<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 2000
------------------------------------------------
Commission file number 001-14067
--------------------------------------------------------
FOREVER ENTERPRISES, INC.
(FORMERLY KNOWN AS LINCOLN HERITAGE CORPORATION)
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
TEXAS 36-3427454
------------------------------------ --------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
10 S. BRENTWOOD
CLAYTON, MISSOURI 63105
-------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(314) 726-3371
-------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. /X/ Yes / / No
Number of shares
Title of class outstanding as of November 13, 2000
---------------------------------- -----------------------------------------
Common stock, $0.01 par value 6,933,359
<PAGE>
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<TABLE>
FOREVER ENTERPRISES, INC.
FORM 10-Q
INDEX
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION.......................................................................... 3
Item 1. Financial Statements........................................................................... 3
Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2000 and
December 31, 1999.............................................................................. 3
Condensed Consolidated Statements of Operations (Unaudited) - Three Months and
Nine Months Ended September 30, 2000 and 1999.................................................. 5
Condensed Consolidated Statements of Shareholders' Equity and Comprehensive
Income (Unaudited) - Nine Months Ended September 30, 2000 and 1999............................. 6
Condensed Consolidated Statements of Cash Flow (Unaudited) - Nine Months Ended
September 30, 2000 and 1999.................................................................... 7
Notes to Condensed Consolidated Financial Statements (Unaudited)............................... 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.....................................................................................14
Cautionary Statement Regarding Forward-Looking Statements......................................14
Overview.......................................................................................14
Results of Operations..........................................................................16
Liquidity and Capital Resources................................................................19
Item 3. Quantitative and Qualitative Disclosure About Market Risk......................................20
PART II. OTHER INFORMATION..............................................................................21
Item 4. Submission of Matters to a Vote of Security Holders............................................21
Item 5. Other Matters..................................................................................21
Item 6. Exhibits and Reports on Form 8-K...............................................................22
SIGNATURES.......................................................................................................23
EXHIBIT INDEX....................................................................................................24
</TABLE>
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
Cash and cash equivalents $ 22,487,418 $ 23,712,005
Investment securities 102,362,952 103,852,162
Policyholder loans 25,706,675 22,707,973
Trade accounts receivable, net 4,624,917 3,640,941
Other investments 2,576,575 --
-------------- -------------
Total cash and investments 157,758,537 153,913,081
-------------- -------------
Cemetery property, net 3,387,717 3,687,333
Property and equipment, net 6,204,813 6,135,346
Inventories 412,441 608,626
Deferred charges, net 27,924,605 24,685,946
Goodwill 3,965,179 2,430,369
Deferred tax assets 9,087,474 7,796,470
Other assets 8,201,518 7,071,115
-------------- -------------
Total assets $ 216,942,284 $ 206,328,286
============== =============
(continued on next page)
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<CAPTION>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
LIABILITIES:
Policy liabilities:
Future policy benefits $ 141,404,731 $ 125,280,583
Policyholder deposits 56,642,844 59,982,273
Deferred preneed revenues 3,566,764 3,456,558
Notes payable 4,482,868 6,285,290
Other 8,488,274 5,967,000
------------- -------------
Total liabilities 214,585,481 200,971,704
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred stock ($.01 par value; 1,000,000 shares authorized;
none issued) -- --
Common stock ($.01 par value; 30,000,000 and 10,000,000 shares
authorized, 6,933,359 and 6,933,259 shares issued and
outstanding, respectively) 69,334 69,333
Additional paid-in capital 9,932,316 9,691,587
Retained earnings 1,685,923 4,102,064
Accumulated other comprehensive loss (9,330,770) (8,506,402)
------------- -------------
Total shareholders' equity 2,356,803 5,356,582
------------- -------------
Total liabilities and shareholders' equity $ 216,942,284 $ 206,328,286
============= =============
The accompanying notes are an integral
part of the condensed consolidated
financial statements.
</TABLE>
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<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 16,521,854 $ 14,743,103 $ 51,415,765 $ 43,010,665
Costs and expenses 10,635,491 7,866,142 31,450,249 24,308,152
------------ ------------ ------------ ------------
Gross profits 5,886,363 6,876,961 19,965,516 18,702,513
Selling, general and administrative 8,288,791 7,523,898 23,957,074 21,263,248
------------ ------------ ------------ ------------
Loss from operations (2,402,428) (646,937) (3,991,558) (2,560,735)
Other income 485,839 55,900 956,258 212,062
Interest expense (107,929) (48,946) (316,673) (143,257)
------------ ------------ ------------ ------------
Loss before income taxes (2,024,518) (639,983) (3,351,973) (2,491,930)
Income tax benefit (508,669) -- (935,832) (330,562)
------------ ------------ ------------ ------------
Net loss $ (1,515,849) $ (639,983) $ (2,416,141) $ (2,161,368)
============ ============ ============ ============
Basic loss per share $ (0.22) $ (0.09) $ (0.35) $ (0.31)
============ ============ ============ ============
Diluted loss per share $ (0.22) $ (0.09) $ (0.35) $ (0.31)
============ ============ ============ ============
Weighted average shares outstanding:
Basic 6,933,359 6,923,474 6,933,329 6,923,474
============ ============ ============ ============
Diluted 6,933,359 6,923,474 6,933,329 6,923,474
============ ============ ============ ============
The accompanying notes are an integral
part of the condensed consolidated
financial statements.
