<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended 0-8254
- ----------------------------------------- ------------------------------------
December 31, 1996 Commission File Number
WESTFORD GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0854431
- ----------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 East Broad Street, Columbus, Ohio 43215
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (614) 228-2800
-------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
NONE NONE
- ----------------------------------------- ------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
COMMON SHARES, WITHOUT PAR VALUE
- --------------------------------------------------------------------------------
(Title of Class)
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 twelve 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Due to the absence of a significant trading market in the Registrant's Common
Shares, the Registrant does not have reliable information on the aggregate
market value of its voting stock held by non-affiliates.
As of February 14, 1997, the Registrant had 1,321,206 Common Shares, without par
value, outstanding.
<PAGE> 2
WESTFORD GROUP, INC. AND SUBSIDIARY
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1. Business........................................................ 3
Item 2. Properties...................................................... 4
Item 3. Legal Proceedings............................................... 4
Item 4. Submission of Matters to a Vote of Security Holders............. 5
PART II
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters..................................... 5
Item 6. Selected Financial Data......................................... 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.......................... 7
Item 8. Financial Statements and Supplementary Data..................... 9
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................... 23
PART III
Item 10. Directors and Executive Officers of the Registrant.............. 23
Item 11. Executive Compensation.......................................... 24
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 25
Item 13. Certain Relationships and Related Transactions.................. 26
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.................................................... 26
<PAGE> 3
PART I
Item 1. Business
--------
The Registrant (which term unless otherwise indicated, includes the Registrant
and its subsidiary) was incorporated in Ohio in 1972 and was a bank holding
company prior to August 15, 1978. Effective as of that date, the Registrant sold
all of its controlling interest in the Community National Bank of Mt. Gilead,
Ohio ("Mt. Gilead Bank").
Following the disposition of the Mt. Gilead Bank, the intention of the
Registrant was to utilize a portion of the sale proceeds to commence operations
as a reinsurer in the credit life and disability reinsurance business. These
operations, however, were frustrated as a result of shareholder litigation which
was eventually settled and dismissed.
On January 12, 1988, American Legal Publishing Corporation ("ALP Corporation"),
a newly formed, wholly-owned subsidiary of Westford Group, Inc., purchased
substantially all of the assets of AM Comp, Inc., formerly American Legal
Publishing Company. The acquired assets consisted generally of inventory,
equipment, supplies, computer software, contracts, leasehold interest and
various other intangibles. See note 1(f) to the consolidated financial
statements.
ALP Corporation's primary business consists of the codification of municipal and
county Codes of Ordinances and the supplementing thereof. The services provided
by ALP Corporation to a customer in providing codification services include:
(1) A review of the municipal ordinances of the customer to detect
possible conflicts with state and federal law, state and federal
constitutions, and state and federal court decisions. This review
is done at the specific direction of the customer's attorney.
(2) A review of the ordinances of the customer to make sure that they
do not conflict with other ordinances or the charter, if one
exists.
(3) Suggestions to the customer for changes, additions and deletions
to their ordinances. After editorial and indexing work is
concluded, the code is enacted into law and published in a
loose-leaf or electronic form to facilitate regular supplementing
to reflect changes in state and local law.
ALP Corporation believes that the additional services it provides in codifying a
customer's ordinances distinguish it from competitors.
Most of ALP Corporation's codification contracts include a provision to
supplement the customer's code, not less than annually, for a period of five (5)
years. Although the agreement may usually be terminated by the customer by
written notice prior to ninety (90) days before the anticipated delivery date of
the supplement, ALP Corporation has generally been successful in retaining
municipalities on supplemental contracts, and in having these contracts renewed
prior to expiration.
Some states now require that municipalities and/or counties each have a Code of
Ordinances. For this reason, ALP Corporation has prepared and marketed a "Basic
Code of Ordinances" to smaller municipalities in these states who do not need or
cannot afford a custom Code of Ordinances but who, by adoption of a basic code,
can meet state law requirements or receive the economic benefits of having a
local code. ALP Corporation has developed this basic or model Code of Ordinances
for the states of Ohio, Illinois, Indiana, Kentucky and North Carolina. It has
also developed, and is marketing with a Texas firm, a model Code of Ordinances
for Texas. In North Carolina and Kentucky, ALP Corporation serves as the
official code consultant to the state municipal leagues. Furthermore, in 1985,
the State of Kentucky enacted legislation providing grants to municipalities to
fund a Code of Ordinances as mandated by state law.
ALP Corporation presently has twenty-five full-time employees. The staff
consists of marketing, production, general administrative and editorial
personnel, eight of whom have law degrees.
3
<PAGE> 4
Item 1. Business (continued)
--------------------
There are approximately twenty-five (25) companies involved in the codification
of local government ordinances. Five (5) companies operate on either a national
or regional basis, with the rest serving clients only within a relatively small
geographic area. ALP Corporation currently represents approximately 850 local
governmental units in twenty-seven (27) states.
In the past few years, ALP Corporation has worked to develop a strong
telemarketing program. The result has been more comprehensive coverage of market
areas, an increase in the number of proposals generated, and higher projected
sales volume. ALP Corporation intends to establish a consistent direct mail
program and to develop a print media advertising campaign.
The success of ALP Corporation's basic code programs has induced the Registrant
to continue to search for similar opportunities in other states. Basic code
products fill a need at the low end of the price market. They are attractive low
cost options for small municipalities who would otherwise forego any code
service.
Rapid growth in the codification industry is most easily attainable through
acquisition of competitors. In recent years, ALP Corporation held serious
discussions with competitors regarding the purchase of such operations by ALP
Corporation. However, no agreements have been reached to date.
A logical opportunity for diversification lies in the school textbook market.
