SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1997 Commission File No. 0-3417
CENCOR, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 43-0914033
(State of other jurisdiction (I.R.S. Employer Identification
of Incorporation or Organization Number)
1100 Main Street, Suite 416A
Post Office Box 26098
Kansas City, Missouri 64196
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (816) 221-5833
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes X No
As of October 8, 1997 CenCor, Inc. had 1,339,862 shares of Common
Stock, $1.00 par value outstanding with a market value of
$12,226,241.
<PAGE>
CENCOR, INC.
FORM 10-Q
QUARTER ENDED June 30, 1997
INDEX
Item Page
PART I
1. Financial Statements and Supplementary Data 1
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II
1. Legal Proceedings 15
2. Change in Securities 15
3. Defaults Upon Senior Securities 15
4. Submission of Matters to a Vote of Security
Holders 15
5. Other Information 15
6. Exhibits and Reports on Form 8-K 15
7. Signatures 16
<PAGE>
Part I
Item I Financial Statements
The Company's Financial Statements are set forth herein, beginning
on the following page.
(The remainder of this page is intentionally blank.)
<PAGE>
<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Net Assets in Liquidation
September 30, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
Assets:
Cash and cash equivalents $ 11,140,000 $ 14,513,000
Other assets 6,139,000 10,320,000
Total assets 17,279,000 24,833,000
Liabilities:
Accounts payable and accrued liabilities 484,000 648,000
Income taxes payable 703,000 1,110,000
Long-term debt -- 5,681,000
Total liabilities 1,187,000 7,439,000
Net assets in liquidation $ 16,092,000 $ 17,394,000
Number of common shares outstanding 1,361,993 1,488,411
Net assets in liquidation per shares $ 11.82 $ 11.69
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Changes in Net Assets in Liquidation
For the Nine Months Ended September 30, 1997 and 1996
(Unaudited)
1997 1996
<S> <C> <C>
Net assets in liquidation,
December 31, 1996 and 1995 $ 17,394,000 $ 18,110,000
Income from liquidating activities
Investment income 846,000 1,036,000
Other -- 507,000
Gain on extinguishment of debt -- 275,000
Gain on retirement of preferred stock -- 126,000
846,000 1,944,000
Expenses from liquidating activities
Salaries and related benefits 571,000 367,000
Interest expense 709,000 912,000
Professional fees 35,000 374,000
Income tax <488,000> 891,000
Other 164,000 256,000
991,000 2,800,000
Retirement of common stock 1,157,000 --
Decrease in net assets in liquidation <1,302,000> <856,000>
Net assets in liquidation,
September 30, 1997 and 1996 $ 16,092,000 $ 17,254,000
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Changes in Net Assets in Liquidation
For the Three Months Ended September 30, 1997 and 1996
(Unaudited)
1997 1996
<S> <C> <C>
Net assets in liquidation,
June 30, 1997 and 1996 $16,707,000 $17,982,000
Income from liquidating activities
Investment income 220,000 353,000
Other -- 81,000
Gain on extinguishment of debt -- 275,000
Gain on retirement of preferred stock -- 6,000
220,000 715,000
Expenses from liquidating activities
Salaries and related benefits 64,000 94,000
Interest expense -- 312,000
Professional fees <488,000> 794,000
Other expenses 67,000 50,000
<322,000> 1,443,000
Retirement of common stock 1,157,000 --
Decrease in net assets in liquidation <615,000> <728,000>
Net assets in liquidation,
September 30, 1997 and 1996 $16,092,000 $17,254,000
See accompanying notes.
</TABLE>
<PAGE>
CenCor, Inc.
(In Process of Liquidation)
Notes to Consolidated Financial Statements
September 30, 1997
1. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited interim condensed financial statements included
herein have been prepared by the Company pursuant to the rules
and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles ("GAAP") have been condensed or
omitted, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
Effective June 30, 1995, the Company sold substantially all of
the assets of Century Acceptance Corporation ("Century"), its
then only operating subsidiary. Since the date of the sale of
Century, the Company has had no ongoing operations. As a result,
the Company has changed its basis of accounting from going
concern basis to liquidation basis.
