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 March 31, 1998 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 April 23, 1998 CenCor, Inc. had 1,340,951 shares of Common
Stock, $1.00 par value outstanding with a market value of
$7,103,017.
<PAGE>
CENCOR, INC.
FORM 10-Q
QUARTER ENDED March 31, 1998
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 9
PART II
1. Legal Proceedings 14
2. Change in Securities 14
3. Defaults Upon Senior Securities 14
4. Submission of Matters to a Vote of Security
Holders 14
5. Other Information 14
6. Exhibits and Reports on Form 8-K 14
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
March 31, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Assets:
Cash and cash equivalents $ 4,148,000 $ 11,248,000
Other assets 6,209,000 6,182,000
Total assets 10,357,000 17,430,000
Liabilities:
Accounts payable and accrued liabilities 445,000 432,000
Partial liquidating distribution payable 66,000 7,225,000
Total liabilities 511,000 7,657,000
Net assets in liquidation $ 9,846,000 $ 17,457,000
Number of common shares outstanding 1,350,384 1,350,384
Net assets in liquidation per shares $ 7.29 $ 7.24
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, 1998 and 1997
(Unaudited)
1998 1997
<S> <C> <C>
Net assets in liquidation,
December 31, 1997 and 1996 $ 9,773,000 $17,394,000
Income from liquidating activities
Investment income 202,000 311,000
202,000 311,000
Expenses from liquidating activities
Salaries and related benefits 51,000 72,000
Interest expense -- 137,000
Professional fees 30,000 10,000
Other expenses 48,000 29,000
129,000 248,000
Increase in net assets in liquidation 73,000 63,000
Net assets in liquidation,
September 30, 1998 and 1997 $ 9,846,000 $ 9,773,000
See accompanying notes.
</TABLE>
<PAGE>
CenCor, Inc.
(In Process of Liquidation)
Notes to Consolidated Financial Statements
March 31, 1998 and 1997
1. Summary of Significant Accounting Policies
Basis of Presentation and Plan of Liquidation
The accompanying consolidated financial statements include accounts
of CenCor, Inc. and its wholly-owned subsidiary Century Acceptance
Corporation ("Century") (collectively, "the Company"). Effective
June 30, 1995, the Company sold substantially all of the assets
of 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.
As a result of Board of Directors' intent as of December 31, 1995,
the Company adopted a Plan of Dissolution and Liquidation (the "Plan
of Liquidation"). In connection with the Plan of Liquidation, the
officers and director of CenCor are authorized to (i) dissolve CenCor,
including the execution and filing of a Certificate of Dissolution
with the Secretary of 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. The
Company's stockholders approved the Plan of Liquidation on September
12, 1996 at the Company's annual meeting of 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 March 31, 1998 and 1997
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.
Use of Estimates
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.
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.
<PAGE>
Other Assets: The Company's other assets 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.
Partial liquidating distribution payable: The carrying
amount reported in the statement of net assets in liquidation
approximates the fair value of the partial liquidating distribution
payable.
<PAGE>
2. Other Assets
As of December 31, 1997, a portion of the Company's assets consisted
of certain charged-off receivables obtained in full payment of the accrued
interest due on a subordinated debt of Concorde Careers Colleges, Inc.
The receivables, which consisted of account and notes receivable from
students who attended schools operated by Concorde or its subsidiaries,
were assigned to the Company without recourse with the Company assuming
all risk of non-payment of the receivables. The agreement with Concorde
granted CenCor limited rights of substitution until such time that it collects
full payment of the accrued interest, exclusive of out-of-pocket
collection fees and expenses paid to third parties. As of December 31,
1997 CenCor had collected approximately $1,046,000 of the total $1,057,000
discharged interest due from the charged-off receivables. The balance of
the discharged interest was collected in January, 1998 and CenCor has
subsequently reassigned the charged off receivables to Concorde.
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
($5,627,000 and $5,549,000 at March 31, 1998 and December 31,
1997, 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 Fidelity 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 Fidelity 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 Fidelity did not receive up to
$750,000 in payments under the SER Agreement. During 1997,
Norwest Financial, Inc. ("Norwest") acquired certain assets and
liabilities of Fidelity including Fidelity's rights under the SER
Agreement and to claims against the escrow. On March 2, 1998
Norwest agreed to relinquish any indemnification claims against
the Company and the escrow related to payments under the SER
Agreement.
