<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 September 30, 1999
Commission File Number: 1-13327
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 September 30, 1999, 5,783,000 shares of the Registrant's $.001 par value
Class A common stock were issued and outstanding, and 8,315,000 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>
PART 1. FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements F1
Consolidated Balance Sheets as of September 30, 1999
and December 31, 1998 F2-3
Consolidated Statements of Operations for the three
months ended September 30, 1999 and September 30, 1998 F4
Consolidated Statements of Operations for the nine
months ended September 30, 1999 and September 30, 1998 F5
Consolidated Statement of Changes in Stockholders'
Equity for the three months ended March 31,
June 30, and September 30, 1999 F6
Consolidated Statements of Cash Flows for the three months
ended September 30, 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
September 30, 1999 and December 31, 1998, and the results of its
operations and cash flows for the three month and nine month periods
ended September 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.
<PAGE> 4
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS 9/30/99 12/31/98
- -------------- ------- --------
<S> <C> <C>
Cash and Cash Equivalents $ 228,463 $ 497,341
Accounts Receivable-Trade (Net of allowance
for doubtful accounts of
$52,000 and $283,000 respectively) 3,850,375 1,923,084
Inventory 139,839 154,798
Marketable Securities 341,733 116,925
Other Current Assets 8,200 44,888
----------- -----------
Total Current Assets 4,568,610 2,737,036
----------- -----------
Property and Equipment
- ----------------------
Land and Building 378,269 378,270
Software and Computer Equipment 85,543 2,245,067
Furniture and Fixtures 87,679 824,186
Machinery and Equipment 46,732 65,139
Transportation Equipment 140,178 215,429
Leasehold Improvements 92,207 159,251
----------- -----------
830,608 3,887,342
Less: Accumulated Depreciation (432,266) (1,382,951)
----------- -----------
Net Property and Equipment 398,343 2,504,391
----------- -----------
Other Assets
- ------------
Investments 686,523 707,666
Security Deposits 16,232 105,653
Goodwill, Net 511,577 1,828,326
Due from Related Parties -- 496,171
Other Assets (9,471) 1,317,340
----------- -----------
Total Other Assets 1,204,861 4,455,156
----------- -----------
Total Assets $ 6,171,814 $ 9,696,583
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 5
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
9/30/99 12/31/98
------- --------
<S> <C> <C>
Current Liabilities
- -------------------
Accounts Payable - Trade $ 2,003,933 $ 1,521,587
Current Maturities - Long Term Debt and Mortgages 558,683 878,149
Capital Lease Obligations -- 104,349
Notes Payable 74,891 200,000
Advances from Stockholders 100 58,524
Accrued Expenses 33,236 1,485,883
Dividends Payable 1,950 16,389
----------- -----------
Total Current Liabilities 2,672,793 4,264,881
Long Term Notes and Mortgages Payable, Less Current Portion 334,986 749,066
- -----------------------------------------------------------
Capital Lease Obligations, Less Current Portion -- 59,195
- ----------------------------------------------- ----------- -----------
Total Liabilities 3,007,779 5,073,142
----------- -----------
Minority Interest 14,207 12,719
----------- -----------
Stockholders' Equity
- --------------------
Preferred Stock, Convertible, $.001 par value, 1,200,000 shares
authorized, 1,000,000 issued and outstanding -- 1,000
Common Stock, Class A, $.001 par value, 25,000,000 shares
authorized, 5,515,000 and 3,783,000 issued 5,515 3,783
Common Stock, Class B, $.001 par value, 25,000,000 shares
authorized, 8,315,000 and 5,167,000 issued and
outstanding 8,315 5,167
Additional Paid in Capital 4,027,785 8,080,396
Retained Deficit (874,235) (2,130,189)
----------- -----------
3,167,380 5,960,157
Less: Class A common stock in treasury, 269,202
shares in 1999 and 1998 (17,550) (899,744)
----------- -----------
Total Stockholders' Equity 3,149,830 5,060,413
----------- -----------
Other Comprehensive Loss -- (449,691)
Total Liabilities and Stockholders' Equity $ 6,171,814 $ 9,696,583
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 6
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales $ 1,671,156 $ 3,039,637
Cost of Sales 1,161,401 1,706,968
----------- -----------
Gross Profit on Sales 509,755 1,332,669
----------- -----------
Operating Costs
- ---------------
Payroll Expense 60,924 454,277
Professional Fees 51,603 65,974
Auto, Travel and Entertainment 20,265 59,414
Amortization and Depreciation 7,645 127,252
Other 57,783 590,925
----------- -----------
Total Operating Costs 198,220 1,297,842
----------- -----------
Income (Loss) From Operations 311,535 34,827
----------- -----------
Other Income (Expense)
- ----------------------
Interest Expense 56,881 (24,625)
Other Income (Expense)-Net (14,388) (258,435)
----------- -----------
