SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 1999
MOTOR CLUB OF AMERICA
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(Exact Name of Registrant as specified in its charter)
New Jersey 0-671 22-0747730
- ----------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
95 Route 17 South, Paramus, New Jersey 07653-0931
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(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code(201) 291-2000
__________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
The purpose of this amended filing is to reflect additional
unaudited pro forma information in Item 7. See current report on
Form 8-K dated and filed September 28, 1999, which is being amended
hereby.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
Unaudited ProForma Condensed Combined Statement of
Income for the nine months ended September 30, 1999 and year
ended December 31, 1998. The Registrant has previously
filed a Condensed Consolidated Balance Sheet as of September
30, 1999 in its Report on Form 10-Q dated November 15, 1999, which
includes North East.
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 hereunto duly authorized.
MOTOR CLUB OF AMERICA
By: /s/Patrick J. Haveron
Patrick J. Haveron
Executive Vice President
Chief Executive Officer and
Chief Financial Officer
Date: November 22, 1999
<PAGE>
<TABLE>
MOTOR CLUB OF AMERICA AND NORTH EAST INSURANCE COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
__________
<CAPTION>
<S> <C> <C> <C>
Historical
-------------------
Motor North Pro Forma Pro Forma
Club East Adjustments Combined
------ ------ ------------ ---------
REVENUES
Insurance premiums $39,643,239 $10,195,317 $49,838,556
Net investment income 3,600,727 614,393 4,215,120
Realized gains (losses) on
sales of investments (net) 5,365 (32,938) (27,573)
Other revenues 109,579 - 109,579
----------- ----------- -------- -----------
Total revenues 43,358,910 10,776,772 - 54,135,682
----------- ----------- -------- -----------
LOSSES AND EXPENSES
Losses and loss expenses
incurred 28,413,303 6,767,370 35,180,673
Amortization of deferred
policy acquisition costs 11,658,039 4,109,790 15,767,829
Interest expense 177,479 - 618,933(C) 796,412
Merger-related expenses 800,000 1,117,933 1,917,933
Other operating expenses 696,848 668,731 66,263(B) 1,431,842
----------- ----------- --------- -----------
Total losses and
expenses 41,745,669 12,663,824 685,196 55,094,689
----------- ----------- --------- -----------
Income (loss) before
Federal income taxes 1,613,241 (1,887,052) (685,196) (959,007)
Benefit for Federal
income taxes (513,558) (630,399) (232,967) (1,376,924)
---------- ----------- -------- -----------
Net income (loss) $ 2,126,799 ($1,256,653) (452,229) $ 417,917
=========== =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net income (loss) per share:
Basic $1.01 ($.41) $.20 (D)
===== ===== ====
Diluted $1.00 ($.41) $.20 (D)
===== ===== ====
Weighted coverage common and potential common shares outstanding:
Basic 2,116,429 3,049,089 2,124,387 (D)
========= ========= =========
Diluted 2,140,275 3,049,089 2,124,387 (D)
========= ========= =========
</TABLE>
<PAGE>
The accompanying notes are an integral part of
these pro forma condensed combined financial statements.