Nearly all states require the teaching of the rudiments of civics and government
in elementary and secondary schools. ALP Corporation, by the nature of its
business, enjoys a unique position through which it can provide educational
institutions with pertinent social studies topics and other textbook update
materials. Presently, the company publishes an educational newsletter which aids
teachers in presenting current state and local government issues to students.
The publication of local government material in electronic formats has become a
growing market segment. Local governments are looking for ways to manage
information electronically rather than to rely on growing stacks of paper
documents. ALP Corporation has developed programs for maintaining codes of
ordinances, meeting minutes, attorney opinions and other public documents in an
electronic format. In Ohio, Texas, Michigan and Wisconsin, ALP Corporation
contracts with the state municipal leagues to provide various electronic records
management services.
Item 2. Properties
----------
The executive offices of the Registrant are located in an office building at 20
East Broad Street, Columbus, Ohio. The office facilities are shared with other
affiliated entities and rental and bookkeeping expenses are allocated among
them. The Registrant does not own any materially important property used in its
operations.
In August 1991, ALP Corporation relocated to occupy 3,520 square feet of
rentable area on the 12th floor of the building located at 432 Walnut Street,
Cincinnati, Ohio and effective March 1, 1994, expanded into an additional 2,038
square feet for a total square footage of 5,558 under an operating lease which
will expire July 31, 1998. The lease provides for a monthly rental of $5,342,
net of reimbursements payable to the lessor for cost of maintenance and
operation of the building.
Item 3. Legal Proceedings
-----------------
Two discrimination charges were filed by an employee against ALP Corporation
with the Federal Equal Employment Opportunity Commission ("EEOC"). In the first
charge, filed on June 21, 1996, the employee alleged discrimination in pay on
the basis of age, sex and disability. The employee also alleged denial of
accommodation for alleged disabilities and oral intimidation and harassment in
retaliation for the employee's internal complaints. In the second discrimination
charge, filed on November 21, 1996, the employee claimed the company has
retaliated against the employee for pursuing the first charge. ALP Corporation
has submitted responses to both discrimination charges.
4
<PAGE> 5
No determination has been made as yet by the EEOC on either charge.
On or about January 27, 1997, a tort claim was filed on behalf of the same
employee of ALP Corporation, in the Court of Common Pleas, Hamilton County,
Ohio. The Complaint alleges that the employee's supervisors are guilty of
"intentional or negligent infliction of emotional distress" by their "verbal and
emotional abuse" of the employee. The Complaint also alleges a claim on behalf
of the employee's spouse for loss of consortium. ALP Corporation has filed an
Answer and will contest these claims vigorously since it believes it has strong
defenses to the claims.
Item 4. Submission of Matters To a Vote of Security Holders
---------------------------------------------------
None.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holders
---------------------------------------------------------------------
Matters
-------
(a) Market information
There is no established public trading market for the Registrant's
shares.
The Registrant does not have reliable information with respect to high
and low bid prices for each quarter.
(b) Holders
The number of holders of record of the Registrant's Common Stock as of
February 14, 1997 was 2,085.
(c) Dividends
There has been no cash dividend declared or paid on the Registrant's
outstanding common stock for the two most recent fiscal years. The
Registrant's intent is to reinvest earnings to finance its growth for the
purpose of improving and increasing both earnings per share and net
worth, and therefore it is not anticipated that the Registrant will pay
dividends in the foreseeable future.
(THIS SPACE INTENTIONALLY LEFT BLANK)
5
<PAGE> 6
Item 6. Selected Financial Data
-----------------------
Selected Income Statement Data:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Sales $1,505,952 $1,389,459 $1,234,981 $1,066,944 $ 969,023
Cost of sales 817,434 815,399 731,089 604,439 639,474
Selling, general and
administrative
expenses 582,131 424,917 416,149 353,630 295,881
Income taxes 27,876 31,579 33,451 (115,100) 2,974
Income from operations
before extraordinary
item 68,800 99,923 35,246 204,767 10,634
Extraordinary item - - - - 2,974
Cumulative effect of
change in accounting
for Federal income
taxes - - - 17,103 -
Net income $ 68,800 $ 99,923 $ 35,246 $ 221,870 $ 13,608
Net income per
outstanding
share of common
stock (1) $ .04 $ .06 $ .02 $ .13 $ .01
Average number of
shares of common
stock outstanding 1,666,219 1,664,842 1,661,226 1,661,226 1,661,226
</TABLE>
Selected Balance Sheet Data:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Current Assets $532,313 $552,267 $406,434 $421,256 $ 336,196
Notes payable
to bank 3,575 83,594 10,009 139,780 181,120
Current Liabilities 144,969 266,150 276,422 312,559 348,354
Working Capital 387,344 286,117 130,012 108,697 (12,158)
Total Assets 733,543 791,060 669,359 719,284 536,078
Shareholders' Equity 530,933 462,139 361,966 326,720 104,850
<FN>
(1) Income per common share has been computed by dividing net income by the weighted average number of common shares
outstanding during the year. Common stock equivalents were excluded from the computation in 1992 due to their
anti-dilutive effect.
</TABLE>
6
<PAGE> 7
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Summary
The following table sets forth changes in certain items reflected in the
financial data as compared to the indicated prior period.
<TABLE>
<CAPTION>
Period to Period Increase
Year Ended December 31,
1995-96 1994-95
------- -------
<S> <C> <C>
Sales $ 116,493 $ 154,478
Cost of sales 2,035 84,310
Selling, general and
administrative expenses 157,214 8,768
</TABLE>
Results of Operations
- ---------------------
The Company's business is principally carried on through its wholly-owned
subsidiary, ALP Corporation. ALP Corporation's sales increased 8.4% during 1996
as compared to 1995, primarily due to production efficiencies resulting from
introduction of electronic technologies. Codification revenue remained
relatively constant during 1996 as compared to 1995. Subscription services on
existing codes of ordinance increased 17.4% due to increased subscription sales
in electronic formats. Gross margin increased in 1996 as compared to 1995 as
sales increased at a higher percentage rate than the percentage rate increase in
cost of sales. Selling, general and administrative expenses increased 37.0% in
1996 as compared to 1995 due to increases in administrative salaries and related
costs, legal and professional and sales related expenses.
