SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31,2001
Commission file number 0-14140
First Albany Companies Inc.
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 22-2655804
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 South Pearl St., Albany, NY 12207
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(Address of principal executive offices) (Zip Code)
(518) 447-8500
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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 Sections 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 (1) No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
7,510,194 Shares of Common Stock were outstanding as of the close
of business on May 8, 2001.
FIRST ALBANY COMPANIES INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
PAGE
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Financial
Condition at March 31, 2001 and
December 31,2000.. ..................................... 3
Condensed Consolidated Statements of Operations
for the Three Months Ended
March 31, 2001 and March 31, 2000 ........................... 4
Consolidated Statements of Comprehensive Income
for the Three Months Ended
March 31, 2001 and March 31, 2000.............................. 5
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended
March 31, 2001 and March 31, 2000.............................. 6
Notes to Condensed Consolidated Financial
Statements...................................................... 7-15
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................................. 16-21
Part II - Other Information
Item 1. Legal Proceedings.......................................... 22
Item 6. Exhibits and Reports on Form 8-K........................... 22-23
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
=======================================================================================
March 31,
2001 December 31,
(In thousands of dollars) (Unaudited) 2000
- ---------------------------------------------------------------------------------------
Assets
Cash $ 612 $ 689
Cash and securities segregated - 7,000
Securities purchased under agreement to resell 63,269 60,222
Securities borrowed 295,920 291,029
Receivables from:
Brokers, dealers and clearing agencies 25,967 7,070
Customers 77,717 12,325
Others 7,389 23,603
Securities owned 265,416 189,881
Investments 25,009 21,162
Office equipment and leasehold improvements,net 5,137 4,823
Other assets 25,907 28,321
- ---------------------------------------------------------------------------------------
Total assets $792,343 $646,125
=======================================================================================
Liabilities and Stockholders' Equity
Liabilities
Short-term bank loans $190,103 $127,853
Securities loaned 296,690 290,110
Payables to:
Brokers, dealers and clearing agencies 30,327 6,540
Customers 61,419 8,923
Others 46,045 17,535
Securities sold but not yet purchased 53,339 63,562
Accounts payable 2,301 3,088
Accrued compensation 15,636 28,701
Accrued expenses 16,570 19,776
Income tax payable 735 2,407
Notes payable 2,713 2,933
Obligations under capitalized leases 2,243 2,591
- ----------------------------------------------------------------------------------------
Total liabilities 718,121 574,019
- ----------------------------------------------------------------------------------------
Commitments and Contingencies
Subordinated debt 6,000 6,000
- ----------------------------------------------------------------------------------------
Stockholders' Equity
Common stock 90 89
Additional paid-in-capital 80,856 80,947
Deferred compensation 527 354
Unamortized value of restricted stock (770) (864)
Retained earnings 1,767 2,046
Less treasury stock at cost (17,044) (16,466)
Accumulated other comprehensive income (see Note 3) 2,796 -
- -----------------------------------------------------------------------------------------
Total stockholders' equity 68,222 66,106
- -----------------------------------------------------------------------------------------
Total liabilities and stockholders'equity $792,343 $646,125
=========================================================================================
See notes to the condensed consolidated financial statements.
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
=========================================================================================
Three Months Ended
(In thousands of dollars except for per share March 31, March 31,
and outstanding share amounts) 2001 2000
- -----------------------------------------------------------------------------------------
Revenues
Commissions $ 3,851 $ 4,771
Principal transactions 28,109 15,377
Investment banking 3,916 8,061
Investment (losses) gains (853) 2,163
Interest income 7,446 19,045
Fees and other 1,566 1,366
- ------------------------------------------------------------------------------------------
Total revenues 44,035 50,783
Interest expense 6,706 17,181
- ------------------------------------------------------------------------------------------
Net revenues 37,329 33,602
- ------------------------------------------------------------------------------------------
Expenses (excluding interest)
Compensation and benefits 28,960 24,407
Clearing, settlement and brokerage costs 678 798
Communications and data processing 2,531 2,248
Occupancy and depreciation 1,808 1,359
Selling 1,634 1,436
Other 1,503 1,224
- ------------------------------------------------------------------------------------------
Total expenses (excluding interest) 37,114 31,472
- ------------------------------------------------------------------------------------------
Operating income 215 2,130
- ------------------------------------------------------------------------------------------
Equity in losses of affiliates:
Loss before cumulative effect of change
in accounting principle (2,128) (597)
Cumulative effect of accounting change
for derivative financial instruments (see note 3) 2,026 -
- ------------------------------------------------------------------------------------------
Total equity in losses of affiliates (102) (597)
- ------------------------------------------------------------------------------------------
Income before income taxes 113 1,533
Income tax expense 45 657
Income from continuing operations 68 876
- ------------------------------------------------------------------------------------------
Income from discontinued operations,
net of taxes - 2,187
- ------------------------------------------------------------------------------------------
Net income $ 68 $ 3,063
==========================================================================================
Per share data:
Basic earnings:
Continued operations 0.01 0.10
Discontinued operations - 0.25
- ------------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.35
==========================================================================================
Diluted earnings:
Continued operations 0.01 0.09
Discontinued operations - 0.21
- ------------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.30
==========================================================================================
Weighted average common
and common equivalent
shares outstanding:
Basic 7,964,833 8,661,102
Dilutive 8,335,877 10,235,995
==========================================================================================
Dividend per common share outstanding $ 0.05 $ 0.05
==========================================================================================
See notes to the condensed consolidated financial statements.