On September 12, 1996 the Company's stockholders approved a Plan
of Dissolution and Liquidation (the "Plan of Liquidation"),
which the Company's Board of Directors submitted for stockholder
approval at the Company's annual meeting of stockholders. In
connection with the Plan of Liquidation, the officers and
directors of CenCor are authorized to (i) dissolve CenCor,
including the execution and filing of a Certificate of
Dissolution with the Secretary of State of the State of Delaware,
(ii) wind up CenCor's affairs, including satisfaction of all
liabilities and long-term debt of CenCor and (iii) liquidate
CenCor's assets on a pro rata basis in accordance with the
respective interests of its common stockholders. CenCor is
expected to be fully liquidated by October 1999.
<PAGE>
Generally accepted accounting principles require the adjustment
of assets and liabilities to estimated fair value under the
liquidation basis of accounting. Accordingly, the statement of
net assets in liquidation at September 30, 1997 and December 31, 1996
reflects assets and liabilities on this basis. Adjustments for
changes in estimated liquidation value are recognized currently.
Estimated costs of liquidation have not been provided since such
costs are not able to be estimated.
The preparation of financial statements in conformity with
generally accepted accounting principles under the liquidation
basis of accounting requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ
significantly from those estimates.
These condensed financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year
1996.
Cash and Cash Equivalents
Cash and cash equivalents include cash, money market accounts,
and short-term government or government agency instruments.
Fair Values of Assets and Liabilities
The following methods and assumptions were used by the Company in
estimating the liquidation value of its assets and liabilities:
Cash and Cash Equivalents: The carrying amount reported in
the statement of net assets in liquidation for cash and cash
equivalents approximates their fair value.
Concorde Career Colleges, Inc. ("Concorde") Securities:
Other assets at December 31, 1996 include the fair value of
CenCor's investments in Concorde which is based upon the terms of
repayment as defined in the December 30, 1996 agreement (the
"Fourth Amendment") with Concorde. See Note 2.
<PAGE>
Other Assets: The Company's other assets, excluding
CenCor's investment in Concorde, are reported in the statement of
net assets in liquidation at their fair value.
Accounts Payable and Accrued Liabilities: The carrying
amount reported in the statement of net assets in liquidation for
accounts payable and accrued liabilities approximates their fair
value.
Income Tax Payable: The carrying amount reported in the
statement of net assets in liquidation approximates the fair
value of taxes currently payable.
Long-Term Debt: The fair value of the Company's long-term
debt at December 31, 1996 was estimated using discounted cash
flow analyses, based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements (10%
at December 31, 1996). The fair value at December 31, 1996 reflects
a conversion of the convertible notes in accordance with the bank-
ruptcy plan and the Company's purchase of a portion of the
outstanding long-term debt (see Note 3).
<PAGE>
2. Other Assets
At December 31, 1996, the Company held a junior secured debenture
(the "Debenture") of Concorde Career Colleges, Inc. ("Concorde")
in the principal amount of approximately $2.4 million and 260,385
shares of Concorde's cumulative preferred stock (the "Preferred
Stock"). Further, the Company held an unsecured debt of Concorde
in the principal amount of approximately $190,000 (the "Unsecured
Debt").
The Debenture, which was to have matured on July 31, 1997, called
for principal and interest payments commencing June 30, 1996
based on a 10-year amortization schedule. Interest on the
Debenture compounded and accrued quarterly at a variable rate not
to exceed 12%. The Debenture further called for an additional
contingent payment at the maturity of the Debenture in an amount
equal to 25% of the amount by which the "market capitalization"
of Concorde exceeded $3.5 million. The Preferred Stock, $.10 par
value, had a per share liquidation preference of $10.00 per
share. Cumulative quarterly dividends accrued at a rate equal to
73% of the then current interest rate on the Debenture.
