<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
- ----
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
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
For the transition period from to
----------------- ------------------
Commission File Number 1-6471
-----------------------------------------------
PGI INCORPORATED
----------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-0867335
- ---------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
212 SOUTH CENTRAL, SUITE 100; ST. LOUIS, MISSOURI 63105
----------------------------------------------------------------------
(Address of principal executive offices)
(314) 512-8650
----------------------------------------------------------------------
(Issuer's telephone number)
----------------------------------------------------------------------
(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 .
----- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of May 14, 1997
there were 3,317,555 shares of the Registrant's common stock outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
----- ------
-1-
<PAGE> 2
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
FORM 10-QSB
For the Quarter Ended March 31, 1997
Table of Contents
---------------------
<CAPTION>
Form 10-QSB
Page No.
-----------
<C> <S> <C>
PART I Financial Information
Item 1 Financial Statements
Consolidated Statements of Financial Position
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements
for Form 10-QSB 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>
-2-
<PAGE> 3
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information
Item 1 Financial Statements
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in thousands)
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash, including restricted cash of $1,147,000
and $1,140,000 $ 1,157 $ 1,152
Receivables on real estate sales - net 226 318
Other receivables 29 26
Land and improvement inventories 9,012 9,016
Property and equipment - net 27 46
Other assets 755 759
---------- ----------
$ 11,206 $ 11,317
========== ==========
LIABILITIES
Accounts payable $ 106 $ 78
Other liabilities 1,456 1,428
Accrued interest:
Primary lender 2,703 2,461
Debentures 7,208 6,880
Other 1,491 1,449
Credit agreements -
Primary lender 7,323 7,307
Notes and mortgages payable 3,659 3,667
Convertible subordinated
debentures payable 9,059 9,059
Convertible debentures payable 1,500 1,500
---------- ----------
34,505 33,829
---------- ----------
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; 3,317,555 shares
issued and outstanding 332 332
Paid in capital 13,698 13,698
Accumulated deficit (39,329) (38,542)
---------- ----------
(23,299) (22,512)
---------- ----------
$ 11,206 $ 11,317
========== ==========
See accompanying notes to consolidated financial statements for Form 10-QSB.
</TABLE>
-3-
<PAGE> 4
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information (Continued)
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended
---------------------
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
REVENUES
Interest income 11 30
Other income 134 92
--------- ---------
145 122
--------- ---------
COSTS AND EXPENSES
Selling expenses 2 6
General & administrative expenses 150 104
Interest 654 573
Other expenses 126 99
--------- ---------
932 782
--------- ---------
NET INCOME (LOSS) $ (787) $ (660)
========= =========
NET INCOME (LOSS) PER SHARE (<F*>)
Primary and fully diluted $ (.29) $ (.25)
========= =========
<FN>
(<F*>) Considers the effect of cumulative preferred dividends in arrears for
the three months ended March 31, 1997 and 1996.
See accompanying notes to consolidated financial statements for form 10-QSB.
</TABLE>
-4-
<PAGE> 5
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
PART I Financial Information (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1997 1996
----------- ----------
<S> <C> <C>
Net cash provided by (used in) operating activities $ (3) $ 113
---------- ---------
Cash flows from financing activities:
Proceeds from borrowings 67 -
Principal payments on debt (59) (148)
---------- ---------
Net cash provided by (used in) financial activities 8 (148)
---------- ---------
Net increase (decrease) in cash 5 (35)
Cash at beginning of period 1,152 1,165
---------- ---------
Cash at end of period $ 1,157 $ 1,130
========== =========
</TABLE>
-5-
<PAGE> 6
PGI INCORPORATED AND SUBSIDIARIES
See accompanying notes to consolidated financial statements for Form
10-QSB.
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, 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 months
ended March 31, 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.
-6-
<PAGE> 7
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(3) Per Share Data
Primary per share amounts are computed by dividing net income (loss),
after considering cumulative dividends in arrears on the Company's
preferred stock, by the average number of common shares and common
stock equivalents outstanding. For this purpose, the Company's
cumulative convertible preferred stock, convertible subordinated
debentures and collateralized convertible debentures are not deemed
to be common stock equivalents, but outstanding vested stock options
are considered as such. However, under the treasury stock method, no
vested stock options were assumed to be exercised, and therefore no
common stock equivalents existed, for the calculation of primary per
share amounts for the three months ended March 31, 1997 and 1996.