FIRST ALBANY COMPANIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended
March 31, March 31,
(In thousands of dollars) 2001 2000
- --------------------------------------------------------------------------------------------
Net income $ 68 $ 3,063
Other comprehensive income:
Unrealized gain on available for sale
securities, net of tax 2,796 -
- --------------------------------------------------------------------------------------------
Total Other comprehensive income,net of tax (see note 3) 2,796 -
- --------------------------------------------------------------------------------------------
Total Comprehensive income $ 2,864 $ 3,063
============================================================================================
The unrealized gain on available for sale securities, net of tax relates to
Mechanical Technology Incorporated's ("MTI") investment in Beacon Power
(see note 3). Accumulated net unrealized gains (losses) related to
available for sale securities are recorded as other comprehensive income.
Decreases or increases in other comprehensive income are recorded as
adjustments to stockholders' equity. Since First Albany Companies Inc.
("the Company") investment in MTI is recorded under the equity method,
the Company must record its proportionate share of MTI's other comprehensive
income accordingly.
See notes to the condensed consolidated financial statements.
FIRST ALBANY COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31, March 31,
(In thousands of dollars) 2001 2000
- ----------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 68 $ 3,063
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 523 1,120
Deferred compensation 173 18
Deferred income taxes 123 (338)
Undistributed losses of affiliate 102 597
Unrealized investment losses 853 168
Realized gains on sale of investments - (2,331)
Services provided in exchange for common stock 103 502
(Increase) decrease in operating assets:
Cash and securities segregated under federal
regulations 7,000 -
Securities purchased under agreement to resell (3,047) (28,258)
Net receivables from customers (12,896) (32,865)
Securities owned, net (85,758) (250)
Other assets 248 (3,663)
Increase (decrease) in operating liabilities:
Securities loaned, net 1,689 44,632
Net payables to brokers, dealers, and clearing agencies 4,890 (483)
Net payables to others 57,096 4,523
Accounts payable and accrued expenses (17,058) (6,029)
Income taxes payable (1,672) 1,810
- ----------------------------------------------------------------------------------------------
Net cash used in operating activities (47,563) (17,784)
- ----------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of furniture, equipment,
and leaseholds, net (816) (118)
Disbursements for purchase of investments (75) (1,500)
Proceeds from sale of investments 149 2,637
- ----------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities (742) 1,019
- ----------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net proceeds of short-term bank loans 62,250 19,695
Payments on notes payable (220) (533)
Payments of obligations under capitalized leases (348) (512)
Payments for purchases of common for treasury (861) (240)
Proceeds from issuance of common stock 124 491
Net decrease from borrowing under
line-of-credit agreements (12,372) (534)
Dividends paid (345) (372)
- ----------------------------------------------------------------------------------------------
Net cash provided by financing activities 48,228 17,995
- ----------------------------------------------------------------------------------------------
(Decrease)/increase in cash (77) 1,230
Cash at beginning of the year 689 1,912
- ----------------------------------------------------------------------------------------------
Cash at end of period $ 612 $ 3,142
==============================================================================================
In 2001, the Company increased its investment in MTI by $4.9 million
and increased paid-in-capital by $2.8 million and deferred income taxes
by $2.1 million (See Note 3).
See notes to the condensed consolidated financial statements
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all normal, recurring adjustments necessary
for a fair presentation of results for such periods. The results for
any interim period are not necessarily indicative of those for the full
year. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes for the year ended December 31, 2000.
Certain amounts in the 2000 financial statements have been reclassified
to conform with the 2001 presentation.
2. Earnings Per Common Share
Basic earnings per share has been computed based upon the weighted
average number of common shares outstanding. Dilutive earnings per
share has been computed based upon the weighted average common shares
outstanding for all potentially dilutive common stock outstanding during
the reporting period. The weighted average number of common shares and
dilutive common equivalent shares were:
====================================================================================
Three Months Ended
March 31, March 31,
(In thousands, except per share amounts) 2001 2000
- -------------------------------------------------------------------------------------
Income from continuing operations $ 68 $ 876
Income from discontinued operations,
net of taxes - 2,187
- -------------------------------------------------------------------------------------
Net income $ 68 $ 3,063
- -------------------------------------------------------------------------------------
Weighted average shares
for basic earnings per share 7,965 8,661
- -------------------------------------------------------------------------------------
Effect of dilutive common
equivalent shares (stock options and stock
issuable under employee benefit plans 371 1,575
- -------------------------------------------------------------------------------------
Weighted average shares and
dilutive common equivalent shares
for dilutive earnings per share 8,336 10,236
=====================================================================================
Earnings per share data:
Basic earnings:
- -------------------------------------------------------------------------------------
Continuing operations $ 0.01 $ 0.10
Discontinued operations - 0.25
- -------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.35
=====================================================================================
Diluted earnings:
- --------------------------------------------------------------------------------------
Continuing operations $ 0.01 $ 0.09
Discontinued operations - 0.21
- --------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.30
======================================================================================
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
3. Investments
First Albany Companies Inc., the Parent Company, holds various
investments in its portfolio. Mechanical Technology Incorporated (MTI)
and META Group, Inc. are two of its major publicly traded holdings.
MTI was incorporated in 1961 and over the last five years has
strengthened its commitment to and involvement in the new energy sector.
MTI plans to implement this strategy through the internal development
and growth of businesses, the acquisition of majority stock positions in
emerging new energy companies, and strategic investments in established
new energy businesses.
MTI holds various investments that are recorded under the equity
method. The principal components of these investments are Plug Power
Inc. and SatCon Technology Corporation. Plug Power Inc. is a U.S.
designer and developer of on-site electricity generation systems
utilizing proton exchange membrane fuel cells for residential
applications, while SatCon Technology Corporation is a designer,
developer and maufacturer of high-efficiency, high-reliability and
long-lived power and energy management products to serve the distributed
power generation and power quality markets.
At March 31, 2001 the Company owned approximately 11,753,744 common
shares (33% of the shares outstanding) of MTI. Shares of MTI are traded
on the NASDAQ National Market System under the symbol MKTY. The
Company's investment in MTI is recorded under the equity method and
has a book value of approximately $20.3 million, which included goodwill
of approximately $425,000, which is being amortized over 10 years.