ALP Corporation's sales increased 12.5% during 1995 as compared to 1994.
Codification revenue increased 5.2% due to the addition of several significant
customers primarily resulting from an accelerated marketing effort and the
recognition of additional revenues earned on contract escalator charges.
Subscription services on existing codes of ordinance increased 17.7% due to
production reorganization which resulted in accelerated completion of
codification production and commencement of supplementation production. Gross
margin increased in 1995 as compared with 1994. However, as sales increased,
cost of sales increased 11.5% primarily due to increases in production salaries
and related costs, insurance and maintenance expense. Selling, general and
administrative expenses increased 2.1% in 1995 as compared to 1994 due to
increases in administrative salaries and related costs, legal and professional,
advertising and travel.
ALP Corporation's sales increased 15.7% during 1994 as compared to 1993.
Codification revenue increased 16.2% during 1994 as compared to 1993 due to the
addition of a significant new customer. Subscription services on existing codes
of ordinance increased 15.4%. Cost of sales increased 23.2% during 1994 as
compared to 1993 due to increases in production supply expense, salaries and
rent. Selling, general and administrative expenses increased 17.7% during 1994
as compared to 1993 due to increases in advertising, consulting, rent, sales
commissions and travel.
Liquidity and Capital Resources
- -------------------------------
Although it is impossible to estimate accurately the future cash flow from the
operations of the Registrant's codification business, management believes the
Registrant's effective capital costs may increase. Management is actively
exploring further avenues for preserving capital and improving liquidity. As of
December 31, 1996, the Company had a revolving credit agreement with a bank to
provide a $250,000 note. The credit facility has a maturity date of April 30,
1997, and bears interest at the banks prime rate (8.25% per annum at December
31, 1996). Management does not know of any trends, events or uncertainties that
will have or that are reasonably likely to have material effect on the
Registrant's liquidity, capital resources or results of operations.
7
<PAGE> 8
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations (continued)
---------------------------------
Factors to Consider Forward Looking
- -----------------------------------
Management has undertaken several initiatives in 1996 which should favorably
impact operating performance in 1997, although there can be no assurance that a
favorable impact will result. Significant cost-cutting measures have been
implemented in an effort to reduce overhead and production-related expenses.
Increased market penetration should position the Company to take advantage of a
number of growth opportunities in the future.
Management has restructured a number of production functions intended to improve
the Company's productivity going forward. Reassignment of experienced production
staff to selected line positions should provide increased efficiencies.
Additional efficiencies should result from the introduction of new production
equipment and production flows utilizing optical scanners, a computer
communications network and a high capacity printer.
The Company expects to continue expanding its direct sale force, which should
allow the Company to increase its market penetration. These activities will be
directed toward selected market niches where management believes the Company
will be able to provide customers with additional services which distinguish it
from competitors.
Deferred Taxes
- --------------
The Company has substantial tax loss carryforwards and temporary differences at
December 31, 1996, which give rise to deferred tax assets. Based on an analysis
of the likelihood of realizing the Company's gross deferred tax asset, the
Company has determined that the recognition criteria set forth in SFAS No. 109,
"Accounting for Income Taxes", are not met for the entire deferred tax asset
and, accordingly, the net deferred tax asset is reduced by a valuation
allowance.
Management believes that it is more likely than not that the net deferred tax
asset at December 31, 1994 will be realized primarily through the generation of
taxable income during the loss carryforward period. This belief derives from an
analysis of estimated future taxable income that incorporates an increase in
sales during the loss carryforward period generated by increases in new
contracts and code supplements related to the prior years new contracts. The
Company will need to generate taxable income of approximately $95,000 a year
over the next two years in order to realize a significant portion of the net
deferred tax assets. After 1996, the amount of taxable income required to
realize the remaining net deferred tax assets is approximately $50,000 a year.
Historically, there has been an insignificant difference between pre-tax
earnings for financial reporting purposes and taxable income for income tax
purposes. As is the case with any estimate of future results, there will be
differences between assumed and actual economic and business conditions of
future periods. Moreover, the estimate may also be affected by unpredictable
future events, including, but not necessarily limited to, changes in the
Company's capital structure and future acquisitions and dispositions. Therefore,
the analysis of estimated future taxable income will be reviewed and updated
periodically and any required adjustments, which may increase or decrease the
net deferred tax asset, will be made in the period in which the developments on
which they are based become known. During 1993, the Company reduced the
valuation allowance to reflect management's revised projection of future taxable
income resulting in a $133,837 increase to income in the fourth quarter of 1993.
As of December 31, 1996, the Company has available unused operating loss
carryovers for Federal tax and financial statement purposes of approximately
$332,000 which expire as follows:
<TABLE>
<S> <C> <C> <C>
1997 $ 53,000 2002 $ 19,000
1998 $ 24,000 2003 $ 23,000
1999 $ 22,000 2005 $ 34,000
2000 $ 30,000 2009 $110,000
2001 $ 17,000
</TABLE>
8
<PAGE> 9
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations (continued)
---------------------------------
Intangible Asset
- ----------------
The excess of net assets acquired in a business combination over the purchase
price of approximately $160,000 was allocated to a database acquired. The
database is comprised of the municipal code data and related files. Provision
for amortization of the database is based on an estimated useful life of forty
years reflecting the long lived nature of municipal codes.
Inflation
- ---------
Management does not consider the impact of changing prices to be material in the
analysis of the Company's overall operations.
