<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
<TABLE>
<S> <S>
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED,
EFFECTIVE OCTOBER 7, 1996).
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 0-07477
</TABLE>
THE ENSTAR GROUP, INC.
(Exact name of Registrant as specified in its charter)
---------------------
<TABLE>
<S> <C>
GEORGIA 63-0590560
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
172 COMMERCE STREET -- 3RD FLOOR
MONTGOMERY, ALABAMA 36104
(Address of principal executive offices)
(334) 834-5483
(Registrant's telephone number, including area code)
---------------------
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 [ ] No [X]
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [X] No [ ]
The number of shares of Registrant's Common Stock, $.01 par value per
share, outstanding at May 8, 1997 was 4,458,735.
================================================================================
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE ENSTAR GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 735 $ 4,749
Restricted cash............................................. 349 346
Certificates of deposit..................................... 4,104 1,238
Other....................................................... 22 55
Investment in First Union................................... 69,234 63,153
Property and equipment, net................................. 28 31
--------- ---------
Total assets...................................... $ 74,472 $ 69,572
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities Not Subject to Compromise:
Note payable.............................................. $ 18,100 $ 18,100
Reserve for litigation settlements........................ 1,891 1,861
Accounts payable and accrued liabilities.................. 632 881
Liabilities Subject to Compromise:
Class 10A claims.......................................... -- 203
Accrued interest on all classes........................... -- 39
Other..................................................... 349 346
--------- ---------
Total liabilities................................. 20,972 21,430
--------- ---------
Shareholders' equity:
Common stock ($.01 par value; 55,000,000 shares
authorized, 4,344,189 shares issued and outstanding at
March 31, 1997, 100 shares issued and outstanding at
December 31, 1996)..................................... 43 --
Additional paid-in capital................................ 167,892 167,935
Unrealized gain on investment in First Union.............. 30,030 23,949
Accumulated deficit....................................... (144,465) (143,742)
--------- ---------
Total shareholders' equity........................ 53,500 48,142
--------- ---------
Total liabilities and shareholders' equity........ $ 74,472 $ 69,572
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE> 3
THE ENSTAR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------
MARCH 31, MARCH 31,
1997 1996
--------- ---------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C>
Investment income........................................... $ 495 $ 433
Litigation expense, net..................................... (29) (61)
General and administrative expenses......................... (386) (187)
Reorganization items, net................................... (484) 173
Interest expense............................................ (318) (143)
-------- ---------
Net income (loss)........................................... $ (722) $ 215
======== =========
Net income (loss) per common share.......................... $ (2.99) $2,150.00
======== =========
Weighted average shares outstanding......................... 241,438 100
======== =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 4
THE ENSTAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------
MARCH 31, MARCH 31,
1997 1996
--------- ---------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (722) $ 215
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation........................................... 3 3
Changes in assets and liabilities:
Restricted cash........................................ (3) 349
Accounts payable and accrued liabilities............... (219) 143
Payment of liabilities subject to compromise........... (244) --
Other.................................................. 37 344
------- -------
Net cash provided by (used in) operating
activities:..................................... (1,148) 1,054
------- -------
Cash flows from investing activities:
Reinvestment of First Union dividends..................... -- (432)
Purchases of certificates of deposit...................... (4,104) (7,204)
Maturities of certificates of deposit..................... 1,238 6,800
------- -------
Net cash used in investing activities:............ (2,866) (836)
------- -------
Increase (decrease) in cash and cash equivalents............ (4,014) 218
Cash and cash equivalents at the beginning of the period.... 4,749 1,814
------- -------
Cash and cash equivalents at the end of the period.......... $ 735 $ 2,032
======= =======
Supplemental disclosures of cash flow information:
Interest paid............................................. $ 429 $ --
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 5
THE ENSTAR GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: GENERAL
The consolidated financial statements of The Enstar Group, Inc. (the
"Company") are unaudited and, in the opinion of management, include all
adjustments consisting solely of normal recurring adjustments necessary to
fairly state the Company's financial condition and results of operations for the
interim period. The results of operations for the three months ended March 31,
1997 are not necessarily indicative of the results to be expected for the full
year. These statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 1996 included in
the Company's Form 10 as filed with the Securities and Exchange Commission on
March 27, 1997 under the Securities Exchange Act of 1934.