At March 31, 2001 the aggregate market value of the Company's shares of MTI
stock was $51.4 million. Under the equity method, the market value of MTI's
stock is not included in the calculation of the Company's investment.
The Company's equity in MTI's net loss for the three months ended
December 31, 2000 recorded on a one-quarter-delay basis was $102 thousand.
This net loss was comprised of the Company's proportionate share of MTI's
loss before the cumulative effect of a change in accounting principle of
($2.1) million and of MTI's cumulative effect of accounting change for
derivative financial instruments of $2.0 million. MTI recorded the
cumulative effect of accounting change for derivative financial instruments
upon its adoption of SFAS No. 133 ("SFAS No. 133), "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 established a new model for
accounting for derivatives and hedging activities. It requires an entity to
recognize all derivatives as either assets or liabilities in the statement
of financial position and measure these instruments at fair value regardless
of purpose or intent for holding them.
MTI's net loss for its fiscal 2001 second quarter ended March 31, 2001 was
$2.8 million. The Company's equity in MTI's net loss, recorded on a one-quarter
delay basis, was $914 thousand, which will be recorded by the Company in the
quarter ending June 30, 2001.
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
The following presents unaudited summarized financial information of
MTI at:
- ------------------------------------------------------------------------------
December 31,
(In thousands of dollars) 2000
===============================================================================
Assets $103,868
Liabilities 44,315
- -------------------------------------------------------------------------------
Shareholders' equity $ 59,553
===============================================================================
Three Months Ended
December 31,
2000
- --------------------------------------------------------------------------------
Revenues $ 1,638
================================================================================
Operating loss $(1,044)
Other expenses (1,485)
- --------------------------------------------------------------------------------
Loss before income taxes, equity in investee losses
and cumulative effect of change in accounting
principle (2,529)
Income tax benefit (982)
Equity in investee losses, net of taxes (4,872)
- --------------------------------------------------------------------------------
Loss before cumulative effect of accounting change
in accounting principle (6,419)
Cumulative effect of accounting change
for derivative financial instruments,
net of taxes 6,110
- --------------------------------------------------------------------------------
Net loss $ (309)
================================================================================
MTI's Stockholders' equity increased $14.5 million during their fiscal
quarter ended December 31, 2000. The increase was due primarily to
other comprehensive income, net of taxes from unrealized gains on
available for sale securities in Beacon Power. Beacon Power develops
and manufacturers a line of energy storage systems based on advanced
flywheel technology. Accumulated net unrealized gains (losses) related to
available for sale securities are recorded as other comprehensive income.
Decreases or increases in other comprehensive income are recorded as adjustments
to stockholders' equity. Accordingly, the Company has recorded, in the
March 31, 2001 quarter ended, its proportionate share ($4.9 million)
of this increase in MTI's equity as an increase in its investment in MTI.
The Company also recorded $2.8 million (net of deferred taxes) as other
comprehensive income in stockholders' equity as a result of this transaction.
On December 27, 2000 the Company entered into a Put and Call Option
Agreement (the "Option Agreement") with Mechanical Technology
Incorporated ("MTI"). MTI purchased the option from the Company for
$945,000. The Option Agreement was entered into to provide independent
credit support for a loan to MTI from Key Bank, N.A. (the "Loan"). The
Option Agreement provides that MTI may put 6.3 million shares of the
Plug Power Inc. common stock pledged as collateral on the Loan at $4 per
share and the Company has the right to either purchase such shares or
take an assignment of all of the bank's rights under the Loan. The
Option Agreement expires on April 27, 2001.
On April 27, 2001, subsequent to the date of this report, MTI and the
Company amended the Put and Call Agreement to extend the expiration date
to August 27, 2001 for a fee of $200,000.
In addition, the Company entered into two loan agreements with MTI
totaling approximately $6 million. The loans are secured by 1.2 million
shares of Plug Power Inc. common stock. The loans bear interest at the
prime rate (8.0% at March 31, 2001) plus 2%, and both interest and
principal are due January 3, 2002.
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
During the quarter ended March 31,2001, MTI was advanced $1.5 million
on the loans and paid down $4.0 million. There was $1.4 million
outstanding at March 31, 2001. Subsequent to the date of this report,
in April 2001, MTI paid the outstanding balance on the loans.
At March 31, 2001, the Company owned 134,500 shares of META Group, Inc.
The fair market value of this investment was $184 thousand. During the
three months ended March 31, 2001, the Company has recorded unrealized
losses of $690 thousand due to the decline in market value of this investment.
4. Receivables from Others
Amounts receivable from others as of:
- ----------------------------------------------------------------------
March 31, December 31,
(In thousands of dollars) 2001 2000
======================================================================
Adjustment to record securities owned on
a trade date basis, net $ - $ 10,863
Others 7,389 12,740
- ----------------------------------------------------------------------
Total $ 7,389 $ 23,603
======================================================================
Proprietary securities transactions are recorded on trade date, as if
they had settled. The related amounts receivable and payable for
unsettled securities transactions are recorded net in Receivables or
Payables to Others on the Statement of Financial Condition.
5. Securities Owned And Sold But Not Yet Purchased
Securities owned and sold but not yet purchased consisted of the
following as of:
====================================================================================
March 31, December 31,
(In thousands of dollars) 2001 2000
Sold, but Sold, but
not yet not yet
Owned Purchased Owned Purchased
- -------------------------------------------------------------------------------------
Marketable Securities
U.S. Government and federal
agency obligations $ 11,327 $ 42,931 $ 5,349 $ 60,870
State and municipal bonds 187,481 10,227 132,370 200
Corporate obligations 58,818 11 47,198 1,034
Corporate stocks 7,185 70 3,934 513
Options 29 5 - -
Not readily marketable securities
securities
Investment securities with
no publicly quoted market 359 - 194 -
Investment securities subject
to restrictions 217 95 836 945
- ----------------------------------------------------------------------------------------
Total $ 265,416 $ 53,339 $ 189,881 $ 63,562
========================================================================================
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
Securities not readily marketable include investment securities (a) for
which there is no market on a securities exchange or no independent
publicly quoted market, (b) that cannot be publicly offered or sold
unless registration has been effected under the Securities Act of 1933,
or (c) that cannot be offered or sold because of other arrangements,
restrictions or conditions applicable to the securities or to the
Company.
