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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
/ x / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-6471
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PGI INCORPORATED
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(Exact name of small business issuer as specified in its charter)
FLORIDA 59-0867335
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
212 SOUTH CENTRAL, SUITE 100; ST. LOUIS, MISSOURI 63105
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(Address of principal executive offices)
(314) 512-8650
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(Issuer's telephone number)
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(Former Name, Former Address and Former Fiscal Year, if changed since
last report)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
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 .
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State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of August 14, 1997
there were 5,317,758 shares of the Registrant's common stock outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
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PGI INCORPORATED AND SUBSIDIARIES
FORM 10-QSB/A
For the Quarter Ended June 30, 1997
<TABLE>
Table of Contents
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<CAPTION>
Form 10-QSB
Page No.
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<S> <C>
PART I Financial Information
Item 1 Financial Statements
Consolidated Statements of Financial Position
June 30, 1997 and December 31, 1996 3
Consolidated Statements of Operations
Three and Six Months Ended June 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements
for Form 10-QSB/A 6 - 10
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 11 - 14
PART II Other Information
Item 1 Legal Proceedings 15
Item 2 Changes in Securities 15
Item 3 Defaults Upon Senior Securities 15
Item 4 Submission of Matters to a Vote of Security Holders 15
Item 5 Other Information 15
Item 6 Exhibits and Reports on Form 8-K 17 - 19
SIGNATURES 16
</TABLE>
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<PAGE> 3
PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information
Item 1 Financial Statements
<TABLE>
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in thousands)
<CAPTION>
June 30, December 31,
1997 1996
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(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 25 $ 12
Restricted cash 1,134 1,140
Receivables on real estate sales - net 147 318
Other receivables 32 26
Land and improvement inventories 9,005 9,016
Property and equipment - net 23 46
Other assets 757 759
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$ 11,123 $ 11,317
========== ==========
LIABILITIES
Accounts payable $ 140 $ 78
Other liabilities 1,537 1,428
Accrued interest:
Primary lender 2,954 2,461
Debentures 7,544 6,880
Other 1,536 1,449
Credit agreements -
Primary lender 7,343 7,307
Notes and mortgages payable 3,645 3,667
Convertible subordinated
debentures payable 9,059 9,059
Convertible debentures payable 1,500 1,500
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35,258 33,829
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Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00 per share;
authorized 5,000,000 shares; 2,000,000 Class A
cumulative convertible shares issued and
outstanding; (liquidation preference
of $4.00 per share or $8,000,000) 2,000 2,000
Common stock, par value $.10 per share;
authorized 25,000,000 shares; 5,317,758 and
3,317,555 shares issued and outstanding 532 332
Paid in capital 13,498 13,698
Accumulated deficit (40,165) (38,542)
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(24,135) (22,512)
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$ 11,123 $ 11,317
========== ==========
See accompanying notes to consolidated financial statements for Form 10-QSB/A.
</TABLE>
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<PAGE> 4
PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information (Continued)
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
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June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------- ------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Interest income 9 24 20 54
Other income 141 77 275 169
-------- -------- -------- --------
150 101 295 223
-------- -------- -------- --------
COSTS AND EXPENSES
Selling expenses 2 3 4 9
General & administrative expenses 213 388 363 492
Interest 672 638 1,326 1,211
Other expenses 99 74 225 173
-------- -------- -------- --------
986 1,103 1,918 1,885
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NET INCOME (LOSS) $ (836) $ (1,002) $ (1,623) $ (1,662)
======== ======== ======== ========
NET INCOME (LOSS) PER SHARE <F*>
Primary and fully diluted $ (.19) $ (.35) $ (.37) $ (.60)
======== ======== ======== ========
<FN>
<F*> Considers the effect of cumulative preferred dividends in arrears for
the three and six months ended June 30, 1997 and 1996.
See accompanying notes to consolidated financial statements for form 10-QSB/A.
</TABLE>
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PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information (Continued)
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
<CAPTION>
Six Months Ended
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June 30, June 30,
1997 1996
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<S> <C> <C>
Net cash provided by (used in) operating activities $ (1) $ 79
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Cash flows from financing activities:
Proceeds from borrowings 117 115
Principal payments on debt (103) (253)
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Net cash provided by (used in) financial activities 14 (138)
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Net increase (decrease) in cash 13 (59)
Cash at beginning of period 12 63
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Cash at end of period $ 25 $ 4
========== ==========
See accompanying notes to consolidated financial statements for Form 10-QSB/A.
