<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 0-07477
THE ENSTAR GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
GEORGIA 63-0590560
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
401 MADISON AVENUE
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 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] NO [ ]
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 November 12, 1999 was 5,265,753.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THIS FORM 10-Q AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY THE
ENSTAR GROUP, INC. OR MEMBERS OF ITS MANAGEMENT TEAM CONTAIN STATEMENTS WHICH
MAY CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES
ACT OF 1933, AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995, 15 U.S.C.A. SECTIONS 77Z-2 AND 78U-5
(SUPP. 1996). THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF
OR CURRENT EXPECTATIONS OF THE ENSTAR GROUP, INC. AND MEMBERS OF ITS MANAGEMENT
TEAM, AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. PROSPECTIVE
INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-LOOKING
STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS FORM 10-Q, AND ARE
HEREBY INCORPORATED BY REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE
OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS, THE
OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS OVER
TIME.
i
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE ENSTAR GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $63,713 $12,826
Certificates of deposit..................................... 3,595 53,424
Other....................................................... 476 724
Investment in B-Line LLC.................................... 955 1,007
Property and equipment, net................................. 37 36
------- -------
Total assets...................................... $68,776 $68,017
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities.................... $ 91 $ 529
Deferred liabilities........................................ 235 174
Other....................................................... 379 370
------- -------
Total liabilities................................. 705 1,073
------- -------
Shareholders' equity:
Common stock ($.01 par value; 55,000,000 shares
authorized, 5,708,080 and 5,707,920 shares issued at
September 30, 1999 and December 31, 1998,
respectively).......................................... 57 57
Additional paid-in capital................................ 183,191 183,201
Note receivable, net of discount of $619 and $973 at
September 30, 1999 and December 31, 1998,
respectively........................................... (14,381) (14,027)
Accumulated deficit....................................... (94,986) (96,477)
Treasury stock, at cost (442,351 shares).................. (5,810) (5,810)
------- -------
Total shareholders' equity........................ 68,071 66,944
------- -------
Total liabilities and shareholders' equity........ $68,776 $68,017
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE> 4
THE ENSTAR GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C>
Investment income............................... $ 1,148 $ 36,894 $ 3,295 $ 39,625
Litigation income (expense), net................ -- (2) 245 68
General and administrative expenses............. (427) (350) (1,956) (1,565)
Interest expense................................ (3) (40) (9) (133)
---------- ---------- ---------- ----------
Income before income taxes...................... 718 36,502 1,575 37,995
Income taxes.................................... (37) (1,154) (84) (1,194)
---------- ---------- ---------- ----------
Net income...................................... $ 681 $ 35,348 $ 1,491 $ 36,801
========== ========== ========== ==========
Weighted average shares outstanding............. 5,265,729 4,115,064 5,265,716 4,205,956
========== ========== ========== ==========
Weighted average shares outstanding -- assuming
dilution...................................... 5,342,337 4,171,084 5,333,915 4,257,165
========== ========== ========== ==========
Net income per common share..................... $ 0.13 $ 8.59 $ 0.28 $ 8.75
========== ========== ========== ==========
Net income per common share -- assuming
dilution...................................... $ 0.13 $ 8.47 $ 0.28 $ 8.64
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 5
THE ENSTAR GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- -----------------
1999 1998 1999 1998
---- -------- ------ --------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C>
Net income................................................. $681 $ 35,348 $1,491 $ 36,801
Other comprehensive income:
Unrealized gains (losses) on investment in First Union... -- (5,680) -- 2,846
Less: reclassification adjustment for gains included in
net income............................................ -- (37,634) -- (40,452)
---- -------- ------ --------
Other comprehensive income................................. 0 (43,314) 0 (37,606)
---- -------- ------ --------
Comprehensive income....................................... $681 $ (7,966) $1,491 $ (805)
==== ======== ====== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 6
THE ENSTAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1999 1998
--------- ----------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 1,491 $ 36,801
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation........................................... 10 11
Amortization of goodwill............................... 70 --
Accretion of discount on note receivable............... (354) --