Dividends were to have accrued until such time as the Debenture
was paid in full. While Concorde could redeem the Preferred
Stock in whole or in part at liquidation value plus accrued
cumulative dividends, the Preferred Stock did not provide for
mandatory redemption.
On December 30, 1996, CenCor and Concorde amended the
Restructuring, Security and Guaranty Agreement (the "Fourth
Amendment") between the parties to facilitate the early
redemption of the Preferred Stock and payment in full of all of
the obligations of Concorde to CenCor. The Fourth Amendment
provided that if CenCor received a "repayment price" of
approximately $4.8 million prior to February 28, 1997, inclusive
of any Preferred Stock redemption payments and debt service
payments on the Debenture subsequent to September 30, 1996, that
the Debenture and the Unsecured Debt would be retired and the
Preferred Stock redeemed in full.
<PAGE>
In February 1997, CenCor retired in full all of Concorde's debt
obligations to CenCor and redeemed in full all of the remaining
shares of Preferred Stock in accordance with the terms of the
Fourth Amendment. In exchange, CenCor agreed to release Concorde
from all liabilities and obligations, except its continuing
obligation to convey written-off receivables in connection with
discharged interest, as described below.
During 1996, CenCor received $452,498 from Concorde in redemption
of 39,615 shares of Preferred Stock and $411,890 in payments from
Concorde on the Debenture.
In 1993 and 1994, Concorde agreed to assign certain charged-off
receivables to CenCor in full payment of the accrued interest due
on the Junior Secured Debenture through December 31, 1993 and
1994, respectively. The receivables, which consist of account
and notes receivable from students who attended schools operated
by Concorde or its subsidiaries, were assigned to CenCor without
recourse with CenCor assuming all risk of non-payment of the
receivables. The agreement with Concorde grants CenCor limited
rights of substitution until such time as it collects full
payment of the accrued interest, exclusive of out-of-pocket
collection fees and expenses paid to third parties. CenCor has
engaged a collection agent to pursue recovery of such receivables
assigned to the Company. As of September 30, 1997, CenCor has
collected approximately $996,000 of the total $1,057,000
discharged interest due from the charged-off receivables.
In addition, an escrow account was established in accordance with
the provisions of the agreement pertaining to the sale of
Century's assets. Such amount, including accrued interest
($5,471,000 and $5,277,000 at September 30, 1997 and December 31,
1996, respectively), is included in other assets. The escrow was
established in order to secure certain indemnification
obligations of Century and CenCor to the buyer that run through
July 1, 1998.
<PAGE>
As part of the sale, Century also assigned to the buyer its
benefits, rights and interests (including interests in future
insurance commissions receivable) in a service expense
reimbursement agreement (the "SER Agreement(s)") with a third
party. Century also agreed to indemnify the buyer in an amount up
to $750,000 if it was determined that any of Century's rights
under the SER Agreement were impaired as a result of the sale of
Century's assets such that Century's buyer did not receive up to
$750,000 in payments under the SER Agreement. The third party
has notified the Company that it believes the sale of
Century's assets constitutes a material breach of the SER
Agreement and, therefore, that Century has forfeited its rights
to receive payments under the SER Agreement. If the third party
fails to make payments under the SER Agreement, Century could be
exposed to indemnification claims by its buyer up to $750,000.
Management is vigorously pursuing collection of the insurance
commission receivable from the third party.
3. Long-Term Debt
Pursuant to a 1993 plan of reorganization, CenCor's noteholders
received the following securities for each $1,000 aggregate
amount of principal and accrued but unpaid interest at
December 31, 1992:
i. $600 principal amount of non-interest bearing Non-
Convertible Notes
ii. $400 principal amount of non-interest bearing Convertible
Notes
iii. 5.2817 shares of CenCor common stock, par value of $1 per
share
The Non-Convertible Notes are non-interest bearing and will
mature on July 1, 1999. On August 19, 1996, CenCor offered to
retire all of its outstanding Non-Convertible Notes due July 1,
1999 at a cash price equal to 74% of their principal amount.