Total Other Income (Expense) - Net 42,494 (283,060)
----------- -----------
Income (Loss) Before Taxes 269,042 (248,233)
Net Income (Loss) $ 269,042 $ (248,233)
----------- -----------
Net Income (Loss) Available for Common Stockholders $ 269,042 $ (248,233)
=========== ===========
Earnings (Loss) Per Share:
Basic and Diluted Earnings (Loss) Per Share $ 0 .02 $ (0.02)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 7
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales $ 7,473,067 $ 9,476,450
Cost of Sales 4,359,496 5,701,349
----------- -----------
Gross Profit on Sales 3,113,571 3,775,101
----------- -----------
Operating Costs
- ---------------
Payroll Expense 918,808 1,519,837
Professional Fees 252,342 430,996
Auto, Travel and Entertainment 124,546 428,974
Amortization and Depreciation 142,061 183,320
Other 999,054 1,446,178
----------- -----------
Total Operating Costs 2,436,810 4,009,305
----------- -----------
Income (Loss) From Operations 676,761 (234,204)
----------- -----------
Other Income (Expense)
- ----------------------
Interest Expense (8,903) (73,529)
Minority Interest (14,414) --
Other Income (Expense)-Net (190,542) (336,295)
----------- -----------
Total Other Income (Expense) - Net (213,859) (409,824)
----------- -----------
Income (Loss) Before Taxes 462,902 (644,028)
----------- -----------
Income Tax Provision (Benefit) -- --
----------- -----------
Net Income (Loss) $ 462,902 $ (644,028)
----------- -----------
Net Income (Loss) Available for Common Stockholders $ 462,902 $ (644,028)
=========== ===========
Earnings (Loss) Per Share:
Basic and Diluted Earnings (Loss) Per Share $ 0.03 $ (0.07)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 8
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30,1999
(Unaudited)
<TABLE>
<CAPTION>
COMMON COMMON ADDITIONAL
PREFERRED STOCK STOCK PAID-IN
STOCK CLASS A CLASS B CAPITAL
----------------------------------------------------------------------
<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
=========== =========== =========== ===========
Net Income for 3 months
ended 9/30/99
Issuance of Common Stock $ 1,732 $ 3,148
Divestiture of Scibal Associates $(4,052,611)
Balance September 30, 1999 -- $ 5,515 $ 8,315 $ 4,027,785
========================== =========== =========== =========== ===========
</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
=========== =========== ===========
Net Income for 3 months
ended 9/30/99 $ 269,042 $ 269,042
Issuance of Common Stock $ 4,880
Divestiture of Scibal Associates $ 878,040 882,194 $(2,292,377)
Balance September 30, 1999 $ (874,235) $ (17,550) $ 3,149,830
========================== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE> 9
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
9/30/99 9/30/98
------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
- -------------------------------------
Cash received from customers $ 6,809,488 $ 9,332,451
Cash paid to suppliers and employees (6,336,931) (9,337,279)
Interest paid (122,665) (73,529)
----------- -----------
Net cash used for operating activities 50,430 (78,357)
----------- -----------
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 -- 1,097,200
Receipts of (payments on) notes (781,797) 339,679
Repayments of short term notes 280,692 --
Net advances from affiliates-stockholders (87,458) (540,618)
----------- -----------
Net cash provided by financing activities (319,038) 896,261
----------- -----------
Net (Decrease) Increase In Cash and Cash Equivalents (268,878) 141,631
- ----------------------------------------------------
Cash and Cash Equivalents - January 1 $ 497,341 $ 282,009
- ------------------------------------- ----------- -----------
Cash and Cash Equivalents - Sept. 30 $ 228,463 $ 423,640
- ------------------------------------ =========== ===========
Net (Loss) Income $ 377,914 (644,028)
Amortization and depreciation 136,810 428,974
Minority interest 14,207 6,300
Increase in accounts receivable 1,700,418 89,277
(Increase) decrease in inventory 33,977 (2,971)
(Increase) decrease in other current assets and other assets (1,923,888) 4,750
Decrease in accounts payable (828,820) (346,835)
Increase in accrued expenses 839,254 386,176
----------- -----------
Net cash used for operating activities $ 349,872 $ (78,357)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-6
<PAGE> 10
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 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-7
<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 September 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 September 30, 1999 and December 31, 1998, and the
results of its operations and cash flows for the three month periods ended
September 30, 1999 and 1998 and the nine month periods ended September 30, 1999
and 1998. The results of operations for the three months ended September 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, houses 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.