6. Payables to Others
Amounts payable to others as of:
- --------------------------------------------------------------------------------------------
March 31, December 31,
(In thousands of dollars) 2001 2000
=============================================================================================
Adjustment to record securities owned on
a trade date basis, net $ 42,018 $ -
Borrowing under line-of-credit agreements 2,326 14,697
Others 1,701 2,838
- ---------------------------------------------------------------------------------------------
Total $ 46,045 $ 17,535
=============================================================================================
7. Notes Payable
Notes payable consist of a note for $2,713,333 which is payable in
monthly principal payments of $73,333 plus interest. The interest rate
is 1.5% over the 30-day London InterBank Offered Rate ("LIBOR") (5.08%
plus 1.5% on March 31, 2001). This note matures on April 1, 2004.
One of the more significant covenants of the note requires First Albany
Corporation to maintain a minimum net capital (as defined by Rule 15c 3-
1 of the Securities and Exchange Commission) equal to three times the
required minimum net capital. The required minimum net capital as of
March 31, 2001 was $1.5 million. The amount of net capital as of March
31, 2001 was $36.8 million.
8. Obligations under Capitalized Leases
The following is a schedule of future minimum lease payments under
capital leases for office equipment together with the present value of
the net minimum lease payments as of March 31, 2001:
===========================================================================
(In thousands of dollars)
- ---------------------------------------------------------------------------
2001 $1,178
2002 930
2003 191
2004 47
2005 6
- ---------------------------------------------------------------------------
Total Minimum Lease Payments 2,352
Less: Amount Representing Interest 109
- ---------------------------------------------------------------------------
Present Value of Minimum Lease Payments $ 2,243
===========================================================================
9. Subordinated Debt
The Company has a subordinated debt of $2,000,000 with interest at
8.75% and $4,000,000 with interest at 9.25%. Interest is paid monthly
with the principal amounts due at maturity on December 31, 2002.
Both loan agreements include restrictive financial covenants. One of
the more significant covenants requires the Company to maintain minimum
net capital equal to three times the required net capital (as defined by
Rule 15c3-1 of the Securities and Exchange Commission). The amount of
required net capital as of March 31, 2001 was $1.5 million. The amount
of net capital as of March 31, 2001 was $36.8 million.
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
10. Commitments and Contingencies
In the normal course of business, the Company has been named a
defendant, or otherwise has possible exposure, in several claims.
Certain of these are class actions, which seek unspecified damages,
which could be substantial. Although there can be no assurance as to
the eventual outcome of litigation in which the Company has been named
as a defendant or otherwise has possible exposure, the Company has
provided for those actions it believes are likely to result in adverse
dispositions. Although further losses are possible, the opinion of
management, based upon the advice of its attorneys and General Counsel,
is that such litigation will not, in the aggregate, have a material
adverse effect on the Company's liquidity or financial position,
although it could have a material effect on quarterly or annual
operating results in the period in which it is resolved.
11. Stockholders' Equity
In January 2001, the Board of Directors declared the regular quarterly
cash dividend of $0.05 per share payable on February 28, 2001, to
shareholders of record on February 14, 2001.
In April, 2001, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the first quarter, ended March 31, 2001,
along with a 5% stock dividend, payable on May 29,2001 to shareholders
of record on May 15,2001.
In October 2000, the Board of Directors authorized a stock repurchase
program of up to 1.5 million shares of its outstanding common stock.
Under the program, the Company may periodically repurchase shares on the
open market at prevailing market prices or in privately negotiated
transactions from time to time over the next 18 months. Shares purchased
under the program will be held in treasury and used for general
corporate purposes. At March 31, 2001, the Company had repurchased
approximately 302,000 shares pursuant to this program with an aggregate
cost of $2.9 million.
12. Net Capital Requirements
The Company's broker-dealer subsidiary, First Albany Corporation (the
"Corporation"), is subject to the Securities and Exchange Commission's
Uniform Net Capital Rule, which requires the maintenance of a minimum
net capital. The Corporation has elected to use the alternative method
permitted by the rule, which requires that the Corporation maintain a
minimum net capital of 2 percent of aggregate debit balances arising
from customer transactions as defined. As of March 31, 2001 the
Corporation had aggregate net capital, as defined, of $36.8 million,
which equaled 47.7% of aggregate debit balances and $35.3 million in
excess of required minimum net capital.
13. Derivative Financial Instruments
The Company does not engage in the proprietary trading of derivative
securities with the exception of highly liquid index futures contracts
and options. These index futures contracts and options are used to
hedge certain securities positions in the Company's inventory. Gains
and losses are included as revenues from principal transactions.
The contractual or notional amounts reflected in these financial
instruments reflect the volume and activity and do not reflect the
amounts at risk. The amounts at risk are generally limited to the
unrealized market valuation gains or losses on the instruments and will
vary based on changes in market value. Futures contracts are executed
on an exchange, and cash settlement is made on a daily basis for market
movements. Open equity in the futures contracts are recorded as
receivables from clearing organizations. The settlement of these
transactions is not expected to have a material adverse effect on the
financial condition of the Company.
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
14. Segment Analysis
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS 131"). SFAS 131 is
effective for fiscal years beginning after December 15, 1997. SFAS 131
establishes standards for reporting financial and descriptive
information about an enterprise's operating segments in its annual
financial statements and selected segment information in interim
financial reports.