Trends
- ------
The Company's results of operations have varied from quarter to quarter
principally because of fluctuations in production results. The Company's
experience indicates that sales increase during second and third quarters as a
result of sales to basic code subscribers. The Company expects that such
quarterly fluctuations may lessen as the percentage of the Company's new sales
are made to clients with fiscal years other than December 31, although there can
be no assurance that this will occur.
Safeharbor Statement Under the Private Securities Litigation Reform Act of 1995
- -------------------------------------------------------------------------------
Except for the historical information contained herein, the matters discussed in
this Form 10-K includes forward-looking statements that involve risks and
uncertainties, including, but not limited to, quarterly fluctuations in results,
the management of growth, and other risks detailed from time to time in the
Company's Securities and Exchange Commission filings. Actual results may differ
materially from management expectations.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
Index to Consolidated Financial Statements
- ------------------------------------------
Included in Part II of this report:
Independent Auditors' Reports
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Operations for the years ended December 31,
1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements
9
<PAGE> 10
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
and Stockholders
Westford Group, Inc.:
We have audited the consolidated balance sheets of Westford Group, Inc. and
subsidiary as of December 31, 1996 and 1995, and the related consolidated
statements of income, shareholders' equity, and cash flows, for each of the
years in the three-year period ended December 31, 1996, as listed in Item 8 of
this Form 10-K. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Westford Group, Inc.
and subsidiary as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
Columbus, Ohio
February 28, 1997
10
<PAGE> 11
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Assets 1996 1995
------ ---------- -------
Current:
<S> <C> <C>
Cash $ 138,711 $ 26,794
Accounts receivable - trade 207,335 316,452
Costs and estimated earnings in excess of billings on
uncompleted codification contracts (note 2) 120,057 154,207
Costs of uncompleted code supplements 39,161 27,661
Deferred taxes (note 7) 24,762 24,948
Other assets 2,287 2,205
---------- ----------
Total current assets 532,313 552,267
Deferred taxes (note 7) 14,536 42,225
Property and equipment, net (notes 3 and 4) 58,312 64,044
Intangible asset, net of accumulated amortization of
$37,272 in 1996 and $33,131 in 1995 (note 1(f)) 128,382 132,524
---------- ----------
$ 733,543 $ 791,060
========== ==========
</TABLE>
(Continued)
11
<PAGE> 12
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Balance Sheets, Continued
<TABLE>
<CAPTION>
Liabilities and Shareholders' Equity 1996 1995
------------------------------------ --------- -------
<S> <C> <C>
Current Liabilities:
Note payable - bank (note 4) $ 3,575 $ 83,594
Accounts payable 53,453 59,845
Accrued salaries, commissions and payroll taxes
payable 66,185 62,984
Billings in excess of costs and estimated earnings on
uncompleted codification contracts (note 2) 16,626 41,527
Current portion of capital lease obligations (note 5) 5,130 18,200
----------- -----------
Total current liabilities 144,969 266,150
Capital lease obligations, less current portion (note 5) 7,641 12,771
Debenture payable (note 6) 50,000 50,000
----------- -----------
Total liabilities 202,610 328,921
----------- -----------
Commitments (note 5)
Series two serial redeemable preference stock, 500 shares
authorized (note 6) -- --
----------- -----------
Shareholders' Equity:
Serial preference stock, without par value:
Series one serial preference, authorized 100 shares;
none issued -- --
Class A preferred shares, par value $2,285; authorized
500 shares; none issued -- --
Class B preferred shares, par value $500; authorized
4,000 shares; none issued -- --
Common stock, without par value; authorized 2,000,000
shares; 1,434,202 shares issued 871,286 871,286
Additional paid-in capital 788,739 788,739
Accumulated deficit (1,099,943) (1,168,743)
----------- -----------
560,082 491,282
Less: Treasury stock, at cost (112,996 common shares
at December 31, 1996 and 112,976 at December
31, 1995) (29,149) (29,143)
----------- -----------
Total shareholders' equity 530,933 462,139
----------- -----------
$ 733,543 $ 791,060
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
12
<PAGE> 13
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Statements of Operations
Years Ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- -----------
<S> <C> <C> <C>
Sales $ 1,505,952 $ 1,389,459 $ 1,234,981
Cost of sales 817,434 815,399 731,089
----------- ----------- -----------
688,518 574,060 503,892
----------- ----------- -----------
Selling, general and administrative expenses:
Salaries and related costs 289,782 207,719 200,292
Professional fees 79,832 45,709 47,584
Other 212,517 171,489 168,273
----------- ----------- -----------
582,131 424,917 416,149
----------- ----------- -----------
Non-operating income (expense):
Interest expense (9,740) (18,563) (19,576)
Other income 29 922 530
----------- ----------- -----------
(9,711) (17,641) (19,046)
----------- ----------- -----------
Income before federal income tax
expense 96,676 131,502 68,697
Federal income tax expense (note 7) 27,876 31,579 33,451
----------- ----------- -----------
Net income $ 68,800 $ 99,923 $ 35,246
=========== =========== ===========
Net income per common share $ .04 $ .06 $ .02
=========== =========== ===========
Weighted average number of common shares and
equivalents outstanding 1,666,219 1,664,842 1,661,226
----------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
13
<PAGE> 14
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Statements of Shareholders' Equity
Years Ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>
Additional Total
Common paid-in Accumulated Treasury shareholders'
stock capital deficit stock equity
-------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1993 $871,286 $ 789,779 $(1,303,912) $(30,433) $ 326,720
Net income - - 35,246 - 35,246
-------- --------- ----------- -------- ---------
Balance December 31, 1994 871,286 789,779 (1,268,666) (30,433) 361,966
Net income - - 99,923 - 99,923
Issuance of 5,000 treasury shares - (1,040) - 1,290 250
-------- --------- ----------- -------- ---------
Balance December 31, 1995 871,286 788,739 (1,168,743) (29,143) 462,139
Net income - - 68,800 - 68,800
Purchase of 20 treasury shares - - - (6) (6)
-------- --------- ----------- -------- ---------
Balance December 31, 1996 $871,286 $ 788,739 $(1,099,943) $(29,149) $ 530,933
======== ========= =========== ======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
14
<PAGE> 15