NOTE 5 - DIVESTITURE OF SCIBAL ASSOCIATES
In the period between June 28 and July 10, 1999, the Company finalized, and then
completed all necessary legal documents necessary by July 26, 1999, to
effectuate the Purchase Agreement with
<PAGE> 12
Advantage Holdings, Inc. Advantage Holdings purchased Scibal Associates for
$600,000 in cash and a note for $1,200,000, and the return of 1,537,272 shares
and warrants of the Company to its treasury.
<PAGE> 13
ITEM 2. Management's Discussion and Analysis
Century Industries, Inc. in Consolidation
with its Subsidiaries
Past Development
The following discussion and analysis of the Company's consolidated financial
condition and results of operations should be read in conjunction with the
Company's Condensed Consolidated Financial Statements and Notes thereto. This
document may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements.
Current Operations
The Registrant, as the parent holding company for Century Steel Products, Inc.,
and US Insurance Brokers, Inc., has no operations of its own, other than its
functions for shareholders' relations, legal and accounting, and the remaining
reporting requirements of a public company. The operations of each subsidiary
can be found hereinbelow.
Third Quarter Consolidated Operating Results
Third quarter 1999 consolidated revenues were $1,671,156, and the same period
for 1998 consolidated revenues were $3,039,637, which is a decrease of
$1,368,481, or 45%. This decrease is due to the Company's divestiture of Scibal
Associates in June, 1999. Third quarter consolidated operating income increased
to $311,535 from $34,827 at September 30, 1998, an increase of $276,708. This
rise in consolidated operating income is attributable to the ongoing strong
sales and earning performance at the Century Steel Products subsidiary, and the
decrease in parent company operating expenses.
Third quarter 1999 consolidated net income increased to $269,042 from ($248,233)
at September 30, 1998, an increase of $517,275, or 208%. The revenue decrease
and concomitant operating income decrease are also attributable to the
divestiture of Scibal Associates. As indicated further herein in the unaudited
financial statements, total operating costs were down across the board, from
$1,297,842 for the three months ended September 30, 1998, to $198,220 for the
same period in 1999. While the divestiture of Scibal Associates was a part of
this reduction, it should be noted that management has effectively reduced its
parent overhead and other consulting fees to help the Company achieve
profitability.
Further information regarding the divestiture of the Scibal Associates
subsidiary can be found in the August 5, 1999 Form 8-K filing completed by the
Registrant.
-2-
<PAGE> 14
Year to Date Consolidated Operating Results
The Company's consolidated year to date 1998 revenues totaled $9,476,450
compared to the same period 1999 of $7,473,067 for a decrease of $2,003,383 or
21%. Consolidated operating costs through the third quarter 1999 were
$2,436,810, a decrease of $1,572,495, or 39%, from operating costs of $4,009,305
for the same period in 1998. Consolidated net income was ($644,028) for the year
to date in September, 1998, and this was $462,902 for the same period in 1999.
These changes can be attributed to the divestiture of Scibal Associates, as well
as the ongoing efforts of management to decrease parent overhead expenses, which
has been completed effectively.
Year to Date Consolidated Assets and Capital Growth
The Company's year to date consolidated assets are $6,171,814, a decrease of
$2,834,481 from consolidated assets of $9,006,295 as of September 30, 1998. This
is due to the divestiture of Scibal Associates. Consolidated capital has
decreased from $5,060,413 for the same period of 1998 to $3,149,830 in 1999.
This is due to the divestiture of Scibal Associates.