NOTE 2: DISTRIBUTION OF NEW COMMON STOCK
On March 27, 1997, the Company distributed a portion of its new common
stock to its former shareholders of record as of June 1, 1992. The Company's old
common stock was cancelled in 1992 pursuant to its bankruptcy plan of
reorganization. The Company has paid off all creditors from its bankruptcy case,
and in accordance with the terms of its bankruptcy plan, the Company issued new
common stock to qualified former shareholders. Shareholders received one new
share for every ten shares of old cancelled stock and cash in lieu of any
fractional shares. See Note 5.
NOTE 3: LITIGATION CONTINGENCIES
In February 1993, the Company obtained a $15 million judgement against
Richard Grassgreen, one of the Company's former officers, who subsequently filed
for bankruptcy. In connection with the settlement of the Company's claims
against the Grassgreen bankruptcy estate (the "Estate") and others the Company
agreed to pay certain taxes of the Estate in the event the Estate did not have
sufficient funds. The IRS has appealed a recent determination by the bankruptcy
court that the IRS cannot seek payment of the taxes from the Estate. The Company
has accrued a liability of approximately $1,700,000 for the potential tax.
On February 11, 1997, fifteen former shareholders of the Company filed a
lawsuit against the Company. The complaint, which deals with actions occurring
prior to the Company's filing for bankruptcy in 1991, alleges that the Company
along with its then principal officers and others defrauded the plaintiffs in
violation of the Alabama Securities Act and other Alabama statutory provisions.
The plaintiffs seek compensatory damages in the amount of their alleged losses
of approximately $2 million and unspecified punitive damages. The Company filed
a motion to dismiss and/or for summary judgement on March 17, 1997. The motion
filed by the Company contends that the claims asserted are barred by the
applicable statutes of limitations. In the event the plaintiffs' claims are not
dismissed pursuant to the Company's motion, the Company intends to contest the
plaintiffs' claims vigorously.
NOTE 4: NEWLY ISSUED ACCOUNTING STANDARD
In February 1997, SFAS No. 128, "Earnings Per Share," was issued and is
effective for both interim and annual periods ending after December 1997. This
Statement simplifies the standards for computing earnings per share ("EPS")
previously found in APB Opinion 15, "Earnings Per Share," ("APB 15") by
replacing the presentation of primary EPS with basic EPS. It also requires dual
presentation of basic and diluted EPS on the face of the income statement for
all entities with complex capital structures and requires a reconciliation of
the numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. Basic EPS is computed by dividing
income available to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted EPS is computed similarly to fully
diluted EPS under APB 15. The Company intends to adopt this Statement in the
fourth quarter of 1997. Application of this statement in each of the three
months ending March 31, 1997 and 1996 would have no impact on the EPS
calculation.
4
<PAGE> 6
THE ENSTAR GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5: SUBSEQUENT EVENTS
With respect to the distribution of the Company's new common stock (Note
2), 4,344,189 shares were issued and outstanding at March 31, 1997. As of May 8,
1997, 4,458,735 shares were issued and outstanding, leaving approximately
291,000 shares remaining available for subsequent distribution.
5
<PAGE> 7
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
The Enstar Group, Inc.
