<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1994
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
For the Quarter Ended: April 30, 1994 Commission File Number: 0-15994
-------------- -------
LDI CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 31-1179824
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1375 EAST NINTH STREET, CLEVELAND, OHIO 44114
- - ---------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (216) 687-0100
--------------
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 X NO
--- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
6,727,457 shares of Common Stock, $.01 par value,
as of May 31, 1994
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<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1994 AND 1993
(Dollars in Thousands, Except Per Share Data)
========================================================================================
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
REVENUES:
Leasing . . . . . . . . . . . . . . . . . . . $20,675 $34,102
Direct sales . . . . . . . . . . . . . . . . 24,049 21,644
Technical services . . . . . . . . . . . . . 3,923 4,757
Equity in earnings of 50% owned affiliate . . 207 55
Other . . . . . . . . . . . . . . . . . . . . 183 1,086
---------- ----------
Total . . . . . . . . . . . . . . . . . . 49,037 61,644
---------- ----------
COSTS AND EXPENSES:
Leasing . . . . . . . . . . . . . . . . . . . 10,943 19,443
Direct sales . . . . . . . . . . . . . . . . 20,577 18,787
Technical services . . . . . . . . . . . . . 2,264 3,040
Interest . . . . . . . . . . . . . . . . . . 7,419 9,057
Selling, general, and administrative . . . . 9,184 9,262
---------- ----------
Total . . . . . . . . . . . . . . . . . . 50,387 59,589
---------- ----------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES . . . . . . . . . . . . . (1,350) 2,055
Income Tax Expense (Benefit) . . . . . . . . . . . (513) 793
---------- ----------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS . . . . (837) 1,262
Loss From Discontinued Operations, Net of
Income Tax Benefit of $33 . . . . . . . . . . - (52)
---------- ----------
NET EARNINGS (LOSS) . . . . . . . . . . . . . . . . $(837) $1,210
========== ==========
EARNINGS (LOSS) PER PRIMARY SHARE:
Continuing operations . . . . . . . . . . . . $ (.12) $ .19
Discontinued operations . . . . . . . . . . . - (.01)
---------- ----------
Net earnings . . . . . . . . . . . . . . . . $ (.12) $ .18
========== ==========
Average Shares Outstanding (Primary) . . . . . . . 6,727 6,727
========== ==========
Cash Dividends Paid Per Share . . . . . . . . . . . - $ .04
========== ==========
<FN>
See the accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
LDI CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1994 (UNAUDITED) JANUARY 31, 1994
(Dollars in Thousands)
============================================================================================================
<CAPTION>
April 30, January 31,
1994 1994
----------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . $21,080 $ 8,972
Receivables--net of allowance for doubtful accounts 41,914 41,831
Inventory held for lease or sale . . . . . . . . . 25,654 18,336
Leased assets:
Sales-type and direct financing leases . . . 376,045 412,561
Operating leases--net of accumulated
depreciation of $25,360 at April 30, 1994 and
$23,412 at January 31, 1994 . . . . . . . . . 50,173 55,006
Land, buildings, equipment and furniture--net of
accumulated depreciation of $8,837 at April
30, 1994 and $8,521 at January 31, 1994 . . . 16,277 16,712
Net assets of discontinued operations . . . . . . . 11,842 20,868
Other assets . . . . . . . . . . . . . . . . . . . 19,717 18,741
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . $562,702 $593,027
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . $18,809 $ 28,793
Accrued liabilities . . . . . . . . . . . . . . . . 7,490 9,508
Notes payable . . . . . . . . . . . . . . . . . . . 142,214 148,175
Subordinated notes . . . . . . . . . . . . . . . . 10,000 10,000
Deferred income taxes . . . . . . . . . . . . . . . 15,429 15,941
Nonrecourse lease financing . . . . . . . . . . . . 289,173 296,794
Reserves and liabilities related to discontinued
operations and restructuring programs . . . . . . 4,256 7,456
Other liabilities . . . . . . . . . . . . . . . . . 6,052 6,276
----------- -----------
Total liabilities . . . . . . . . . . . . . . 493,423 522,943
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, par value of $.01--20,000,000 shares authorized;
6,828,984 shares issued . . . . . . . . . . . . . 68 68
Additional paid-in capital . . . . . . . . . . . . 44,954 44,922
Retained earnings . . . . . . . . . . . . . . . . . 25,517 26,354
Treasury shares at cost--101,527 shares . . . . . . (1,260) (1,260)
----------- -----------
Total shareholders' equity . . . . . . . . . 69,279 70,084
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . $ 562,702 $ 593,027
=========== ===========
<FN>
Note: The balance sheet at January 31, 1994 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
See the accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1994 AND 1993
(Dollars in Thousands)
======================================================================================================
<CAPTION>
1994 1993
--------- ----------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net earnings (loss) from continuing operations . . . . . $ (837) $ 1,262
Adjustments to reconcile net earnings to net cash flow from
operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 5,672 6,783
Deferred income taxes . . . . . . . . . . . . . . . . . (513) 773
Additions to sales-type and direct financing leases . . (14,742) (27,595)
Principal portion of lease rentals received . . . . . . 50,807 36,146
Purchases of inventory for resale . . . . . . . . . . . (27,894) (18,906)
Sales, transfers, and disposals of inventory and
equipment . . . . . . . . . . . . . . . . . . . . . . 43,312 56,895
Change in reserves related to restructuring programs . . (1,485)