The year to date earnings per common share is $0.03, and the third quarter
earnings were $0.02 per common share. Additional shares were issued in the 3rd
quarter, totaling 1,732,000 Class A common voting shares, and 3,148,000 Class B
common voting shares, for a grand total of 4,880,000 shares, represent the
conversion of unit holders equity in the USIB Holdings, LP to Class B common
stock equity in the Company. USIB Holdings, LP was not consolidated due to the
divestiture of Scibal Associates.
Additionally, the Company completed its examination of its internal computer
systems to verify for Year 2000 compliance. Finalization indicates that the
Issuer and its subsidiaries will not have any Year 2000 compliance difficulty.
The "worst case" scenario for Year 2000 problems are that the Registrant would
have to function manually and could do so without significant loss of business.
The Registrant feels that the Year 2000 efforts have not substantially or
materially deferred its ability to conduct any other projects or IT projects.
The following is a discussion and analysis of each subsidiary's results of
operations.
Century Steel Products, Inc.
Century Steel Products, Inc.'s (CSP's) sales of $1,671,156 for the third quarter
1999 were greater than the third quarter of 1998 sales of $1,017,321. CSP finds
this increase to be in line with its ongoing efforts to increase its business
through development of new customer relationships.
Cost of goods sold was $1,161,401 in 1999, and was $849,730 for the third
quarter 1998. This increase is concomitant with the increase in sales.
-3-
<PAGE> 15
At September 30, 1999, CSP's third quarter operating income was $341,202, and at
September 30, 1998 it was ($36,000). This operating income is indicative of
CSP's efforts to increase revenues and earnings through new customer
relationships while reducing its office personnel.
CSP's revenues year to date for the first 9 months of 1999 were $3,719,212, and
were $3,582,708 for the same period of 1998. CSP's year to date 1999 operating
income is $341,202, and 1998 operating income for the same period was $53,061.
U.S. Insurance Brokers, Inc. (USIB)
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 preliminary discussions with
various entities regarding the disposal of USIB's assets.
Results of Operations
USIB's third quarter 1998 operating loss was ($21,051), and in 1999 is was
$0.00. This change is due to the decrease of expense at USIB's offices, as the
Registrant intends to dispose of the assets of USIB shortly, and USIB did not
have any operations.
USIB's year to date 1998 operating loss was ($99,237), and for the same period
1999 it was ($39,256). Again, USIB has effectively reduced personnel in
anticipation of divestiture.
As mentioned previously, the Registrant has divested itself of its Scibal
Associates, Inc. subsidiary, in exchange for $600,000 and a note for an
additional $1,200,000, and the retirement of 1,537,272 shares and warrants of
the Company's stock to the Company's treasury.
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 warrants
for Class B common shares, which he contributed as capital to the LP, as
consideration for the proposed formation of the new insurance subsidiary, as
capital. 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. This was anticipated to reduce the
potential dilution of the Company's shares
-4-
<PAGE> 16
after the securities underwriting which was planned for financing the new
Florida insurance subsidiary, which never materialized.
Due to the divestiture, which included the return of Mr. Scibal's 20% interest
in the LP, the LP's subsequent return of Mr. Scibal 727,273 Class B common
shares to the Company's treasury, and the lack of income and operations, the LP
is being dissolved. USIB's investment in the LP will be offset by amounts due to
the LP and are anticipated to be eliminated in the "winding up."
CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES
The Company's and its subsidiaries' primary sources of capital are their
accounts receivable and their bank credit lines.
Consolidated accounts receivable were $3,850,375 at September 30, 1999, an
increase over its accounts receivable of $1,881,939 at September 30, 1998.
The Company expects to receive payments totaling $750,000 towards its note from
Advantage Holdings, Inc. during the year 2000 from the sale of Scibal
Associates.
PART II - Other Information
ITEM 1. Legal Proceedings
There are, at present, no material legal proceedings in which the Company is
involved, either as plaintiff or defendant.
ITEM 2. Changes in Securities
NONE
ITEM 3. Defaults
NONE
ITEM 4. Submission of Matters to a Vote of Security Holders
NONE
-5-
<PAGE> 17
ITEM 5. Other Information
As indicated previously herein, the Company filed a Form 8-K on July 7, 1999
regarding the execution of a Partial Acquisition and Parent/Subsidiary Agreement
signed between the Company and Interactive Gaming and Communications Corp.
ITEM 6. Exhibits and Reports on Form 8-K
Form 8-K filed July 7, 1999 regarding the execution of a Partial Acquisition and
Parent/Subsidiary Agreement signed between the Company and Interactive Gaming
and Communications Corp. and the consequent change in control.