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 68,800 $ 99,923 $ 35,246
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Net realized (gain) loss on disposal of
equipment (29) (800) 189
Depreciation and amortization 30,736 34,495 28,130
Deferred federal income tax (benefit)
expense 27,875 31,579 33,451
(Increase) decrease in accounts
receivable - trade 109,117 (139,082) 71,662
Increase in costs and estimated earnings
in excess of billings on uncompleted
codification contracts 34,150 (24,696) (21,360)
(Increase) decrease in costs of uncompleted
code supplements (11,500) 704 (3,192)
(Increase) decrease in other assets (82) (137) 103
Increase (decrease) in accounts payable (6,392) 17,821 (3,181)
Increase (decrease) in accrued salaries,
commissions and payroll taxes payable 3,201 (9,946) 21,167
Increase (decrease) in billings in excess
of costs and estimated earnings on
uncompleted codification contracts (24,901) (39,214) 19,934
--------- --------- ---------
Net cash provided by (used in) operating
activities 230,975 (29,353) 182,149
--------- --------- ---------
Cash flows from investing activities:
Purchase of property and equipment (20,953) (35,075) (14,271)
Sale of equipment 120 800 210
--------- --------- ---------
Net cash used in investing activities (20,833) (34,275) (14,061)
--------- --------- ---------
</TABLE>
(Continued)
15
<PAGE> 16
WESTFORD GROUP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows, Continued
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from note payable to bank 68,981 203,585 150,229
Repayment of note payable to bank (149,000) (130,000) (280,000)
Principal payments under capital lease
obligations (18,200) (20,718) (17,786)
Issuance of treasury stock (6) 250 -
--------- --------- ---------
Acquisition of treasury stock - -
Net cash provided by (used in) financing
activities (98,225) 53,117 (147,557)
--------- --------- ---------
Net increase (decrease) in cash 111,917 (10,511) 20,531
--------- --------- ---------
Cash at beginning of year 26,794 37,305 16,774
--------- --------- ---------
Cash at end of year $ 138,711 $ 26,794 $ 37,305
========= ========= =========
Supplemental cash flow disclosure:
Interest paid $ 8,465 $ 18,562 $ 19,576
========= ========= =========
</TABLE>
Supplemental Schedule of non-cash investing and financing activities:
Capital lease obligations of $24,491 were incurred when the Company
entered into leases for new equipment in 1994.
See accompanying notes to consolidated financial statements.
16
<PAGE> 17
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996, 1995, and 1994
(1) Summary of Significant Accounting Policies
------------------------------------------
The accompanying consolidated financial statements include the following
significant accounting policies:
(a) Consolidation Policy
--------------------
The accompanying financial statements include the accounts of
Westford Group, Inc. (the Company) and its wholly-owned
subsidiary, American Legal Publishing Corporation (ALP
Corporation). ALP Corporation is engaged in the codification
of municipal and county codes of ordinances and the
supplementing thereof. All significant intercompany
transactions and balances have been eliminated in this
consolidation.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates. Note 1(b).
(b) Revenue and Cost Recognition
----------------------------
Revenue from municipal code contracts is recognized on the
percentage-of- completion method; completion is measured
based on the percentage of direct labor costs incurred to
date to estimated direct labor costs for each contract. While
management uses available information to estimate total
direct labor costs on each contract, actual experience may
vary from estimated amounts. Under this method, the costs
incurred and the related revenues are included in the
statement of operations as work progresses. Adjustments to
contract cost estimates are made in the periods in which the
facts which require such revisions become known. If a revised
estimate indicates a loss, such loss is provided for in its
entirety. The amount by which revenues are earned in advance
of contractual collection dates is an unbilled receivable and
the amount by which contractual billings exceed earned
revenues is unrealized revenue which is carried as a
liability.
Revenue from code supplements is recognized on the
completed-contract method because the typical supplement is
completed in approximately two months. No progress payments
are billed due to the short production time and the low
average supplement contract price. Supplement contracts in
process are valued at the lower of cost or contract price
less estimated cost of completion. The asset, "Costs of
uncompleted code supplements," represents all supplement
costs incurred to date. Provisions for estimated losses on
uncompleted contracts are made in the period in which losses
are determined.
17
<PAGE> 18
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(c) Property and Equipment
----------------------
Property and equipment are recorded on a cost basis.
Depreciation is computed using the straight-line method in
amounts adequate to amortize costs over the estimated useful
life of the applicable asset. Equipment under capital leases
is stated at the present value of the net minimum lease
payments and is amortized over the lease term. When assets
are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and
any resulting gain or loss is recognized as income for the
period. The cost of maintenance and repairs is charged to
income as incurred; significant renewals and betterments are
capitalized.
(d) Federal Income Taxes
--------------------
Westford Group, Inc. files a consolidated Federal income tax
return with its subsidiary. Deferred tax liabilities and
assets have been recognized for the expected future tax
consequences of events that have been included in the
financial statements or tax returns. Deferred income taxes
for temporary differences between financial statement and
income tax bases of assets and liabilities and net operating
loss carryforwards are recognized at the average graduated
tax rate for the estimated amount of taxable income in future
years.
(e) Net Income Per Common Share
---------------------------
Net income per common share is computed on the basis of the
weighted average number of common shares outstanding during
the year, including the outstanding convertible debenture,
which is included as a common stock equivalent.
(f) Intangible Asset
----------------
During 1988, the Company acquired substantially all the assets
of AM Comp, Inc., in an acquisition accounted for as a
purchase. The excess of AM Comp, Inc.'s net assets acquired
over the purchase price of $165,654 was allocated to the
database. The database is comprised of the municipal code
data and related files. Provision for amortization of the
database is based on an estimated useful life of forty years
and is computed on the straight-line method.