Montgomery, Alabama
We have reviewed the accompanying consolidated balance sheets of The Enstar
Group, Inc. and subsidiary as of March 31, 1997, and the related consolidated
statements of operations and cash flows for the three-month period ended March
31, 1997 and 1996. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of The Enstar Group, Inc. and
subsidiary as of December 31, 1996, and the related consolidated statements of
operations, shareholder's equity, and cash flows for the year then ended (not
presented herein); and in our report dated January 3, 1997 (January 20, 1997 as
to Note 12 and March 19, 1997 as to Note 5), we expressed an unqualified opinion
on those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31, 1996 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Atlanta, Georgia
May 8, 1997
6
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
The Company's assets, aggregating approximately $74.5 million at March 31,
1997, consist primarily of 853,423 shares of First Union Corporation ("First
Union Common Stock") (with a market value of $69.2 million), cash, cash
equivalents and certificates of deposit. Based on the average daily trading
volume of shares of First Union Common Stock, the Company believes that its
investment in First Union is readily marketable.
In October of 1996, the Company borrowed approximately $18.1 million from a
bank for the purpose of repaying certain of the Company's liabilities subject to
compromise. The loan matures on October 1, 1997 and bears interest, at the
Company's option, at either a fixed rate equal to the Adjusted Eurodollar Rate,
as defined, plus .6%, or at a variable rate equal to Prime. The interest rate on
the loan was 6.1625% at March 31, 1997.
The Company is seeking to acquire one or more operating businesses. Until
such time as the Company uses its assets for an acquisition, the Company's only
liquidity needs are to fund operating expenses and debt service.
Financial Condition
The Company had total assets of $74.5 million at March 31, 1997 compared to
$69.6 million at December 31, 1996. The change in total assets was primarily due
to the increase in market value of the Company's First Union Common Stock.
The Company's total liabilities at March 31, 1997 were $21.0 million
compared to $21.4 million at December 31, 1996. The decrease in liabilities is
primarily due to the payment of certain liabilities subject to compromise,
accounts payable and accrued liabilities.
Approximately $43,000 was reclassified from Additional paid-in capital to
Common stock to reflect the distribution of 4,344,189 of its $.01 par value
common shares on March 27, 1997.
Results of Operations
Investment income was $495,000 for the three months ended March 31, 1997
compared to $433,000 for the three months ended March 31, 1996. This change was
a direct result of the increase in dividends received from the Company's
investment in First Union Common Stock.
Litigation expense for the three months ended March 31, 1997 was $29,000
compared to $61,000 for the same period in 1996.
General and administrative expenses were $386,000 for the three month
period ended March 31, 1997 compared to $187,000 for the same period in 1996.
The increase in 1997 was primarily due to professional fees paid in connection
with the preparation of the Company's registration statement filed in March 1997
and an increase in franchise taxes.
Reorganization items consist of interest income less expenses directly
related to the reorganization of the Company. Net expenses of the reorganization
for the three months ended March 31, 1997 were $484,000 compared to net interest
income of $173,000 for the three month period ended March 31, 1996. The increase
in net expenses for 1997 was a result of expenses incurred in connection with
the 1997 distribution of the Company's common stock to former shareholders. No
reorganization expenses were incurred during the period ended March 31, 1996.
Interest expense for the three months ended March 31, 1997 was $318,000
compared to $143,000 for the three months ended March 31, 1996. Interest expense
for 1997 was comprised of $279,000 relating to the $18.1 million loan and
$39,000 relating to the reserve for litigation settlements and liabilities
subject to compromise. Interest expense for the three month period ended March
31, 1996 related only to liabilities subject to compromise.
The income tax benefit that would have been recordable for the quarter
ended March 31, 1997 and the income tax expense that would have been recordable
for the quarter ended March 31, 1996 were fully offset by changes in the
valuation allowance for deferred tax assets during the respective quarters.
7
<PAGE> 9
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Since May 31, 1991, the Company has been involved in extensive litigation
relating to its bankruptcy case. The history of the Company's bankruptcy case
has been previously described by the Company in the Registration Statement on
Form 10, filed by the Company on March 27, 1997 (the "Form 10"). Except as
described below, the Company is not aware of any pending litigation matters that
could have a material adverse effect on the Company.