On December 12, 1997 Fidelity also asserted an indemnification
claim of approximately $2.5 million against the escrow account.
Fidelity's claim is based upon two claims by a third party against
Fidelity, as Century's successor in interest. Fidelity reserved
the right to seek an additional disbursement from the escrowed
funds in the event Fidelity's ultimate liability to the third
party exceeded the approximate $2.5 million.
The third party's claims against Fidelity relate to amounts
alledgedly due for reserves that the third party claims were to be
established by Century under certain agreements with the third party.
The first claim relates to a $200,000 deposit with Century from
the third party under a guarantee agreement. When Century sold
substantially all of their assets to Fidelity, Fidelity was given
a reduction in the purchase price for the $200,000 deposit and agreed
to assume Century's obligations to the third party related to the
deposit. Accordingly, the Company believes this claim is without
merit.
<PAGE>
The second claim by the third party relates to an alledged $2.3
million second reserve account. Century has advised Fidelity
and the third party that neither Century nor any of its
subsidiaries held any other deposits or reserves for the third
party other than the aforementioned $200,000 deposit. While the
Company has agreed to indemnify Fidelity in this matter, the
Company believes this claim of the third partry is without
merit and is actively defending the third party claim.
The Escrow Agent has advised the Company that it will not release any of
the contested escrowed funds until it receives non-conflicting
written instructions from Century and Fidelity as to the disposition
of the escrowed funds or an order of an arbitrator of Court
having jurisdiction over the matter. As previously mentioned, the
Company is actively attempting to resolve the $2.3 million
claim with the third party so that Fidelity will agree to the release
of escrowed funds.
Other assets at March 31, 1998 and December 31, 1997 also includes
a net income tax refund receivable of $488,000 and $595,000,
respectively from the Company's prior years federal and state
income tax returns.
3. Income Taxes
The Company's 1990, 1991 and 1992 federal income tax returns were
examined by the Internal Revenue Service (IRS), which has
proposed certain adjustments, a portion of which have been protested
by the Company. The Company has recently reached a tentative agreement with
the IRS. Based upon the tentative agreement, the Company's net
operating loss ("NOL") carryforward, for federal income tax
purposes, at March 1, 1998 is expected to be approximately $30,000
and the Company's alternative minimum tax ("AMT") carryforward
is expected to be approximately $577,000. The NOL carryforward
expires December 31, 2008 and the AMT credit can be carried forward
indefinately.
Based upon the terms of the tentative agreement, the Company has recorded
in other assets a net recoverable for income taxes of $488,000 and $595,000
at March 31, 1998 and December 31, 1997, respectively. The net recoverable
for income taxes at December 31, 1997 also includes $107.000 refund for
state income taxes which was received in March 1998.
Although no assurances can be made, the Company believes it will settle
the IRS exam under the tentative agreement and that the amount of the
net recoverable is reasonable.
<PAGE>
4. 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, 1998 and December 31, 1997.
Effective April 1, 1996, CenCor converted its outstanding non-interest bearing
convertible notes due July 1, 1999 (the "Convertible Notes") in the principal
amount of $11,449,771 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 the conversion, the holders of the Convertible Notes were entitled
to 572,554 shares of CenCor common stock upon surrender of their Convertible
Notes. The outstanding share amount reflected in the financial statements
assumes all 572,554 shares issued as a result of the conversion of the
Convertible Notes are outsanding. However, as of March 31, 1998,
11,631 shares issuable remain
unclaimed by the holders of the Convertible Notes.
On February 2, 1998, CenCor announced a partial liquidating distribution of
$5.35 per share to shareholders of record on February 16, 1998. On
March 9, 1998 CenCor distributed 7,159,049 to its 1,338,140 outstanding
shareholder of record as of February 16, 1998.
The outstanding shares of common stock of 1,338,410 on February 16, 1998 was
exclusive of 12,140 shares of common stock issuable to holders of Old Notes who
have failed to surrender their Old Notes.
In April, 1998, the Bankruptcy Court approved the motions of the three holders
of Old Notes. As a result the three holders of Old Notes will be entitled to
receive a total of 531 shares of common stock and the partial liquidating
distribution of $5.35 per share for the exchange of their Old Notes and the
surrender of the Convertible Notes. The partial liquidataion distribution
payable and the outstanding shares of common stock at March 1, 1998 and
December 31, 1997 includes the 531 shares, but does not include any amounts
that may be owed to the remaining holders of Old Notes.