Prior to the offer, the principal balance of the Non-Convertible
Notes was $17,174,656. CenCor purchased and retired outstanding
Non-Convertible Notes in the principal amount of $9,970,930 as of
the November 18, 1996 offer expiration date at a cost of
$7,374,415. The fair value of the non-tendered, Non-Convertible
Notes was $5,680,770 at December 31, 1996.
<PAGE>
On May 30, 1997, pursuant to the indenture governing the Non-
Convertible Notes, the Company delivered approximately $6.4
million in U.S. government securities to the indenture trustee as
an irrevocable pledge to defease the $7,203,726 outstanding
principal amount of Non-Convertible Notes. Accordingly, long-
term debt is not reflected in the financial statements at
September 30, 1997.
On December 31, 1995, CenCor had outstanding non-interest bearing
convertible notes due July 1, 1999 (the "Convertible Notes") in
the principal amount of $11,449,771. Effective April 1, 1996,
CenCor converted these Convertible Notes into shares of CenCor's
common stock at a ratio of one share of common stock for each $20
principal amount of Convertible Notes. As a result of this
conversion, the holders of the Convertible Notes are entitled to
be issued 572,554 shares of CenCor common stock upon surrender of
their Convertible Notes. As of September 30, 1997, 22,131 shares
issuable remain unclaimed.
4. Income Taxes
The Company's 1990, 1991 and 1992 federal income tax returns have
been examined by the Internal Revenue Service (IRS). The IRS has
proposed adjustments to increase taxable income in 1991 which the
Company is in the process of appealing. Management believes that
the ultimate disposition of the IRS examination will not have a
material effect on the financial position of the Company.
In addition, an income tax refund receivable for approximately
$554,000 related to the Company's 1996 income tax returns is
included in other assets at September 30, 1997.
<PAGE>
5. Per Share Information
Net assets in liquidation per common share was computed by
dividing net assets in liquidation by the outstanding shares of
common stock at September 30, 1997 and December 31, 1996, respec-
tively. The outstanding share amounts reflected in the financial
statements assumes all 572,554 shares issued as a result
of the conversion of the Convertible Notes are issuable. In
addition, the outstanding share amount at September 30, 1997
has been reduced by 126,418 shares to reflect the purchase and
retirement by CenCor of its common stock on August 12, 1997.
See Item 2, Management's Discussion and Analysis of Financial
Condition and Results of Operations--Stock Tender Offer, for a
further discussion regarding CenCor's purchase of its stock.
(The remainder of this page is intentionally blank)
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition
Sale of Century
Effective June 30, 1995, Century consummated the sale of its
consumer finance business to Fidelity Acceptance Corporation, a
subsidiary of the Bank of Boston Corporation.
Under the terms of the sale, Century received $128.7 million
for substantially all of its assets. In accordance with the
provisions of the sales agreement, $5 million of the sale
proceeds were placed in escrow to secure certain indemnification
obligations of the Company that expire on July 1, 1998. The buyer
has made one claim for $40,000 against the escrow and has
notified the Company of other claims which may be asserted
against the escrow balance. Management does not believe the
amount of the other claims, if any, will be material to the
consolidated financial statements.
As part of the sale, Century also assigned to the buyer its
benefits, rights and interests (including interests in future
insurance commissions receivable) in a service expense
reimbursement agreement (the "SER Agreement(s)") with a third
party. Century also agreed to indemnify the buyer in an amount up
to $750,000 if it was determined that any of Century's rights
under the SER Agreement were impaired as a result of the sale of
Century's assets such that Century's buyer did not receive up to
$750,000 in payments under the SER Agreement. The third party
has recently notified the Company that it believes the sale of
Century's assets constitutes a material breach of the SER
Agreement and, therefore, that Century has forfeited its rights
to receive payments under the SER Agreement. If the third party
fails to make payments under the SER Agreement, Century could be
exposed to indemnification claims by its buyer up to $750,000.
Management is vigorously pursuing collection of the insurance
commission receivable from the third party.
