<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1999
Commission File Number: 1-13327
August 24, 1999
CENTURY INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
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<S> <C>
District of Columbia 54-1666769
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(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)
</TABLE>
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, 1999, 3,783,000 shares of the Registrant's $.001 par value Class A
common stock were issued and outstanding, and 5,167,000 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> <C>
PART 1. FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements F1
Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998 F2-3
Consolidated Statements of Operations for the three
months ended June 30, 1999 and June 30, 1998 F4
Consolidated Statements of Operations for the six
months ended June 30, 1999 and June 30, 1998 F5
Consolidated Statement of Changes in Stockholders'
Equity for the three months ended March 31, 1999 F6
Consolidated Statements of Cash Flows for the three months
ended March 31, 1999 and 1998 F7-8
Notes to Consolidated Financial Statements F8
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, 1999 and December 31, 1998, and the
results of its operations and cash flows for the three month and six month
periods ended June 30, 1999 and 1998.
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 for the year ended December 31, 1998.
Certain items in prior period consolidated financial statements have been
reclassified, where appropriate, to conform with the June 30, 1999 presentation.
F-1
<PAGE> 4
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS 6/30/99 12/31/98
- -------------- ------- --------
<S> <C> <C>
Cash and Cash Equivalents $ 315,263 $ 497,341
Accounts Receivable-Trade (Net of allowance
for doubtful accounts of
$52,000 and $283,000 respectively) 1,873,774 1,923,084
Inventory 127,717 154,798
Marketable Securities 100,943 116,925
Other Current Assets 196,723 44,888
----------- -----------
Total Current Assets 2,614,420 2,737,036
----------- -----------
Property and Equipment
- ----------------------
Land and Building 378,269 378,270
Software and Computer Equipment 2,308,987 2,245,067
Furniture and Fixtures 823,082 824,186
Machinery and Equipment 65,342 65,139
Transportation Equipment 206,229 215,429
Leasehold Improvements 159,251 159,251
----------- -----------
3,941,160 3,887,342
Less: Accumulated Depreciation (1,525,732) (1,382,951)
----------- -----------
Net Property and Equipment 2,415,428 2,504,391
----------- -----------
Other Assets
- ------------
Investments 785,971 707,666
Security Deposits 105,653 105,653
Goodwill, Net 2,034,077 1,828,326
Due from Related Parties 255,423 496,171
Other Assets 1,099,079 1,317,340
----------- -----------
Total Other Assets 4,280,203 4,455,156
----------- -----------
Total Assets $ 9,310,051 $ 9,696,583
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-2
<PAGE> 5
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
6/30/99 12/31/98
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<S> <C> <C>
Current Liabilities
- -------------------
Accounts Payable - Trade $ 1,526,608 $ 1,521,587
Current Maturities - Long Term Debt and Mortgages 555,521 878,149
Capital Lease Obligations 103,325 104,349
Notes Payable 200,000 200,000
Advances from Stockholders 62,487 58,524
Accrued Expenses 1,105,958 1,485,883
Dividends Payable 16,389 16,389
----------- -----------
Total Current Liabilities 3,570,288 4,264,881
Long Term Notes and Mortgages Payable, Less Current Portion 570,183 749,066
- -----------------------------------------------------------
Capital Lease Obligations, Less Current Portion (6,912) 59,195
- ----------------------------------------------- ----------- -----------
Total Liabilities 4,133,559 5,073,142
----------- -----------
Minority Interest 7,207 12,719
----------- -----------
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, 3,783,000 and 3,783,000 issued 3,783 3,783
Common Stock, Class B, $.001 par value, 25,000,000 shares
authorized, 5,167,000 and 5,167,000 issued and outstanding 5,167 5,167
Additional Paid in Capital 8,080,396 8,080,396
Retained Deficit (2,021,317) (2,130,189)
----------- -----------