The average number of common shares outstanding for the three months
ended March 31, 1997 and 1996 was 3,317,555, respectively.
Fully diluted per share amounts are computed by dividing net income
(loss) by the average number of common shares outstanding, after
adjusting both for the estimated effects of the assumed exercise of
stock options and the assumed conversion of all cumulative
convertible preferred stock, convertible subordinated debentures and
collateralized convertible debentures into shares of common stock.
For the three months ended March 31, 1997 and 1996, no stock options
were assumed to be exercised and the effect of the assumed exercise
of stock options and the assumed conversion of all cumulative
convertible preferred stock, convertible subordinated debentures and
collateralized convertible debentures would have been anti-dilutive.
(4) Statement of Cash Flows
The Financial Accounting Standards Board issued Statement No. 95,
"Statement of Cash Flows", which requires a statement of cash flows
as part of a full set of financial statements. For quarterly
reporting purposes, the Company has elected to condense the reporting
of its net cash flows. Interest paid for the three months ended
March 31, 1997 and 1996 was $42,000 and $53,000, respectively.
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
(5) Restricted Cash
Restricted cash included cash and certificates of deposit pledged to
agencies in various states and local Florida governmental units
related to land development and environmental matters, escrowed
receipts related to pledged receivables on real estate sales and the
servicing of sold receivables and, as a result of sales agreements
and Company policies, customer payments and deposits related to
homesite and housing contracts.
-7-
<PAGE> 8
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(6) Receivables on Real Estate Sales
Net receivables on real estate sales consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Contracts receivable on homesite sales $ 984 $ 1,076
Other 96 98
---------- ----------
1,080 1,174
Less: Allowance for cancellations (806) (806)
Unamortized valuation discount (48) (50)
---------- ----------
$ 226 $ 318
========== ==========
</TABLE>
(7) Land and Improvements
Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Unimproved land $ 8,724 $ 8,724
Fully improved land 288 292
---------- ----------
$ 9,012 $ 9,016
========== ==========
</TABLE>
(8) Property and Equipment
Property and equipment consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Furniture, fixtures and other equipment $ 211 $ 363
Less: Accumulated depreciation (184) (317)
---------- ----------
$ 27 $ 46
========== ==========
</TABLE>
(9) Other Assets
Other assets consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Guaranteed future connections related to
sale of utility plants and equipment, net $ 621 $ 621
Deposit with Trustee of 6-1/2% debentures 126 125
Other 8 13
---------- ----------
$ 755 $ 759
========== ==========
</TABLE>
-8-
<PAGE> 9
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(10) Other Liabilities
Other Liabilities consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Accrued property taxes
- current $ 260 $ 208
- delinquent 476 476
Other accrued expenses 293 316
Deposits, advances and escrows 345 346
Estimated recourse liability for
receivables sold 66 66
Other 16 16
---------- -----------
$ 1,456 $ 1,428
========== ===========
</TABLE>
(11) Primary Lender Credit Agreements, Notes and Mortgages Payable and
Convertible Subordinated Debentures Payable
Credit agreements with the Company's primary lender and notes and
mortgages payable consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
($ in thousands)
<S> <C> <C>
Credit agreements - primary lender:
(maturing July 8, 1997, bearing interest
at prime plus 5%): $ 7,323 $ 7,307
Notes and mortgages payable - $1,326,000
bearing interest at 12-1/4%, $1,176,000
bearing interest at prime plus 2%, the
remainder bearing interest at varying
rates to 23%; maturing through 2000 3,659 3,667
---------- -----------
Convertible subordinated debentures payable:
At 6-1/2% interest; due June 1991;
convertible into shares of common stock
at $18.00 per share $ 1,034 $ 1,034
At 6% interest; due May 1, 1992; convertible
into shares of common stock at
$19.50 per share 8,025 8,025
---------- -----------
$ 9,059 $ 9,059
---------- -----------
Collateralized convertible debentures
payable:
At 14% interest; due July 8, 1997,
convertible into shares of common stock
at $1.72 per share 1,500 1,500
---------- -----------
$ 21,541 $ 21,533
========== ===========
</TABLE>
-9-
<PAGE> 10
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(12) Real Estate Sales and Other Income
There were no real estate sales for the three months ended March 31,
1997 and 1996.