Equity in earnings of B-Line LLC....................... (18) --
Gain on sale of First Union common stock............... -- (40,452)
Loss on call option transactions....................... -- 2,498
Changes in assets and liabilities:
Accounts payable and accrued liabilities............... (438) 1,142
Other.................................................. 318 117
------- --------
Net cash provided by operating activities......... 1,079 117
------- --------
Cash flows from investing activities:
Proceeds from sale of First Union common stock............ -- 68,824
Proceeds from sale of call options........................ -- 363
Repurchases of call options sold.......................... -- (902)
Purchases of certificates of deposit...................... (3,595) (6,754)
Maturities of certificates of deposit..................... 53,424 6,655
Purchase of property and equipment........................ (11) (3)
------- --------
Net cash provided by investing activities......... 49,818 68,183
------- --------
Cash flows from financing activities:
Common stock issuance costs............................... (10) --
Proceeds from note payable................................ -- 1,311
Repayment of note payable................................. -- (1,824)
Purchase of treasury stock................................ -- (4,770)
------- --------
Net cash used in financing activities............. (10) (5,283)
------- --------
Increase in cash and cash equivalents....................... 50,887 63,017
Cash and cash equivalents at the beginning of the period.... 12,826 700
------- --------
Cash and cash equivalents at the end of the period.......... $63,713 $ 63,717
======= ========
Supplemental disclosures of cash flow information:
Interest paid............................................. $ -- $ 18
======= ========
Income taxes paid......................................... $ 58 $ 189
======= ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 7
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 and nine months ended
September 30, 1999 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, 1998
included in the Company's Form 10-K as filed with the Securities and Exchange
Commission on March 29, 1999 under the Securities Exchange Act of 1934, as
amended. Certain prior year amounts have been reclassified in the financial
statements to conform with the current year presentation.
NOTE 2: INVESTMENT IN B-LINE
In November 1998, the Company made an investment in B-Line LLC ("B-Line").
B-Line is a privately owned company based in Seattle, Washington that provides
services to credit card issuers and other holders of similar receivables.
The Company purchased $950,000 of membership units of B-Line, representing
approximately 8.77% of the then outstanding units of B-Line. The Company also
purchased a one-year warrant to acquire additional B-Line units, with an
aggregate exercise price of $950,000. Other investors also purchased membership
units and warrants in B-Line. If the Company and the other investors with
outstanding B-Line warrants and options were to exercise those warrants and
options, the Company would own approximately 13.89% of B-Line.
The Company's B-Line membership units are accounted for under the equity
method. In addition, legal and professional fees of approximately $15,000
incurred in the purchase were capitalized as a part of the original cost.
Approximately $803,000 of the original $950,000 paid was recorded as goodwill
and is being amortized over a period of 10 years.
NOTE 3: SHAREHOLDERS' EQUITY
(a) Common Stock -- In January 1999, the Company issued 160 shares of its
common stock to qualified former shareholders in accordance with the terms of
its reorganization plan. It was determined by the Company that these former
shareholders had submitted a complete Certification of Ownership in a timely
manner.
(b) Additional Paid-in Capital -- In February 1999, additional legal fees
of $10,000 were incurred by the Company in relation to the sale of 1,158,860
newly issued shares of the Company's common stock to J. Christopher Flowers in
December 1998. In accordance with generally accepted accounting principles,
these fees were charged to equity in the first quarter of 1999.
(c) Note Receivable -- In December 1998, the Company sold 1,158,860 newly
issued shares of the Company's common stock to J. Christopher Flowers for a
total purchase price of $15 million, in exchange for a full recourse promissory
note from Flowers. Since the interest rate on the note is less than the rate an
independent lender would charge Flowers, the note was recorded at a discount so
as to yield a then current "market rate" of interest over its term, and a charge
to earnings of approximately $990,000 was incurred to reflect such discount.
This discount is being accreted over the term of the note. During the nine
months ended September 30, 1999, approximately $354,000 was recorded as interest
income to reflect the accretion of the discount. In accordance with generally
accepted accounting principles, the note receivable, net of discount, is
recorded as a charge to equity.
5
<PAGE> 8
THE ENSTAR GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 4: LEGAL PROCEEDINGS
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 $2.0 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. The motion is still pending before the
court. In the event the plaintiffs' claims are not dismissed pursuant to the
Company's motion, the Company intends to contest the plaintiffs' claims
vigorously. The Company cannot, however, reasonably predict the outcome of this
lawsuit.