The Company's reportable operating segments are: Institutional
(including Investment Banking, Institutional Sales and Trading, First
Albany Asset Management Corporation and FA Technology Ventures
Corporation), Investments, Equity in Losses of Affiliates and
Discontinued Operations. The financial policies of the Company's
segments are the same as those described in the "Summary of Significant
Accounting Policies." The Institutional segment generates revenues from
securities transactions (equities and fixed-income securities) with
institutional clients along with investment banking activities, which
includes managing, co-managing of tax-exempt and corporate securities
underwritings and financial advisory services. This segment also
includes trading activity in which the Company buys and maintains
inventories of fixed-income products and equities securities (as a
"market maker") for sale to other dealers and to institutional clients.
The Investment segment includes gains and losses associated with the
investment portfolio held at the Company. Discontinued operations is
comprised of the Company's Private Client Group. The Private Client
Group had provided securities brokerage services to individual
investors.
Revenues were generated through customer purchase and sale of various
securities: equity, taxable and non-taxable fixed income, mutual funds
and various other investment products and services.
Equity in loss of affiliates includes revenue relating to the Company's
investment in Mechanical Technology Incorporated (MTI) which is recorded
under the equity method (see Note 3). Pre-tax net loss relating to MTI
was ($102,000), and ($597,000) for the quarters ended March 31, 2001,
and 2000, respectively.
Intersegment revenues and expenses are eliminated between segments.
Interest revenues and interest expenses are reviewed primarily on a net
basis (Net Interest Revenues) and are shown as such. The Company
evaluates the performance of its segments and allocates resources to
them based upon long-term margin opportunities, which are consistent
with the growth strategy of the Company. Asset information by
reportable segments is not reported since the Company does not produce
such information internally for the reportable segments. All assets are
located in the United States.
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
Information concerning operations in these segments is as follows:
=====================================================================================
Three Months Ended
March 31, March 31,
(In thousands of dollars) 2001 2000
- -------------------------------------------------------------------------------------
Revenues (excluding interest):
Institutional $ 37,442 $ 29,575
Investments (853) 2,163
- -------------------------------------------------------------------------------------
Continued operations 36,589 31,738
Discontinued operations - 32,317
- -------------------------------------------------------------------------------------
Total $ 36,589 $ 64,055
=====================================================================================
Net Interest Revenues:
Institutional $ 740 $ 1,864
- --------------------------------------------------------------------------------------
Continued operations 740 1,864
Discontinued operations - 1,084
- --------------------------------------------------------------------------------------
Total $ 740 $ 2,948
======================================================================================
Net Revenues:
Institutional $ 38,182 $ 31,439
Investments (853) 2,163
- ---------------------------------------------------------------------------------------
Continued operations 37,329 33,602
Discontinued operations - 33,401
- ---------------------------------------------------------------------------------------
Total $ 37,329 $ 67,003
=======================================================================================
Pre-Tax Income:
Institutional $ 1,068 $ (33)
Investments (853) 2,163
Equity in losses of affiliates (102) (597)
- ---------------------------------------------------------------------------------------
Continued operations 113 1,533
Discontinued operations - 3,767
- ---------------------------------------------------------------------------------------
Total $ 113 $ 5,300
=======================================================================================
FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
15. Discontinued Operations
On May 9, 2000, the Company announced that it signed an agreement for
the sale of the assets of its Private Client Group, its retail brokerage
branch network, to First Union Securities, a subsidiary of First Union
Corp. The transaction closed on August 4, 2000.
In accordance with Accounting Principles Board Opinion No. 30 (APB 30),
"Reporting the Results of Operations - Reporting the Effect of Disposal
of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions", the results of the Private Client
Group have been reported separately as a discontinued operation for all
periods presented.
Components of amounts reflected in condensed consolidated statement of
financial condition and condensed consolidated statement of operations
are presented in the following tables:
=========================================================================
Three Months Ended
March 31, March 31,
(In thousands of dollars) 2001 2000
- -------------------------------------------------------------------------
Net revenues $ - $ 33,401
Expenses - 29,634
- -------------------------------------------------------------------------
Income before income taxes - 3,767
Income tax expense - 1,580
- -------------------------------------------------------------------------
Income from discontinued
operations, net taxes $ - $ 2,187
==========================================================================
Included in the balance sheet, for the period ending March 31, 2001 was
approximately $9.2 million in accrued expenses relating to discontinued
operations. These accruals consisted primarily of impairment of future
lease space of $8.6 million and other costs relating to the divestiture
of the Private Client Group.
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
=========================================================================================
2001 vs.