Other income for the three months ended March 31, 1997 and 1996
consisted of:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1997 1996
----------- ----------
($ in thousands)
<S> <C> <C>
Commission income $ 102 $ 78
Other income 32 14
--------- ---------
$ 134 $ 92
========= =========
</TABLE>
(13) Commitments and Contingencies
The aggregate outstanding balances of all receivables sold and
exchanged with recourse totaled $190,000 and $246,000 at March 31,
1997 and December 31, 1996, respectively. Based on its collection
experience with such receivables, the Company maintained allowances
at both March 31, 1997 and December 31, 1996, classified in other
liabilities, of $66,000 for the recourse provisions related to all
receivables sold.
(14) Income Taxes
Effective January 1, 1993 the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes,"
which requires a change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset and
liability method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the
financial statement carrying amounts and the tax bases of existing
assets and liabilities. Under SFAS No. 109, the effect on deferred
taxes of a change in tax rates is recognized in income in the period
that includes the enactment date. Under the deferred method deferred
taxes were recognized using the tax rate applicable to the year of
the calculation and were not adjusted for subsequent changes in tax
rates. Based on the Company's current tax status and current tax
laws, adoption of SFAS No. 109 did not have a material effect on the
Company's financial position.
At December 31, 1996, the Company had an operating loss carryforward
of approximately $34,000,000 to reduce future taxable income. These
operating losses expire at various dates through 2,009.
The following summarizes the temporary differences of the Company at
December 31, 1996 at the current statutory rate:
<TABLE>
<S> <C>
Deferred tax asset:
Net operating loss carryforward $12,531,000
Adjustments to reduce land to
net realizable value 12,000
Expenses capitalized under IRC 263(a) 56,000
ITC carryforward 215,000
Other 2,000
Valuation allowance (10,347,000)
-----------
2,469,000
-----------
Deferred tax liability
Basis difference of land and
improvement inventories 2,453,000
Excess tax over book depreciation 16,000
-----------
2,469,000
-----------
Net deferred tax asset $ 0
===========
</TABLE>
-10-
<PAGE> 11
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Preliminary Note
The description of the Company's business in the Quarterly Report on Form
10-QSB focuses on its traditional core business of selling individual homes
and homesites and the construction of residences. Readers should understand
as they read the report, however, that the Company is not presently pursuing
its core business until its debt obligations have been substantially
eliminated. The reason the Company is no longer pursuing its core business
is set forth with more particularity below.
During the fiscal year ended December 31, 1996, the Company's business
focus and emphasis changed substantially as it concentrated its sales and
marketing efforts almost exclusively on the disposition in bulk of its
undeveloped, platted, residential real estate. This change was prompted by
it's continuing financial difficulties due to the principal and interest owed
on its debt and managements' conclusion that a bulk sale was the best way to
reduce the Company's debt service obligations. If the Company is successful
in its sale of this undeveloped land, its remaining inventory will consist of
undeveloped commercial property. There can be no assurance that the Company
will be successful in its efforts to effect a bulk sale. Assuming a bulk
sale occurs, the Company intends to decide at that point whether it will
pursue the development and sale of the commercial property in accordance with
its traditional core business plans or whether it will attempt to sell such
property in bulk. That decision will depend, in part, on whether the Company
believes it can generate more revenue by developing and selling individual
commercial properties or by selling in bulk.
On January 31, 1997, Sugarmill Woods, Inc., a Florida corporation and a
wholly-owned subsidiary of the Company, and Love-PGI Partners, L.P. ("L-PGI")
(collectively as "Seller"), entered into an Option Agreement For Sale and
Purchase ("Sale Agreement") with the Nature Conservancy, Inc., an unrelated
nonprofit District of Columbia corporation ("Purchaser"), for the sale of and
purchase of approximately 5,240 acres of certain undeveloped real estate
located in Citrus County and Hernando County, Florida ("Property").
