<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998
Commission File Number: 1-13327
May 19, 1999
CENTURY INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
District of Columbia 54-1666769
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45034 Underwood Lane
Sterling, Va. 20166
(Mail) P.O. Box 319
Sterling, Va. 20167
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 471-7606.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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.
(1) Yes X No ____
(2) Yes X_ No ____
At June 30, 1998, 3,240,798 shares of the Registrant's $.001 par value Class A
common stock were issued and outstanding after deducting 269,202 Class A shares
classified as treasury stock, and 4,293,428 shares of the Registrant's $.001 par
value Class B common stock were issued and outstanding.
<PAGE> 2
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART 1. FINANCIAL INFORMATION
ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS F1
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1998
AND DECEMBER 31, 1997 F2-3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 1998 AND 1997 AND FOR THE THREE
MONTHS ENDED JUNE 30, 1998 AND 1997 F4 -5
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND
JUNE 30, 1998 F6
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 1998 AND 1997 F7-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F9-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
</TABLE>
<PAGE> 3
FINANCIAL STATEMENTS
--------------------
IN THE OPINION OF THE MANAGEMENT OF CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
(THE COMPANY), THE ACCOMPANYING UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS CONTAIN ALL ADJUSTMENTS NECESSARY OF A FAIR PRESENTATION OF THE
COMPANY'S FINANCIAL CONDITION AS OF JUNE 30, 1998 AND DECEMBER 31, 1997, AND THE
RESULTS OF ITS OPERATIONS AND CASH FLOWS FOR THE SIX MONTH PERIODS ENDED JUNE
30, 1998 AND 1997.
THE ACCOMPANYING UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED
PURSUANT TO THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION.
CERTAIN INFORMATION AND NOTE DISCLOSURES NORMALLY INCLUDED IN ANNUAL FINANCIAL
STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
HAVE BEEN CONDENSED OR OMITTED PURSUANT TO THOSE RULES AND REGULATIONS, ALTHOUGH
THE COMPANY'S MANAGEMENT BELIEVES THAT THE DISCLOSURES AND INFORMATION PRESENTED
ARE ADEQUATE AND NOT MISLEADING. REFERENCE IS MADE TO THE DETAILED FINANCIAL
STATEMENT DISCLOSURES WHICH SHOULD BE READ IN CONJUNCTION WITH THIS REPORT AND
ARE CONTAINED IN THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE
COMPANY'S ANNUAL REPORT FORM 10-KSB/A FOR THE YEAR ENDED DECEMBER 31, 1997.
CERTAIN ITEMS IN PRIOR PERIOD CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN
RECLASSIFIED, WHERE APPROPRIATE, TO CONFORM WITH THE JUNE 30, 1998 PRESENTATION.
F-1
<PAGE> 4
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS 6/30/98 12/31/97
- -------------- ------- --------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 181,658 $ 282,009
ACCOUNTS RECEIVABLE-TRADE (NET OF ALLOWANCE
FOR DOUBTFUL ACCOUNTS OF
$120,000 IN 1998 AND 1997) 2,005,256 1,907,446
INVENTORY 236,729 256,695
MARKETABLE SECURITIES 128,362 106,952
OTHER CURRENT ASSETS 562,484 572,462
--------- ---------
TOTAL CURRENT ASSETS 3,114,489 3,125,564
---------- ---------
PROPERTY AND EQUIPMENT
- ----------------------
LAND AND BUILDING 361,475 ----
SOFTWARE AND COMPUTER EQUIPMENT 2,057,190 1,997,743
FURNITURE AND FIXTURES 829,441 779,941
MACHINERY AND EQUIPMENT 50,508 15,875
TRANSPORTATION EQUIPMENT 215,429 215,429
LEASEHOLD IMPROVEMENTS 159,250 151,878
---------- ---------
3,673,293 3,160,866
LESS: ACCUMULATED DEPRECIATION (1,243,496) (1,083,443)
---------- ----------
NET PROPERTY AND EQUIPMENT 2,429,797 2,077,423
---------- ---------
OTHER ASSETS
INVESTMENTS 1,134,278 991,842
DEFERRED COSTS ---- ----
SECURITY DEPOSITS 104,463 160,779
GOODWILL, NET 1,931,690 1,949,035
DUE FROM RELATED PARTIES 86,346 128,422
OTHER ASSETS 377,535 428,857
--------- ---------
TOTAL OTHER ASSETS 3,634,312 3,604,935
--------- ---------
TOTAL ASSETS $ 9,178,598 $ 8,807,922
============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-2
<PAGE> 5
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
6/30/98 12/31/97
------- --------
CURRENT LIABILITIES
- -------------------
<S> <C> <C>
