<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the second quarterly period ended June 30, 1998
GIANT GROUP, LTD.
9000 Sunset Boulevard, 16th Floor, Los Angeles, California 90069
Registrant's telephone number: (310) 273-5678
Commission File Number: 1-4323
I.R.S. Employer Identification Number: 23-0622690
State of Incorporation: Delaware
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X
On July 27, 1998 the latest practicable date, there were 3,180,655 shares of
Common Stock outstanding.
<PAGE> 2
GIANT GROUP, LTD.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Item 1. Financial Statements
Consolidated Statements of Operations -
Three and Six-Month Periods Ended June 30, 1998 and 1997 3
Consolidated Balance Sheets -
June 30, 1998 and December 31, 1997 4
Consolidated Statements of Cash Flows -
Six-Month Periods Ended June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
(a) Exhibits
(b) Reports on Form 8-K
Signature 13
</TABLE>
<PAGE> 3
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
GIANT GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six-month periods ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts)
Three-months ended Six-months ended
June 30, June 30,
------------------ -----------------
1998 1997 1998 1997
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Revenue:
Investment income $ 728 $ 649 $1,205 $ 1,348
Gain on the sale of marketable
securities 7 51 125 92
Gain on sale of property and
equipment 2,845 - 2,845 -
Charter and other income 350 4 505 9
------- ------- ------- -------
3,930 704 4,680 1,449
------- ------- ------- -------
Costs and expenses:
Co-ownership and charter 418 551 990 1,014
General and administrative 910 1,224 1,809 2,358
Interest expense 1 77 2 78
Depreciation 47 121 188 217
------- ------- ------- -------
1,376 1,973 2,989 3,667
Equity in income (loss) of affiliate - 14 - (129)
------- ------- ------- -------
Income (loss) before provision for
income taxes 2,554 (1,255) 1,691 (2,347)
Provision for income taxes 697 - 697 -
------- ------ ------- ------
Net income (loss) $ 1,857 $(1,255) $ 994 $(2,347)
======= ======= ======= =======
Basic and diluted earnings
(loss) per common share $ 0.58 $ (0.39) $ 0.31 $ (0.70)
======= ======= ======= =======
Weighted average shares for
basic and diluted earnings
(loss) per common share 3,181,000 3,191,000 3,181,00 3,340,000
========= ========= ======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 4
GIANT GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts)
June 30, December 31,
1998 1997
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 885 $ 1,137
Marketable securities 36,667 18,874
Income tax receivables - 1,100
Other receivables 653 332
Assets held-for-sale 10,876 24,362
Prepaid expenses and other assets 174 420
--------- ----------
Total current assets 49,255 46,225
Property and equipment, net 1,410 4,905
Receivable and other assets 4,160 2,746
--------- ----------
Total assets $ 54,825 $ 53,876
========= ==========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 904 $ 1,209
Income taxes payable 940 219
Deferred income taxes (note 3) 2,120 2,776
--------- ----------
Total current liabilities 3,964 4,204
Deferred income taxes 2,364 1,174
--------- ----------
Total liabilities 6,328 5,378
--------- ----------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
authorized 2,000,000 shares, none issued - -
Class A common stock, $.01 par value;
authorized 5,000,000 shares, none issued - -
Common stock, $.01 par value; authorized
12,500,000 shares, 7,266,000 issued 73 73
Capital in excess of par value 36,767 36,767
Accumulated other comprehensive income
- unrealized gains on marketable
securities, net 3,190 4,185
Retained earnings 44,084 43,090
-------- ---------
84,114 84,115
Less common stock in treasury; 4,085,000
shares at June 30 and December 31, at cost 35,617 35,617
-------- ---------
Total stockholders' equity 48,497 48,498
-------- ---------
Total liabilities and stockholders' equity $ 54,825 $ 53,876
======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 5
GIANT GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six-month periods ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands) Six-months ended
June 30,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
Operating Activities:
Net income (loss) $ 994 $ (2,347)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation 188 217
Gain on sale of property and equipment (2,845) -