In 1996, the Company adopted SFAS No.121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed" which requires that long-lived assets be evaluated for
impairment and establishes guidance for recognizing and
measuring impairment losses. The adoption of this statment did
not have a significant impact on the financial statements.
18
<PAGE> 19
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(2) Uncompleted Contracts
---------------------
Costs on uncompleted codification contracts were $645,051 and $771,893
and billings to date on those contracts were $541,620 and $659,213 at
December 31, 1996 and 1995, respectively. The excess of costs and
estimated earnings over billings to date are presented in the
accompanying consolidated balance sheets.
(3) Property and Equipment
----------------------
Property and equipment at December 31, consists of the following:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Machinery and equipment $ 137,992 $ 126,111
Furniture and fixtures 6,897 6,897
Capital lease equipment 24,491 83,916
--------- ---------
169,380 216,924
Less: accumulated depreciation and
amortization (111,068) (152,880)
--------- ---------
$ 58,312 $ 64,044
========= =========
</TABLE>
(4) Note Payable - Bank
-------------------
The Company has a revolving credit agreement with a bank to provide a
$250,000 note with repayment on demand by the lender with a maturity of
April 30, 1997. The Company had an outstanding balance of $3,575 at
December 31, 1996 and $83,594 at December 31, 1995 under this
arrangement. Advances under the revolving credit line bear interest
payable quarterly at the lending bank's prime rate (8.25% at December
31, 1996).
The note is personally guaranteed by the Company's Chief Executive
Officer up to $100,000 plus accrued interest and collateralized by
the assignment of the Company's property and equipment and accounts
receivable.
19
<PAGE> 20
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(5) Leases
------
The Company's office facilities are shared with other affiliated
entities and rental and bookkeeping expenses are allocated among
them. The Company's share of these expenses were $2,940 in 1996, 1995
and 1994.
ALP Corporation occupies space under an operating lease which will
expire July 31, 1998.
The following is a schedule of ALP Corporation's future minimum lease
payments for capital and operating leases as of December 31, 1996.
<TABLE>
<CAPTION>
Capital Operating
Year ending lease leases
----------- --------- --------
<S> <C> <C>
1997 $ 6,124 $ 48,262
1998 6,124 28,153
1999 2,040 -
--------- ---------
Total minimum lease payments 14,288 $ 76,415
Less: Amount representing interest 1,517 =========
---------
Present value of net minimum
lease payments 12,771
Less: Current installments of
obligations under capital lease 5,130
---------
Long-term obligation under capital
lease $ 7,641
=========
</TABLE>
Total rental expenses under operating leases were $61,313, $58,751, and
$56,354 in 1996, 1995 and 1994, respectively. Included in accumulated
depreciation and amortization is $15,453 and $58,077 of accumulated
amortization applicable to capital lease equipment at December 31,
1996 and 1995, respectively.
(6) Debenture Payable
-----------------
On August 7, 1992, a resolution was adopted by the Company to authorize
a $50,000 convertible subordinated debenture, due December 31, 1995,
issued to Bancinsurance Corporation, an affiliate of the Company
through a common officer and principal shareholder. Each $1,000 of
principal is convertible into 6,900 shares of common stock at the
holder's option. The debenture may be prepaid, in whole or in part,
by the Company upon thirty days prior written notice without penalty.
Interest accrues at the rate of ten percent per annum and is payable
quarterly on the last day of each March, June, September, and
December until the principal sum has been paid. In the event of
default, all obligations shall become immediately due and payable at
the option of the holder. On December 1, 1995, a resolution was
adopted by the Company to renew the debenture. The maturity was
extended to December 31, 2000.
20
<PAGE> 21
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(7) Federal Income Taxes
Deferred income taxes for 1996 and 1995 reflect the impact of "temporary
differences" between amounts of assets and liabilities for financial
reporting purposes and such amounts as measured on an income tax
basis. Temporary differences and carryforwards which give rise to the
net deferred tax asset at December 31, are as follows:
<TABLE>
<CAPTION>
1996 1995
--------- -------
<S> <C> <C>
Deferred tax asset:
Tax operating loss carryforwards $ 79,605 $ 108,474
Deferred tax liability:
Intangible asset (30,812) (31,806)
--------- ---------
Net deferred tax asset 48,793 76,668
Valuation allowance (9,495) ( 9,495)
--------- ---------
39,298 67,173
Less current portion (24,762) (24,948)
--------- ---------
Non-current deferred tax asset $ 14,536 $ 42,225
========= =========
</TABLE>
As of December 31, 1996, the Company has net operating loss ("NOL")
carryforwards of approximately $332,000 which expire at various dates
through 2009. The valuation allowance represents the portion of these
net operating loss carryforwards at enacted tax rates not expected to
be utilized through future taxable income. Net deferred tax assets
and federal income tax expense in future years can be significantly
affected by changes in enacted tax rates or by unexpected adverse
events that would impact management's conclusions as to the ultimate
realizability of deferred tax assets.
The provision for Federal income taxes at December 31, consists of the
following:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Deferred, amortization of intangible
asset $ (994) $ (994) $ (1,035)
Utilization of NOL 22,815 32,573 13,209
Expiration of unutilized NOL 6,055 - 21,277
-------- -------- --------
Total deferred 27,876 31,579 33,451
-------- -------- --------
Federal income tax expense $ 27,876 $ 31,579 $ 33,451
======== ======== ========
</TABLE>
21
<PAGE> 22
WESTFORD GROUP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
For 1996, 1995 and 1994, the Federal income tax expense differs from
the amount computed by applying the normal tax rate of 34% to
income before Federal income taxes as follows:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Expected tax $ 32,870 $ 44,711 $ 23,357
Officers life insurance 272 305 235
Meals and entertainment 1,379 - -
Graduated rate differential (6,645) (13,437) (11,418)
Adjustment for net operating loss
carryforwards expiring in 1994
but not utilized - - 21,277
-------- -------- --------
Federal income tax expense $ 27,876 $ 31,579 $ 33,451
======== ======== ========
</TABLE>
22
<PAGE> 23
Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Originally
elected to
Name Age Position office
- ---- --- -------- ----------
Si Sokol 69 Chairman and Director 1972
President 1980
James Davis 62 Director 1981
David White 60 Director 1981
John Sokol 34 Director 1990
Daniel Harkins 67 Director 1996
Steve Wolf 45 President American Legal 1988
Publishing, Inc.