Three Months Ended 2000 Percentage
March 31, March 31, Increase Increase
(In thousands of dollars) 2001 2000 (Decrease) (Decrease)
- -----------------------------------------------------------------------------------------
Revenues
Commissions $ 3,851 $ 4,771 $ (920) (19)%
Principal transactions 28,109 15,377 12,732 83%
Investment banking 3,916 8,061 (4,145) (51)%
Investment gain (loss) (853) 2,163 (3,016) (139)%
Interest income 7,446 19,045 (11,599) (61)%
Fees and others 1,566 1,366 200 15%
- -------------------------------------------------------------------------------------------
Total revenues 44,035 50,783 (6,748) (13)%
Interest expense 6,706 17,181 (10,475) (61)%
- -------------------------------------------------------------------------------------------
Net revenues 37,329 33,602 3,727 11%
- -------------------------------------------------------------------------------------------
Expenses (excluding interest)
Compensation and benefits 28,960 24,407 4,553 19%
Clearing, settlement and
brokerage costs 678 798 (120) (15)%
Communications and
data processing 2,531 2,248 283 13%
Occupancy and depreciation 1,808 1,359 449 33%
Selling 1,634 1,436 198 14%
Other 1,503 1,224 279 23%
- -------------------------------------------------------------------------------------------
Total expenses (excl. interest) 37,114 31,472 5,642 18%
- -------------------------------------------------------------------------------------------
Operating income 215 2,130 (1,915) (90)%
- -------------------------------------------------------------------------------------------
Equity in losses of affiliates:
Loss before cumulative
effect of change in
accounting principle (2,128) (597) (1,531) (256)%
Cumulative effect of
accounting change for
derivative financial
instruments (see note 3) 2,026 - 2,026 -
- -------------------------------------------------------------------------------------------
Total Equity in losses of affil. (102) (597) 495 (83)%
- -------------------------------------------------------------------------------------------
Income before income taxes 113 1,533 (1,420) (93)%
- -------------------------------------------------------------------------------------------
Income tax expense 45 657 (612) (93)%
- -------------------------------------------------------------------------------------------
Income from continuing operations 68 876 (808) (92)%
- -------------------------------------------------------------------------------------------
Income from discontinued operations,
net of taxes - 2,187 (2,187) (100)%
- -------------------------------------------------------------------------------------------
Net income $ 68 $ 3,063 $ (2,995) (98)%
===========================================================================================
Net interest income
Interest income $ 7,446 $ 19,045 $ (11,599) (61)%
Interest expense 6,706 17,181 (10,475) (61)%
- -------------------------------------------------------------------------------------------
Net interest income $ 740 $ 1,864 $ (1,124) (60)%
===========================================================================================
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
The following is management's discussion and analysis of certain
significant factors, which have affected the Company's financial
position, and results of operations during the periods included in the
accompanying condensed consolidated financial statements.
Business Environment
- --------------------
First Albany Companies Inc. (the Company) is the parent company of
First Albany Corporation, First Albany Asset Management Corporation
and FA Technology Ventures Corporation. First Albany Corporation provides
investment banking services to corporate and public clients, and engages in
market-making and trading of corporate, government and municipal securities.
The Company also provides venture capital and merchant banking to the
investment and corporate communities, and asset management services to
individuals and institutions.
The investment banking and brokerage businesses generate revenues in direct
correlation with the general level of trading activity in the stock and bond
markets. The Company cannot control this level of activity; however many of
the Company's costs are fixed . Therefore, the Company's earnings, like those
of others in the industry, reflect the activity in the markets and can
fluctuate accordingly.
Results of Operations
- ---------------------
First Albany Corporation, the investment bank and brokerage firm, had
net revenues of $36.2 million for the first quarter ended March 31,
2001, compared to $31.1 million for the same period in 2000, an increase
of 16 percent. Consolidated net revenues for the first quarter were
$37.3 million compared to $33.6 million for the same period in 2000, an
increase of 11 percent. The increase in net revenues was driven by a
volatile corporate bond environment, which was partially offset by a 64
percent decline in corporate investment banking revenues.
Due to the sale of the assets of the Private Client Group, the
Company's retail brokerage network, to First Union Securities, the
operating results of the Private Client Group are reported as
discontinued operations on a net income basis.
Net income from the brokerage operations for the quarter was $215
thousand compared to $767 thousand for the same period in 2000. The
decline in earnings from the brokerage operations was driven by an
adverse shift in business mix and a decline in the market value of
equity investments held at First Albany Corporation. The net income from
the brokerage operations was substantially offset by net losses at First
Albany Companies Inc., driven primarily by a decline in the market value
of the Company's investments. For the first quarter the Company
reported consolidated net income from continued operations of $68
thousand compared to $876 thousand for the same period in 2000, or net
income of $0.01 per diluted share compared to $0.09 per diluted share,
respectively.
A portion of First Albany Companies Inc.'s investment portfolio is
accounted for at market value while the remainder is accounted for under
the equity method. The aggregate market value of the Firm's investment
portfolio increased from $46.9 million at December 31, 2000, to $56.3
million at March 31, 2001, primarily as a result of an increase in the
market value of its investment in Mechanical Technology Inc. ("MKTY").
The Firm is required to account for the MKTY investment under the equity
method of accounting because it owns in excess of 20% (approximately 33%)
of the shares outstanding, and does not recognize changes in the market
value of this investment in the income statement. Changes in the value
of those portions of the Company's investment portfolio accounted for at
market value may impact the financial results of future periods either
positively or negatively.
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Three Month Periods Ended March 31, 2001 and March 31, 2000
- -----------------------------------------------------------
Commissions
- -----------
Commission revenues for this year's first quarter decreased $0.9
million or 19% compared to the comparable 2000 period primarily due to
decrease in listed agency transactions.
Principal Transactions
- ----------------------
Principal transactions for this year's first quarter increased $12.7
million or 83% compared to the comparable 2000 period. This amount was
comprised of an increase in corporate fixed income of $12.3 million and
an increase in municipal bonds of $2.6 million, with equity securities
decreasing of $2.2 million.
Investment Banking
- ------------------
Investment banking revenues for this year's first quarter decreased
$4.1 million or 51% compared to the comparable 2000 period primarily due
to a decrease in corporate underwritings due to unfavorable conditions
in the stock market.
Investment Gains/(Losses)
- -------------------------
Investment gains (losses) for this year's first quarter decreased $3.0
million compared to the comparable 2000 period. The decrease was due
primarily to a decrease in the market value of the investment portfolio
held at First Albany Companies Inc, the Parent Company. (See Note 3)
Net Interest Income
- -------------------
Net interest income for this year's first quarter decreased $1.1 million or 60%
reflecting a decrease in the Company's stock loan conduit business and an
increasein the Company's inventory in tax exempt municipal bonds which carry
a negative spread in relation to the Company's short term bank loans.
Compensation and Benefits
- -------------------------
Compensation and benefits expense for this year's first quarter
increased $4.6 million or 19% compared to the same period of 2000,
mainly due to an increase in net revenues, excluding investment
gains/(losses).