</TABLE>
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<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (UNAUDITED)
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN COMPREHENSIVE RETAINED
TOTAL STOCK CAPITAL LOSS EARNINGS
------------ ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999 $ 5,356,582 $ 69,333 $9,691,587 $(8,506,402) $ 4,102,064
Comprehensive loss, net of tax:
Net loss (2,416,141) (2,416,141)
Change in unrealized losses on
available-for-sale securities,
net of tax benefit of $424,674 (824,368) (824,368)
------------
Total comprehensive loss (3,240,509)
------------
Effect of stock options granted
under stock options plans,
net of applicable income tax
benefit of $68,183 132,355 132,355
Issuance of shares for stock
options 375 1 374
Capital contributions 108,000 108,000
------------ ----------- ---------- ----------- -----------
Balance, September 30, 2000 $ 2,356,803 $ 69,334 $9,932,316 $(9,330,770) $ 1,685,923
============ =========== ========== =========== ===========
Balance, January 1, 1999 $ 11,815,923 $ 69,200 $6,711,350 $(2,238,912) $ 7,274,285
Comprehensive loss, net of tax:
Net loss (2,161,368) (2,161,368)
Change in unrealized losses
on available-for-sale
securities, net of tax
benefit of $2,486,094 (4,825,947) (4,825,947)
------------
Total comprehensive loss (6,987,315)
Issuance of shares for stock
options 45,503 121 45,382
Effect of stock options granted
under stock options plans, net
of applicable income tax
effects of $102,000 198,000 198,000
------------ ----------- ---------- ----------- ------------
Balance, September 30, 1999 $ 7,676,315 $ 69,321 $9,558,936 $(7,064,859) $ 5,112,917
============ =========== ========== =========== ===========
The accompanying notes are an integral
part of the condensed consolidated
financial statements.
</TABLE>
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<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,416,141) $ (2,161,368)
Adjustments to reconcile net loss to cash provided by (used in)
operating activities:
Realized investment gains (2,005,406) (153,001)
Accretion of discount on investments (153,537) (265,077)
Depreciation and amortization 798,732 1,167,236
Provision for doubtful accounts -- --
Deferred income taxes (1,674,624) (321,060)
Deferred compensation 200,538 300,000
Changes in operating assets and liabilities
Trade accounts receivable (983,976) (306,009)
Deferred charges (2,793,813) (2,869,253)
Cemetery properties 299,616 79,984
Inventories 196,185 --
Other assets (1,558,744) 202,521
Future policy benefits and deposit funds 12,728,571 1,582,379
Deferred revenues 110,206 225,165
Other liabilities 481,198 (267,150)
------------ ------------
Net cash provided by (used in) operating activities 3,228,805 (2,785,633)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of available-for-sale investments 43,073,032 53,429,486
Cost of investments purchased (40,472,987) (63,513,214)
Purchase of fixed assets (689,200) (659,481)
Acquisition of subsidiaries (3,670,897) --
Increase in investment in subsidiaries (261,361) (2,000,000)
Increase in policyholder loans (2,998,702) (4,716,343)
Other, net (174,179) (321,764)
------------ ------------
Net cash used in investing activities (5,194,294) (17,781,316)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares for stock options 375 45,503
Repayment of long-term debt (1,615,992) (22,281)
Capital contributions 108,000 2,604,204
Increase in accounts payable to affiliates 2,248,519 (188,444)
------------ ------------
Net cash provided by financing activities 740,902 2,438,982
------------ ------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,224,587) (18,127,967)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 23,712,005 43,840,065
------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 22,487,418 $ 25,712,098
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION
INCOME TAXES PAID $ 681,485 $ --
============ ============
INTEREST PAID $ 409,179 $ 143,013
============ ============
The accompanying notes are an integral
part of the condensed consolidated
financial statements.
</TABLE>
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FOREVER ENTERPRISES, INC.
(FORMERLY KNOWN AS LINCOLN HERITAGE CORPORATION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
-----------
NOTE 1 -- BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
include the accounts of Forever Enterprises, Inc. (formerly known as Lincoln
Heritage Corporation) and our direct and indirect wholly owned subsidiaries.
These condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States of America for interim financial information and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and notes required by accounting principles generally
accepted in the United States of America for complete financial statements.
All intercompany accounts and transactions have been eliminated in
consolidation. Certain prior period amounts have been reclassified to
conform with the current period presentation.
We acquired Forever Network, Inc. (formerly known as Forever
Enterprises, Inc.) on March 9, 2000. Forever Network, directly and through
its subsidiaries, owns and operates funeral homes and cemetery properties
and markets, archives and displays digital interactive life stories viewed
at grave sites and on the Internet. The acquisition of Forever Network was
accounted for in a manner similar to the pooling-of-interests method of
accounting. Accordingly, the accounts of Forever Network have been included
in our accounts for all periods presented. The results of Forever Network
are not necessarily indicative of the results of operations that actually
would have occurred if the transaction had occurred at the beginning of the
earliest period presented.
On December 8, 1999, Forever Network acquired an additional 45% of
Hollywood Forever, Inc. (through its acquisition of Dartmont Finance, Inc.)
increasing Forever Network's ownership in that entity to 90%. As a result,
Hollywood Forever, Inc. is included in our consolidated financial statements
as of and for the three and nine months ended September 30, 2000. In
November 1999, Mt. Washington Forever, Inc., a wholly owned subsidiary of
our company, acquired a cemetery property located in Kansas City, Missouri
known as Mt. Washington Cemetery for $1,200,000. Effective January 1, 2000,
50% of the interest in Mt. Washington Forever, Inc. was sold to an
unaffiliated party for $50,000. The accounts of Mt. Washington Forever, Inc.
have been consolidated with our accounts as of December 31, 1999, and are
accounted for using the equity method beginning January 1, 2000.