</TABLE>
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<PAGE> 6
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and
therefore do not include all disclosures necessary for fair presentation
of financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. The Company's independent
accountants included an explanatory paragraph regarding the Company's
ability to continue as a going concern in their opinion on the Company's
consolidated financial statements for the year ended December 31, 1996.
The Company continues, however, to remain in default under the
indentures governing its convertible unsecured subordinated debentures
(the "Indentures") (See Management's Discussion and Analysis of
Financial Condition and Results of Operations). However, as more fully
discussed in Note 10 to the Company's consolidated financial statements
for the year ended December 31, 1996, as contained in the Company's
Annual Report on Form 10-KSB/A, the Company's management is seeking
purchasers for its remaining undeveloped land.
The financial statements do not include any adjustments relating to the
recoverability of recorded asset amounts or the amounts of liabilities
that might be necessary should the Company be unsuccessful in its sales
and refinancing efforts.
In the opinion of management, subject to the effects on the Company's
unaudited consolidated financial statements of such adjustments, if any,
as might have been required had the outcome of the matters discussed in
the preceding paragraph been known, all other adjustments (consisting of
only normal recurring accruals) necessary for fair presentation of
financial position, results of operations and cash flows have been made.
The results for the three and six months ended June 30, 1997 are not
necessarily indicative of operations to be expected for the fiscal year
ending December 31, 1997 or any other interim period.
(2) Recognition of Real Estate Sales
The Company has adopted the installment method of profit recognition for
all homesite sales effective January 1, 1990 and thereafter. For sales
consummated prior to January 1, 1990, the Company recognized profit
under the full accrual or percentage-of-completion methods as
appropriate. The full accrual method recognizes the entire profit when
minimum down payments and other requirements are met. Under the
percentage-of-completion method, profit is recognized by the
relationship of costs incurred to total estimated costs to be incurred.
The installment method recognizes gross profit as down payments and
principal payments on contracts are received.
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PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(6) Receivables on Real Estate Sales
Net receivables on real estate sales consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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($ in thousands)
<S> <C> <C>
Contracts receivable on homesite sales $ 907 $ 1,076
Other 92 98
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999 1,174
Less: Allowance for cancellations (806) (806)
Unamortized valuation discount (46) (50)
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$ 147 $ 318
========== ==========
</TABLE>
(7) Land and Improvements
Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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($ in thousands)
<S> <C> <C>
Unimproved land $ 8,724 $ 8,724
Fully improved land 281 292
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$ 9,005 $ 9,016
========== ==========
</TABLE>
(8) Property and Equipment
Property and equipment consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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($ in thousands)
<S> <C> <C>
Furniture, fixtures and other equipment $ 211 $ 363
Less: Accumulated depreciation (188) (317)
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$ 23 $ 46
========== ==========
</TABLE>
(9) Other Assets
Other assets consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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($ in thousands)
<S> <C> <C>
Guaranteed future connections, net $ 621 $ 621
Deposit with Trustee of 6-1/2% debentures 128 125
Other 8 13
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$ 757 $ 759
========== ==========
</TABLE>
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<PAGE> 8
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Cash used in operating activities for the six months ended June 30,
1997 was $1,000 compared to $79,000 cash provided by operating activities for
the comparable 1996 period. During the first six months of 1997, financing
activities provided $14,000 in cash flow with $117,000 in proceeds from
borrowings. Net cash used in financing activities was $103,000 for normal debt
repayment as compared to $253,000 for the same period in 1996.
Analysis of Financial Condition
Assets totaled $11.1 million at June 30, 1997 compared to $11.3 million
at December 31, 1996, reflecting the following changes:
<TABLE>
<CAPTION>
June 30, December 31, Increase
1997 1996 (Decrease)
---------- ------------ ----------
($ in thousands)
<S> <C> <C> <C>
Cash and cash equivalents $ 25 $ 12 $ 13
Restricted cash 1,134 1,140 (6)
Receivables 179 344 (165)
Land and improvement inventories 9,005 9,016 (11)
Net property and equipment 23 46 (23)
Other assets 757 759 (2)
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$ 11,123 $ 11,317 $ (194)
========== ========== ==========
</TABLE>
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PGI INCORPORATED AND SUBSIDIARIES
SIGNATURES
In accordance with the requirement of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
PGI INCORPORATED
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(Registrant)
Date: October 1, 1997 /s/Laurence A. Schiffer
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Laurence A. Schiffer
President
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