Approximately 4,890 acres of the Property is owned by the Company, and 350
acres is owned by L-PGI.
Results of Operations
Revenues for the first three months of 1997 increased by $23,000 to
$145,000 from $122,000 for the comparable 1996 period. A net loss of
$787,000 was incurred for the first three months of 1997 compared to a net
loss of $660,000 for the first three months of 1996. After consideration of
cumulative preferred dividends in arrears, totaling $160,000 for each of the
three months ended March 31, 1997 and 1996 ($.05 per share of common stock),
net losses per share of $.29 and $.25, respectively, were reported for the
three month periods ended March 31, 1997 and 1996.
On March 28, 1996, the Company's primary lender, First Union National Bank
of Florida, a national banking association ("First Union") assigned to PGIP
L.L.C., a Missouri limited liability company ("PGIP") all of First Union's
right, title and interest in and to the documents (the "Loan Documents")
evidencing and securing its primary credit agreements with the Company and
the Company's subsidiaries, Sugarmill Woods, Inc., Burnt Store Marina, Inc.
and Gulf Coast Credit Corporation (collectively, the "Borrowers"), which
credit agreements are in default and the maturity of the indebtedness secured
thereby has been accelerated.
-11-
<PAGE> 12
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
The Company has been advised by PGIP that it will be the policy of PGIP
not to proceed with collection of the principal and interest evidenced and
secured by the Loan Documents so long as PGI pursues satisfactory efforts to
market and sell the Property. PGIP's policy, but not its contractual
obligation, will be to facilitate sales of the Property by agreeing to the
release of Property to be sold from the lien of the Loan Documents against
disposition of the net sale proceeds therefrom, after all expenses, closing
costs and the like incurred by PGI in connection with any such sale, in a
manner to be agreed upon by PGIP and PGI.
PGIP is owned and managed by Love Savings Holding Company ("LSHC"), Andrew
S. Love, Jr. and Laurence A. Schiffer. Messrs. Love and Schiffer are
directors and executive officers of LSHC and own slightly more than half of
all the issued and outstanding voting stock of LSHC. Messrs. Love and
Schiffer serve as executive officers and directors of the Company and the
other Borrowers and the Guarantors.
Company management has determined that the Company's primary activity must
concentrate on one goal - the sale of sufficient additional acreage as soon
as possible to again substantially reduce the primary lender debt.
There were no real estate sales for the three months ended March 31,
1997 and 1996.
Other income for the three months ended March 31, 1997 and 1996
consisted of:
<TABLE>
<CAPTION>
Three Months Ended
-------------------
March 31, March 31,
1997 1996
--------- ---------
($ in thousands)
<S> <C> <C>
Commission income $ 102 $ 78
Other income 32 14
-------- ---------
$ 134 $ 92
======== =========
</TABLE>
The Company suspended the construction of homes and sale of homes and
homesites in 1994. Starting in January 1996, the Company began concentrating
on disposing in bulk of its undeveloped, platted, residential real estate in
order to decrease its debt obligations. The Company envisioned selling off
such property and retaining its undeveloped commercial real estate for future
development or bulk sales depending on the profitability. The Company has
not been successful in selling off its undeveloped residential real estate
and is constantly seeking new opportunities to sell this property and to
decrease its debt and stay in operation.
Effective January 1, 1990 the Company implemented the installment method
of homesite sales reporting in accordance with Statement of Financial
Accounting Standard No. 66 "Accounting for Sales of Real Estate" (see Item I
- - Note 2 - Recognition of Real Estate Sales). This method will be utilized
for all installment sales regardless of the down payment percentage. As a
result of the Secured Lender Transaction non-recourse sale of receivables,
all previously deferred profits were recognized during 1992.
Cash used in operating activities for the three months ended March 31,
1997 was $3,000 compared to $113,000 cash provided by operating activities
for the comparable
-12-
<PAGE> 13
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
1996 period. During the first three months of 1997, financing activities
provided $8,000 in cash flow with $67,000 in proceeds from borrowings. Net
cash used in financing activities was $59,000 for normal debt repayment as
compared to $148,000 for the same period in 1996.