6,069,029 5,960,157
Less: Class A common stock in treasury, 269,202
shares in 1999 and 1998 (899,744) (899,744)
----------- -----------
Total Stockholders' Equity 5,169,285 5,060,413
----------- -----------
Other Comprehensive Loss -- (449,691)
Total Liabilities and Stockholders' Equity $ 9,310,051 $ 9,696,583
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-3
<PAGE> 6
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
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<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales $ 2,734,894 $ 3,366,761
Cost of Sales 1,547,012 2,059,882
----------- -----------
Gross Profit on Sales 1,187,881 1,306,879
----------- -----------
Operating Costs
- ---------------
Payroll Expense 375,548 522,381
Professional Fees 106,642 233,824
Auto, Travel and Entertainment 46,106 54,342
Amortization and Depreciation 66,281 148,057
Other 509,727 477,751
----------- -----------
Total Operating Costs 1,104,304 1,436,355
----------- -----------
Income (Loss) From Operations 83,578 (129,476)
----------- -----------
Other Income (Expense)
- ----------------------
Interest Expense (31,749) (40,154)
Minority Interest (7,207) (6,300)
Other Income (Expense)-Net (62,379) (35,422)
----------- -----------
Total Other Income (Expense) - Net (101,335) (81,876)
----------- -----------
Income (Loss) Before Taxes (17,757) (211,352)
Income Tax Provision (Benefit) -- 84,547
-----------
Net Income (Loss) $ (17,757) $ (126,811)
----------- -----------
Net Income (Loss) Available for Common Stockholders $ (17,757) $ (126,811)
=========== ===========
Earnings (Loss) Per Share:
Basic and Diluted Earnings (Loss) Per Share $ (.01) $ (0.03)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE> 7
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales $ 5,801,911 $ 6,436,813
Cost of Sales 3,198,095 3,994,381
----------- -----------
Gross Profit on Sales 2,603,816 2,442,432
----------- -----------
Operating Costs
- ---------------
Payroll Expense 857,884 1,065,561
Professional Fees 200,739 320,268
Auto, Travel and Entertainment 104,281 103,964
Amortization and Depreciation 134,416 287,014
Other 941,271 929,159
----------- -----------
Total Operating Costs 2,238,590 2,705,966
----------- -----------
Income (Loss) From Operations 365,226 (263,534)
----------- -----------
Other Income (Expense)
- ----------------------
Interest Expense (65,784) (76,131)
Minority Interest (14,414) (12,600)
Other Income (Expense)-Net (176,154) (34,689)
----------- -----------
Total Other Income (Expense) - Net (256,352) (123,420)
----------- -----------
Income (Loss) Before Taxes 108,872 (386,954)
----------- -----------
Income Tax Provision (Benefit) -- 99,067
-----------
Net Income (Loss) $ 108,872 $ (287,887)
----------- -----------
Net Income (Loss) Available for Common Stockholders $ 108,872 $ (287,887)
=========== ===========
Earnings (Loss) Per Share:
Basic and Diluted Earnings (Loss) Per Share $ .01 $ (0.03)
=========== ===========
</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 30,1999
(UNAUDITED)
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<CAPTION>
COMMON COMMON ADDITIONAL
PREFERRED STOCK STOCK PAID-IN
STOCK CLASS A CLASS B CAPITAL
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<S> <C> <C> <C> <C>
Balance December 31, 1998 $ 1,000 $ 3,783 $ 5,167 $ 8,080,396
- -------------------------
Net Income for three months ended 3/31/99
------- ------- ------- -----------
Balance March 31,1999 $ 1,000 $ 3,783 $ 5,167 $ 8,080,396
======= ======= ======= ===========
Net Income for 3 months ended
6/30/99
Balance June 30, 1999 $ 1,000 $ 3,783 $ 5,167 $ 8,080,396
======= ======= ======= ===========
</TABLE>
<TABLE>
<CAPTION>
RETAINED TOTAL
EARNINGS TREASURY STOCKHOLDERS'
(DEFICIT) STOCK EQUITY
------------------------------------------------------
<S> <C> <C> <C>
Balance December 31, 1998 $ (2,130,189) $ (899,744) $ 5,060,413
- -------------------------
Net Income for three months ended 3/31/99 126,629 126,629
------------- ----------- ------------
Balance March 31,1999 $ (2,003,560) $ (899,744) $ 5,187,042
============= =========== ============
Net Income for 3 months ended
6/30/99 (17,757) (17,757)
Balance June 30, 1999 $ (2,021,317) $ (899,744) $ 5,169,285