ACCOUNTS PAYABLE - TRADE $ 1,314,703 $1,732,486
CURRENT MATURITIES - LONG TERM DEBT AND MORTGAGES 315,434 260,267
CAPITAL LEASE OBLIGATIONS 96,941 90,385
NOTES PAYABLE 200,000 125,000
ADVANCES FROM STOCKHOLDERS ---- 179,601
ACCRUED EXPENSES 1,740,448 1,442,004
DIVIDENDS PAYABLE 16,389 16,389
----------- -------------
TOTAL CURRENT LIABILITIES 3,683,915 3,846,132
LONG TERM NOTES AND MORTGAGES PAYABLE, LESS CURRENT PORTION 810,934 555,926
- -----------------------------------------------------------
CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION 103,796 155,848
- ----------------------------------------------- ---------- -------
TOTAL LIABILITIES 4,598,645 4,557,906
---------- ---------
MINORITY INTEREST 51,601 38,250
----------- ------------
STOCKHOLDERS' EQUITY
- --------------------
PREFERRED STOCK, CONVERTIBLE, $.001 PAR VALUE, 1,200,000 SHARES
AUTHORIZED, 1,000,000 ISSUED AND OUTSTANDING 1,000 1,000
COMMON STOCK, CLASS A, $.001 PAR VALUE, 25,000,000 SHARES
AUTHORIZED, 3,510,000 AND 3,373,000 ISSUED AND OUTSTANDING 3,510 3,373
COMMON STOCK, CLASS B, $.001 PAR VALUE, 25,000,000 SHARES
AUTHORIZED, 4,293,000 AND 4,173,000 ISSUED AND OUTSTANDING 4,293 4,173
ADDITIONAL PAID IN CAPITAL 7,135,525 6,540,403
RETAINED DEFICIT (1,770,294) (1,482,401)
----------- -----------
5,374,032 5,066,548
LESS: CLASS A COMMON STOCK IN TREASURY, 269,202
SHARES IN 1998 AND 1997 (862,555) (862,555)
----------- ---------
TOTAL STOCKHOLDERS' EQUITY 4,511,477 4,203,993
---------- ---------
OTHER COMPREHENSIVE INCOME OR LOSS 16,875 7,773
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,178,598 $ 8,807,992
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-3
<PAGE> 6
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
SALES $ 6,436,813 $7,850,284
COST OF SALES 3,994,381 4,349,311
---------- ---------
GROSS PROFIT ON SALES 2,442,432 3,500,973
--------- ---------
OPERATING COSTS
- ---------------
PAYROLL EXPENSE 1,065,561 1,349,326
PROFESSIONAL FEES 320,268 139,358
AUTO, TRAVEL AND ENTERTAINMENT 103,964 174,963
AMORTIZATION AND DEPRECIATION 287,014 156,307
OTHER 929,159 1,063,121
----------- ---------
TOTAL OPERATING COSTS 2,705,966 2,883,075
--------- ----------
INCOME (LOSS) FROM OPERATIONS (263,534) 617,898
------------ ----------
OTHER INCOME (EXPENSE)
- ---------------------
INTEREST EXPENSE (76,131) (80,073)
MINORITY INTEREST (6,300) (46,156)
OTHER INCOME (EXPENSE)-NET (40,989) 113,622
----------- ----------
TOTAL OTHER INCOME (EXPENSE) - NET (123,420) (12,607)
----------- -----------
INCOME (LOSS) BEFORE TAXES (386,954) 605,291
INCOME TAX BENEFIT 99,067 70,200
----------- -----------
NET INCOME (LOSS) $ (287,893) $ 535,091
PREFERRED STOCK DIVIDENDS OF SUBSIDIARIES ----------- (167,700)
-------------- -----------
NET INCOME (LOSS) AVAILABLE FOR COMMON STOCKHOLDERS $ (287,893) $ 367,391
=============== ==========
EARNINGS (LOSS) PER SHARE:
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $(0.04) $0.06
======= =====
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-4
</TABLE>
<PAGE> 7
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
SALES $ 3,366,761 $4,045,466
COST OF SALES 2,059,882 2,355,713
--------- ---------
GROSS PROFIT ON SALES 1,306,879 1,689,753
------------ -----------
OPERATING COSTS
PAYROLL EXPENSE 522,381 624,938
PROFESSIONAL FEES 233,824 91,352
AUTO, TRAVEL AND ENTERTAINMENT 54,342 82,241
AMORTIZATION AND DEPRECIATION 148,057 82,327
OTHER 477,751 512,188
------------- ---------
TOTAL OPERATING COSTS 1,436,355 1,393,046
------------ ----------
INCOME (LOSS) FROM OPERATIONS (129,476) 296,707
------------- ----------
OTHER INCOME (EXPENSE)
INTEREST EXPENSE (40,154) (36,613)
MINORITY INTEREST (6,300) (3,971)
OTHER INCOME (EXPENSE)-NET (35,422) 134,227
--------- --------
TOTAL OTHER INCOME (EXPENSE) - NET (81,876) 93,643
------------- ----------
INCOME (LOSS) BEFORE TAXES (211,352) 390,350
INCOME TAX BENEFIT 84,547 58,200
---------- -----------
NET INCOME (LOSS) $ (126,811) $ 332,150
PREFERRED STOCK DIVIDENDS OF SUBSIDIARIES ----------- (25,750)
----------- -------------
NET INCOME (LOSS) AVAILABLE FOR COMMON STOCKHOLDERS $ (126,811) $ 306,400
============= ==========
EARNINGS (LOSS) PER SHARE:
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.03) $0.05
========== =====
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE> 8
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30,1998