<PAGE>
The outstanding shares of stock at February 16, 1998 that received the
partial liquidating distribution on March 9, 1998 does not include 11,713
of common shares issuable to Convertible Noteholders who have failed to
surrender their Convertible Notes in exchange for common stock.
Subsequently, 82 shares of common stock and the underlying partial
liquidating distribution of $5.35 per share were issued as a result of the
surrender of Convertible Notes. The partial liquidation distribution payable
and the outstanding shares of common stock reflected in the financial statements
at March 31, 1998 and December 31, 1997 include the 11,631 and 11,713 shares,
respectively and the resulting partial liquidating distribution due to the
unsurrendered Convertible Noteholders.
(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 ("Fidelity").
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. Fidelity
has made two claims fora total of $48,000 against the escrow, which the
Company did not dispute.
<PAGE>
On December 12, 1997 Fidelity also asserted an indemnification
claim of approximately $2.5 million against the escrow account.
Fidelity's claim is based upon two claims by a third party against
Fidelity, as Century's successor in interest. Fidelity reserved the
right to seek an additional disbursement from the escrowed funds in
the event Fidelity's ultimate liability to the third party exceeded
the approximate $2.5 million claim.
The third party's claims against Fidelity relate to amounts
allegedly due for reserves that were to be established by Century under
certain agreements with the third party. The first claim relates to a
$200,000 deposit with Century from the third party under a guarantee
agreement. When Century sold substantially all of
their assets, Fidelity was given a reduction in the purchase
price for the $200,000 deposit and agreed to assume Century's obligations
to the third party related to the deposit. Century has been advised by
Fidelity that this claim has been resolved with the third party.
The second claim by the third party relates to an alleged
$2.3 million second reserve account. Century has advised Fidelity and the
third party that neither Century nor any of its subsidiaries held any
other deposits or reserves for the third party other than the
aforementioned $200,000 deposit. While the Company has agreed to
indemnify Fidelity in this mater, the Company believes this claim of the
third party is without merit and is actively defending the third party
claim.
The Escrow Agent has advised the Company that it will not
release any of the contested escrowed funds until it receives non-conflicting
written instructions from Century and Fidelity as to the disposition of the
escrowed funds or an order of an arbitrator or Court having jurisdiction over
the matter. As previously mentioned, the Company is actively attempting to
resolve the $2.3 million claim with the third party so that Fidelity will agree
to the release of the escrowed funds.
<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.
The Board determined that a partial liquidating distribution of
$5.35 per share would be issued to stockholders of record on February
16, 1998. At such time as the Board has determined that all claims and
liabilities have been identified and paid or provided for, the Board
will determine a record date and issue a final liquidating distribution.
CenCor does not expect this to occur prior to 1999.
<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. In addition, the Vice President of the
Company will receive a bonus of $100,000 if the officer is still
employed by the Company on the date the Company makes its final
liquidation distribution to its shareholders.
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.
As discussed below, on February 2, 1998, CenCor announced a partial
liquidating distribution in the amount of $5.35 per share to be paid
on March 9, 1998. After the partial liquidating distribution
and assuming CenCor had fully liquidated and distributed its assets by
March 31, 1998 and the Compnay'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 $9,846,000 in
distributions or approximately $7.29 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.
<PAGE>
Partial Liquidating Distribution
On February 2, 1998 CenCor announced payment of a partial
liquidating distribution on March 9, 1998 in the amount of $5.35
per share to common stockholders of record as of February 16, 1998.
The Company distributed $7,159,049 on 1,338,140 outstanding shares
of common stock on March 9, 1998.
The outstanding shares of common stock of 1,338,140 on
February 16, 1998 is exclusive of 12,140 shares of common stock
issuable to holders of Old Notes who have failed to surrender
their Old Notes. The Company has submitted an application to the
Bankruptcy Court to confirm the Company's right to disregard
recognition of the ownership rights claimed by holders of Old
Notes in accordance with the 1993 plan of reorganization. How-
ever, as of the payment record date of February 16, 1998, three
holders of Old Notes had notified the Company of their intention
to file a motion with the Bankruptcy Court to request a late
exchange of their Old Notes for Non-Convertible Notes, Convertible
Notes, and common stock. In April, 1998, the Bankruptcy Court
approved the motions of the three holders of Old Notes. As a
result the three holders of Old Notes will be entitled to receive
a total of 531 shares of common stock and the partial liquidating
distribution of $5.35 per share for the exchange of their Old Notes
and the surrender of the Convertible Notes. The partial liquidation
distribution payable and the
outstanding shares of common stock at March 31, 1998 and December
31, 1997 includes the 531 shares, but does not include any amounts
that may be owed to the remaining holders of Old Notes.