Analysis of Financial Condition
Assets totaled $11.2 million at March 31, 1997 compared to $11.3 million
at December 31, 1996, reflecting the following changes:
<TABLE>
<CAPTION>
March 31, December 31, Increase
1997 1996 (Decrease)
--------- ------------ ----------
($ in thousands)
<S> <C> <C> <C>
Cash $ 1,157 $ 1,152 $ 5
Receivables 255 344 (89)
Land and improvement inventories 9,012 9,016 (4)
Net property and equipment 27 46 (19)
Other assets 755 759 (4)
---------- ---------- --------
$ 11,206 $ 11,317 $ (111)
========== ========== ========
</TABLE>
-13-
<PAGE> 14
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Liabilities were $34.5 million at March 31, 1997 compared to $33.8 million
at December 31, 1996, reflecting the following changes among categories.
<TABLE>
<CAPTION>
March 31, December 31, Increase
1997 1996 (Decrease)
--------- ------------ ----------
($ in thousands)
<S> <C> <C> <C>
Accounts payable $ 106 $ 78 $ 28
Other liabilities 1,456 1,428 28
Accrued interest 11,402 10,790 612
Credit agreements - primary lender 7,323 7,307 16
Notes and mortgages payable 3,659 3,667 (8)
Convertible subordinated
debentures payable 9,059 9,059 -
Convertible debentures payable 1,500 1,500 -
---------- ---------- -------
$ 34,505 $ 33,829 $ 676
========== ========== =======
</TABLE>
The Company has aggressively taken steps to curtail and simplify
operations as well as concentrate on major bulk sales of its undeveloped
acreage. The Company remains totally dependent upon the sale of property to
fund its operations and debt service requirements.
The Company remains in default of the entire principal plus interest on
its convertible subordinated debentures. The amounts due are as indicated in
the following table:
<TABLE>
<CAPTION>
March 31, 1997
----------------------
Principal Unpaid
Amount Due Interest
---------- ---------
($ in thousands)
<S> <C> <C>
Convertible subordinated debentures due June 1, 1991 $ 1,034 $ 486
Convertible subordinated debentures due May 1, 1992 8,025 3,975
---------- ---------
$ 9,059 $ 4,461
========== =========
</TABLE>
The Company does not have funds available to make any payments of either
principal or interest on the above debentures. The Company has investigated
the consequences of a bankruptcy filing and believes that such an event is
not in the best interest of either the debenture or equity holders because a
bankruptcy filing would negatively impact the Company's business.
-14-
<PAGE> 15
PGI INCORPORATED AND SUBSIDIARIES
PART II Other Information
Item 1 Legal Proceedings
Not applicable.
Item 2 Changes in Securities
Not applicable.
Item 3 Defaults Upon Senior Securities
See discussion in Item 2 with respect to defaults on the Company's
convertible subordinated debentures and collateralized convertible
debentures, which discussion is incorporated herein by this reference.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5 Other Information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits - reference is made to the Exhibit Index contained on page
18 herein for a list of exhibits filed under this Item.
(c) No report on Form 8-K was filed during the quarter ended March 31,
1997.
-15-
<PAGE> 16
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
---------------------------------
(Registrant)