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON COMMON ADDITIONAL RETAINED
PREFERRED STOCK STOCK PAID-IN EARNINGS
STOCK CLASS A CLASS B CAPITAL (DEFICIT)
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1997 $ 1,000 $ 3,373 $ 4,173 $ 6,540,403 $ (1,482,401)
- -------------------------
ISSUANCE OF COMMON STOCK AND LIMITED 137 387,291
PARTNERSHIP UNITS
NET LOSS FOR THREE MONTHS ENDED 3/31/98 (161,082)
------- ------- ------- ----------- ------------
BALANCE MARCH 31,1998 $ 1,000 $ 3,510 $ 4,173 $ 6,927,694 $ (1,643,483)
ISSUANCE OF COMMON STOCK AND LIMITED
PARTNERSHIP UNITS 120 207,831
NET LOSS FOR THREE MONTHS ENDED 6/30/98 (126,811)
----------- --------- -------- ----------- ------------
BALANCE JUNE 30, 1998
$ 1,000 $ 3,510 $ 4,293 $ 7,135,525 $ (1,770,294)
=========== ========= ======== =========== =============
</TABLE>
<TABLE>
<CAPTION>
TOTAL
TREASURY STOCKHOLDERS'
STOCK EQUITY
------------------------------------
<S> <C> <C>
BALANCE DECEMBER 31, 1997 $ (862,555) $ 4,203,993
- -------------------------
ISSUANCE OF COMMON STOCK AND LIMITED 387,428
PARTNERSHIP UNITS
NET LOSS FOR THREE MONTHS ENDED 3/31/98 (161,082)
---------- -----------
BALANCE MARCH 31,1998 $ (862,555) $ 4,430,339
ISSUANCE OF COMMON STOCK AND LIMITED
PARTNERSHIP UNITS 207,951
NET LOSS FOR THREE MONTHS ENDED 6/30/98 (126,811)
---------- -----------
BALANCE JUNE 30, 1998
$ (862,555) $ 4,511,477
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6
<PAGE> 9
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
6/30/98 6/30/97
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
CASH RECEIVED FROM CUSTOMERS $ 6,339,003 $ 7,431,999
CASH PAID TO SUPPLIERS AND EMPLOYEES (7,132,505) (8,167,645)
INTEREST PAID (76,131) (80,073)
INCOME TAXES PAID ----------- (70,200)
-------------- -------------
NET CASH USED FOR OPERATING ACTIVITIES (869,633) (885,919)
--------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
PURCHASES OF FIXED ASSETS (512,427) (162,641)
PURCHASES OF MARKETABLE SECURITIES AND INVESTMENTS (163,846) (680,058)
---------- ---------------
NET CASH USED FOR INVESTING ACTIVITIES (676,273) (842,699)
------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
PROCEEDS FROM STOCK AND LIMITED PARTNERSHIP UNITS 1,285,477 2,130,241
PREFERRED DIVIDENDS PAID --------- (251,046)
RECEIPTS OF (PAYMENTS ON) NOTES 339,679 (138,934)
NET ADVANCES FROM AFFILIATES-STOCKHOLDERS (179,601) (206,335)
---------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,445,555 1,533,926
---------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (100,351) (194,692)
- -----------------------------------------
CASH AND CASH EQUIVALENTS - JANUARY 1 $ 282,009 $ 382,548
- ------------------------------------- ------------- ---------------
CASH AND CASH EQUIVALENTS - JUNE 30 $ 181,658 $ 187,856
- ----------------------------------- ============== ==============
NET (LOSS) INCOME $ (372,434) $ 535,091
AMORTIZATION AND DEPRECIATION 287,014 156,307
MINORITY INTEREST 6,300 46,156
INCREASE IN ACCOUNTS RECEIVABLE (97,810) (618,285)
(INCREASE) DECREASE IN INVENTORY 19,966 (21,468)
(INCREASE) DECREASE IN OTHER CURRENT ASSETS AND OTHER ASSETS (593,330) (849,432)
DECREASE IN ACCOUNTS PAYABLE (417,783) (352,683)
INCREASE IN ACCRUED EXPENSES 298,444 218,395
-------------- ----------------
NET CASH USED FOR OPERATING ACTIVITIES $ (869,633) $ (885,919)
============= ================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7
<PAGE> 10
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
FOR THE PURPOSE OF THE STATEMENTS OF CASH FLOWS, THE COMPANY CONSIDERS ALL
HIGHLY LIQUID DEBT INSTRUMENTS PURCHASED WITH A MATURITY OF THREE MONTHS OR LESS
TO BE CASH EQUIVALENTS.
NON-CASH INVESTING AND FINANCING ACTIVITIES:
DURING THE QUARTERS ENDED AND FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997,
THE COMPANY RECOGNIZED UNREALIZED GAINS OF $14,530 AND $4,909 AND $25,332 AND
$3,848, RESPECTIVELY, ON MARKETABLE SECURITIES AVAILABLE FOR SALE. IN ACCORDANCE
WITH STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 115, ACCOUNTING FOR CERTAIN
INVESTMENTS IN DEBT AND EQUITY SECURITIES, THE INVESTMENT AND RETAINED EARNINGS
ACCOUNTS WERE INCREASED FOR THE QUARTERS ENDED AND FOR THE SIX MONTHS ENDED JUNE
30, 1998 AND 1997.
DIVIDENDS OF $141,950 WERE ACCRUED AND CHARGED TO RETAINED EARNINGS FOR THE
QUARTER ENDED JUNE 30, 1997.