The outstanding shares of stock at February 16,
1998 that received the partial liquidating distribution on March
9, 1998 does not include 11,713 of common shares issuable to
Convertible Noteholders who have failed to surrender their
Convertible Notes in exchange for common stock.
<PAGE>
Subsequently, 82 shares of common stock and the underlying
partial liquidating distribution of $5.35 per share have been issued as
a result of the surrender of Convertible Notes. The partial
liquidation distribution payable and the outstanding shares of
common stock reflected in the financial statements at March 31,
1998 and December 31, 1997 include the 11,631 and 11,713 shares,
respectively, and the resulting partial liquidating distribution
due to the unsurrendered Convertible Noteholders.
CenCor's 1993 plan of reorganization entitled holders of
Old Notes to receive Non-Convertible Notes, Convertible Notes, and
common stock in exchange for their Old Notes. The Convertible Notes
were converted into shares of common stock at a ratio of one share
of common stock for each $20 principal amount of Convertible Notes
on April 1, 1996.
<PAGE>
Conversion of Convertible Notes and Retired Stock
On December 31, 1995, CenCor had outstanding non-interest
bearing convertible notes due July 1, 1999 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 March 31, 1998,
11,631 shares issuable remain unclaimed by the holders of the
Convertible Notes.
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.
<PAGE>
Concorde Career Colleges, Inc. Agreements
In February, 1997 the Company retired in full its holding
in a junior secured debenture (the "Debenture") of Concorde
Career Colleges, Inc. ("Concorde") in the principal amount of
approximately $2.4 million plus interest and redeemed all of its
shares of Concorde's cumulative preferred stock.
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 consisted 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 December 31, 1997, the Company had
collected approximately $1,046,000 of the total $1,057,000
discharged interest due from the charged-off receivables. The
balance of the discharged interest was collected in January, 1998
and CenCor had subsequently reassigned the charged off receivables
to Concorde.
<PAGE>
Assets and Liabilities Following Sale of Century Using
Liquidation Accounting
The Company's assets at March 31, 1998 and December 31, 1998
consist primarily of cash and cash equivalents, an income tax receivable
refund, 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 at March 31, 1998 and
December 31, 1997 consist primarily of accounts payable and other
accrued liabilities, including the accrued additional payments
due to the Company's officers and directors prior to liquidation.
At December 31, 1997 the Company has also recorded a liability
for the partial liquidating distribution payable to its share-
holders on March 9, 1998. The Company distributed $7,159,040 on
March 9, 1998 to the stockholders of record on February 16, 1998.
The partial liquidating distribution payable at March 31, 1998
represents the balance due to unsurrendered Convertible Note
holders and to the previously mentioned three holders of Old Notes.
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 months ended March 31, 1998, the Company's
source of income was from short-term government and government-
agency investments.
The Company's expenses for the three months ended March 31,
1998 consisted mainly of salaries, professional and consulting fees,
and other liquidating expenses.
<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 monitoring 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 the distributions
are made to the 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 final 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
The Company's 1990, 1991, and 1992 federal income tax
returns were examined by the Internal Revenue Service (IRS),
which has proposed certain adjustments, a portion of which have
been protested by the Company. The Company has recently reached a
tentative agreement with the IRS. Based upon the tentative
agreement, the Company's NOL carryforward for federal income tax
purposes, at December 31, 1997 is expected to be approximately
$30,000 and the Company's alternative minimum tax (AMT) credit
carryforward is expected to be approximately $577,000.
Based upon the terms of the tentative agreement, the
Company has recorded in other assets a net recoverable for income
taxes of $488,000 and $595,000 at March 31, 1988 and December 31,
1997, respectively. The net recoverable for income taxes at
December 31, 1997 also includes a $107,000 refund for state income
taxes which was received in March, 1998.
Although no assurances can be made, the Company believes it
will settle the IRS exam under the tentative agreement and that the
amount of the net recoverable is reasonable.
(The remainder of this page is intentionally blank)
<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
(The remainder of this page is intentionally blank)
<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 May 15, 1998 /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-31-1997
<PERIOD-END> MAR-31-1998
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