SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q/A
AMENDMENT NO. 1 TO THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1997 Commission File No. 0-3417
CENCOR, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 43-0914033
(State of other jurisdiction of (I. R. S. Employer Identifica-
Incorporation or Organization) tion 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 April 15, 1997, CenCor, Inc. had 1,459,214 shares of Common
Stock, $1.00 par value outstanding with a market value of
$11,673,712.
<PAGE>
Part I
Item I Financial Statements
Part I, Item I of the report is amended as follows:
The Company's Financial Statements are set forth herein, beginning
on the following page.
(The remainder of this page is intentionally blank.)
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<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Net Assets in Liquidation
March 31, December 31,
1997 1996
Assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 18,655,000 $ 14,513,000
Other assets 5,638,000 10,320,000
Total assets 24,293,000 24,833,000
Liabilities:
Accounts payable and accrued
liabilities 208,000 648,000
Income taxes payable 810,000 1,110,000
Long-term debt 5,818,000 5,681,000
Total liabilities 6,836,000 7,439,000
Net assets in liquidation $ 17,457,000 $ 17,394,000
Number of common shares
outstanding 1,488,411 1,488,411
Net assets in liquidation per share $ 11.73 $ 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 Three Months Ended March 31, 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 311,000 362,000
Other -- 145,000
311,000 507,000
Expenses from liquidating
activities
Salaries and related benefits 72,000 124,000
Interest expense 137,000 297,000
Professional fees 10,000 145,000
Other expenses 29,000 172,000
248,000 738,000
Increase (decrease) in net assets
in liquidation 63,000 <231,000>
Net assets in liquidation,
March 31, 1997 and 1996 $ 17,457,000 $ 17,394,000
See accompanying notes.
</TABLE>
<PAGE>
CenCor, Inc.
(In Process of Liquidation)
Notes to Consolidated Financial Statements
March 31, 1997
(Unaudited)
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 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.
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 March 31, 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.
<PAGE>
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 latest 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 3.
Other Assets: The fair value of the Company's other assets,
excluding CenCor's investment in Concorde, is estimated using
discounted cash flow analysis, based on an estimated discount rate
commensurate with the associated risks.
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 is estimated using discounted cash flow analyses, based on the
Company's current incremental borrowing rates for similar types of
borrowing arrangements (10% at March 31, 1997 and December 31,
1996). The fair value reflects a conversion of the convertible
notes in accordance with the bankruptcy plan (see Note 4).
<PAGE>
2. Litigation and Contingencies
Century was a defendant, along with a number of other consumer
finance companies, in two class action lawsuits in the State of
Alabama. The suits were filed by certain alleged borrowers of the
defendant creditor/lenders and assert various violations. While
Century denied the allegations, Century settled the claims during
1996 in order to avoid the time, expense, and uncertainty of
litigation. The settlement required Century to pay the class-
action plaintiffs $295,000, which included certain administrative
costs of the settlement of the claims.
3. 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.
<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 of all of Concorde's debt
obligations to CenCor and redeemed in full of 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 March 31, 1997, CenCor has collected approximately
$783,000 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 ($5,312,000 and
$5,277,000 at March 31, 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. Management believes
that any potential liability pertaining to these obligations would
be immaterial to the accompanying financial statements.
4. 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
<PAGE>
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 $9,965,425 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
$5,818,000 and $5,680,770 at March 31, 1997 and December 31, 1996
respectively.
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 April 15,1997, 543,357 shares have
been issued and are outstanding as a result of the surrender of
Convertible Notes. The conversion of these notes in satisfaction
of $11,449,771 principal amount of the obligation is reflected in
the financial statements and the number of outstanding shares at
March 31, 1997 and December 31, 1996.
5. 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.
6. 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 March 31, 1997 and December 31, 1996, respectively.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this amended report to be signed
by the undersigned, thereunto duly authorized.
CENCOR, INC.
Dated May 16, 1997 /s/ Jack L. Brozman
Jack L. Brozman, President
/s/ Terri L. Rinne
Terri L. Rinne, Vice President