Gain on the sale of marketable securities (125) (92)
Equity in loss of affiliate - 129
Amortization of premium and accretion of
discounts on investments, net (355) (714)
Changes in assets and liabilities:
Decrease in income tax receivables 1,100 10,813
Increase in prepaid expenses and
other assets (76) (426)
Decrease in accounts payable
and accrued expenses (305) (267)
Increase in income taxes 1,911 -
--------- ----------
Net cash provided by operating activities 487 7,313
--------- ----------
Investing Activities:
Sales of marketable securities 5,055 9,098
Purchase of marketable securities (25,506) (18,916)
Debt payment and short-term advance repayment 74 1,843
Net proceeds from sale of assets 19,726 -
Purchase of assets held-for-sale
and related costs (49) (4,101)
Purchases of property and equipment (39) (871)
--------- ----------
Net cash used by investing activities (739) (12,947)
--------- ----------
Financing Activities:
Proceeds from short-term borrowings - 10,000
Repayment of short-term borrowings - (10,500)
Purchase of treasury stock - (3,638)
--------- ----------
Net cash used by financing activities - (4,138)
--------- ----------
Decrease in cash and cash equivalents (252) (9,772)
Cash and cash equivalents:
Beginning of period 1,137 13,137
--------- ----------
End of period $ 885 $ 3,365
========= ==========
Supplemental disclosure of cash received
(paid) for:
Income taxes, net $ 2,282 $ 10,813
Interest (2) (78)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 6
GIANT GROUP, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share amounts)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30,
1998 and the results of operations for the three and six-month periods ended
June 30, 1998 and 1997 and cash flows for the six-months ended June 30, 1998
and 1997. These results have been determined on the basis of generally
accepted accounting principles and practices applied consistently with
those used in the preparation of the Company's 1997 Annual Report on Form
10-K. Certain 1997 amounts have been reclassified to conform to the 1998
presentation. For the six-months ended June 30, 1997, the Company corrected
weighted average shares and basic loss per common share, which was previously
reported as 3,490,000 and $(0.67), respectively. Operating results for the
three and six-month periods ended June 30, 1998 are not necessarily indicative
of the results that may be expected for the full year. It is suggested that
the accompanying unaudited consolidated financial statements be read in
conjunction with the financial statements and notes in the Company's 1997
Annual Report on Form 10-K.
2. Investment in Affiliate
As of June 30, 1998 and December 31, 1997, the Company's investment in
Rally's common stock consists of approximately 3,226,000 and 3,181,000
shares, respectively. On June 11, 1998, the Rally's stockholders approved the
conversion of Rally's series A participating preferred stock into common
stock. As a result, the Company's 449 shares of Rally's series A
participating preferred stock was converted into 44,900 shares of Rally's
common stock. As a result of this conversion, the Company's ownership
decreased to approximately 11%. This investment is accounted for as a
marketable security-available-for-sale. The quoted market value of Rally's
common stock on June 30, 1998 was approximately $6,653.
On December 18, 1997, the Company's ownership decreased to approximately
13%. The decrease in the Company's ownership resulted from the exchange by
the Company of approximately 200,000 shares of Checkers common stock for
Rally's securities. In addition, certain of the Company's related parties,
CKE and Fidelity also participated in the exchange of Checkers' securities.
In June 1997, Rally's and Checkers ended talks for a proposed merger
between the two companies, which was announced on March 25, 1997. However,
as a result of the exchange of securities in December 1997, Rally's now owns
approximately 27% of Checkers. Rally's Chairman of the Board and Chief
Executive Officer have both been appointed to the same positions in Checkers
and further consolidations of management and operations have taken place.
In March 1997, 1,175,000 options granted to Fidelity and CKE by GIANT to
purchase Rally's common stock at $4.00 per share were canceled. These options
had been granted pursuant to the 1996 Purchase and Standstill Agreement
between GIANT and Fidelity.