NOTE 5: INVESTMENT INCOME
Investment income for the three and nine months ended September 30, 1999
and 1998 is made up of the following components:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1999 1998 1999 1998
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Gain on sale of First Union common
stock................................. -- $37,634,000 -- $40,452,000
Loss on call option transactions...... -- (1,371,000) -- (2,498,000)
Dividend and interest income and
other............................... $1,148,000 631,000 $3,295,000 1,671,000
---------- ----------- ---------- -----------
Total investment income..... $1,148,000 $36,894,000 $3,295,000 $39,625,000
========== =========== ========== ===========
</TABLE>
6
<PAGE> 9
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Shareholders of
The Enstar Group, Inc.:
We have reviewed the accompanying consolidated balance sheet of The Enstar
Group, Inc. and subsidiary as of September 30, 1999, and the related
consolidated statements of income, comprehensive income, and cash flows for the
three-month and nine-month periods ended September 30, 1999 and 1998. These
financial statements are the responsibility of The Enstar Group, Inc. and
subsidiary'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.
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.
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, 1998 and the related consolidated statements of
income, comprehensive income, shareholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated March 15, 1999, 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, 1998 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/s/ DELOITTE & TOUCHE LLP
October 29, 1999
Atlanta, Georgia
7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
The Company's assets, aggregating approximately $68.8 million at September
30, 1999, consisted primarily of cash, cash equivalents and certificates of
deposit.
The Company is currently engaged in the active search for one or more
operating businesses. This search occupies substantially all of the time of the
Company's senior officers. The Company's officers and directors have made
efforts to identify suitable acquisition targets, however, such efforts have not
resulted to date in any definitive agreements with respect to the acquisition of
any business or company. With the exception of various expenses incurred in
connection with the Company's search for a suitable acquisition, its only needs
are to fund normal operating expenses. In the event the Company fails to acquire
an operating business within a reasonable period of time, the Company will
consider other alternatives, including, but not limited to, liquidation of the
Company.
Financial Condition
The Company had total assets of $68.8 million at September 30, 1999
compared to $68.0 million at December 31, 1998.
Results of Operations
The Company reported net income of $681,000 and $1,491,000 for the three
and nine month periods ended September 30, 1999, compared to net income of
$35,348,000 and $36,801,000 for the same periods in the prior year. The changes
in net income from the three and nine month periods ended September 30, 1999
compared to the same periods in the prior year are primarily a result of changes
in the components of investment income and, in 1999, increased general and
administrative expenses.
Investment income was approximately $1.1 million and $3.3 million for the
three and nine months periods ended September 30, 1999, respectively, compared
to approximately $36.9 and $39.6 million for the same periods in the prior year.
During the first quarter of 1998, the Company recorded a gain on the sale of
101,939 shares of First Union common stock of $2.8 million net of losses on call
option transactions of approximately $1.2 million. During the quarter ended
September 30, 1998, the Company sold its remaining 1,232,307 Shares of First
Union common stock. The Company received net proceeds of approximately $63.7
million and realized a gain of approximately $37.6 million on the sale of the
shares. This gain was partially offset by losses on call option transactions of
approximately $1.4 million during the quarter ended September 30, 1998. In
addition, the Company had interest and dividend income of approximately $631,000
and $1,671,000 for the three and nine month periods ended September 30, 1998,
respectively. Investment income for the three and nine month periods ended
September 30, 1999 consisted almost entirely of interest income. Since the sale
of the Company's remaining holdings in First Union common stock during the year
ended December 31, 1998, the Company has invested primarily in interest bearing
accounts and certificates of deposit.
General and administrative expenses were $427,000 and $1,956,000 for the
three and nine month periods ended September 30, 1999, respectively, compared to
$350,000 and $1,565,000 for the same periods in 1998. In addition to normal
operating expenses, general and administrative expenses include legal and
professional fees as well as travel expenses incurred in connection with the
Company's search for a suitable acquisition. Most variances in general and
administrative expenses can be attributed to the number of potential acquisition
candidates the Company locates as well as the degree of interest the Company may
have in such candidates. The stronger the interest in a candidate, the more
rigorous financial and legal due diligence the Company will incur with respect
to that candidate. During 1999, the Company incurred an increase in general and
administrative expenses as a direct result of intensive evaluation of several
potential acquisition candidates.
8
<PAGE> 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to some market risk from changes in interest rates,
but the Company does not believe the risk is material. The Company had cash and
cash equivalents of approximately $63.7 million in interest bearing accounts
(interest at floating rates) and approximately $3.6 million of short-term
certificates of deposit (interest at fixed rates) at September 30, 1999.