The accompanying condensed consolidated financial statements and
notes thereto are unaudited and should be read in conjunction with our
audited financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 1999 filed with the Securities and Exchange
Commission. Prior period amounts included in the condensed consolidated
financial statements have been restated to reflect the accounts of Forever
Network, Inc. as if the acquisition had occurred as of the beginning of the
earliest period presented. The unaudited interim condensed consolidated
financial statements have been prepared on the same basis as the annual
consolidated financial statements and, in the opinion of management, reflect
all adjustments, which include only normal recurring adjustments, necessary
to present fairly our financial position, results of operations and cash
flows as of and for the three and nine months ended September 30, 2000. The
results for the nine months ended September 30, 2000 are not necessarily
indicative of the results to be expected for the year ending December 31,
2000.
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<PAGE>
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are new to our
company due to our acquisition of Forever Network, Inc. during the first
quarter of 2000.
Accounts Receivable -- Accounts receivable consist of receivables
-------------------
from cemetery customers who pre-purchase cemetery property and merchandise
and are paying the balance on an installment basis. Customers who purchase
cemetery property and merchandise on an at-need basis must pay the entire
purchase amount at the time of sale.
Cemetery Property and Inventory -- Cemetery property consists of
-------------------------------
developed and undeveloped cemetery property and is valued at cost. Repairs
and maintenance are charged to expense as incurred, whereas major
improvements are capitalized. Cemetery property is expensed as sales of
cemetery plots occur. Mausoleum inventory is the cost of unsold mausoleum
crypts and niches. Mausoleum inventories are expensed as sales of crypts and
niches occur. A portion of the cost of the mausoleum is included in
buildings in the accompanying condensed consolidated financial statements
and is being depreciated over the useful life of the mausoleum.
Depreciation -- Property and equipment are being depreciated using
------------
the straight-line method over the estimated useful lives of the various
classes of assets which range from three to 30 years.
Deferred Preneed Revenue -- As each preneed funeral contract is
------------------------
entered into, we record the face amount of the contract as deferred revenue.
At the time of need (fulfillment of the contract), we recognize revenue for
the full amount of the contract.
Deferred Software Development Costs -- Costs expended to develop
-----------------------------------
the software used to process and display the Forever biographies have been
deferred and are being amortized over the estimated useful life of the
software of three years. Deferred software development costs are included in
other assets in the accompanying condensed consolidated balance sheets.
Revenue/Expense Recognition for Cemetery Operations -- Cemetery
---------------------------------------------------
property and merchandise sales are recorded at the time of a completed sales
contract. Costs related to such sales are charged to operations at the time
the sale is recorded with a corresponding liability recorded representing
the cemetery's obligation to purchase the merchandise at the time of need,
or when the contract is paid in full. Costs related to merchandise are based
on actual costs incurred or estimated future costs to purchase the
merchandise.
Other Income - Other income includes rental income from leased
------------
property, interest income from certain trust accounts, miscellaneous income
and Forever Network's 50% share of earnings from investment in Mt.
Washington Forever. For the three and nine months ended September 30,
2000, net income for Mt. Washington Forever was $67,770 and $422,085,
respectively, of which 50%, or $34,203 and $211,855, respectively, was
included in other income.
- 9 -
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<PAGE>
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Perpetual Care -- A portion of the proceeds from sales of cemetery
--------------
property is required by state law to be paid into perpetual care trust
funds. In accordance with state laws, we remit amounts to the perpetual care
trust after the sale is paid in full. Therefore, we record a liability for
amounts to be remitted when contracts are paid in full. Such amounts are
recorded in other liabilities in the accompanying condensed consolidated
financial statements. Investment income from such perpetual care trust funds
is included in other income in the accompanying condensed consolidated
financial statements and is intended to defray ongoing maintenance costs.
The principal of the trust cannot be withdrawn and, accordingly, is not
included in the accompanying condensed consolidated financial statements.
Net Loss Per Share -- Our basic net loss per share is computed by
------------------
dividing net loss by the weighted average number of shares outstanding.
Diluted net loss per share includes the impact of potential common shares,
unless the inclusion of such shares would have an anti-dilutive effect.
321,862 potential shares were excluded from the calculation of diluted
earnings per share for the nine months ended September 30, 2000, because
they were anti-dilutive. There were no factors that affected the net
income amount in the earnings per share computation.
NOTE 3 -- NOTES PAYABLE
As of September 30, 2000, we had a note payable to Allegiant Bank
in the amount of $2,100,444, which matures on January 1, 2003. Principal
payments of $4,674 are due monthly along with interest at the "corporate
market" interest rate (9.5% per annum at September 30, 2000). The "corporate
market" interest rate is based upon an index developed by Allegiant Bank.
We also have a $250,000 revolving line of credit from Allegiant
Bank at rates similar to the primary credit agreement discussed above. The
balance outstanding was $220,000 at September 30, 2000. This line of credit
is renewable on a yearly basis subject to Allegiant Bank's discretion.
We also have notes payable to companies owned by the previous
investment partners in Hollywood Forever, in the amount of $2,086,805 at
September 30, 2000. These notes were incurred in connection with the
purchase of the additional 45% of Hollywood Forever, Inc. on December 8,
1999. Payments of $48,723 are due monthly until the principal balance of the
notes is paid in full. The interest rate on these notes is 8.5% per annum.