In connection with the settlement of the bankruptcy estate of Richard
Grassgreen, a former chairman and chief executive officer of the Company (the
"Grassgreen Bankruptcy Estate"), the United States Internal Revenue Service (the
"IRS") has asserted a liability of the Company for taxes allegedly owed by the
Grassgreen Bankruptcy Estate. In 1996, the IRS appealed a determination by the
United States Bankruptcy Court for the Middle District of Florida that the IRS
cannot seek payment of the taxes. The alleged tax liability, for calendar year
1994, is for sums paid to the Company in connection with the settlement of the
Grassgreen Bankruptcy Estate by third parties to resolve the Company's claims
against those parties. In United States of America v. Richard J. Grassgreen and
The Enstar Group, Inc., Case No. 96-1099-CIV-J-10 (U.S.D.C. M.D. Fla.), the IRS
claims that it should be entitled to assess additional taxes in the approximate
amount of $1.6 million against the Grassgreen Bankruptcy Estate for 1994 and
that the IRS should be able to seek payment of those taxes from the Company by
virtue of the Company's agreement to pay certain taxes of the Grassgreen
Bankruptcy Estate. Although the Company has accrued a liability for the
potential tax, the Company intends to contest vigorously that any taxes are owed
by the Grassgreen Bankruptcy Estate. In the event a court determines that
additional taxes are owed, the Company will vigorously contest that it has any
obligation to pay such taxes.
On February 11, 1997, fifteen former shareholders of the Company filed a
lawsuit against the Company in the Circuit Court of Montgomery County, Alabama
styled Peter N. Zachary, et al. v. The Enstar Group, Inc., Case No.
CV-97-257-Gr. The complaint, which deals with actions occurring prior to the
Company's filing for bankruptcy in 1991, alleges that the Company along with its
then principal officers and others defrauded the plaintiffs in violation of the
Alabama Securities Act and other Alabama statutory provisions. The plaintiffs
seek compensatory damages in the amount of their alleged losses of approximately
$2 million and unspecified punitive damages. The complaint is virtually
identical to a complaint brought by these plaintiffs against the Company's
former chairman, former president and others in December, 1991, during the
pendency of the Company's bankruptcy case and prior to the confirmation of the
reorganization plan. The plaintiffs allege that the bankruptcy court issued an
order on January 15, 1997, allowing them to litigate their claims against the
Company. The bankruptcy court's order actually held that the plaintiffs could
not bring a late claim against the Company in its bankruptcy case and then went
on to state that because of facts relating to these particular plaintiffs, they
were not bound by the provisions of the reorganization plan and their claims
were not subject to discharge under the bankruptcy code. The Company filed a
motion to dismiss and/or for summary judgement on March 17, 1997. The motion
filed by the Company contends that the claims asserted are barred by the
applicable statute of limitations. In the event the plaintiffs' claims are not
dismissed pursuant to the Company's motion, the Company intends to contest the
plaintiffs' claims vigorously.
ITEM 2. CHANGES IN SECURITIES
REINCORPORATION AS GEORGIA CORPORATION
As previously reported in the Form 10, the Company was formerly a Delaware
corporation of the same name and has been reincorporated as a Georgia
corporation. The reincorporation of the Company as a Georgia corporation was
effective as of December 31, 1996. All information relating to the
reincorporation of the Company has been previously described by the Company in
the Form 10 under the captions "The Company -- History of the
Company -- Reorganization as Georgia Corporation" and "Description of New Common
Stock", the texts of which are herein incorporated by reference.
8
<PAGE> 10
ADOPTION OF RIGHTS AGREEMENT
On January 20, 1997, the Board of Directors of the Company adopted a share
purchase rights plan (the "Rights Plan") as described herein. The Rights Plan
gives the Company's shareholders a right to purchase one share of common stock
(a "Right") for each share of common stock of the Company currently outstanding.