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-8
<PAGE> 11
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1-BASIS OF PRESENTATION
THE ACCOMPANYING UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CENTURY
INDUSTRIES, INC. AND SUBSIDIARIES (THE COMPANY) HAVE BEEN PREPARED PURSUANT TO
THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION. CERTAIN
INFORMATION AND NOTE DISCLOSURES NORMALLY INCLUDED IN ANNUAL FINANCIAL
STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
HAVE BEEN CONDENSED OR OMITTED PURSUANT TO THOSE RULES AND REGULATIONS, ALTHOUGH
THE COMPANY'S MANAGEMENT BELIEVES THAT DISCLOSURES AND INFORMATION PRESENTED ARE
ADEQUATE AND NOT MISLEADING. REFERENCE IS MADE TO THE DETAILED FINANCIAL
STATEMENT DISCLOSURES WHICH SHOULD BE READ IN CONJUNCTION WITH THIS REPORT AND
ARE CONTAINED IN THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB/A FOR THE YEAR ENDED DECEMBER 31, 1997.
CERTAIN ITEMS IN PRIOR PERIOD CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN
RECLASSIFIED, WHERE APPROPRIATE, TO CONFORM WITH THE JUNE 30, 1998 PRESENTATION.
THE DECEMBER 31, 1997 BALANCE SHEET WAS DERIVED FROM AUDITED CONSOLIDATED
FINANCIAL STATEMENTS, BUT DOES NOT INCLUDE ALL DISCLOSURES REQUIRED BY GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
NOTE 2- INTERIM PERIODS
IN THE OPINION OF THE MANAGEMENT OF THE COMPANY, THE ACCOMPANYING UNAUDITED
INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONTAIN ALL ADJUSTMENTS (WHICH ARE OF
A NORMAL RECURRING NATURE) NECESSARY FOR A FAIR PRESENTATION OF THE COMPANY'S
FINANCIAL CONDITION AS OF A JUNE 30, 1998 AND DECEMBER 31, 1997, AND THE RESULTS
OF ITS OPERATIONS AND CASH FLOWS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1998
AND 1997. THE RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE
30,1998 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE
FULL YEAR.
NOTE 3-PER SHARE DATA
PER SHARE DATA WAS COMPUTED BY DIVIDING NET INCOME (LOSS) AS ADJUSTED BY THE
PREFERRED DIVIDENDS BY THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING
THE PERIOD.
NOTE 4- BUILDING AND RELATED MORTGAGES
THE COMPANY CLOSED ON AN OFFICE CONDO BUILDING LOCATED IN RESTON, VIRGINIA
DURING THE FIRST QUARTER OF 1998. THIS FACILITY, WHICH COST APPROXIMATELY
$360,000, WILL HOUSE THE COMPANY'S CORPORATE OFFICE AND USIB AND USIB HOLDINGS
INSURANCE OPERATIONS.
THE FACILITY WAS FINANCED WITH A $281,250 FIRST TRUST MORTGAGE LOAN FROM A BANK.
THE FIRST TRUST MORTGAGE LOAN BEARS A 9% INTEREST RATE AND HAS A THREE YEAR
MATURITY WITH MONTHLY PRINCIPAL AND INTEREST PAYMENTS BASED ON A FIFTEEN YEAR
AMORTIZATION. ADDITIONAL FINANCING OF $37,500 WAS PROVIDED THROUGH A SECOND
TRUST MORTGAGE LOAN FROM A FINANCIAL INSTITUTION. THE SECOND TRUST MORTGAGE
BEARS INTEREST AT 13% AND HAS A TERM OF THREE YEARS. THE SECOND TRUST LOAN
CARRIES MONTHLY INTEREST PAYMENTS ONLY UNTIL THE LOAN IS PAID IN FULL. MONTHLY
INTEREST WILL BE ADJUSTED ACCORDINGLY FOR ANY PARTIAL REPAYMENTS OF PRINCIPAL.
F-9
<PAGE> 12
NOTE 5 - SALE OF STOCK
ON JULY 2, 1998 THE COMPANY ANNOUNCED THAT ITS PLACEMENT AGENT, SECURITY CAPITAL
TRADING, INC., HAS COMMENCED A PRIVATE PLACEMENT OF $10 MILLION OF SENIOR
CALLABLE CONVERTIBLE PREFERRED STOCK, THE PROCEEDS OF WHICH WILL BE UTILIZED TO
CAPITALIZE THE COMPANY'S PROPOSED PROPERTY AND CASUALTY INSURANCE SUBSIDIARY IN
FLORIDA. THE INSURANCE COMPANY SUBSIDIARY WILL PARTICIPATE IN THE STATE OF
FLORIDA'S JOINT UNDERWRITING ASSOCIATION (JUA) DEPOPULATION OF ITS HOMEOWNERS
PROGRAM.
F-10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Century Industries, Inc. in Consolidation
with its Subsidiaries
The second quarter 1998 results reflect the Company's continuing growth in
assets and capital over the prior year's second quarter, but reflect a
consolidated net loss due to the costs of financing the continuing growth of its
subsidiaries and the continuing overhead costs from the formation and
underwriting for the Registrant's proposed Florida property and casualty
insurance company subsidiary.
The Registrant's consolidated assets increased to $9,178,598 at second quarter
1998 from $8,807,922 at 12-31-97, a 4% increase. Consolidated capital has
increased from $4,203,993 at 12-31-97 to $4,511,477 in second quarter 1998, a 7%
increase.
Consolidated second quarter sales were $3,366,761, a decrease of $678,705 from
second quarter sales of $4,045,466 in 1997. Consolidated gross profit decreased
from $1,689,753 in 1997 to $1,306,879 in 1998. Consolidated operating costs
increased slightly from $1,393,046 in 1997 to $1,436,355 in 1998. The
consolidated operating income (loss) from operations was ($129,476) in 1998, a
decrease from the $296,707 for the same period in 1997.