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<PAGE>
NOTE 4 -- INVESTMENTS
The cost or amortized cost, gross unrealized gains and losses, and
estimated fair value of fixed maturity and equity securities available-for-
sale as of September 30, 2000 were as follows:
<TABLE>
<CAPTION>
COST OR GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Fixed maturity securities
Corporate bonds $ 10,698,111 $ 126,445 $ (1,341,510) $ 9,483,046
Mortgage backed securities 77,659,480 213,532 (8,452,709) 69,420,303
U.S. government 18,179,040 32,664 (1,355,235) 16,856,469
------------ ---------- ------------ ------------
Total fixed maturity securities 106,536,631 372,641 (11,149,454) 95,759,818
Equity securities 10,404,696 1,059,219 (4,860,781) 6,603,134
------------ ---------- ------------ ------------
Total $116,941,327 $1,431,860 $(16,010,235) $102,362,952
============ ========== ============ ============
</TABLE>
NOTE 5 -- ACQUISITIONS
On March 9, 2000, our shareholders approved a stock acquisition
agreement to acquire all of the issued and outstanding shares of common
stock of Forever Network from National Heritage Enterprises. Forever Network
owns and operates funeral home and cemetery properties. In exchange for the
Forever Network shares, we issued 2.4 million shares of our common stock
with a market value of approximately $12.0 million. Upon consummation of the
acquisition, National Heritage Enterprises' ownership of our common stock
increased from 4,000,000 shares to 6,400,000 shares, or approximately 92.3%
of our issued and outstanding shares. The acquisition was accounted for in a
manner similar to the pooling-of-interests method of accounting.
Accordingly, the accounts of Forever Network have been included in our
accounts for all periods presented. The following table summarizes the
effects of including Forever Network in the consolidated statements.
<TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 2000
<CAPTION>
FOREVER
ENTERPRISES
(EXCLUDING FOREVER CONSOLIDATED
FOREVER NETWORK) NETWORK ELIMINATIONS TOTAL
---------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Revenues $ 46,071,403 $ 5,963,189 $ (618,827) $ 51,415,765
Net loss (1,344,945) (919,844) (151,352) (2,416,141)
Assets 201,690,580 20,160,976 (4,909,272) 216,942,284
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
FOREVER
ENTERPRISES FOREVER CONSOLIDATED
(PREVIOUSLY REPORTED) NETWORK ELIMINATIONS TOTAL
--------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 41,210,800 $ 2,064,886 $(265,021) $ 43,010,665
Net loss (1,059,450) (986,664) (115,254) (2,161,368)
Assets 159,496,049 12,356,588 (787,643) 171,064,994
</TABLE>
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<PAGE>
NOTE 5 -- ACQUISITIONS (CONTINUED)
<TABLE>
<CAPTION>
TOTAL SHAREHOLDERS' EQUITY SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
Total shareholders' equity, before acquisition $ 876,986 $ 2,722,895
Equity of Forever Network 1,757,099 2,759,618
Intercompany eliminations (277,282) (125,931)
-------------- --------------
Total shareholders' equity, after acquisition $ 2,356,803 $ 5,356,582
============== ==============
</TABLE>
NOTE 6 -- SEGMENT INFORMATION
We conduct and manage our business through two segments,
cemetery/funeral operations and life insurance operations. The following
tables and narratives summarize the results of our operations by our
business segments. Costs and revenues that are not related to operating
segments are included in the column "Corporate."
<TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 2000
<CAPTION>
CEMETERY INSURANCE CORPORATE INTERSEGMENT TOTAL
-------- --------- --------- ------------ -----
<S> <C> <C> <C> <C> <C>
Revenues $ 5,404,035 $ 46,050,343 $ 580,214 $ (618,827) $ 51,415,765
Net loss before income taxes (314,477) (227,264) (2,658,880) (151,352) (3,351,973)
Total assets 20,160,976 200,100,891 1,589,689 (4,909,272) 216,942,284
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
CEMETERY INSURANCE CORPORATE INTERSEGMENT TOTAL
-------- --------- --------- ------------ -----
<S> <C> <C> <C> <C> <C>
Revenues $ 1,950,324 $ 41,193,635 $ 131,727 $ (265,021) $ 43,010,665
Net loss before income taxes (136,223) 701 (2,241,155) (115,254) (2,491,931)
Total assets 12,356,588 158,220,995 1,275,054 (787,643) 171,064,994
</TABLE>
NOTE 7 -- SUBSEQUENT EVENT
We are currently in negotiations to reinsure substantially all of
our currently insured business in order to raise capital for further
cemetery expansion.
On October 17, 2000, we entered into a letter of intent with the
owner of a single-location cemetery property in the Midwest. Due diligence
is in process and no closing date has yet been set. Financing will be
provided by the current owner.
On October 27, 2000, we entered into a letter of intent to purchase
nine additional cemetery properties in a major metropolitan city. We are in
the beginning stages of due diligence. If due diligence proves favorable,
then closing is expected to occur during the first quarter of 2001. The
current owners are expected to finance seventy-five percent of the purchase
price with the remaining twenty-five percent and working capital funded
through other debt sources.
- 12 -
<PAGE>
<PAGE>
NOTE 8 -- RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133, as
amended, is effective for fiscal years beginning after June 15, 2000. SFAS
133 requires all derivative instruments to be recorded on the balance sheet
at their fair value. Changes in the fair value of derivatives are recorded
each period in current earnings or other comprehensive income, depending on
whether a derivative is designed as part of a hedge transaction and, if it
is, the type of hedge transaction.
In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements"
(SAB 101). SAB 101 is effective for our financial statements no later than
the fourth quarter of fiscal year 2000 and requires us to recognize revenue
only when it is realized or realizable and earned.
Management has not completed evaluating the impact of the adoption
of SFAS 133 and SAB 101 on our financial position, results of operations or
cash flows. Other members of the death care (memorialization) industry
currently are discussing directly with the Securities and Exchange
Commission the application of SAB 101. We will evaluate the outcome of those
discussions and the corresponding action to be taken. These actions are not
expected to have an impact on our consolidated cash flows, but may have an
impact on our consolidated financial condition and on the manner in which we
record preneed sales activities.