<PAGE> 7
GIANT GROUP, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share amounts)
2. Investment in Affiliate (Cont.)
As of June 30, 1997, the Company accounted for its 15% investment in
Rally's common stock, which consisted of 3,137,000 shares, under the equity
accounting method. The quoted market value on June 30, 1997 of this
investment was $8,235.
Summarized financial information for Rally's is as follows:
<TABLE>
<CAPTION>
Three-Months Ended Six-Months Ended
Operating results: 6/29/97 6/29/97
- -------------------- ------------------ ----------------
<S> <C> <C>
Revenues $ 38,090 $ 70,685
Income from operations 1,806 2,821
Net income (loss) 92 (860)
GIANT's share of non-cash equity income (loss)
in Rally's net income (loss) 14 (129)
</TABLE>
3. Current Deferred Income Taxes
Current deferred income taxes represent the tax effect of the unrealized
gains on marketable securities included in accumulated other comprehensive
income as part of Stockholders' Equity.
4. New Accounting Pronouncements
During the first quarter of 1998, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income", which established standards for reporting
and displaying comprehensive income or loss and its components in a full set
of general-purpose financial statements. The changes in components of
comprehensive income (loss), net of provision (benefit) for income taxes, for
the six-month periods ended June 30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
----------------------- ------------------------
Pre-Tax Tax Net Pre-tax Tax Net
Amount Benefit Amount Amount Provision Amount
------- ------- ------ ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Other comprehensive income
(loss):
Unrealized gains
(losses) on marketable
securities, net $(1,658) $ (663) $ (995) $ 607 $ 243 $3,644
Net income (loss) 994 (2,347)
------- ------
Comprehensive loss $( 1) $(1,983)
======= =======
</TABLE>
5. Sale of Assets
On April 17, 1998, the Company sold for cash one of its two
luxury yachts for $14,500, less selling expenses. At December 31, 1997, the
Company reduced the carrying value, in total, of the yachts to their
approximate net realizable value. The net sales price equaled the Company's
carrying value. The Company is marketing the remaining yacht for sale, and
continues to charter it pending a sale.
On April 28, 1998, the Company sold for cash its plane, a Gulfstream II
SP acquired in 1991, for $6,293, less selling expenses, and recognized a pre-
tax gain of $2,845.
<PAGE> 8
6. Commitments and Contingencies
The Company is involved in lawsuits as described in the following
paragraphs.
Mittman/Rally's. In January and February 1994, two putative class
action lawsuits were filed, purportedly on behalf of the shareholders of
Rally's in the United States District Court for the Western District of
Kentucky, against Rally's, certain of Rally's present and former officers,
directors and shareholders and its auditors and GIANT and Burt Sugarman. The
complaints allege defendants violated the Securities Exchange Act of 1934, as
amended, among other claims, by issuing inaccurate public statements about
Rally's in order to arbitrarily inflate the price of Rally's common stock, and
seek unspecified damages, including punitive damages. On April 15, 1994,
GIANT filed a motion to dismiss and a motion to strike. On April 5, 1995, the
Court struck certain provisions of the complaint but otherwise denied GIANT's
motion to dismiss. In addition, the Court denied plaintiffs' motion for class
certification. On July 31, 1995, the plaintiffs renewed this motion, and, on
April 16, 1996, the Court certified the class. Two settlement conferences
have been conducted but have been unsuccessful. Fact discovery is now set to
be completed by the end of August, 1998. No trial date has been scheduled yet.
Management is unable to predict the outcome of this matter at the present time
and does not know if all of the potentially available insurance coverages will
apply. Rally's and GIANT deny all wrongdoing and intend to defend themselves
vigorously in this matter.