Date: May 15, 1997 /s/Laurence A. Schiffer
--------------------------------- ---------------------------------
Laurence A. Schiffer
President
-16-
<PAGE> 17
PGI INCORPORATED AND SUBSIDIARIES
<TABLE>
<CAPTION>
EXHIBIT INDEX
- -------------
Sequential
Page Number
<S> <C>
2. Inapplicable.
3. Inapplicable.
4. Inapplicable.
10. Inapplicable.
11. Statements re: Computations of Per Share Earnings, filed
herewith................................................. 19
15. Inapplicable.
18. Inapplicable.
19. Inapplicable.
22. Inapplicable.
23. Inapplicable.
24. Inapplicable.
27. Financial Data Schedule.................................. 20
</TABLE>
-17-
<PAGE> 1
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
FACTS FOR COMPUTATION OF NET LOSS PER SHARE
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
1) Net loss for period $ ( 787,000) $ ( 660,000)
2) Average shares outstanding before assumed exercise of stock
options and conversion of preferred stock and debentures 3,317,555 3,317,555
============ ============
3) Average shares outstanding from assumed exercise of stock options:
Primary - -
============ ============
Fully diluted - -
============ ============
4) Average shares outstanding from assumed conversion of preferred stock 3,760,000 3,760,000
============ ============
5) Average shares outstanding from assumed conversion of debentures 1,341,076 1,341,076
============ ============
6) Cumulative preferred dividends in arrears $ 160,000 $ 160,000
============ ============
7) Interest and amortization charged against income for debentures during period $ 190,000 $ 190,000
============ ============
ADJUSTMENT OF NET LOSS:
- -----------------------
Primary
-------
Net loss for period (Line 1) $ ( 787,000) $ ( 660,000)
Less cumulative preferred dividends in arrears (Line 6) ( 160,000) ( 160,000)
------------ ------------
8) Adjusted net loss for primary net loss per share $ ( 947,000) $ ( 820,000)
============ ============
Fully Diluted
-------------
Adjusted net loss for primary net loss per share (Line 8) $ (947,000) $ (820,000)
Add cumulative preferred dividends in arrears on preferred
stock assumed converted (Line 6) 160,000 160,000
Add interest and amortization charged against income for
debentures during period (Line 7) 190,000 190,000
Tax effect on Line 7 -<FA> -<FA>
------------ ------------
9) Adjusted net loss for fully diluted net loss per share ($597,000) $(470,000)
========== ==========
ADJUSTMENT OF AVERAGE SHARES OUTSTANDING
- ----------------------------------------
Primary
- -------
Average shares outstanding (Line 2) 3,317,555 3,317,555
Average shares outstanding (Line 3) - -
------------ ------------
10) Shares assumed outstanding for primary net loss per share 3,317,555 3,317,555
============ ============
Fully Diluted
- -------------
Average shares outstanding (Line 2) 3,317,555 3,317,555
Average shares outstanding from assumed exercise of stock options (Line 3) - -
Average shares outstanding from assumed conversion of preferred stock (Line 4) 3,760,000 3,760,000
Average shares outstanding from assumed conversion of debentures (Line 5) 1,341,076 1,341,076
------------ ------------
11) Shares assumed outstanding for fully diluted net loss per share 8,418,631 8,418,631
============ ============
NET LOSS PER SHARE:
- -------------------
Before Adjustment
- -----------------
(Line 1 : Line 2) $ (.24) $ (.20)
======= =======
Primary
- -------
Net loss
(Line 8 : Line 10) $ (.29) $ (.25)
======= =======
Fully Diluted <FB>
- -------------
Net loss <FB> $ (.29) $ (.25)
======= =======
<FN>
- -----------------------------------------------------
<FA> No tax calculation has been made because of full utilization of all
available tax benefits for financial account purposes.
<FB> Fully diluted net loss per share is the same as primary net loss per
share due to anti-dilutive effect of assumed exercise of stock options and
conversion of preferred stock and debentures to common stock.
</TABLE>
-18-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,157,000
<SECURITIES> 0
<RECEIVABLES> 1,061,000
<ALLOWANCES> (806,000)
<INVENTORY> 9,012,000
<CURRENT-ASSETS> 0<F1>
<PP&E> 211,000
<DEPRECIATION> (184,000)
<TOTAL-ASSETS> 11,206,000
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 21,541,000
<COMMON> 332,000
0
2,000,000
<OTHER-SE> (25,631,000)
<TOTAL-LIABILITY-AND-EQUITY> 11,206,000
<SALES> 0
<TOTAL-REVENUES> 145,000
<CGS> 0
<TOTAL-COSTS> 2,000
<OTHER-EXPENSES> 276,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 654,000
<INCOME-PRETAX> (787,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (787,000)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> (.29)
<FN>
<F1>CURRENT ASSETS AND CURRENT LIABILITIES VALUES ARE ZERO BECAUSE OF AN
UNCLASSIFIED BALANCE SHEET.
</TABLE>