NOTE 9 -- PRIOR PERIOD ADJUSTMENT
We have recorded a prior period adjustment related to the method of
recording certain pre-need cemetery and funeral contracts and the related
trust assets prior to January 1, 1999. This adjustment resulted in an
increase in total assets of approximately $1.8 million, an increase in
liabilities of approximately $3.5 million and a charge to retained earnings,
net of tax, of approximately $1.7 million as of January 1, 1999.
- 13 -
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements are based on the beliefs of our
management as well as on assumptions made by and information currently
available to us at the time such statements were made. We can give no
assurance that the expectations indicated by such forward-looking statements
will be realized. If any of management's assumptions should prove incorrect,
or if any of the risks and uncertainties underlying such expectations should
materialize, our actual results may differ materially from those indicated
by the forward-looking statements.
The following factors that are not within our control and that may
have a direct bearing on operating results include, but are not limited to:
(i) our ability to achieve anticipated levels of operational efficiencies
for recently acquired companies, cemetery properties or blocks of policies,
as well as through other cost-saving initiatives; (ii) the availability and
terms of future acquisitions; (iii) regulatory changes or actions, including
those relating to regulation of the sale and pricing of funeral home
operations and products and regulation of the sale, underwriting and pricing
of insurance products; (iv) increasing competition in the sale of our
products; (v) market acceptance of our Forever biography products which have
required, and will continue to require, investments in software development
and marketing before corresponding levels of anticipated revenues are
realized; (vi) general economic conditions and other factors, including
prevailing interest rate levels and stock market performance, which may
affect our ability to sell our products, the market value of our investments
and the lapse rate and profitability of our policies; (vii) mortality,
morbidity, and other factors which may affect the profitability of our
insurance products; (viii) changes in the Federal income tax laws and
regulations which may affect the cost of or demand for our products; and
(ix) the risk factors or uncertainties listed in our other filings with the
Securities and Exchange Commission.
Additionally, we may not be successful in identifying, acquiring,
and integrating other companies or their business, implementing improved
management and accounting information systems and controls and may be
dependent upon additional capital and equipment purchases for future growth.
There may be other risks and uncertainties that management is not able to
predict.
When used in this report, the words "anticipate," "believe,"
"estimate," "expect," "intends," and similar expressions, as they relate to
us are intended to identify forward-looking statements, although there may
be certain forward-looking statements not accompanied by such expressions.
OVERVIEW
We are a holding company engaged in the ownership and operation of
businesses that produce and market multimedia biographies, own and operate
cemetery/funeral home properties and market and issue life insurance
principally to fund preneed funeral contracts.
In March 2000, we acquired Forever Network, Inc. (f/k/a Forever
Enterprises, Inc.) and its subsidiaries. With the acquisition of Forever
Network, we have shifted our focus from the ownership and operation of
insurance companies to the new industry of "Memorialization," a modern
landscape of virtual memorials and visual, interactive cemeteries. We
believe that the death care industry generally has been slow and reluctant
to respond to customer needs and desires and that our products and services
are innovative and provide foundation on which to build a national Forever
brand.
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<PAGE>
<PAGE>
With our acquisition of Forever Network, Inc. we acquired three
cemetery/funeral home properties located in Los Angeles, California and St.
Louis and Kansas City, Missouri, a funeral home located in Kirkwood,
Missouri that is leased to Service Corporation International and the
Cremation Society of St. Louis, the Cremation Specialists of Los Angeles and
Cremation Specialists of Kansas City. In addition, Forever Network sells,
archives and displays digital interactive life stories at the grave sites
and on the Internet at www.forevernetwork.com. Forever Network currently
maintains more than 3,300 client biographies that are available for viewing
on the Internet site.
Our intended strategy is to acquire cemetery/funeral home
properties (known as "combination properties") in targeted metropolitan
areas, aggressively growing the multimedia biography business through all
company properties and the Internet, and further developing the Internet
marketing business. We plan to develop the Forever brand to enhance
recognition and sales. Any decision to acquire a funeral home or cemetery
property will depend on our assessment of various factors. No assurance can
be given that we will be successful in consummating any acquisition, or that
any acquisition, once completed, will ultimately enhance our results of
operations.
A component of our business strategy is to increase the number of
quality cemetery/funeral home combination properties we own and operate and
to expand our Forever network of families with digital biographies. This is
intended to support accelerated development of our Internet business
strategy, which will serve to display family archives, educate consumers on
memorial products, services and providers, and sell memorial services and
merchandise over the www.forevernetwork.com website.
Our plan is to acquire properties in major metropolitan areas.
Properties also may be in the form of raw land in a current or developing
population center that can support a funeral home/mausoleum structure and
with a suitable supply of saleable cemetery land. Acquiring and developing
properties in major areas is intended to allow for more rapid expansion of
the Forever biography program and marketing of the Internet site. We believe
that the current environment provides excellent opportunities to acquire
cemetery properties at attractive prices.
We have developed strategies designed to enhance the profitability
of the businesses and properties we acquire. With respect to our cemetery/
funeral home operations, we believe we can apply tested and proven marketing
techniques to produce significant revenue and market share growth. Efficient
property operations management should allow for greatly enhanced profitability
on newly acquired properties. Demographics and the growing interest in
organizing and preserving family memories, use of the Internet for information
gathering, and commerce on the Web are expected to provide the platform for
success of our Internet strategy. Economies of scale through the integration
of our systems, administration and purchasing and marketing programs should
provide other valuable cost savings to enhance results.