Equity in losses of affiliates
- ------------------------------
Equity in losses of affiliates for this year's first quarter increased
$0.5 million due to a decrease in the net loss of Mechanical
Technology Incorporated. (See note 3)
Income Taxes
- ------------
Income taxes decreased $0.6 million for this year's first quarter due
mainly to decrease in income from continued operations.
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Income from Discontinued Operations, Net Of Taxes
- -------------------------------------------------
Income from discontinued operations, net of taxes decreased $2.2
million for this year's first quarter, resulting from the completion of
the sale of the Private Client Group network to First Union Securities
on August 4, 2000.
Liquidity and Capital Resources
- -------------------------------
A substantial portion of the Company's assets, similar to other
brokerage and investment banking firms, is liquid, consisting of cash
and assets readily convertible into cash. These assets are financed
primarily by the Company's bank lines-of-credit interest-bearing and non-
interest-bearing payables to customers and payables to brokers and
dealers secured by loaned securities. Securities borrowed and
securities loaned along with receivables from customers and payable to
customers will fluctuate primarily due to the current level of business
activity in these areas. Securities owned will fluctuate as a result of
the changes in the level of positions held to facilitate customer
transactions and changes in market conditions. Short-term bank loans,
is a source of financing for the Company and will fluctuate accordingly.
Receivables from others and payables to others will fluctuate primarily
due to the change in the adjustment to record securities owned on a
trade date basis.
At March 31, 2001 First Albany Corporation, a registered broker-dealer
subsidiary of First Albany Companies Inc., was in compliance with the
net capital requirements of the Securities and Exchange Commission and
had capital in excess of the minimum required.
Management believes that funds provided by operations and a variety of
bank lines-of-credit-totaling $470 million of which approximately $280 million
were unused as of March 31,2001-will provide sufficient resources to
meet present and reasonably foreseeable short-term financing needs.
In January 2001, the Board of Directors declared the regular quarterly
cash dividend of $0.05 per share payable on February 28, 2001, to
shareholders of record on February 14, 2001.
In April 2001, the Board of Directors declared the regular quarterly
dividend of $0.05 per share for the first quarter, ended March 31, 2001,
along with a 5% stock dividend, both payable on May 29, 2001 to shareholders
of record on May 15, 2001.
In October 2000, the Board of Directors authorized a stock repurchase
program of up to 1.5 million shares of its outstanding common stock.
Under the program, the Company may periodically repurchase shares on the
open market at prevailing market prices or in privately negotiated
transactions from time to time over the next 18 months. Shares
purchased under the program will be held in treasury and used for
general corporate purposes. At March 31, 2001,the Company had repurchased
approximately 302,000 shares pursuant to this program with an aggregate
cost of $2.9 million.
On December 27,2000, the Company entered into a Put and Call Option Agreement
(the "Option Agreement") with Mechanical Technology Incorporated ("MTI").
MTI purchased the option from the Company for $945,000. The Option Agreement
was entered into to provide independent credit support for a loan to MTI from
Key Bank, N.A. (the "Loan"). The Option Agreement provides that MTI may put
6.3 million shares of the Plug Power Inc. common stock pledged as collateral on
the Loan at $4 per share and the Company has the right to either purchase such
shares or take an assignment of all of the bank's rights under the Loan. The
Option Agreement expires on April 27, 2001.
On April 27, 2001, subsequent to the date of this report, MTI and the Company
amended the Put and Call Option Agreement to extend the expiration date to
August 27, 2001 for a fee of $200,000.
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
The Company believes that funds provided by operations will be
sufficient to fund the acquisition of office equipment, leasehold
improvements, current long-term loan repayment requirements, and other
long-term requirements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
- --------------------------------------------------------------------
Market Risk
- -----------
Market risk generally represents the risk of loss that may result from
the potential change in the value of a financial instrument as a result
of fluctuations in interest rates, yield curve, credit worthiness, and
equity prices. Market risk is inherent to both derivative and non-
derivative financial instruments, and accordingly, the scope of the
Company's market risk management procedures extends beyond derivatives
to include all market risk sensitive financial instruments. The
Company's exposure to market risk is directly related to its role as a
financial intermediary in customer-related transactions and to its
proprietary trading.
The Company trades tax exempt and taxable debt obligations,
including U.S. Treasury bills, notes, and bonds; U.S. Government agency
notes and bonds; state and local obligations; bank certificates of deposit;
mortgage-backed securities, and corporate obligations. The Company
is also an active market-maker in over-the-counter equity markets and
trades certain listed equities as well. In connection with these activities,
the Company may be required to maintain inventories in order to ensure
availability and to facilitate customer transactions. In connection
with some of these activities, the Company attempts to mitigate its
exposure to such market risk by entering into hedging transactions,
which may include highly liquid future contracts, options and U.S.
Government securities.
Following is a discussion of the Company's primary market risk
exposures as of March 31, 2001, including a discussion of how those
exposures are currently managed.
Interest Rate and Bond Price Risk
Maintaining inventory positions and trading interest-rate-sensitive
financial instruments exposes the Company to interest rate risk.
Changes in the level or volatility of interest rate credit spreads and
the shape and slope of the yield curve expose the Company to risk of loss.
The Company hedges its exposure to interest rate risk primarily through the
use of U.S. Government securities, highly liquid futures and options designed
to reduce the Company's risk profile.
A sensitivity analysis has been prepared to estimate the Company's
exposure to interest rate risk of its inventory position. The fair
market value of these securities included in the Company's inventory at
March 31, 2001 was $189.5 million. Interest rate risk is estimated as
the potential loss in fair value resulting from a hypothetical one-half
percent decrease in interest rates. At March 31, 2001, the potential
change in fair value, assuming this hypothetical decrease, was $6.3
million. The actual risks and results of such adverse effects may
differ substantially.
FIRST ALBANY COMPANIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Equity Price Risk
The Company is exposed to equity price risk as a consequence of making
markets in equity securities. Equity price risk results from changes in
the level or volatility of equity prices, which affect the value of
equity securities or instruments that derive their value from a
particular stock. The Company attempts to reduce the risk of loss
inherent in its inventory of equity securities by monitoring those
security positions daily.
