341 $101,645 $113,762
========= ======== ========= ========
Financial Condition
- -------------------
The Company's total assets have increased 30% since fiscal year end,
reaching almost $5 billion. The rise is due to increases in matched-book stock
loan program balances, and increased customer margin loan and cash balances.
Customer cash balances are reflected as a client payable. Customer margin loan
balances are included in client receivables.
In addition to the $39 million mortgage on the corporate headquarter
complex, loans payable at June 25, 1999 includes $95 million related to short-
term borrowings under existing lines of credit in order to accommodate customer
settlement activity, $60 million to finance customer borrowing in a finance
subsidiary (which provides loans collateralized by restricted or control shares
of public companies), and $30 million to fund the acquisition of Roney & Co.
Liquidity and Capital Resources
- -------------------------------
Net cash used in operating activities for the nine months was
$117,302,000. The primary use was the aforementioned increased customer margin
loans net of increased customer cash balances.
Investing and financing activities provided a net additional $131,858,000
over the last nine months. The source of the additional cash was the short
term borrowings from banks under existing credit lines. The primary uses were
purchases of treasury stock, purchases of property and equipment (including
$2.5 million for 200,000 square feet of additional development rights at the
corporate headquarters complex), the payment of cash dividends and the purchase
of Roney and Co.
The Company has two lines of credit. The parent company has an
uncommitted, unsecured $50 million line for general corporate purposes. In
addition, a $50 million committed line has been established to finance Raymond
James Credit Corporation, a finance subsidiary which provides loans
collateralized by restricted or control shares of public companies. In
addition, Raymond James & Associates, Inc. maintains uncommitted lines of
credit aggregating $360,000,000 with commercial banks ($235,000,000 secured and
$125,000,000 unsecured).
The Company's broker-dealer subsidiaries are subject to requirements of
the Securities and Exchange Commission relating to liquidity and capital
standards (see Notes to Consolidated Financial Statements).
Year 2000
- ---------
The widespread use of computer programs that rely on two-digit date
programs to perform computations and decision-making functions may cause
computer systems to malfunction in the year 2000 and lead to significant
business delays and disruptions in the U.S. and internationally.
The Company has revised all critical information technology (IT) internal
computer code that it has identified as requiring modification for Year 2000
compliance, and has successfully tested the revised code for the transition
between December 29, 1999 and January 3, 2000; testing will continue throughout
1999. All of the Company's securities transactions are processed on software
provided by Securities Industry Software (SIS), a subsidiary of Automatic Data
Processing, Inc., and the Company is closely monitoring the progress of SIS in
revising its software. Based on information received to date, the Company
believes that SIS will complete revision and testing of its software on a
timely basis. The Company is also monitoring information received from third-
party vendors regarding their progress in modification of other software used
by the Company, as well as the progress of other industry suppliers, in
addressing this issue.
With respect to non-IT systems, primarily those located at its
headquarters campus and those provided by its telecommunications and satellite
service providers, the Company has completed the inventory of all systems and
is confirming the compliance status of its vendors. Most of these vendors are
major national or international companies which have been addressing the Year
2000 issue for some time. The Company expects to complete this process of third-
party review by August of 1999.
With the exception of those discussed below, all of the Company's
subsidiaries are substantially dependent upon the Company's Year 2000
compliance program. Raymond James Bank FSB, Raymond James Trust Company and
Heritage Asset Management, Inc. have received revised computer software from
the third-party vendors on whom they are dependent; they anticipate testing of
these systems will be completed by August of 1999. Eagle Asset Management, Inc.
has installed a new portfolio management system which has been designed to be
Year 2000 compliant and expects to complete testing of mission critical systems
by August of 1999.
The Company has developed a contingency plan for mission critical business
functions which will be evaluated and refined during the balance of the year.
The securities industry conducted a series of industry-wide tests for Year
2000 compliance between April and July, 1999; the Company participated in all
tests and did not experience any material problems relating to its year 2000
code and data revisions. In general, representatives of the securities industry
were satisfied that the tests confirmed substantial success in dealing with the
year 2000 issue. The testing process did identify a number of minor
communications problems, most of them unrelated to year 2000 issues; these
problems were identified and successfully resolved during the course of the
testing.
The Company estimates that its costs for these efforts during this fiscal
year will be approximately $2,500,000, and an additional $800,000 will be spent
during fiscal 2000. Because many of the Company's basic operating systems are
provided by third party vendors, as indicated above, the Company's costs for
Year 2000 remediation have been substantially less than the costs incurred by
companies which have developed and maintain all their own operating systems.
The impact of this problem on the securities industry will be material,
however, since virtually every aspect of the sale of securities and the
processing of transactions will be affected. Due to the enormous task facing
the securities industry, the interdependent nature of securities transactions,
and reliance on third parties such as utilities, and telecommunications
providers, the Company may be adversely affected by this problem in the Year
2000 depending on whether it and the entities with whom it does business
address this issue successfully.
Effects of Inflation
- --------------------
The Company's assets are primarily liquid in nature and are not
significantly affected by inflation. Management believes that the changes in
replacement cost of property and equipment would not materially affect
operating results. However, the rate of inflation affects the Company's
expenses, including employee compensation, communications and occupancy, which
may not be readily recoverable through charges for services provided by the
Company.
RAYMOND JAMES FINANCIAL, INC.
-----------------------------
COMPUTATION OF EARNINGS PER SHARE
---------------------------------
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
-------------------- --------------------
June 25, June 26, June 25, June 26,
1999 1998 1999 1998
-------- -------- -------- --------
Net income $23,490 $22,791 $62,838 $70,236
======= ======= ======= =======
Weighted average common
shares outstanding during
the period 47,278 48,351 47,698 48,086
Additional shares assuming
exercise of stock
options and warrants (1) 806 1,603 868 1,803
------- ------- ------- -------
Weighted average diluted common
shares 48,084 49,954 48,566 49,889
======= ======= ======= =======
Net income per share-basic $ .50 $ .47 $ 1.32 $ 1.46
======= ======= ======= =======
Net income per share-diluted $ .49 $ .46 $ 1.30 $ 1.41
======= ======= ======= =======
(1) Represents the number of shares of common stock issuable on the
exercise of dilutive employee stock options less the number of shares
of common stock which could have been purchased with the proceeds from
the exercise of such options. These purchases were assumed to have
been made at the average market price of the common stock during the
period, or that part of the period for which the option was
outstanding.
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.
RAYMOND JAMES FINANCIAL, INC.
-----------------------------
(Registrant)
Date: August 6, 1999 /s/ Thomas A. James
-------------- -----------------------------
Thomas A. James
Chairman and Chief
Executive Officer
/s/ Jeffrey P. Julien
------------------------------
Jeffrey P. Julien
Vice President - Finance
and Chief Financial
Officer