<PAGE>
Plan of Liquidation
With the sale of its consumer finance business, CenCor's
business purpose no longer exists. For that reason, CenCor's
Board of Directors adopted a resolution on January 22, 1996 that
CenCor be liquidated and that the Plan of Liquidation be
submitted to the stockholders for approval. The Company's
Stockholders approved the Plan of Liquidation at the Company's
annual meeting of Stockholders held on September 12, 1996 and a
Certificate of Dissolution was subsequently filed with the State
of Delaware.
Under Delaware law, CenCor will continue as a corporate
entity for three years after the effective date of the
dissolution (October 1, 1996) or for such longer period as the
Delaware Court of Chancery directs in its own discretion, for the
purpose of prosecuting and defending suits by or against CenCor
and winding up the business and affairs of CenCor, but not for
the purpose of continuing the business of CenCor.
The Plan of Liquidation provides that the implementation of
the plan is intended to be completed by October 1, 1999. During
this three year period, CenCor will not engage in any business
activities, except for preserving the value of its assets,
adjusting and winding up its business and affairs, and
distributing its assets in accordance with the Plan of
Liquidation. CenCor's debts and liabilities, whether fixed,
conditioned or contingent, will either be paid as they become due
or provided for.
At such time as the Board has determined that all claims and
liabilities have been identified and paid or provided for, which
CenCor does not expect to occur prior to 1999, CenCor will
distribute in one or a series of distributions, at any time, or
from time to time as the Board, in its discretion may determine,
all funds resulting from CenCor's liquidation to the stockholders
in accordance with the respective rights of each. The
proportionate interests of the respective stockholders in the
assets of CenCor would be fixed on the basis of their ownership
of the outstanding shares of CenCor on a record date to be
determined by the Board.
<PAGE>
During the period of liquidation CenCor's directors and
officers are authorized to implement and carry out the
provisions of the Plan of Liquidation and will receive
compensation for their services. The Board recently determined
that, in addition to the regular directors fees paid to each
member of the Board of Directors, each Director shall receive a
payment equal to $75,000 immediately prior to the final
distribution of the liquidation proceeds to the shareholders
as additional consideration for the performance of
services to the Company. The purpose of the additional
payments is to encourage these individuals to continue
in their service to the Company through the Company's final
liquidation and to recognize the directors for their past
performance. The additional payments have been recorded as a
liability in the September 30, 1997 financial statements.
Assuming CenCor had fully liquidated and distributed its assets
by September 30, 1997 and assuming further that the Company's
actual realizable value of its assets and liabilities is
identical to the Company's estimated realized value of these
items, CenCor's stockholders would have received $16,092,000 in
distributions or approximately $11.82 per share, less costs to
liquidate. The actual amount to be received upon complete
liquidation may be adversely affected by claims arising from the
indemnification obligations resulting from the sale of Century's
assets, unanticipated tax liabilities, or other unforeseen
factors.
Stock Tender Offer
On June 13, 1997 CenCor commenced an offer to purchase
and retire 570,000 shares of its common stock at $8.75 per share.
The offer expired on August 12, 1997 at which time CenCor paid
$1,106,158 for 126,418 shares of its common stock. The purpose
of the offer was to provide the shareholders, who did not wish
to hold their shares until CenCor completes its liquidation, an
opportunity to sell their shares and to enhance the liquidation
value to the non-tendering shareholders.
<PAGE>
Conversion of Convertible Notes and Retired Stock
On December 31, 1995, CenCor had outstanding non-interest
bearing convertible notes due July 1, 1999 (the "Convertible
Notes") in the principal amount of $11,449,771. Effective April
1, 1996, CenCor converted these Convertible Notes into shares of
CenCor's common stock at a ratio of one share of common stock for
each $20 principal amount of Convertible Notes. As a result of
this conversion, the holders of the Convertible Notes are
entitled to be issued 572,554 shares of CenCor common stock upon
surrender of their Convertible Notes. As of September 30, 1997,
22,131 shares issuable remain unclaimed.