The Registrant's year to date 1998 revenues have decreased from $7,850,284 at
June 30, 1997 to $6,436,813, a decrease of $1,413,471 or 18%. Year to date
consolidated gross profit decreased from $3,500,973 at June 30, 1997 to
$2,442,432 in 1998. Year to date consolidated operating costs decreased from
$2,883,075 in 1997 to $2,705,966 in 1998. Year to date consolidated operating
income (loss) from operations was ($263,534) in 1998, a decrease of $881,432
from the $617,898 for the same period in 1997.
The earnings (loss) per share was ($. 02) for the second quarter of 1998, a $.08
decrease over the $.05 earned in the second quarter 1997. Outstanding shares
increased from 6,096,000 in second quarter 1997, to 7,534,226, after deducting
269,202 Class A shares classified as treasury stock, in the second quarter 1998,
due to final preferred stock conversions and Class B quarterly stock dividends
being paid to former USIB preferred shareholders at the rate of 8% per annum, to
those preferred investors who have been unable to liquidate their Class B shares
received after converting from USIB preferred stock to Class B stock of the
Company.
The Company and its subsidiaries have more than sufficient cash on hand, and
liquidity from the cash flow of the subsidiary accounts receivable to continue
to maintain the profitability of their operations.
FUTURE PROSPECTS: TRENDS AND EVENTS LIKELY TO MATERIALLY IMPACT REGISTRANT'S
SHORT AND LONG TERM LIQUIDITY, REVENUES AND INCOME FROM CONTINUING OPERATIONS
USIB and Scibal's management teams expect to increase their respective revenues
and earnings in 1998 through the Company's go forward business plan described
elsewhere herein, and
-2-
<PAGE> 14
Management continues to believe that its investment in that program will provide
a substantial return on that investment. The Company's focus for 1998 is its
formation and capitalization of a new Florida insurance company to take
advantage of the State of Florida JUA Homeowners Insurance TakeOut Program.
USIB Holdings, LP, whose general partner is USIB, has expended funds to cover
legal, auditing and compliance expenses, as well as the go forward expense
associated with the underwriting of the offering which is ongoing through
Security Capital Trading, Inc., an NASD member firm, to finance the Florida
insurance JUA Program.
In the first quarter of 1998, the Company entered into two Letters of Intent
with Security Capital Trading, Inc., an NASD member firm. The first letter of
intent covers a $10,000,000 private placement of Senior Callable Convertible
Preferred shares, the proceeds of which are to fund the formation and
capitalization of the proposed new Florida insurance company. The second letter
of intent covers a public offering of an additional $12,000,000 to $15,000,000
of Senior Callable Convertible Preferred shares, the proceeds of which are
generally to be used for further insurance related acquisitions. In addition,
the proposed registered offering will include the registration of the privately
placed shares.
The JUA was established by the Florida Legislature in 1992 as a temporary
measure to provide homeowners' insurance coverage for individuals who could not
obtain such coverage from private carriers by reason of the impact that
Hurricane Andrew had on the private insurance market. However, instead of
serving as a temporary source of emergency insurance coverage, as originally
intended, the JUA has become a significant provider of original and renewal
insurance coverage for Florida homeowners.
The proposed Florida insurance company's initial business operations will
consist of providing property and casualty insurance coverage through homeowners
insurance policies that are acquired from the JUA. The Company anticipates that
the proposed Florida insurance company will acquire between 30,000 and 60,000
policies from the JUA within the first year of the proposed Florida insurance
company's operations, representing approximately $40,000,000 in annual renewal
premiums. The Company further anticipates that the proposed Florida insurance
company will offer homeowners property and casualty insurance in Florida in the
voluntary insurance market through independent agents. The earnings of the
proposed Florida insurance company from policy premiums will be supplemented by
the generation of investment income from investment policies adopted by the
proposed Florida insurance company's Board of Directors. Principal investment
goals will be to maintain safety and liquidity, enhance equity values and
achieve an increased rate of return consistent with Florida's regulatory
requirements.
Management has no assurances that these levels of performance will be achieved,
nor that its operations will materialize as planned.
The Company has entered into an agreement with Century Management Company to
service the new Florida insurance company as a full service manager. Mr.
DeAlessandro is presently Director of European American Group, and its
subsidiaries. He is also President and CEO of Rutgers Insurance Co. and Kentucky
National Insurance Co. He was formerly a Senior
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<PAGE> 15
Executive with Gulf Insurance Co., Travelers Insurance Co., and American
International Group (AIG). He serves on the Board of Directors of Smith Barney
Private Trust Co., and the New Jersey Insurance Advisory Board.
Mr. DeAlessandro was also appointed Chairman and Executive Counselor of the
Registrant during July, 1998, in a restructuring of the Company's Board. The
Board believes that Mr. DeAlessandro is the best qualified Director to lead the
Company as it begins to operate as an insurance holding company. Ted
Schwartzbeck and David Scibal, the former President and Chairman, respectively,
have assumed duties as Executive Vice Presidents of the Company, but remain as
President and CEO of their respective divisions.
SUBSIDIARIES' SECOND QUARTER RESULTS OF OPERATIONS
- --------------------------------------------------
Century Steel Products, Inc. (CSP)
CSP's second quarter manufacturing revenues always reflect the nation's winter
weather in the steel subsidiary's marketing area, and manufacturing revenues
reflect winter conditions in general. In spite of the weather, CSP's sales were
20% greater than second quarter 1997, even though commercial and residential
construction volumes were generally consistent with 1997 in the region.