<TABLE>
MOTOR CLUB OF AMERICA AND NORTH EAST INSURANCE COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
__________
<CAPTION>
<S> <C> <C> <C>
Historical
---------------------
Motor North Pro Forma Pro Forma
Club East Adjustments Combined
------ ----- ----------- ---------
REVENUES
Insurance premiums $53,175,663 $12,580,432 $65,756,095
Net investment income 4,304,507 870,548 5,175,055
Realized gains on
sales of investments (net) 28,545 54,272 82,817
Other revenues 171,171 - 171,171
----------- ----------- ------ -----------
Total revenues 57,679,886 13,505,252 - 71,185,138
----------- ----------- ------ -----------
LOSSES AND EXPENSES
Losses and loss expenses
incurred 36,479,591 8,357,673 44,837,264
Amortization of deferred
policy acquisition costs 13,375,221 3,571,626 16,946,847
Interest expense - - 844,000(C) 844,000
Other operating expenses 2,105,668 1,354,430 88,351(B) 3,548,449
----------- ----------- -------- -----------
Total losses and
expenses 51,960,480 13,283,729 932,351 66,176,560
----------- ----------- -------- -----------
Income before
Federal income taxes 5,719,406 221,523 (932,351) 5,008,578
Provision for Federal
income taxes (1,463,615) (63,836) 316,999 (1,210,452)
----------- ---------- --------- ----------
Net income $ 4,255,791 $ 157,687 ($615,352) $3,798,126
=========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net income per share:
Basic $2.02 $0.05 $1.79 (D)
===== ===== =====
Diluted $1.00 $0.05 $1.57 (D)
===== ===== =====
Weighted coverage common and potential common shares outstanding:
Basic 2,108,722 3,048,138 2,116,680 (D)
========= ========= =========
Diluted 2,121,366 3,124,489 2,766,944 (D)
========= ========= =========
</TABLE>
The accompanying notes are an integral part of
these pro forma condensed combined financial statements.
<PAGE>
MOTOR CLUB OF AMERICA AND NORTH EAST INSURANCE COMPANY
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
__________
Note A - Basis of Presentation:
The unaudited pro forma condensed combined statement of income
reflects a combination of: 1) 41,781 of the outstanding shares
of North East Insurance Company ("North East") based upon an
exchange ratio of 0.19048 of a share of Motor Club of America
("Motor Club") Common Stock for each outstanding share of
North East; and 2) the remaining outstanding shares and all
other dilutive shares of North East presently issued but not
outstanding based upon a cash price of $3.30 per share. The
total purchase price is therefore assumed to be approximately
$10.483 million.
With respect to North East, certain accounts have been
reclassified in the financial statements to conform to Motor
Club's presentation.
Note B - Goodwill:
Under the purchase method of accounting for business
combinations, the total purchase price is allocated to the
acquired assets and liabilities based on their fair values.
Any differences between the excess of the cost of the
transaction and the fair value of North East's net assets
acquired is recorded as goodwill, which will be amortized on
a straight-line basis over twenty years after the merger.
Note C - Convertible Subordinated Debentures:
In connection with its acquisition of North East, on
September 23, 1999, Motor Club issued $10 million of
Convertible Subordinated Debentures ("Debentures"), in
one series, under a plan previously approved by its
shareholders.
The Debentures are due on September 23, 2009 and bear an
interest rate of 8.44%, which is 2.5% over the London
Interbank Offered Rate, fixed as of September 23, 1999, the
date the series was issued.
At each holder's option, the Debenture is convertible at any
time, in whole or in part, into 645,578 of Motor Club's common
shares ($10 million divided by 130% of the average trading
price of Motor Club's common stock over the twenty day period
immediately prior to September 23, 1999 ("Conversion Price")).
The applicable Conversion Price is $15.49.
<PAGE>
MOTOR CLUB OF AMERICA AND NORTH EAST INSURANCE COMPANY
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
__________
Note C - Convertible Subordinated Debentures (Continued):
Members of Motor Club's Executive Committee purchased
$9,253,785 of the $10 million in Debentures issued. If the
members of the Executive Committee convert those Debentures,
their percentage ownership in Motor Club's common stock will
substantially increase. Based on Motor Club's common shares
outstanding as of September 30, 1999 and those subsequently
issued to North East shareholders as part of their elections
under the Merger, the Executive Committee could increase its
collective percentage stock ownership from the current 42.2%
to 53.8%.
Note D - Earnings per Share:
The weighted average number of outstanding common shares has
been adjusted to reflect the additional Motor Club shares
which are assumed to be issued to North East stockholders as
described in Note A. The weighted average number of potential
outstanding common shares has been adjusted to reflect the
conversion of the debentures described in Note C. Net income
available to common shareholders for purposes of the diluted
earnings per share computation excludes interest expense (net
of tax) applicable to the debentures. For the nine months
ended September 30, 1999, basic and diluted income per share
are the same because the dilutive computation would be anti-
dilutive on a per share basis.