The Board of Directors adopted the Rights Plan in order to maximize
shareholder value in the event of a potential takeover of the Company by
encouraging potential acquirors to negotiate with the Company's Board of
Directors. In addition, under certain sections of the Internal Revenue Code of
1986, as amended, a change in control could jeopardize the Company's potential
use of certain net operating losses, a result that the Board of Directors wanted
to deter unless in the best interest of the Company's shareholders.
The Company's Articles of Incorporation authorize the issuance of up to 55
million shares of common stock, a number which the Company believes is
sufficient to cover the issuance of additional shares of common stock under the
Rights Plan. The Rights Plan also contains a provision that would permit the
Company's Board of Directors under certain circumstances to delay the exercise
of the Rights in order to convene a shareholders' meeting that would authorize
sufficient additional shares of common stock in order to permit such exercise.
The terms of the common stock issuable upon exercise of the Rights will be
identical to the Company's currently issued and outstanding common stock. Until
the occurrence of a "Distribution Triggering Event" as described below, all
future issuances of common stock by the Company (e.g., exercise of employee
stock options and outside director stock options) will also carry the Rights.
The Rights will have no dividend or voting rights and will expire on January 20,
2007, unless exercised or redeemed prior to that time.
Exercise. Rights may not be exercised and are not detached from the common
stock until ten days after the occurrence of a Distribution Triggering Event.
The exercise price of the Rights is fixed at $40, an amount per share of common
stock that approximates the Board's estimate of the long-term value of the
Company's common stock at the time the Rights Plan was adopted, subject to
certain anti-dilution adjustments. Because the Rights are substantially "out of
the money" when initially issued and probably will remain so even after a
Distribution Triggering Event, there is a strong disincentive to exercising them
prior to the occurrence of a Flip-in Triggering Event or Flip-over Triggering
Event described below.
Redemption. So as not to interfere with the Company's ability to enter
into a negotiated merger, the Rights generally are redeemable by the Board of
Directors of the Company at a nominal price of $.01 per Right at any time prior
to the time that they are detached from the common stock and separate
certificates evidencing the Rights are delivered. The Rights Plan also provides
for the optional payment of the redemption price in shares of the Company's
common stock at management's discretion, but in any event, the redemption is
treated as a dividend to the Company's shareholders.
Distribution Triggering Events. Shortly after a person or group acquires
beneficial ownership of a fifteen percent (15%) interest or announces its
intention to commence a tender or exchange offer the consummation of which would
result in beneficial ownership of fifteen percent (15%) of the Company's common
stock (a "Distribution Triggering Event"), the Rights will separate from the
common stock. Upon distribution of the Rights, they become exercisable and are
transferable separately from the Company's common stock. As soon as practicable
thereafter, separate Rights certificates will be issued.
Flip-In Triggering Event. If an acquiror purchases an equity position in
the Company equal to or greater than a fifteen percent (15%) interest or engages
in certain other types of transactions with the Company (a "Flip-In Triggering
Event"), each Right (other than Rights beneficially owned by the acquiror) is
converted into the right to buy that number of shares of common stock of the
Company which has a market value shortly after the Flip-In Triggering Event of
two times the exercise price of the Right. Valuation of the Flip-In conversion
right is based on the average trading price of the Company's New Stock during
the ten trading days preceding the occurrence of a Flip-In Triggering Event.
Thus, if the Company's common stock traded at $30 per share immediately after
the occurrence of the Flip-In Triggering Event and the exercise price of a Right
was $75, each Right thereafter would be exercisable at the exercise price of $75
for five shares of the Company's common stock. This feature of the Rights Plan
gives the shareholders the power to substantially dilute an unwanted bidder's
equity ownership in the Company and thereby substantially increase the cost of a
takeover.
9
<PAGE> 11
Flip-Over Triggering Events. After the Distribution Triggering Event has
occurred, if the acquiring company were to merge or otherwise combine with the
Company, or the Company were to sell or transfer fifty percent (50%) of its
assets or earning power ("Flip-Over Triggering Event"), each Right is converted
into the Right to buy that number of shares of common stock of the acquiring
company which has a market value of two times the exercise price of the Right.