CSP's sales of $1,460,811 for the second quarter 1998 were $239,284 or 20%
greater than $1,221,527 for the second quarter 1997. CSP's trade debt was
$753,030 as compared to $428,091 in the second quarter of 1997. CSP's trade
receivables for the second quarter were $1,466,660, a 63% increase over the
$897,952 for the second quarter 1997. CSP's second quarter 1998 operating profit
was $140,472, this being higher than the second quarter 1997 operating profits
of $35,361.
CSP's year to date sales of $2,565,386 through the second quarter 1998 were
$338,560 or 15% greater than $2,226,826 for the same period of 1997. CSP's year
to date 1998 operating profit was $76,945, this being lower than the operating
profits for the same period of 1997 of $245,273.
This earnings decrease is attributed to CSP's increasing dependence on
fabrication and installation projects (which have contributed to its increased
revenues), as CSP must substantially complete those projects before the revenue
recognition therefrom can be recognized.
Accounts receivable increased 63% during the quarter ended June 30, 1998, as
compared with the same quarter in 1997, due to the slow payment by customers for
work already shipped. From time on any given project subcontractors
intentionally hold back payment to CSP for their own internal cash flow reasons.
The Company does not feel that these slow payments have an adverse effect on CSP
or the Company. This would account for an increase in accounts receivable and
the decrease in operating profit.
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<PAGE> 16
Operating profits decreased from June 30, 1998 compared to June 30, 1997 due to
cost overruns and dependency upon subcontractors for installation. CSP does not
provide installation work, and relies heavily on subcontracts for erection of
structural steel made by CSP for certain contracts.
U.S. Insurance Brokers, Inc.
It is anticipated that USIB will facilitate the liaison and agency plant
supervision for the Florida insurance agents providing the sales for the Florida
insurance subsidiary. USIB will also be responsible for cross marketing the sale
of other insurance products to the Florida homeowners it will already be
writing. These products will include automobile, accident and health insurance.
Management has no assurances that these levels of performance will be achieved,
nor that its operations will materialize as planned.
USIB will be the managing general agency for Century Property & Casualty. Its
primary function will be the marketing of insurance products for Century
Property & Casualty, and acting as a licensed agency liaison, coordinating
Century Property & Casualty functions between Century Industries, Century
Property & Casualty and Century Insurance Management, Inc. Management has no
assurances that these levels of performance will be achieved, nor that its
operations will materialize as planned.
In the third quarter, 1998, USIB, working in conjunction with Scibal Associates,
placed the excess workers compensation and corresponding bond insurance for
Temple University and its affiliated health care operations. USIB was able to
negotiate a 30% reduction in premium and a 50% reduction in the deductible for
Temple University and its affiliated health care operations. In addition,
several key coverage conditions were broadened.
USIB, organized in April 1995 under the laws of the District of Columbia, has
its domiciliary offices at 1155 Connecticut Ave., NW, Suite 300, Washington,
D.C., 20036 and its telephone number is (202) 965-6555. It has administrative
offices at 11708 Bowman Green Drive, Reston, VA 20190.
Results of Operations
- ---------------------
USIB's second quarter 1998 operating loss was ($31,942), a decrease of 79% from
the operating loss of ($153,199) in 1997. This loss resulted from continued
operating and development costs related to its national association marketing
programs and its plan to act as the MGA for the proposed Florida insurance
subsidiary.
USIB's year to date 1998 operating loss was ($72,496), an increase of $120,604
over the $48,108 operating profit for the same period 1997.
Scibal Associates, Inc.
-----------------------
In 1996 the Company acquired DC Partners, Ltd. (DCP), in Somers Point, NJ.
Scibal Associates, Inc., (Scibal), formerly the wholly owned subsidiary of DC
Partners, Ltd., is a third
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<PAGE> 17
party claims administrator (TPA) , adjusting and settling claims for both
insurance companies and self insured companies and institutions. Scibal adjusts
in excess of $80,000,000 of claims annually. Scibal is now a wholly owned
subsidiary of USIB, as DCP and USIB merged with USIB surviving the merger.
Scibal has been in business for 45 years, and specializes in workers
compensation and all phases of commercial liability claims administration. In
administering these programs, Scibal offers its customers a full range of
services, including claims adjusting and administration, risk management as well
as the full complement of reporting required for both program management by the
customer as well as for regulatory compliance.
Workers compensation and liability payments total in the tens of billions each
year, and the number of entities which are self insuring and administering this
aspect of their operations continues to grow. With its dual IBM AS 400 computer
systems running internally developed proprietary claims administration and
reporting software, Scibal is well positioned to add new customers.
The customer base of Scibal consists of municipal and other government-related
entities, primarily in New Jersey, as well as an expanding base of national and
regional industrial, retail and service corporations.
Scibal's customers are comprised of clients of long standing, no one of which is
significant to the company. Being a service provider, there is no dependence on
any major supplier.
While competition in the claims administration industry is substantial, it has
evolved in the 90's into an industry where the administrator must be hardware
and software intensive, and the software must be developed internally and is
therefore proprietary. Scibal has the capacity to create, maintain and utilize
this software and is very competitive in the claims administration software
industry. Additionally, it has its 45 year track record of performance and
integrity in its operations and results on behalf of its clients, and handles
claims administration deposits for its clients.