Harbor. In February 1996, Harbor Finance Partners ("Harbor")
commenced a derivative action, purportedly on behalf of Rally's, against
certain of Rally's officers and directors and GIANT, David Gotterer and Burt
Sugarman (listed alphabetically), before the Delaware Chancery Courts. Harbor
named Rally's as a nominal defendant. Harbor claims that the directors and
officers of both Rally's and GIANT, along with GIANT itself, breached their
fiduciary duties to the public shareholders of Rally's by causing Rally's to
repurchase certain Rally's Senior Notes at an inflated price. The NASDAQ
closing price of the Senior Notes as of July 17, 1998 was $95 1/8,
approximately 40% higher than the repurchase price of $67 7/8. Harbor seeks
"millions of dollars in damages", along with rescission of the repurchase
transaction. In the fall of 1996, all defendants moved to dismiss this
action. On April 3, 1997, the Chancery Court denied defendants' motion.
There has been limited document discovery. No trial date has been scheduled
yet. Rally's and GIANT deny all wrongdoing and intend to vigorously defend
this action. It is not possible to predict the outcome of this action at this
time.
KCC/Pike Santa Monica Action. In October 1996, KCC filed a complaint,
in the Los Angeles County Superior Court, against NeoGen Investors, L.P., N.D.
Management, Inc., NeoGen Holdings, L.P., Danco Laboratories, Inc. and NeoGen
Pharmaceutical, Inc. (collectively the "NeoGen Entities") and Joseph Pike,
stating causes of action for fraud, breach of fiduciary duty, fraudulent
concealment, breach of contract, unfair business practices and permanent and
preliminary injunctive relief and against the licensors of Mifepristone, the
Population Council, Inc. and Advances in Health Technology, Inc., on a
declaratory relief claim. The complaint seeks damages for the breach by
Joseph Pike and the NeoGen entities of a July 24, 1996 agreement by which KCC
agreed to contribute $6,000, in return for a 26% equity interest in the entity
producing the drug, Mifepristone, in the United States and other parts of the
world ("NeoGen Agreement"). On February 19, 1997, Joseph Pike and the
NeoGen Entities filed an answer to the complaint, denying its material
allegations and raising affirmative defenses. On that date, the NeoGen
Entities also filed a cross-complaint against KCC, the Company, and certain of
the Company's directors, Terry Christensen, David Malcolm and Burt Sugarman
(listed alphabetically), which alleged causes of action for fraud, breach of
contract, intentional interference with prospective economic advantage,
negligent interference with prospective economic advantage and unfair business
practices. In October 1997, KCC settled their action with the licensors, the
Population Council, Inc. and Advances in Health Technology, Inc., and in
November 1997, KCC settled their action with Joseph Pike. On May 1, 1998, the
court granted the NeoGen Entities summary adjudication on KCC's cause of
action for breach of contract. Discovery is on going in KCC's action against
the NeoGen Entities and in the related cross-complaint. Trial is rescheduled
for September 28, 1998. The Company denies all wrongdoing and intends to
vigorously defend itself against the cross-complaint. It is not possible to
predict the outcome of this action at this time.
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
(Dollars in thousands except per share amounts)
Results of Operations for the Three-Months Ended June 30, 1998 Versus June 30,
1997
Total revenue for the three-month period ended June 30, 1998 increased
$3,226 to $3,930 from $704 for the comparable period in 1997. Total revenue
for the second quarter of 1998 included a pre-tax gain of $2,845 on the sale
of the Company plane. As a result of the Company ending the Luxury Yacht Co-
Ownership Program ("Co-Ownership Program") in November 1997, the Company sold
one of its luxury yachts for its net book value in the second quarter of 1998.
The Company continues to market the remaining yacht for sale and earned $346
from the chartering of this yacht during the second quarter of 1998. No
charter income was earned in the comparable period in 1997.
The on-going operating and maintenance expenses for both of the yachts
for the three-months ended June 30, 1998 decreased $133 to $418 from $551 for
the comparable period in 1997, resulting primarily from lower advertising of
$134. One yacht was sold in April 1998.