This right provides the target's shareholders with a dilutive fifty percent
(50%) discount on purchases of the acquiror's equity. The "flip-over" feature is
implemented by a provision in the Rights Plan prohibiting a business combination
transaction unless the Rights are assumed by the acquiring company.
A copy of the Rights Plan has been filed with the Securities and Exchange
Commission as an exhibit to the Form 10. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by reference to
the Rights Plan, which is incorporated in this summary description herein by
reference.
ITEM 5. OTHER INFORMATION
On March 27, 1997, simultaneously with its distribution of common stock to
qualifying former shareholders under its reorganization plan, the Company
distributed proxy materials relating to an annual meeting of shareholders
scheduled to be held on April 28, 1997. Due to unanticipated delays in the
distribution of common stock to the Company's former shareholders and associated
delays in many shareholders' receipt of the proxy materials, the Company
announced on April 18, 1997, that it had decided to reschedule the meeting so
that all of the Company's shareholders would have the opportunity to participate
fully in the annual meeting. Subsequently, the Company announced that the annual
meeting had been re-scheduled for June 30, 1997, with a record date of May 21,
1997. In addition, the Company announced that it had waived the advance notice
requirements set forth in its Bylaws for nominations for directors at the
upcoming meeting.
Since the distribution of the original proxy materials, the Company's Board
of Directors has expanded the number of directors to five and elected Jeffrey S.
Halis, the Company's largest shareholder, as a director. Mr. Halis has also been
nominated by the Board of Directors for election as a director at the upcoming
annual meeting. The four other nominees of the Board of Directors remain
unchanged from the original proxy materials -- Nimrod T. Frazer, T. Whit
Armstrong, T. Wayne Davis, and Christopher J. Flowers.
The Company intends to distribute revised proxy materials to shareholders
of record on or about May 21, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
REFERENCE
NO. DESCRIPTION OF EXHIBIT
- --------- ----------------------
<C> <C> <S>
4.1 -- Rights Agreement between the Company and American Stock
Transfer & Trust Company, as Rights Agent, dated as of
January 20, 1997 (incorporated by reference to Exhibit 4.1
to the Company's Amendment No. 2 to Form 10, filed on March
27, 1997)
27.1 -- Financial Data Schedule (For SEC use only)
99.1 -- "The Company -- History of the Company -- Reorganization as
Georgia Corporation" and "Description of New Common Stock"
from the Company's Amendment No. 2 to Form 10, filed on
March 27, 1997 (incorporated by reference)
</TABLE>
(b) Reports on Form 8-K
There were no reports filed on Form 8-K for the three months ended
March 31, 1997.
10
<PAGE> 12
SIGNATURES
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.
THE ENSTAR GROUP, INC.
By: /s/ CHERYL D. DAVIS
------------------------------------
Cheryl D. Davis
Chief Financial Officer, Vice
President
of Corporate Taxes, Secretary
(Authorized Officer)
(Principal Financial Officer)
Date: May 15, 1997
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED FINANCIAL STATEMENTS CONTAINED IN ITS REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,084
<SECURITIES> 73,338
<RECEIVABLES> 22
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 78
<DEPRECIATION> 50
<TOTAL-ASSETS> 74,472
<CURRENT-LIABILITIES> 18,732
<BONDS> 0
0
0
<COMMON> 43
<OTHER-SE> 53,457
<TOTAL-LIABILITY-AND-EQUITY> 74,472
<SALES> 0
<TOTAL-REVENUES> 495
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 899
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 318
<INCOME-PRETAX> (722)
<INCOME-TAX> 0
<INCOME-CONTINUING> (722)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (722)
<EPS-PRIMARY> (2.99)
<EPS-DILUTED> (2.99)
</TABLE>