Scibal has an experienced staff of computer programmers. These programmers are
continuously improving and enhancing the proprietary claims handling software.
Additionally, there is an effort underway at the company to write the "next
generation" of software, which will take advantage of Internet access,
electronic claims reporting, and data warehousing for its customers. The new
system will enable the company to better leverage its adjusters against case
loads, which will lead to higher profit margins while maintaining competitive
pricing. The features and functionality offered are singular, which should
provide Scibal with a substantial sales advantage in the near future.
Claims administration fees currently mirror the "soft" market in the entire
insurance industry. Rates are presently so competitive that they are stagnant or
reducing and have been for the last 4 years. Profit margins are slimmer in soft
markets, but markets are cyclical, and have historically upturned and rates
become "hard" for an undetermined cycle after they have remained soft for an
undetermined cycle.
-6-
<PAGE> 18
Scibal presently employs approximately 120 persons. None of the employees are
represented by labor unions so Scibal is not vulnerable to union demands or the
threat of a strike. Employee turnover is at a rate consistent with or lower than
the industry average, with a majority of the employees having been with the
company for more than three years.
Additionally, Scibal has signed new customers to contracts which will increase
Scibal's revenues, on an annualized basis, by $680,000. All contracts which
expired during the second quarter 1998 have been renewed and adjusted, which
should add an additional $200,000 in annualized revenues.
Payroll expenses were reduced in the second quarter 1998 by $177,000
(annualized) from the first quarter, through operating efficiencies. These staff
reductions will also realize savings in other expenses, such as benefits,
telephone and fax costs, and office supplies, on a go forward basis.
Results of Operations
- ---------------------
Scibal's revenues of $1,905,950 for the 1998 second quarter were $917,989 lower
than the second quarter of 1997 revenues of $2,823,939, a reduction of 33%. This
reduction was due to management's continued objective of replacing less
profitable accounts with accounts where profit margins are greater.
Scibal's trade debt was $537,612 in 1998 as compared to $860,051 in the second
quarter of 1997, a decrease of 37%. Scibal's trade receivables at June 30, 1998
were $538,596, a 27% decrease over the $734,743 at June 30, 1997.
Scibal's second quarter 1998 operating income of $128,097 was $290,615 lower
than the 1997 second quarter's operating income of $418,712, a decrease of 69%.
Year to date Scibal's sales of $3,871,427 for 1998 were $1,752,031 lower than
the six months of 1997 revenues of $5,623,458, a reduction of 31%. This
reduction was due to management's continued objective of replacing less
profitable accounts with accounts where profit margins are greater.
Scibal's year to date 1998 operating income of $272,211 was $337,022 lower than
the 1997 year to date operating income $609,233, a reduction of 55%.
USIB Holdings Limited Partnership
USIB Holdings LP was formed in 1997 for the purpose of acting as an acquisition
entity for the proposed acquisition of Reinsurance Corporation of America, which
management has been in active negotiations to purchase for approximately one
year.
This entity was formed as a Limited Partnership, with USIB as its General
Partner, in order that the Company could utilize David Scibal's 727,273 Class B
warrants, which he contributed as capital to the LP, as consideration for the go
forward business plan as capital. This reduced the potential dilution of the
Company's shares after the securities underwriting which is planned for
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<PAGE> 19
financing the new Florida insurance subsidiary. Mr. Scibal, in effect, was
willing to participate in the go forward profits as a 20% investor in the
limited partnership rather than exercise and sell the Class B common voting
shares underlying his warrant based upon his demand registration rights which
originally attached to his warrants.
The limited partnership will also provide favorable tax advantages to the
Company in that earnings upstreamed to the holding entity by any newly acquired
company can be upstreamed to the Company without being taxed in the holding
entity (USIB Holdings, LP) prior to being recognized as consolidated income by
the parent holding company, Century Industries, Inc.
Management has no assurances that these levels of performance will be achieved,
nor that its operations will materialize as planned.
The USIB Holdings, LP is being managed and operated by USIB as its General
Partner, and thus the information regarding USIB as explained herein will again
satisfy most of the informational requirements of the USIB Holdings, LP.
Results of Operations
- ---------------------
USIB Holdings, LP had a second quarter 1998 development stage operating loss of
($347,369).
This operating earnings loss is attributed to costs associated with running a
shareholders relations office for the Registrant, as well as covering
significant accounting and legal expenses for the Registrant. A large portion of
the accounting expense was due to the prolonged audit conducted by Correa,
Berger & Associate, PLLC, which was the subject of three Form 8-K filings in the
second quarter.
CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------------------
The Company's and its subsidiaries' primary sources of capital are their
accounts receivable, their bank credit lines, and their private placement of
convertible securities from time to time.
Consolidated accounts receivable were $2,005,256 at June 30, 1998, an increase
of $123,061 over its accounts receivable of $1,882,195 at June 30, 1997, a 7%
increase.
The Company has entered into two Letters of Intent with Security Capital
Trading, Inc., an NASD member firm located in New York City. The Company has
agreed to pay the underwriter's legal and due diligence fees associated with the
offering, which are anticipated to be approximately $85,000.
Consistent with the relationship with its underwriter, the Company has further
retained insurance counsel to represent the Company in the application process
for the proposed Florida insurance subsidiary, and other professionals who have
assisted with the insurance business plan, proposed reinsurance matters, and
management considerations. The Company believes that the proceeds of the
underwriting will be sufficient to capitalize the proposed Florida insurance
company and to provide its operations with sufficient working capital and
surplus to finance its future operations.