============= =========== ============
</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, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
6/30/99 6/30/98
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<S> <C> <C>
Cash Flows from Operating Activities:
- -------------------------------------
Cash received from customers $ 5,801,911 $ 6,339,003
Cash paid to suppliers and employees (5,436,685) (7,132,505)
Interest paid (65,784) (76,131)
Income taxes paid -- --
----------- -----------
Net cash used for operating activities 299,442 (869,633)
----------- -----------
Cash Flows from Investing Activities:
- -------------------------------------
Purchases of fixed assets (7,863) (512,427)
Purchases of marketable securities and investments (22,324) (163,846)
----------- -----------
Net cash used for investing activities (30,187) (676,273)
----------- -----------
Cash Flows from Financing Activities:
- -------------------------------------
Proceeds from issuance of equity securities -- 1,285,477
Receipts of (payments on) notes (555,521) 339,679
Net advances from affiliates-stockholders (87,458) (179,601)
----------- -----------
Net cash provided by financing activities (642,979) 1,445,555
----------- -----------
Net (Decrease) Increase In Cash and Cash Equivalents (373,724) (100,351)
- ----------------------------------------------------
Cash and Cash Equivalents - January 1 $ 497,341 $ 282,009
- ------------------------------------- ----------- -----------
Cash and Cash Equivalents - June 30 $ 315,263 $ 181,658
- ----------------------------------- =========== ===========
Net (Loss) Income $ 101,666 (372,434)
Amortization and depreciation 134,416 287,014
Minority interest 14,414 6,300
Increase in accounts receivable (49,310) (97,810)
(Increase) decrease in inventory 48,936 19,966
(Increase) decrease in other current assets and other assets 679,164 593,330
Decrease in accounts payable (93,216) (417,783)
Increase in accrued expenses (197,358) 298,444
----------- -----------
Net cash used for operating activities $ 406,904 $ (869,633)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-7
<PAGE> 10
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(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 March 31, 1999 and 1998, the Company recognized an
unrealized gain of $0.00 and an unrealized gain of $10,802, 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 was
not adjusted and increased by $10,802 for the quarters ended March 31, 1999 and
1998, respectively.
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 for the year ended December 31, 1998.
Certain items in prior period consolidated financial statements have been
reclassified, where appropriate, to conform with the June 30, 1999 presentation.
The December 31, 1998 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 June 30, 1999 and December 31, 1998, and the results
of its operations and cash flows for the three month periods ended June 30, 1999
and 1998. The results of operations for the three months ended June 30,1999 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) 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
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Century Industries, Inc. in Consolidation
with its Subsidiaries
The first quarter 1999 results reflect the Company's continuing success at the
operational level for both the Century Steel subsidiary and the Scibal
Associates, but reflect a small consolidated net loss due to the costs of a
failed underwriting effort to create a new subsidiary. During the second quarter
the Company was successful in reducing parent overhead costs in an ongoing
effort to do so.
Its consolidated assets were $8,785,026, in comparison to $9,696,583 at
12-31-98.
Consolidated second quarter sales were $2,734,894, in comparison to $3,366,761
at the same period in 1998. Consolidated operating costs decreased to $1,104,304
in the second quarter 1999 from $1,436,355 in second quarter 1998. The
consolidated operating income was ($129,476) in 1998, whereas in second quarter
1999 it was $83,578. Century, as the parent holding company, has no operations
of its own, and further delineation of sales and earnings is described later
herein under each subsidiaries' results of operations section.