Form 8-K filed August 5, 1999 regarding the divestiture of the Scibal Associates
subsidiary.
Form 8-K filed August 23, 1999 regarding the resignation of its independent
accountant.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
December 9, 1999
Century Industries, Inc.
/s/ Ted L. Schwartzbeck
- --------------------------
Ted L. Schwartzbeck
Director
/s/ Joel M. Gundersheimer
- --------------------------
Joel M. Gundersheimer
Director
/s/ Jay Pignatello
- --------------------------
Jay Pignatello
Director
-6-
<PAGE> 18
INDEX TO EXHIBITS
The following Exhibits are attached as required by Small Business Issuers:
(l) Underwriting agreement. Not applicable.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession. Not applicable.
(3) Articles of Incorporation and by-laws. Incorporated by reference in
previously filed Form 10-QSB and Form 10-KSB.
(4) Instruments defining rights of holders. Not applicable.
(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. Not applicable.
(10) Material contracts. Not applicable.
(11) Statement re computation of per share earnings. Attached hereto.
(12) No Exhibit required.
(13) Annual or quarterly reports, Form 10-Q or quarterly report to security
holders. Incorporated by reference in previously filed Form 10-QSB and
Form 10-KSB.
(14) Material foreign patents. Not applicable.
(15) Letter on unaudited interim financial information. Not applicable.
(16) Letter on change in certifying accountant. Not applicable.
(17) Letter on director resignation. Not applicable.
(18) Letter re change in accounting principles. Not applicable.
(19) Report furnished to security holders. Not applicable.
(20) Other documents or statements to security holders. Not applicable.
(21) Subsidiaries of the registrant. Attached hereto.
-7-
<PAGE> 19
(22) Published report regarding matters submitted to vote of security 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. Attached hereto.
(28) Information from reports furnished to state insurance authorities. Not
applicable.
(29) Through (98) [RESERVED]
(99) Additional Exhibits. None.
-8-
<PAGE> 1
EXHIBIT 11
CENTURY INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Three Months
Ended Sept. 30, Sept. 30,
1999 1998
-------------------------------------------------------------------------------------
<S> <C> <C>
Shares Outstanding......................... 14,098,000 7,931,000
Weighted average shares outstanding........ 14,098,000 7,931,000
Net Income (Loss) ........................ $ 269,042 $ (248,233)
Total Net Income (Loss) Available for
Common Stockholders' .................... $ 0.02 $ (0.03)
=========== ==========
</TABLE>
CENTURY INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Nine Months
Ended Sept. 30, Sept. 30,
1999 1998
-------------------------------------------------------------------------------------
<S> <C> <C>
Shares Outstanding......................... 14,098,000 7,931,000
Weighted average shares outstanding........ 14,098,000 7,931,000
Net Income (Loss) ........................ $ 462,042 $ (644,208)
Total Net Income (Loss) Available for
Common Stockholders' .................... $ 0.03 $ (0.07)
=========== ==========
</TABLE>
<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 Subsidiary State of Incorporation Does Business As
- ------------------------------------ ----------------------------------- -----------------------------------
<S> <C> <C>
Century Steel Products, Inc. Virginia Century Steel Products, Inc.
US Insurance Brokers, Inc. District of Columbia US Insurance Brokers, Inc.
USIB Holdings, LP District of Columbia USIB Holdings, LP
</TABLE>
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 228,463
<SECURITIES> 341,733
<RECEIVABLES> 3,850,375
<ALLOWANCES> 335,000
<INVENTORY> 139,839
<CURRENT-ASSETS> 4,568,610
<PP&E> 398,343
<DEPRECIATION> 432,266
<TOTAL-ASSETS> 6,171,814
<CURRENT-LIABILITIES> 3,007,779
<BONDS> 334,986
0
1,000
<COMMON> 13,830
<OTHER-SE> 3,149,830
<TOTAL-LIABILITY-AND-EQUITY> 6,171,814
<SALES> 7,473,067
<TOTAL-REVENUES> 7,473,067
<CGS> 4,359,496
<TOTAL-COSTS> 6,796,306
<OTHER-EXPENSES> (213,859)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,903
<INCOME-PRETAX> 462,902
<INCOME-TAX> 0
<INCOME-CONTINUING> 462,902
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 462,902
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