<PAGE>
Long - Term Debt
On August 19, 1996 CenCor offered to redeem all of its
outstanding Non-Convertible Notes due July 1, 1999 at a cash
price equal to 74% of their principal amount. Prior to the
offer, the principal balance of the Non-Convertible Notes was
$17,174,656. CenCor redeemed outstanding Non-Convertible Notes
in the principal amount of $9,970,930 as of the November 18, 1996
offer expiration date at a cost of $7,374,415. On May 30, 1997,
pursuant to the indenture governing the Non-Convertible Notes,
CenCor defeased its outstanding Non-Convertible Notes in the
principal amount of $7,203,726 by delivering approximately $6.4
million in U.S. Government Securities to the indenture trustee.
Concorde Career Colleges, Inc. Agreements
At December 31, 1996, the Company held a junior secured
debenture (the "Debenture") of Concorde Career Colleges, Inc.
("Concorde") in the principal amount of approximately $2.4
million and 260,385 shares of Concorde's cumulative preferred
stock (the "Preferred Stock"). Further, the Company held an
unsecured debt of Concorde in the principal amount of
approximately $190,000 (the "Unsecured Debt").
The Debenture, which was to mature on July 31, 1997,
called for principal and interest payments commencing June 30,
1996 based on a 10-year amortization schedule. Interest on the
Debenture compounded and accrued quarterly at a variable rate not
to exceed 12%. The Debenture further called for an additional
contingent payment at the maturity of the Debenture in an amount
equal to 25% of the amount by which the "market capitalization"
of Concorde exceeded $3.5 million.
The Preferred Stock, $.10 par value, had a per share
liquidation preference of $10.00 per share. Cumulative quarterly
dividends accrued at a rate equal to 73% of the then current
interest rate on the Debenture. Dividends were to have accrued
until such time as the Debenture was paid in full. While
Concorde could redeem the Preferred Stock in whole or in part
at liquidation value plus accrued cumulative dividends, the
Preferred Stock did not provide for mandatory redemption.
<PAGE>
On December 30, 1996, CenCor and Concorde amended the
Restructuring, Security and Guaranty Agreement (the "Fourth
Amendment") between the parties to facilitate the early
redemption of the Preferred Stock and payment in full of all of
the obligations of Concorde to CenCor. The Fourth Amendment
provided that if CenCor received a "repayment price" of
approximately $4.8 million prior to February 28, 1997, inclusive
of any Preferred Stock redemption payments and debt service
payments on the Debenture subsequent to September 30, 1996, that
the Debenture and the Unsecured Debt would be retired and the
Preferred Stock redeemed in full.
In February 1997, CenCor retired in full all of
Concorde's debt obligations to CenCor and redeemed in full all of
the remaining shares of Preferred Stock in accordance with the
terms of the Fourth Amendment. In exchange, CenCor agreed to
release Concorde from all liabilities and obligations, except
its continuing obligation to convey written-off receivables in
connection with discharged interest, as described below.
During 1996, CenCor received $452,498 from Concorde in
redemption of 39,615 shares of Preferred Stock and $411,890 in
payments from Concorde on the Debenture.
In 1993 and 1994, Concorde agreed to assign certain
charged-off receivables to CenCor in full payment of the accrued
interest due on the Junior Secured Debenture through December 31,
1993 and 1994, respectively. The receivables, which consist of
account and notes receivable from students who attended schools
operated by Concorde or its subsidiaries, were assigned to CenCor
without recourse with CenCor assuming all risk of non-payment of
the receivables. The agreement with Concorde grants CenCor
limited rights of substitution until such time as it collects
full payment of the accrued interest, exclusive of out-of-pocket
collection fees and expenses paid to third parties. CenCor has
engaged a collection agent to pursue recovery of such receivables
assigned to the Company. As of September 30, 1997, CenCor has
collected approximately $996,000 of the total $1,057,000
discharged interest due from the charged-off receivables.
<PAGE>
Assets and Liabilities Following Sale of Century Using
Liquidation Accounting
The Company's assets consist primarily of cash and cash
equivalents, certain previously charged-off receivables received
in payment of accrued interest on the Debenture, an income tax
receivable refund from the Company's 1996 tax returns, and the
escrow account established to secure the indemnification obliga-
tions of the Company to the buyer of the consumer finance
business.