Marketable equity securities included in the Company's inventory at
March 31, 2001, which were recorded at a fair value of $7.5 million, have
exposure to equity price risk. This risk is estimated as the potential
loss in fair value resulting from a hypothetical 10% adverse change in
prices quoted by stock exchanges and amounts to $0.7 million. The
actual risks and results of such adverse effects may differ
substantially. The Company's investment portfolio, excluding its
investment in MTI, at March 31, 2001 had a fair market value of $4.8
million. (See Note 3). This equity price risk is also estimated as the
potential loss in fair value resulting from a hypothetical 10% adverse
change in prices quoted by stock exchanges and amounts to $0.5 million.
Actual results may differ.
CREDIT RISK
The Company is engaged in various trading and brokerage activities
whose counterparties primarily include broker-dealers, banks, and other
financial institutions. In the event counterparties do not fulfill
their obligations, the Company may be exposed to risk. The Company
seeks to control credit risk by following an established credit approval
process, monitoring credit limits, and requiring collateral where appropriate.
The Company purchases debt securities and may have significant
positions in its inventory subject to market and credit risk. In order
to control these risks, security positions are monitored on at least a
daily basis. Should the Company find it necessary to sell such a
security, it may not be able to realize the full carrying value of the
security due to the significance of the position sold. The Company
attempts to reduce its exposure to changes in securities valuation with
the use of highly liquid municipal bond index futures contracts.
OPERATING RISK
Operating risk is the potential for loss arising from limitations in
the Company's financial systems and controls, deficiencies in legal
documentation and the execution of legal and fiduciary responsibilities,
deficiencies in technology and the risk of loss attributable to
operational problems. These risks are less direct than credit and
market risk, but managing them is critical, particularly in a rapidly
changing environment with increasing transaction volumes. In order to
reduce or mitigate these risks, the Company
has established and maintains an effective internal control environment
which incorporates various control mechanisms at different levels
throughout the organization and within such departments as Finance and
Accounting, Operations, Legal, Compliance and Internal Audit. These
control mechanisms attempt to ensure that operational policies and
procedures are being followed and that the Company's various businesses
are operating with established corporate policies and limits.
OTHER RISKS
Other risks encountered by the Company include political, regulatory
and tax risks. These risks reflect the potential impact that changes in
local laws, regulatory requirements or tax statutes have on the
economics and viability of current or future transactions. In an effort
to mitigate these risks, the Company seeks to continuously review new
and pending regulations and legislation and their potential impact on
its business.
Part II-Other Information
Item 1. Legal Proceedings
- -------------------------
In the normal course of business, the Company has been named a
defendant, or otherwise has possible exposure, in several claims.
Certain of these are class actions which seek unspecified damages that
could be substantial. Although there can be no assurance as to the
eventual outcome of litigation in which the Company has been named as a
defendant or otherwise has possible exposure, the Company has provided
for those actions most likely to result in adverse dispositions.
Although further losses are possible, the opinion of management, based
upon the advice of its attorneys and general counsel, is that such
litigation will not, in the aggregate, have a material adverse effect on
the Company's liquidity or financial position, although it could have a
material effect on quarterly or annual operating results in the period
in which it is resolved.
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
--------
Item No. Item
-------- ----
(10.28) First Albany Companies Inc. Employee Stock Purchase Plan
(filed as registration No. 333-60244 (form S-8) dated May 4, 2001
(11) Statement Re: Computation of Per Share Earnings (filed herewith)
(b) Reports on Form 8-K
-------------------
The following reports on Form 8K were filed during the
quarter ended March 31, 2001:
--------------
1. Form 8-K filed January 10, 2001. The Company, on December 27,
2000, entering into a Put and Call Option Agreement (the "Option
Agreement") with Mechanical Technology Incorporated ("MTI").
(Exhibit 11)
FIRST ALBANY COMPANIES INC.
COMPUTATION OF PER SHARE EARNINGS
===============================================================================================
Three Months Ended
March 31, March 31,
(In thousands, except per share amounts) 2001 2000
- -----------------------------------------------------------------------------------------------
Basic:
- -----------------------------------------------------------------------------------------------
Income from continuing operations $ 68 $ 876
Income from discontinued operations,
net of taxes - 2,187
- -----------------------------------------------------------------------------------------------
income $ 68 $ 3,063
===============================================================================================
Weighted average number of shares
outstanding during the period 7,965 8,661
- -----------------------------------------------------------------------------------------------
Income per share for continuing
operations $ 0.01 $ 0.10
Income per share for discontinued
operations - 0.25
- -----------------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.35
===============================================================================================
Dilutive:
- -----------------------------------------------------------------------------------------------
Income from continuing operations $ 68 $ 876
Income from discontinued operations,
net of taxes - 2,187
- -----------------------------------------------------------------------------------------------
Net income $ 68 $ 3,063
===============================================================================================
Weighted average number of shares
outstanding during the period 7,965 8,661
Effective of dilutive common
equivalent shares 371 1,575
- -----------------------------------------------------------------------------------------------
Weighted average shares and common
equivalent shares outstanding 8,336 10,236
- -----------------------------------------------------------------------------------------------
Income per share for continuing
operations $ 0.01 $ 0.09
Income per share for discontinued
operations - 0.21
- ------------------------------------------------------------------------------------------------
Net income per share $ 0.01 $ 0.30
================================================================================================
**Per share figures and shares outstanding have been restated for all
dividends declared.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Albany Companies Inc.
----------------------------
(Registrant)
Date: /s/
-------------------------------------
Alan P. Goldberg
President/Co-Chief Executive Officer
Date: /s/
-------------------------------------
Steven Jenkins
Chief Financial Officer
(Principal Accounting Officer)