Year to date sales are $5,801,911, down from $6,436,813 for the same period in
1998. Gross profit through June 30, 1999 increased from $2,442,432 in 1998 to
$2,603,816 in 1999. Operating income year to date for 1999 was $365,226, whereas
operating income for the same period in 1998 was ($263,534).
The earnings per share was $(.01) for the second quarter of 1999, a $.02
increase over the ($.03) earned in the second quarter 1998. There was no
additional share issuance in the second quarter from that indicated at December
31, 1998.
The Company and its subsidiaries have sufficient cash on hand, and liquidity
from the cash flow of their accounts receivable, to continue to grow the
profitability of their operations.
SUBSIDIARIES' SECOND QUARTER RESULTS OF OPERATIONS
Century Steel Products, Inc. (CSP)
CSP's sales of $893,823 in 1999 were less than the $1,460,811 for the second
quarter 1998 sales. CSP contributes this decrease in sales to its downsizing
efforts as a means to achieve greater profitability.
CSP's trade debt was $753,030 in 1998 as compared to $706,520 in the second
quarter of 1999. CSP considers this debt decrease as resultant from its
downsizing efforts.
CSP's second quarter 1999 operating income was $(27,519), whereas its 1998
operating loss was ($134,058). CSP continues to reduce overhead costs while
trying to develop a new and profitable customer base.
-2-
<PAGE> 13
Year to date sales through June 30, 1999 were $2,048,056 and were $2,565,386 for
the same period in 1998. Operating income through June 30, 1999 was $133,124,
and for the same period of 1998 it was $76,945.
U.S. Insurance Brokers, Inc.
USIB was organized in April 1995 under the laws of the District of Columbia, has
its domiciliary offices at 700 13th St., NW, Suite 950, Washington, DC 20007,
and it has administrative offices at 11708 Bowman Green Drive, Reston, VA 20190.
To date, none of USIB's efforts to market group insurance plans to membership
based groups have succeeded. Management is in discussion with regards to USIB's
future, the disposal of USIB's assets, and a go-forward business plan for USIB.
Results of Operations
USIB's second quarter 1999 operating loss was ($190), and its 1998 operating
loss was ($31,942). Year to date, USIB's operating loss was ($39,256), and for
the same period 1998 was ($72,496). USIB's only expenses were to help defray
some of the parent public company overhead costs.
Scibal Associates, Inc.
In 1996, the Company acquired DC Partners, Ltd. (DCP), with a home office
situated in Somers Point, NJ, and branch offices in Edison, NJ, West Chester,
PA, Livonia, MI, and Jacksonville, FL. Scibal Associates, Inc. (Scibal),
formerly the wholly owned subsidiary of DC Partners, Ltd., is a Third Party
Claim Administrator, investigating, adjusting and administering liability,
workers' compensation and property claims on behalf of self-insureds and
insurance companies. Scibal adjusts in excess of $65,000,000 worth of claims
annually.
Scibal began operations in 1953. The Company offers its customers a complete
range of services, including claim administration, adjusting, investigation and
risk management, as well as a full complement of computer reporting required for
program management.
Scibal presently employs over 100 personnel. None of the employees are
represented by labor unions, so Scibal is not vulnerable to union demands or the
threat of strike. Employee turnover is at a rate consistent with or lower than
industry average, with the majority of the employees having been with the
Company for many years.
While competition in the third party administration industry is substantial, it
has evolved in the 1990s into an industry where the TPA must be hardware and
software intensive. Scibal's unique software, which was developed internally and
is therefore proprietary, allows for an extremely flexible delivery of reporting
systems to its clientele. This software is supported by an experienced staff of
computer programmers, who are continually improving and enhancing the
proprietary claims handling software. Additionally, through its computer
programmers, Scibal continues to write "next generation" software, which will
take advantage of Internet
-3-
<PAGE> 14
access, electronic claims reporting, electronic medical payment processing, data
warehousing, as well as various other value-added programs. This will enable the
Company's personnel to increase production, thereby increasing profit margins
while maintaining competitive pricing. The features and functionality offered
are singular, which should provide Scibal with a substantial sales advantage in
the future. Many of the new functions will be available for delivery in early
1999. Additionally, internal computer staff has commenced re-mapping of Scibal's
software to ensure Year 2000 compliance, which will be completed prior in June
of 1999.