General and administrative expenses for the three-months ended June 30,
1998 decreased $314 to $910 from $1,224 for the comparable period in 1997 due
to an overall decrease in corporate expenses.
Results of Operations for the Six-Months Ended June 30, 1998 Versus June 30,
1997
Total revenue for the six-month period ended June 30, 1998 increased
$3,231 to $4,680 from $1,449 for the comparable period in 1997. Total revenue
for the six-month period ended June 30, 1998 included a pre-tax gain of $2,845
on the sale of the Company plane. As a result of the Company ending the Co-
Ownership Program in November 1997, the Company sold one of its luxury yachts
for its net book value during the current period. The Company continues to
market the remaining yacht for sale and earned $496 from the chartering of the
two yachts during the six-months ended June 30, 1998. No charter income was
earned in the comparable period in 1997.
The on-going operating and maintenance expenses for both of the yachts
for the six-months ended June 30, 1998 decreased $24 to $990 from $1,014 for
the comparable period in 1997. Contributing to the decrease was lower
advertising of $287, partially offset by higher crew payroll and related
expenses of $271. One yacht was sold in April 1998.
General and administrative expenses for the six-months ended June 30,
1998 decreased $549 to $1,809 from $2,358 for the comparable period in 1997
due to an overall decrease in corporate expenses.
Effective December 1997, the Company records its investment in Rally's
common stock as a marketable security-available-for-sale because of a
reduction of its ownership. In 1997, the Company accounted for its investment
in Rally's common stock under the equity method.
Liquidity and Capital Resources
Cash and cash equivalents, marketable securities and income tax
receivables at June 30, 1998 totaled $37,552 compared with $21,111 at
December 31, 1997. At June 30, 1998 and December 31, 1997, the Company had
working capital of $45,291 and $42,021 with current ratios of 12.4 to 1 and
11.0 to 1, respectively. The Company's liquidity increased substantially due
to certain transactions described in the following paragraphs.
Net cash provided by operating activities for the six-months ended June
30, 1998 was $487 compared to cash provided by operating activities of $7,313
for the comparable period in 1997. The six-month periods ended June 30, 1998
and 1997 included the receipt of income tax refunds of $2,291 and $10,813,
respectively. The 1998 receipt related to the 1997 net operating loss
carryback claim, and the 1997 receipt related to the realization of capital
losses on the 1996 sales of Rally's common stock and the 1996 net operating
loss carryback claim. These increases were lowered by cash used for the
funding of the Company's operations.
Net cash used by investing activities for the six-months ended June 30,
1998 was $739 compared to cash used by investing activities of $12,947 for the
comparable period in 1997. In 1998, the Company received cash of $19,726 from
the sale of one of the Company's yachts and from the sale of its corporate
plane. These proceeds plus
<PAGE> 10
Liquidity and Capital Resources (Cont.)
sales of marketable securities of $5,055 were used for purchases of $25,506 of
marketable securities. The comparable 1997 purchases were $18,916, and
proceeds from sales were $9,098. In 1998, the Company invested $49 in assets
held-for-sale compared to $4,101 in 1997. The Company received principal
payments on its investment in Checkers subordinated debt of $74 and $1,843 in
1998 and 1997, respectively, including payment in full of the 1996 short-term
advance of $500 in 1997. Finally, during the current year, the Company paid
$39 for property and equipment compared to $871 for the comparable period in
1997.
The Company's financing activities for the six-months ended June 30,
1998 did not use or provide cash compared to a use of cash of $4,138 for the
comparable 1997 period. In 1997, the Company repaid the $10,500 note, which
financed assets purchased in 1996 for the Co-Ownership Program. In May 1997,
the Company borrowed $10,000 on a loan that was secured by one of its luxury
yachts. In July 1997, the loan was paid in full. In addition, in 1997, the
Company, with the approval of the Board of Directors, purchased 459,000 shares
of its own Common Stock at an aggregate cost of $3,638.