Sally Cress 42 Treasurer 1985
Secretary 1985
In addition to his positions with the Registrant, Si Sokol has been Chairman of
the Board of Bancinsurance Corporation since 1970 and Chairman of the Board of
Ohio Indemnity Company since 1969. He became President and Director of
Bancinsurance Corporation and President of Ohio Indemnity Company in 1980.
Bancinsurance Corporation, whose common stock is registered pursuant to Section
12 of the Securities Exchange Act of 1934, and its wholly-owned property and
casualty insurance subsidiary, Ohio Indemnity Company, are engaged in the
underwriting and sales of specialized property and casualty insurance. In
addition, Mr. Sokol serves as President of BCIS Services, Inc. and is a Director
of Fifth Third Bank, Columbus, Ohio. Mr. Sokol is the father of John Sokol.
James Davis joined Ohio Indemnity in 1989 as the Administrator of Ohio
Indemnity's Bonded Service Program and was elected a Vice President of the Ohio
Indemnity Company in 1992. He has served as a Director of Ohio Indemnity and
Bancinsurance Corporation since 1987 and as Vice President of BCIS Services,
Inc. since 1993. From 1986 to 1989, Mr. Davis served as an independent
consultant to third party administrators of self-insured workers' compensation
programs. He acted as President and Director of James R. Davis & Associates,
Inc., a corporation providing cost management services, from 1980 to 1986, which
he sold in 1985. He was President of Gates, McDonald & Company, a corporation
providing cost management services from 1971 to 1979.
David White has been President of Oakfield Convalescent Center since 1979 to the
present date. He was also President of White Realty Company from 1972 to 1981, a
real estate company.
23
<PAGE> 24
Item 10. Directors and Executive Officers of the Registrant (continued)
--------------------------------------------------------------
John Sokol, son of Si Sokol, became a Director of Bancinsurance Corporation and
Ohio Indemnity Company in 1990. He was a Vice President of Bancinsurance
Corporation and Ohio Indemnity from 1993 to 1996 and was elected to Executive
Vice President of both companies in 1996. From 1989 until 1993, he served as an
officer for what is now The Chase Bank of New York (formally Manufacturers
Hanover and Chemical Bank). In 1989, he received a Masters of Business
Administration Degree from Vanderbilt University. From 1985 to 1987, he was a
Client Services Manager for Financial Guaranty Insurance Company (FGIC).
Daniel Harkins is a private investor. He also serves as a Director of Ohio
Indemnity Company and Bancinsurance Corporation. Prior to 1987, Mr. Harkins was
the owner and president of Ace Beverage Distributing Company. From 1973 to 1978,
he served as General Sales Manager and International Sales Manager for several
divisions of Ashland Chemical Co., and from 1978 to 1980, he served as a
consultant for A.T. Kearney Inc., a management consulting firm.
Stephen Wolf has been the President of American Legal Publishing Corporation
since its incorporation in 1988. He was formerly President of American Legal
Publishing Company from 1984 to 1988, and served in other positions including
Staff Attorney and Vice President from 1979 to 1984. In addition, Mr. Wolf has
been an elected official of the City of Mt. Healthy, Ohio, serving as Law
Director from 1980 to 1983, as a Council person from 1984 to 1985, as Mayor from
1988 to 1995 and again as Law Director from 1996 to the present.
Sally Cress has been Secretary and Treasurer of the Registrant as well as of
Bancinsurance Corporation and Ohio Indemnity Company since March 1985. She also
serves as a Director of Ohio Indemnity Company and as Secretary and Treasurer of
BCIS Services, Inc. Mrs. Cress is a Certified Public Accountant.
There are no arrangements or understandings between any of the officers and
directors of the Registrant and other persons relating to their selections as
officers and directors.
All Directors of the Registrant serve a term of one year or until their
successors are elected and qualified. The officers serve at the discretion of
the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Registrant's
officers and directors, and greater than 10% shareholders, to file reports of
ownership and changes in ownership of the Registrant's securities with the
Securities and Exchange Commission (SEC). Copies of the reports are required by
SEC regulation to be furnished to the Registrant. Based on its review of such
reports and written representations from reporting persons, the Registrant
believes that, during fiscal 1996, all filing requirements were complied with.
Item 11. Executive Compensation
----------------------
The table below shows the cash compensation paid or accrued by the Registrant
during the fiscal years ended December 31, 1996, 1995 and 1994, respectively, to
the Chief Executive Officer of the Registrant. During the fiscal year ended
December 31, 1996, 1995 and 1994, respectively, no other executive officer
received cash compensation in excess of $100,000 (based on salary and bonus).
24
<PAGE> 25
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
(a) (b) (i)
Name and Principal All Other
Position Year Compensation($)(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
SI SOKOL
Chairman, President 1996 10,600
Chief Executive
Officer 1995 10,600
1994 10,450
<FN>
- ----------
(1) This amount includes $10,000 in consulting fees paid to Mr. Sokol.
Additionally, $600, $600 and $450 in directors fees were paid to Mr. Si
Sokol during 1996, 1995 and 1994, respectively. Mr. Sokol did not receive
any other compensation from the Registrant.