Our insurance companies will serve to complement the Forever
strategy rather than serving as the principal component of the Company's
operations. Pre-need contracts will be sold over the Internet and at our
funeral homes and cemetery properties, as well as through independent
funeral homes and our affiliated sales force. Insurance products will be one
of many memorialization products that we offer.
During and prior to 1999, we derived revenues primarily from
premiums on insurance policies and our expenses consisted principally of
benefits paid or accrued, commissions on the sale of policies and general
and administrative costs associated with life insurance company operations.
For 2000 and beyond, in addition to our insurance operations, our revenues
and expenses will be impacted by our memorialization business.
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<PAGE>
<PAGE>
RESULTS OF OPERATIONS
The following presents management's discussion and analysis of our
consolidated financial condition and results of operations as of the dates
and for the periods indicated. This discussion should be read in conjunction
with the other information set forth in this Quarterly Report on Form 10-Q,
including our unaudited condensed consolidated financial statements and the
accompanying notes thereto.
Our financial highlights were as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
STATEMENT OF OPERATIONS DATA: SEPTEMBER 30,
----------------------------------------
2000 1999
---- ----
<S> <C> <C>
Premium income $ 35,821,502 $ 33,092,675
Net investment income and realized gains 9,279,025 7,679,922
Cemetery revenue 5,963,189 2,064,886
Other revenue 352,049 173,182
------------- -------------
Total revenues 51,415,765 43,010,665
Benefits incurred 18,616,129 14,435,093
Other operating expenses 36,791,194 31,136,307
Other income net (639,585) (68,805)
------------- -------------
Loss before income taxes (3,351,973) (2,491,930)
Income tax benefit (935,832) (330,562)
------------- -------------
Net loss $ (2,416,141) $ (2,161,368)
============= =============
Loss per share:
Basic $ (0.35) $ (0.31)
Diluted (0.35) (0.31)
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
BALANCE SHEET DATA:
Trade accounts receivable, net $ 4,624,917 $ 3,640,941
Cemetery property, net 3,387,717 3,687,333
Total assets 216,942,284 206,328,286
Total policy liabilities 198,047,575 185,262,856
Shareholders' equity 2,356,803 5,356,582
</TABLE>
We conduct and manage our business through two segments,
cemetery/funeral operations and life insurance operations. The following
tables and narratives summarize the results of our operations by our
business segments. Costs and revenues that are not related to operating
segments are included in the column "Corporate."
NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
CEMETERY INSURANCE CORPORATE INTERSEGMENT TOTAL
-------- --------- --------- ------------ -----
<S> <C> <C> <C> <C> <C>
Revenues $ 5,404,035 $ 46,050,343 $ 580,214 $ (618,827) $ 51,415,765
Net loss before income taxes (314,477) (227,264) (2,658,880) (151,352) (3,351,973)
Total assets 20,160,976 200,100,891 1,589,689 (4,909,272) 216,942,280
- 16 -
<PAGE>
<PAGE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
CEMETERY INSURANCE CORPORATE INTERSEGMENT TOTAL
-------- --------- --------- ------------ -----
<S> <C> <C> <C> <C> <C>
Revenues $ 1,950,324 $ 41,193,635 $ 131,727 $ (265,021) $ 43,010,665
Net loss before income taxes (136,223) 701 (2,241,155) (115,254) (2,491,931)
Total assets 12,356,588 158,220,995 1,275,054 (787,643) 171,064,994
</TABLE>
Cemetery Operations. Cemetery revenues increased approximately $1.0
million and $3.5 million, or 129% and 177%, in the three-month and
nine-month periods ended September 30, 2000, respectively, compared to the
corresponding periods of 1999. The increases were largely attributable to
Forever Networks' acquisition of an additional 45% interest in Hollywood
Forever in December 1999, which brought our total ownership to 90%. Sales
for the first nine months of 2000 at each location also increased compared
to the corresponding period in 1999 due to more effective marketing and
increased sales of certain cemetery and memorialization products and
services.
Cost of sales increased approximately $503,000 and $1.4 million, or
478% and 292%, from $105,000 and $463,000 in the three and nine months ended
September 30, 1999, respectively, to $608,000 and $1.8 million in the
corresponding periods of 2000 due to increased cemetery sales. Cost of sales
as a percentage of revenues increased to 34% for both the three months and
nine months ended September 30, 2000, compared to 13% and 24% for the three
months and nine months ended September 30, 1999, respectively.
Selling, general and administrative expenses increased $1.2 million
and $3.2 million, or 170% and 168%, from $718,000 and $1.9 million in the
three and nine months ended September 30, 1999, respectively, to $1.9
million and $5.1 million, in the corresponding periods of 2000 due to
increased variable selling expenses (as a result of increased sales) and
additional administrative cost associated with the acquisition of an
additional 45% interest in Hollywood Forever and the acquisition of Mt.
Washington Forever. As a percentage of revenues, selling, general and
administrative costs increased to 107% and declined to 94% in the three and
nine months ended September 30, 2000, respectively, from 91% and 97% in the
three months and nine months ended September 30, 1999 due to increased
revenues, cost-saving efforts and increased operating efficiencies.
Our loss before income taxes increased from a gain of $35,000 and a
loss of $136,000 in the three and nine months ended September 30, 1999,
respectively, to a loss of $166,000 and $314,000 in the corresponding
periods of 2000. The operating loss as a percentage of revenues was -9% and
-6% in the three and nine months ended September 30, 2000, respectively,
compared to 4% and -7% in the corresponding periods of 1999. The three and
nine months ended September 30, 2000 included $210,000 and $615,000,
respectively, in interest expense due to increased acquisitions compared to
$49,000 and $143,000 in interest expense for the corresponding periods of
1999.