Although interest rate changes would affect the fair value of the Company's
certificates of deposits, the weighted average original term of certificates
held by the Company at September 30, 1999 was approximately 8 months. The
short-term nature of these certificates limits the Company's risk of changes in
the fair value of these certificates. The Company also had a full recourse note
receivable at September 30, 1999, classified as a reduction of equity. The $15.0
million note bears interest at a fixed rate of 4.06% per annum, requires
quarterly interest payments, and matures in December 2000. The note was recorded
at a discount so as to yield a current market rate of interest as of the date of
issuance of the note.
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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
Company's Second Amended Plan of Reorganization, as modified (the
"Reorganization Plan"). The plaintiffs allege that the United States Bankruptcy
Court for the Middle District of Alabama (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. On March 17, 1997, the
Company filed a motion to dismiss and/or for summary judgment in response to the
complaint on the basis that the claims asserted are barred by the applicable
statute of limitations. The motion is still pending before the court. In the
event the plaintiffs' claims are not dismissed pursuant to the Company's motion,
the Company intends to contest the plaintiffs' claims vigorously. The Company
cannot, however, reasonably predict the outcome of this litigation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
REFERENCE
NUMBER DESCRIPTION OF EXHIBITS
- --------- -----------------------
<C> <C> <S>
2.1 -- Second Amended Plan of Reorganization of the Company,
effective as of June 1, 1992 (incorporated by reference to
Exhibit 2.1 to the Amendment No. 2 to Registration Statement
on Form 10, dated March 27, 1997).
2.2 -- Amended Modification to Second Amended Plan of
Reorganization of the Company, confirmed on August 24, 1993
(incorporated by reference to Exhibit 2.2 to the Amendment
No. 2 to Registration Statement on Form 10, dated March 27,
1997).
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
REFERENCE
NUMBER DESCRIPTION OF EXHIBITS
- --------- -----------------------
<C> <C> <S>
2.3 -- Agreement and Plan of Merger, dated as of December 31, 1996
(incorporated by reference to Exhibit 2.3 to the Amendment
No. 2 to Registration Statement on Form 10, dated March 27,
1997).
3.1 -- Articles of Incorporation of the Company, as amended on June
10, 1998 (incorporated by reference to Exhibit 3.1 to the
Quarterly Report on Form 10-Q, dated August 4, 1998).
3.2 -- Bylaws of the Company, as amended on May 20, 1999
(incorporated by reference to Exhibit 3.2 to the Quarterly
Report on Form 10-Q dated August 6, 1999).
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 Amendment No. 2 to Registration Statement on Form 10,
dated March 27, 1997).
4.2 -- Amendment Agreement dated as of October 20, 1998, to the
Rights Agreement dated as of January 20, 1997 between the
Company and American Stock Transfer & Trust Company
(incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K dated October 20, 1998).
27.1 -- Financial Data Schedule. (For SEC Use Only)
99.1 -- The Enstar Group, Inc. Private Securities Litigation Reform
Act of 1995 Safe Harbor Compliance Statement For
Forward-Looking Statements (incorporated by reference to
Exhibit 99.1 to the Annual Report on Form 10-K, dated March
29, 1999).
99.2 -- Notice of Pending Distribution of New Common Stock in The
Enstar Group, Inc. (incorporated by reference to Exhibit
99.1 to the Amendment No. 2 to Registration Statement on
Form 10, dated March 27, 1997).
99.3 -- Modified Order on Proposed Distribution to Equity Security
Holders by the United States Bankruptcy Court for the Middle
District of Alabama (incorporated by reference to Exhibit
99.2 to the Amendment No. 2 to Registration Statement on
Form 10, dated March 27, 1997).
</TABLE>
(b) Reports on Form 8-K
There were no reports filed on Form 8-K for the quarter ended September 30,
1999.
10
<PAGE> 13
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: November 12, 1999
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ENSTAR
GROUP, INC.'S UNAUDITED FINANCIAL STATEMENTS CONTAINED IN ITS REPORT ON FORM
10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 63,713
<SECURITIES> 3,595
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 110
<DEPRECIATION> 73
<TOTAL-ASSETS> 68,776
<CURRENT-LIABILITIES> 91
<BONDS> 0
0
0
<COMMON> 57
<OTHER-SE> 68,014
<TOTAL-LIABILITY-AND-EQUITY> 68,776
<SALES> 0
<TOTAL-REVENUES> 3,540
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,956
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> 1,575
<INCOME-TAX> 84
<INCOME-CONTINUING> 1,491
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,491
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
</TABLE>