</TABLE>
Compensation Pursuant to Plans:
The Registrant has no annuity, pension, retirement stock option, stock
appreciation or similar plans for its officers or employees.
On March 1, 1996, the Company implemented the American Legal Publishing
Corporation Employee 401(k) Plan (the "401(k) Plan"). The 401(k) Plan is
available to full-time employees who meet the 401(k) Plan's eligibility
requirements. Under the 401(k) Plan, the Company matches 50% of the qualified
employee's contribution up to 6%. The total cost of the matching contribution
was $13,295 for the year ended December 31, 1996.
Compensation of Directors:
The Registrant pays each director a fee of $150 per meeting for attending
meetings of the Board of Directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table sets forth: (i) the name and address of each person known by
the Registrant to be the beneficial owner of more than 5% of any class of the
Registrant's voting securities and each director and each officer named in the
Summary Compensation Table of the Registrant; and (ii) the number and percent of
the Registrant's common shares beneficially owned by each such person and by all
directors and officers of the Registrant as a group as of December 31, 1996:
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Beneficial Beneficially of
Owner Owned (1) Class
- ------------------ ---------------- -------
<S> <C> <C>
James R. Davis 2,000 0.2%
Director
6064 Olentangy River Road
Worthington, Ohio 43085
Daniel D. Harkins 0 0.0%
Director
4369 Donington Road
Columbus, Ohio 43220
David White 25,000 1.9%
Director
1635 Peace Place
Columbus, Ohio 43209
</TABLE>
25
<PAGE> 26
<TABLE>
<S> <C> <C>
John S. Sokol 74,250 (2) 5.6%
Director
2346 Fishinger Road
Columbus, Ohio 43221
Barbara Sokol 726,773 (2) 55.0%
2346 Fishinger Road
Columbus, Ohio 43221
Si Sokol 726,773 (2) 55.0%
Chairman and President
2346 Fishinger Road
Columbus, Ohio 43221
All Directors and Officers 778,023 58.9%
as a group (six persons)
<FN>
(1) Except as otherwise noted, none of the named individuals shares with
another person either voting or investment power as to the shares
reported.
(2) Includes 300,300 common shares owned by Barbara Sokol, of which 150,000
shares are owned by her a trustee for her children, including 50,000 as
trustee for John Sokol, and 426,473 common shares owned by Si Sokol, her
husband. The rules of the Securities and Exchange Commission require
that Mr. and Mrs. Sokol's shares be aggregated for purposes of this
disclosure; however, Mr. and Mrs. Sokol each disclaim any beneficial
ownership of the other's shares.
</TABLE>
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
See Item 2, Properties.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) Exhibits
--------
3(a) Amended Articles of Incorporation (reference is made to Exhibit
3(a) of Form 10-K for the fiscal year ended December 31, 1986
(file number 0-8254), which is incorporated herein by reference).
3(b) Amended Articles of Incorporation (reference is made to Exhibit
3(b) of Form 10-K for the fiscal year ended December 31, 1988
(file number 0-8254), which is incorporated herein by reference).
3(c) Amended Code of Regulations (reference is made to Exhibit 3(b) of
Form 10-K for the fiscal year ended December 31, 1980 (file
number 0-8254), which is incorporated herein by reference).
10 Acquisitions. Asset Purchase Agreement among American Legal
Publishing Corporation, the Registrant, American Legal
Corporation and AM Comp, Inc. dated January 12, 1988 (references
made to Exhibit 10 of Form 10-K for the fiscal year ended
December 31, 1987 (file number 0-8254), which is incorporated
herein by reference).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule.
26
<PAGE> 27
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(Continued)
-----------
(b) Financial Statement Schedules
-----------------------------
Financial Statement schedules are omitted because of the absence of
conditions under which they are required or because the required
information is included in the financial statements or notes thereto.
(c) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1996.
27
<PAGE> 28
Signatures
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Westford Group, Inc.
(Registrant)
3/17/97 By Si Sokol
--------- ----------------------
DATE Si Sokol
Chairman of Board of
Directors, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, which include the Chief
Executive Officer, the Chief Financial Officer and a majority of the Board of
Directors, on behalf of the Registrant and in the capacities and on the dates
indicated:
3/17/97 Si Sokol 3/17/97 Sally Cress
- --------- ------------------------ --------- ------------------------
DATE Si Sokol DATE Sally Cress
Chairman of Board of Treasurer, Secretary
Directors, President and hief Financial Officer
Chief Executive Officer and Chief Accounting
Officer
3/17/97 David J. White 3/17/97 Daniel D. Harkins
- --------- ------------------------ --------- ------------------------
DATE David J. White DATE Daniel D. Harkins
Director Director
3/17/97 James R. Davis 3/17/97 John S. Sokol
- --------- ------------------------ --------- ------------------------
DATE James R. Davis DATE John S. Sokol
Director Director
28
<PAGE> 1
WESTFORD GROUP, INC. AND SUBSIDIARY
EXHIBIT 21 - SUBSIDIARY OF THE REGISTRANT
----------------------------
WESTFORD GROUP, INC.
----------------------------------------------------------
100%
American Legal Publishing Corporation
A Publishing Company
29
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 138,711
<SECURITIES> 0
<RECEIVABLES> 207,335
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 532,313
<PP&E> 169,380
<DEPRECIATION> 111,068
<TOTAL-ASSETS> 733,543
<CURRENT-LIABILITIES> 144,969
<BONDS> 0
<COMMON> 871,286
0
0
<OTHER-SE> (340,353)
<TOTAL-LIABILITY-AND-EQUITY> 733,543
<SALES> 1,505,952
<TOTAL-REVENUES> 1,505,981
<CGS> 817,434
<TOTAL-COSTS> 1,399,565
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,740
<INCOME-PRETAX> 96,676
<INCOME-TAX> 27,876
<INCOME-CONTINUING> 68,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,800
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