The third party administration industry is directly affected by the current
"soft" insurance market. This is an industry-wide issue which has, historically,
had a tendency to run in cycles. Although many medium and large public entities
and private corporations have opted to discontinue participation in
self-insured/loss sensitive programs due to substantially reduced insurance
costs, many believe that the market will begin to tighten throughout 1999, which
will encourage both small and large entities to once again revisit insurance
programs involving alternative risk financing, including either self-insurance,
deductibles or retrospective ratings.
Scibal's customer base consists of organizations that participate in either
self-insurance or alternative risk financing programs. A representative list of
Scibal's clients includes hundreds of public entities, as well as many colleges,
universities, health care institutions, real estate holding companies, electric
authorities, various associations and entertainment related business.
In early 1999, Scibal was informed that a customer which generated approximately
$400,000 per year in revenue would be utilizing their own "in-house" program
during the second quarter of 1999. All other contracts which expired through the
second quarter of 1999 have been renewed. The great majority of Scibal's revenue
is generated from long standing customers, only one of which amounts to more
than 5% of revenues for Scibal.
Being a service provider, there exists no dependence on any major supplier.
Scibal employs approximately 110 persons. None of the employees are represented
by labor unions.
Payroll expenses were reduced in the second quarter 1999 by $165,000
(annualized) from the first quarter, through operating efficiencies.
Results of Operations
Scibal's revenues of $1,819,995 for the 1999 second quarter were $86,966 lower
than the second quarter of 1998 revenues of $1,905,950, a reduction of 4.5%.
Scibal's trade debt was $806,492 in 1999 as compared to $537,612 in the second
quarter of 1998, an increase of 50%. Scibal's trade receivables at June 30, 1999
were $591,609, a 9.8% increase over the balance of $538,596 at June 30, 1998.
Scibal's second quarter 1999 operating income of $158,869 was $31,772 higher
than the 1998 second quarter's operating income of $128,097, an increase of 25%.
-4-
<PAGE> 15
Year to date revenues for Scibal of $3,731,263 were $140,164 lower than the six
months of 1998 revenues of $3,871,427, a reduction of 3.6%.
Year to date 1999 operating income of $355,475 was $83,264 higher than the 1998
year to date operating income of $272,211, an increase of 30.6%.
Overall, the results of operations are a reflection of the tight market in
conjunction with the continuing effort by management to generate operating
efficiencies, as well as a refusal to cut prices below a profitable level in
order to retain customers. As such, although revenues are down, operating income
is increasing.
USIB Holdings Limited Partnership
USIB Holdings LP was formed in 1997 for the purpose of acting as an acquisition
entity for insurance related entities.
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
proposed formation of the new insurance subsidiary, as capital. This was
anticipated to reduce the potential dilution of the Company's shares after the
securities underwriting which was planned for financing the new Florida
insurance subsidiary. As this underwriting has failed, the Company is
considering "folding up" this limited partnership. Mr. Scibal, in effect, was
willing to participate in the go forward profits as a 20% investor rather than
exercise and sell the Class B shares underlying his warrant based upon his
demand registration rights which originally attached to his warrants.
The USIB Holdings, LP is managed and operated by USIB as its General Partner,
and thus the information regarding USIB as explained herein will again satisfy
the informational requirements of the USIB Holdings, LP.
Results of Operations
USIB Holdings, LP had a second quarter 1999 development stage operating loss of
($34,843), and a year to date operating loss of ($75,242). The second quarter
1998 development stage operating loss was ($347,369). This is due to the
continued efforts by management to lower overhead parent public company costs.