The Company's current liquidity is provided by cash and cash
equivalents, marketable securities, and investment income. In addition, in the
second quarter of 1998, the Company's liquidity was provided by the sale of
certain assets. Management believes that this liquidity, plus the Company's
capital resources, is sufficient for the Company to fund its current business
operations and operating expenses. The Company continues to review operating
companies to acquire, but has not yet entered into any definitive agreements.
It is expected that the Company's current assets would be sufficient to fund
possible future acquisitions and, if necessary, the Company believes that it
would have the ability to obtain financing at favorable rates.
Year 2000
Based on the Company's existing operations, the Company believes that
it will achieve the Year 2000 compliance through the modification of its
existing programs and systems which was completed as of June 30, 1998 at a
minimal cost.
Personal Holding Company
Under the Internal Revenue Code, in addition to the regular corporate
income tax, an additional tax may be levied upon an entity that is classified
as a "personal holding company". In general, this tax is imposed on
corporations which are more than 50% owned, directly or indirectly, by 5 or
fewer individuals (the "Ownership Test") and which derive 60% or more of
their income from "personal holding company" sources, generally defined to be
passive income (the "Income Test"). If a corporation falls within the
Ownership Test and the Income Test, it is classified as a personal holding
company, and will be taxed on its "undistributed personal holding company
income" at a rate of 39.6%. The Company currently meets the stock ownership
test. The Company has not met the income requirement in recent years,
therefore is not subject to this additional tax; however no assurance can be
given that the income test will not be satisfied in the future.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE> 11
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements: Certain information included in this
document (as well as information included in oral statements or other written
statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future activities.
Such forward-looking information involves important risks and uncertainties
that could significantly affect anticipated results in the future and,
accordingly, such results may differ from those expressed in any forward-
looking statements made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to the
development and implementation of the Company's business plan, domestic and
global economic conditions, activities of competitors, changes in federal or
state tax laws and of the administration of such laws.
<PAGE> 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
For information regarding legal matters, see Note 6 of the Notes to
Consolidated Financial Statements on page 8 of this Form 10-Q and Item 3
"Legal Proceedings" as reported in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997.
Item 4. Submissions of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on June 10, 1998.
The stockholders elected a Board of five directors and ratified the
appointment of Arthur Andersen LLP as the Company's independent auditors.
Results of the voting in connection with each of the matters submitted to
the stockholders were as follows:
<TABLE>
<CAPTION>
Board of Directors For Against No Vote
--------- -------- -------
<S> <C> <C> <C>
Terry Christensen 2,738,777 110,612
David Gotterer 2,738,527 110,862
David Malcolm 2,738,707 110,682
Jeffrey Rosenthal 2,738,572 110,817
Burt Sugarman 2,731,580 117,809
Ratify appointment of Arthur
Anderson LLP as Company's
independent auditors 2,748,965 97,863 2,561
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The following reports on Form 8-K have been filed by the Company
during the second quarterly period ended June 30, 1998:
Report Date Item Reported
April 17, 1998 Sale of one of the Company's luxury yachts
April 28, 1998 Sale of the Company plane
Items 2,3, and 5 are not applicable.
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GIANT GROUP, LTD. - Registrant
By: /s/ William H. Pennington
William H. Pennington
Vice President,
Chief Financial Officer,
Secretary and Treasurer
Date: July 28, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FILED IN ITEM 1 TO THE COMPANY'S FORM 10-Q FOR THE
QUARTER ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 885
<SECURITIES> 36,667
<RECEIVABLES> 653
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 49,255
<PP&E> 1,692
<DEPRECIATION> 282
<TOTAL-ASSETS> 54,825
<CURRENT-LIABILITIES> 3,964
<BONDS> 0
0
0
<COMMON> 73
<OTHER-SE> 48,424
<TOTAL-LIABILITY-AND-EQUITY> 54,825
<SALES> 0
<TOTAL-REVENUES> 4,680
<CGS> 0
<TOTAL-COSTS> 2,989
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2
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