Total assets increased from $12.4 million at September 30, 1999 to
$20.2 million at September 30, 2000 due largely to the acquisition of the
additional 45% of Hollywood Forever.
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<PAGE>
<PAGE>
Minority Interest Cemetery Operations. Our equity in the earnings
of Mt. Washington Forever for the nine months ended September 30, 2000 was
$211,855. We first acquired an interest in Mt. Washington Forever in
November 1999, and, therefore, had no share in its earnings prior to that
time. Forever Enterprises, Inc. currently has a 50% interest in Mt.
Washington Forever and takes an active role in management of the cemetery.
The results of Mt. Washington Forever are summarized in the table below.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------------------------
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
ACTUAL ESTIMATED
------------------ ------------------
<S> <C> <C>
Revenues $ 3,013,000 $ 220,500
Cost of goods sold 847,000 55,500
Selling, general and administrative expenses 1,744,000 427,500
Income (loss) from operations 422,000 (262,500)
</TABLE>
Insurance Operations. Insurance revenues increased approximately
$471,000 and $4.9 million, or 3.4% and 11.8%, in the three-month and
nine-month periods ended September 30, 2000, respectively, compared to the
corresponding periods in 1999. The increase was attributable to higher
levels of new policies issued and in force, an increase in realized gains on
investments and the absence of impairment losses which were recognized in
1999.
Our premium income decreased approximately $289,000 and increased
approximately $2.7 million, or -2.3% and 8.2%, in the three-month and
nine-month periods ended September 30, 2000, respectively, compared to the
corresponding periods of 1999. The three-month decrease was attributable
to a minor fluctuation in premium payments, while the nine-month increase
was due to higher levels of new business and subsequent increases in the
in-force business.
Our net investment income and realized gains increased
approximately $876,000 and $1.9 million, or 52.5% and 25.4%, in the
three-month and nine-month periods ended September 30, 2000, respectively,
compared to the corresponding periods of 1999. In the first quarter of 1999,
we recognized impairment losses on certain securities of approximately $1.7
million. We recognized no impairment losses during the first three quarters
of 2000.
Our benefit expenses increased approximately $2.1 million and $4.2
million, or 50.4% and 29.1%, in the three-month and nine-month periods ended
September 30, 2000, respectively, compared to the corresponding periods of
1999. This increase was due primarily to an increase in future policy
benefits due to higher levels of policies in force.
Operating loss increased $934,000 and $228,000, respectively, in
the three-month and nine-month periods ended September 30, 2000, compared to
$118,661 and $701, respectively for the corresponding periods of 1999. The
change in operating performance was due primarily to increased benefit
expenses.
Total assets increased $41.9 million from $158.2 million at
September 30, 1999, to $200.1 million at September 30, 2000, due primarily
to the acquisition of a block of life insurance and annuity policies from
Funeral Securities Life Insurance Company in October 1999, and due to the
acquisition of Liberty Standard Life Insurance Company in May 2000.
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<PAGE>
<PAGE>
Corporate. Operating losses increased approximately $238,000 and
$418,000, or 32.3% and 18.6%, in the three-month and nine-month periods
ended September 30, 2000, respectively, compared to the corresponding
periods in 1999 due to expenses incurred in connection with the acquisition
of Forever Network, Inc. and related investment banking services.
Consolidated. Net loss before income tax for the three- and nine-
month periods ended September 30, 2000, increased $1.5 million and $939,000,
or 261% and 38.9%, respectively, compared to the same periods in 1999. Net
loss per basic and diluted share for the quarter ended September 30, 2000,
increased to ($0.22) from ($0.08) for the same period of 1999. Net loss per
basic and diluted share for the nine months ended September 30, 2000,
increased to ($0.35) from ($0.31) for the comparable period in 1999. The
increases in net loss for the three- and nine-month periods ended September
30, 2000, as compared to the same period of 1999, were due to increased
revenues from our cemetery and insurance operations offset by similar
increases in cost of sales and operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
Our cash requirements for 2000 and in the future will depend upon
acquisitions, timing of expansion plans, capital expenditures and mortality
experience. We plan to secure capital required for additional cemetery
properties, large capital improvement projects and significant technology
developments related to the digital biographies and the Internet through
equity or debt financing. The initial capital provided for the purchase and
working capital of combined properties is anticipated to be sufficient to
allow the property to realize positive cash flow within six to twelve months
after acquisition, depending on the property. Bellerive Forever currently
generates positive cash flow from operations. Hollywood Forever has begun to
show positive cash flow and is expected to meet its operating cash
requirements by year-end 2000. Any current operating cash shortfall is
provided by cash flows from other operations.
Capital projects on new cemetery properties for mausoleum/funeral
home combination buildings and other saleable inventory features are
expected to be funded through use of cash generated from pre-construction
sales and/or debt financing and should require little or no additional
capital investment. Certain other improvements would be funded through
working capital.
Capital will be required to fund the Internet/technology business
plan. The Internet/technology operation currently is generating a negative
cash flow and will require some investment capital for a period of time
until revenues can be increased to approximate cash flow. Margins are
expected to be high and overhead relatively low once Internet sales volumes
achieve targeted levels. Until those levels are achieved, capital and cash
requirements are expected to be provided by other operations of our company.
Our St. Louis, Missouri combination property, Bellerive Forever,
has recently completed and fully funded construction of a new office
building. A second phase of the property's mausoleum currently is being
planned with construction expected to begin in the second half of 2001.
Capital requirements are expected to be funded through pre-construction
sales and additional debt, if necessary.