-8-
<PAGE> 20
PART II - Other Information
ITEM 1. Legal Proceedings
NONE
ITEM 2. Changes in Securities
NONE
ITEM 3. Defaults
NONE
ITEM 4. Submission of Matters to a Vote of Security Holders
NONE
ITEM 5. Other Information
On July 24, 1998, the Registrant announced the restructuring of its Board of
Directors. Joseph P. DeAlessandro replaced David Scibal as Chairman, and Mr.
DeAlessandro also was named to a new position as Executive Counselor. The
Registrant attributed the restructuring of its Board to its new focus as an
insurance holding company and Mr. DeAlessandro's experience. Ted Schwartzbeck
and David Scibal, the former President and Chairman, respectively, have assumed
duties as Executive Vice Presidents of the Company, but remain as President and
CEO of their respective divisions.
ITEM 6. Exhibits and Reports on Form 8-K
On April 20, 1998, the Registrant filed a Form 8-K regarding the mutual decision
to file an amended Form 10-KSB to further clarify the audited financial
statements.
On May 20, 1998, the Registrant filed a Form 8-K regarding the decision by the
Registrant to not re-engage Correa, Berger & Associate, CPA's, PLLC and to
engage Sobel & Co., LLC as the independent auditors for the Registrant.
On June 17, 1998, the Registrant filed a Form 8-K/A further clarifying the May
20, 1998 Form 8-K. This Form 8-K/A clarified that Correa, Berger & Associate,
CPA's, PLLC had provided a completed and unqualified audit and that any previous
difference of opinion had been resolved to the satisfaction of Correa, Berger &
Associate, CPA's, PLLC.
-9-
<PAGE> 21
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
May 14, 1999
Century Industries, Inc.
/s/ Ted L. Schwartzbeck
----------------------------------------------
Ted L. Schwartzbeck
President and Treasurer
/s/ Jay Pignatello
-------------------------------------
Jay Pignatello
Vice President, Director
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<PAGE> 22
INDEX TO EXHIBITS
(l) Underwriting Agreement. Not applicable.
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession. Not applicable.
(3) Articles of Incorporation and Bylaws. Incorporated by reference through
previously filed 10-K's.
(4) Instruments Defining the Rights of Security Holders, Including
Indentures. Incorporated by reference through previously filed 10-K's.
(5) Opinion: re: Legality. Not applicable.
(6) No Exhibit Required.
(7) Opinion: re: Liquidation Preference. Not applicable.
(8) Opinion: re: Tax Matters. Not applicable.
(9) Voting Trust Agreement and Amendments. Not applicable.
(10) Material Contracts. Not applicable.
(11) Statement re: Computation of Per Share Earnings. Attached herewith.
(12) No Exhibit Required.
(13) Annual Report to Securities Holders. Not applicable.
(14) Material Foreign Patents. Not applicable.
(15) Letter re: Unaudited Interim, Financial Information. Not applicable.
(16) Letter on Change in Certifying Accountant. Not applicable.
(17) Letter re Director Resignation. Not applicable.
(18) Letter re: Change in Accounting Principles. Not applicable.
(l9) Report Furnished to Security Holders. Not applicable.
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<PAGE> 23
INDEX TO EXHIBITS - CONT'D
(20) Other Documents Furnished to Security Holders. Not applicable.
(21) Subsidiaries of the Registrant. Incorporated by reference in previously
filed Form 10-QSB and Form 10-KSB.
(22) Published Report Regarding Matters Submitted to Securities Holders. Not
applicable.
(23) Consents of Experts and Counsel. Not applicable
(24) Power of Attorney. Not applicable.
(25) Statement of Eligibility of Trustee. Not applicable.
(26) Invitations for Competitive Bids. Not applicable.
(27) Financial Data Schedule. Incorporated by reference in previously filed
Form 10-QSB and Form 10-KSB
(28) Information from Reports Furnished to State Insurance Regulatory
Authorities. Not applicable.
(29) Additional Exhibits. Not applicable.
-12-
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 11
CENTURY INDUSTRIES, INC., AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
-----------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1998 1997
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHARES OUTSTANDING.......................................... 7,803,000 6,096,000
WEIGHTED AVERAGE SHARES OUTSTANDING......................... 7,600,000 5,800,000
NET INCOME (LOSS)........................................... $ (287,893) $ 535,091
PREFERRED DIVIDENDS ---------- (167,700)
------------ -----------
TOTAL NET INCOME (LOSS) AVAILABLE
FOR COMMON STOCKHOLDERS' $ (287,893) $ 367,391
============ ==========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
EARNINGS (LOSS) PER SHARE $(0.04) $0.06
------ -----
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
EXHIBIT 11
CENTURY INDUSTRIES, INC., AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
-----------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1998 1997
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHARES OUTSTANDING.......................................... 7,803,000 6,096,000
WEIGHTED AVERAGE SHARES OUTSTANDING......................... 7,600,000 5,800,000
NET INCOME (LOSS)........................................... $ (126,811) $ 332,150
PREFERRED DIVIDENDS ---------- (25,750)
------------ -----------
TOTAL NET INCOME (LOSS) AVAILABLE
FOR COMMON STOCKHOLDERS' $ (126,811) $ 306,400
============ ==========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
EARNINGS (LOSS) PER SHARE $(0.02) $0.05
------ -----
</TABLE>