The Company's remaining liabilities consist primarily of
accounts payable and other accrued liabilities, including the
accrued additional payments due to the Company's directors prior
to liquidation, and accrued income taxes. As a result of being in
the process of liquidation, the Company is required to adopt the
liquidation basis of accounting. Generally accepted accounting
principles require the adjustment of assets and liabilities to
estimated fair value under the liquidation basis of accounting.
For information concerning the estimated fair values given these
items by the Company and the methods and assumptions used to
arrive at such values, see the Company's Financial Statements and
the notes thereto.
Results of Operations
During the three and nine months ended September 30, 1997,
the Company's sources of income consisted mostly of investment
income and collections from the Concorde charged-off receivables
that the Company accepted in exchange for accrued interest on the
Debenture.
The Company's expenses during the three and nine months
ended September 30, 1997 consisted mainly of salaries, accretion of
interest on the Company's then outstanding long-term debt, pro-
fessional and consulting fees, and other liquidating expenses.
During the three months ended September 30, 1997, the company
recorded a reduction to income tax expense as a result of refunds
due from overpayment of tax on the 1996 income tax returns. In
addition, during the three months ended September 30, 1997, the
Company also disbursed $1,157,000 for costs related to the pur-
chase and retirement of its common stock as previously discussed.
<PAGE>
Activities During Liquidation Period
The Company's activities during the period of liquidation
will focus on the collection of various amounts owed to it,
including the previously charged-off Concorde receivables
received in payment of accrued interest. The Company will also
closely monitor claims arising from indemnification obligations
to the buyer of Century in order to maximize the value of the
escrow fund established as a result of the sale. Until
distributions are made to stockholders, management expects to
invest the available proceeds from the sale of Century and the
Company's other cash in short-term government or government
agency instruments.
The Company's expenses during the period of liquidation are
expected to consist mostly of salaries, professional fees,
stockholder communication expenses, income taxes and other
liquidating expenses.
The Company will be required to satisfy all liabilities
prior to any distribution on its outstanding common stock. The
Company believes that it has adequate reserves for all of its
material known contingent, conditional and unmatured liabilities.
Liquidity and Capital Resources
Capital Obligations
The Company has no significant obligations for capital
purchases.
<PAGE>
Internal Revenue Service Examination and Potential California
Sales Tax Assessment
The Company's 1990, 1991, and 1992 federal income tax
returns have been examined by the IRS. The IRS has proposed
adjustments to increase taxable income in 1991 which the Company
is in the process of appealing. Management believes that an
adequate reserve has been provided at September 30, 1997 relating
to these proposed adjustments and therefore the ultimate
disposition of the IRS examination will not have a material
effect on the financial position of the Company.
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<PAGE>
Part II
Item 1 Legal Proceedings - None
Item 2 Change in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Security Holders - None
Item 5 Other Information - None
Item 6 Exhibits and Reports on Form 8-K
EXHIBIT NUMBER DESCRIPTION
27 Financial Data Schedule
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
by the undersigned, thereunto duly authorized.
CENCOR, INC.
Dated November 14, 1997 /s/ Jack L. Brozman
Jack L. Brozman, President
/s/ Terri L. Rinne
Terri L. Rinne, Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 11,140,000
<SECURITIES> 0
<RECEIVABLES> 6,139,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,279,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,279,000
<CURRENT-LIABILITIES> 1,187,000
<BONDS> 0
0
0
<COMMON> 1,361,993
<OTHER-SE> 14,730,007
<TOTAL-LIABILITY-AND-EQUITY> 17,279,000
<SALES> 0
<TOTAL-REVENUES> 846,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,927,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 709,000
<INCOME-PRETAX> (1,790,000)
<INCOME-TAX> (488,000)
<INCOME-CONTINUING> (1,302,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,302,000)
<EPS-PRIMARY> (0.96)
<EPS-DILUTED> (0.96)