Our Hollywood combination property, Hollywood Forever, is in the
pre-construction phase of a new mausoleum addition. The first phase of
construction is not anticipated to begin until summer of 2001.
Pre-construction sales and/or additional debt financing, if necessary, are
expected to fund the project.
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<PAGE>
<PAGE>
Our Kansas City combination property, Mt. Washington Forever, has
largely completed several maintenance projects, including major
infrastructure and road repairs, office building renovations and records
management. These projects are being funded through an escrow account
established as a requirement of the Mt. Washington Forever purchase. A new
mausoleum/chapel building is currently in the design and pre-construction
phase of development. Construction is expected to begin in the first half of
2001. An addition to the existing funeral home is being designed to
accommodate higher than expected funeral calls to date and reasonable growth
projections. Debt and other financing arrangements to fund this project are
currently being negotiated. Other significant development projects,
including a water development, lighting and security, office expansion, and
additional park amenities are expected to start within the next twelve
months. Funding is expected to be from the escrow account, an approved tax
increment financing program, and/or additional debt financing.
Our insurance subsidiaries generally generate sufficient cash
receipts from premium collections and investment income to satisfy their
obligations. We believe that the diversity of the investment portfolio of
our insurance subsidiaries provides sufficient liquidity to meet their
operating cash requirements. We believe that anticipated cash flow from
operations should be adequate for the working capital requirements of our
existing insurance business over the next twelve months.
Our insurance subsidiaries are restricted by state insurance laws
as to the amount of dividends that they may pay to us without prior notice
to, or in some cases prior approval from, their respective state insurance
departments. These restrictions on dividend distributions are based on
statutory capital and surplus and operating earnings. Statutory surplus and
statutory operating results are determined according to statutes adopted by
the state in which the subsidiaries are domiciled. Statutory surplus bears
no direct relationship to equity as determined under generally accepted
accounting principles. No amounts are currently available for transfer to
the parent company by dividend, loan or advance without prior regulatory
approval.
Total cash and investments were $157.8 million and $153.9 million
at September 30, 2000 and December 31, 1999, respectively. Changes in the
separate components of invested assets were due to the portfolio mix of our
invested assets and changes in the fair market value of balances in actively
managed fixed maturity and equity securities.
Deferred charges increased $3.2 million from $24.7 million at
December 31, 1999 to $27.9 million at September 30, 2000 due to an increase
in new policies issued.
Policy liabilities increased $12.7 million from $185.3 million at
December 31, 1999 to $198.0 million at September 30, 2000 due to higher
levels of policies in force and due to the acquisition of Liberty Standard
Life Insurance Company.
In the event that our plans or assumptions change, or if the
resources available to meet unanticipated changes in business conditions
prove to be insufficient to fund operations, we could be required to seek
additional financing and such financing may not be available on favorable
terms or at all.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes from the information provided
in our Annual Report on Form 10-K for the year ended December 31, 1999.
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<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of shareholders was held on August 31, 2000. Of
6,933,359 shares issued, outstanding and eligible to be voted at the
meeting, 6,425,993 shares, constituting a quorum, were represented in person
or by proxy at the meeting. One matter was submitted to a vote of the
shareholders at the meeting, an amendment to Article IV, Section 4.1(1) of
our Amended and Restated Articles of Incorporation to increase the number of
authorized shares of common stock to 30,000,000. Upon tabulation of the votes
cast, it was determined that the amendment had been approved. The voting
results are set forth below:
<TABLE>
<CAPTION>
MATTER FOR AGAINST WITHHELD
------ --- ------- --------
<S> <C> <C> <C>
Amendment to increase authorized shares 6,425,673 210 110
</TABLE>
ITEM 5. OTHER MATTERS
On August 31, 2000, our board of directors elected J. Tyler
Cassity, Michael R. Butler and Randall K. Sutton as president, chief
financial officer and treasurer of our company, respectively. Prior thereto,
Mr. Cassity served as co-chief executive officer (technology, research and
development) of our company from March 2000 and has served as president of
Forever Memorial and Hollywood Forever since 1998.
Mr. Sutton has served in various capacities with our company and
its subsidiaries since 1977, most recently as chief financial officer of
our company. Additionally, Mr. Sutton continues to serve as a member of the
board of directors of our company and Memorial Service Life Insurance
Company and Lincoln Memorial Life Insurance Company, each a subsidiary of
our company, and as chief financial officer of National Prearranged
Services, Inc.
Mr. Butler has served as Chief Financial Officer of the Forever
Network companies since he joined Forever in March of 1998. Prior to that,
Mr. Butler spent ten years with Monsanto Company in various positions of
increasing responsibility in sales and marketing, manufacturing, and
business management.
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<PAGE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
See Exhibit Index attached hereto.
(b) Reports on Form 8-K.
We did not file any Current Reports on Form 8-K during the
quarter ended September 30, 2000.
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<PAGE>
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FOREVER ENTERPRISES, INC.
(Registrant)
Dated: November 13, 2000 By: /s/ Brent D. Cassity
-------------------------------------------
Brent D. Cassity, Chief Executive Officer
Dated: November 13, 2000 By: /s/ J. Tyler Cassity
-------------------------------------------
J. Tyler Cassity, President
Dated: November 13, 2000 By: /s/ Michael R. Butler
-------------------------------------------
Michael R. Butler, Chief Financial Officer
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<PAGE>
<PAGE>
EXHIBIT INDEX
Ex. No. Description
------- -----------
3.1 (c) Certificate of Amendment of Amended and Restated Articles of
Incorporation of the Company, are filed herewith.
27.1 Financial Data Schedule (September 30, 2000), are filed
herewith.
27.2 Restated Financial Data Schedule (September 30, 1999), are
filed herewith.
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