This operating earnings loss is attributed to the failed formation of the
proposed Florida property & casualty insurance company and the assumption of
legal and accounting expenses associated with running the parent public company.
CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES
The Company's and its subsidiaries' primary sources of capital are their
accounts receivable and their bank credit lines.
-5-
<PAGE> 16
Consolidated accounts receivable were $1,873,774 at June 30, 1999, a decrease
over its accounts receivable of $2,149,957 at June 30, 1998.
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
NONE
ITEM 6. Exhibits and Reports on Form 8-K
NONE
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.
August 24, 1999
Century Industries, Inc.
/s/ Ted L. Schwartzbeck
----------------------------------
Ted L. Schwartzbeck, President
/s/ Joel Gundersheimer
----------------------------------
Joel Gundersheimer, Director
-6-
<PAGE> 17
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. Not applicable.
(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.
-7-
<PAGE> 18
INDEX TO EXHIBITS - CONT'D
(20) Other Documents Furnished to Security Holders. Not applicable.
(21) Subsidiaries of the Registrant. See attached Exhibit 21.
(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. See attached Exhibit 27.
(28) Information from Reports Furnished to State Insurance Regulatory
Authorities. Not applicable.
(29) Additional Exhibits. Not applicable.
-8-
<PAGE> 1
EXHIBIT 11
CENTURY INDUSTRIES, INC., AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Shares Outstanding................................. 8,949,000 7,803,000
Weighted average shares outstanding................ 8,949,000 7,803,000
Net Income (Loss).................................. $101,666 $(287,893)
Total Net Income (Loss) Available
for Common Stockholders' $ 101,666 $(287,893)
========= ===========
Basic and Diluted Earnings (Loss) Per Share:
Earnings (Loss) Per Share $0.01 $(0.04)
----- -------
</TABLE>
-10-
<PAGE> 2
EXHIBIT 11
CENTURY INDUSTRIES, INC., AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Shares Outstanding................................8,949,000 7,803,000
Weighted average shares outstanding...............8,949,000 7,803,000
Net Income (Loss)................................$ (17,757) $ (126,811)
Total Net Income (Loss) Available
for Common Stockholders' $ (17,757) $ (126,811)
=========== ===========
Basic and Diluted Earnings (Loss) Per Share:
Earnings (Loss) Per Share $0.00 $(0.02)
----- -------
</TABLE>
-11-
<PAGE> 1
Exhibit (21).
21. A list of all subsidiaries, the State or other jurisdiction of incorporation
or organization of each, and the names under which the subsidiaries do business.
<TABLE>
<CAPTION>
Name of State of
subsidiary Incorporation Does business as
- --------------------------------------------------------------------------------
<S> <C> <C>
Century Steel
Products, Inc. Virginia Century Steel Products, Inc.
U.S. Insurance Brokers, District of U.S. Insurance Brokers, Inc.
Inc. Columbia
Scibal Associates, Inc. New Jersey Scibal Associates, Inc.
USIB Holdings, LP District of USIB Holdings, LP
Columbia
</TABLE>
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000355701
<NAME> CENTURY INDUSTRIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 315,263
<SECURITIES> 100,943
<RECEIVABLES> 1,873,774
<ALLOWANCES> 335,000
<INVENTORY> 127,717
<CURRENT-ASSETS> 2,614,420
<PP&E> 2,415,428
<DEPRECIATION> 1,525,723
<TOTAL-ASSETS> 9,310,051
<CURRENT-LIABILITIES> 4,133,559
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,310,051
<SALES> 2,734,894
<TOTAL-REVENUES> 2,734,894
<CGS> 1,547,012
<TOTAL-COSTS> 1,104,304
<OTHER-EXPENSES> 17,757
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65,784
<INCOME-PRETAX> 108,872
<INCOME-TAX> 0
<INCOME-CONTINUING> 108,872
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,872
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