Change in accounts receivable . . . . . . . . . . . . . 345 2,146
Change in accounts payable . . . . . . . . . . . . . . . (9,984) (10,868)
Change in accrued expenses and other liabilities . . . . (2,157) 350
Other . . . . . . . . . . . . . . . . . . . . . . . . . (1,008) (564)
--------- ----------
Cash provided by continuing operations . . . . . . . . . 41,516 46,422
--------- ----------
Discontinued operations:
Net loss from operations . . . . . . . . . . . . . . . . - (52)
Change in assets and liabilities (except reserves) of
discontinued operations . . . . . . . . . . . . . . . . 8,927 (893)
Change in reserves . . . . . . . . . . . . . . . . . . . . (1,715) -
--------- ----------
Cash provided by (used in) discontinued operations. . . 7,212 (945)
--------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . 48,728 45,477
--------- ----------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of equipment for lease . . . . . . . . . . . . (22,953) (41,090)
Purchases of land, building, equipment and furniture . . (570) (570)
Proceeds from sale of company, equipment and other
assets . . . . . . . . . . . . . . . . . . . . . . . . 100 -
--------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . (23,423) (41,660)
--------- ----------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Proceeds from nonrecourse lease financing . . . . . . . 32,925 15,398
Payments on nonrecourse lease financing . . . . . . . . (40,154) (45,607)
Change in revolving and line of credit facilities . . . . (961) 29,582
Payments on installment and term notes . . . . . . . . . (5,000) (2,000)
Cash dividends paid . . . . . . . . . . . . . . . . . . . - (269)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (634)
--------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . (13,197) (3,530)
--------- ----------
Increase in Cash and Cash Equivalents . . . . . . . . . . . . 12,108 287
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . . 8,972 4,482
--------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . $21,080 $ 4,769
========= ==========
<FN>
See the accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED APRIL 30, 1994 (UNAUDITED) AND
FOR THE YEAR ENDED JANUARY 31, 1994
(Dollars in Thousands, Except Share Data)
<CAPTION>
========================================================================================================================
Common
Additional stock in Total
Common paid-in Retained treasury shareholders'
stock capital earnings at cost equity
------ ---------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT FEBRUARY 1, 1993. . . . . $68 $44,884 $51,952 $(1,260) $95,644
Net loss . . . . . . . . . . . . . (24,522) (24,522)
Cash dividends - $.16 per
share . . . . . . . . . . . . . (1,076) (1,076)
Compensation expense
under stock award plan for
shares issued in a prior
year . . . . . . . . . . . . . . 38 38
--- ------- ------- ------- -------
BALANCE AT JANUARY 31, 1994. . . . . 68 44,922 26,354 (1,260) 70,084
Net loss . . . . . . . . . . . . . (837) (837)
Compensation expense
under stock award plan for
shares issued in a prior
year . . . . . . . . . . . . . . 32 32
--- ------- ------- ------- -------
BALANCE AT APRIL 30, 1994 . . . . . $68 $44,954 $25,517 $(1,260) $69,279
=== ======= ======= ======= =======
<FN>
See the accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> 6
LDI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in Thousands, Except Where Indicated)
===============================================================================
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended January 31, 1994.
2. Receivables
<TABLE>
<CAPTION>
April 30, January 31,
1994 1994
--------- ---------
<S> <C> <C>
Trade accounts . . . . . . . . . . . . $32,198 $34,441
Trade notes . . . . . . . . . . . . . . 15,753 13,537
Other . . . . . . . . . . . . . . . . . 63 153
Allowance for doubtful accounts . . . . (6,100) (6,300)
--------- ---------
Net Receivables . . . . . . . . . $41,914 $41,831
========= =========
3. Accrued and Other Liabilities
April 30, January 31,
1994 1994
--------- ---------
Accrued liabilities consist of:
Compensation . . . . . . . . . . . . . $2,199 $ 3,896
Interest . . . . . . . . . . . . . . . 1,384 1,594
Sales tax . . . . . . . . . . . . . . . 1,188 1,022
Other . . . . . . . . . . . . . . . . . 2,719 2,996
--------- ---------
Total . . . . . . . . . . . . . . $7,490 $9,508
========= =========
Other liabilities consist of:
Customer rental prepayments . . . . . . $3,715 $4,035
Deferred revenues . . . . . . . . . . . 2,219 2,084
Other . . . . . . . . . . . . . . . . . 118 157
--------- ---------
Total . . . . . . . . . . . . . . $6,052 $6,276
========= =========
</TABLE>
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<TABLE>
4. Notes Payable
Notes payable consist of the following:
<CAPTION>
April 30, January 31,
1994 1994
----------- ----------
<S> <C> <C>
Revolving and line of credit facilities $ 96,114 $ 97,075
Installment notes . . . . . . . . . . . 46,100 51,100
----------- ----------
Total . . . . . . . . . . . . . . $142,214 $148,175
=========== ==========
</TABLE>
As of April 30, 1994, the Company's revolving credit facilities consisted of
a $100 million revolving credit facility with a group of banks and $8.3 million
of additional revolving credit facilities maturing on April 30, 1995. At April
30, 1994, $106.3 million was outstanding on these facilities. The agreements
provided several borrowing options with varying interest rates depending on the
mix of borrowing options used. There are no compensating balances required by
the agreements. The Company pays fees ranging from 1/8 percent to 1/4 percent
annually to maintain the committed facilities.
Subsequent to April 30, 1994, $10.8 million of the borrowings under the line
of credit facilities was refinanced on a nonrecourse basis. Accordingly, the
refinanced amounts have been included in nonrecourse lease financing at April
30, 1994.
As of April 30, 1994, the Company had $35 million outstanding under a term
loan with a group of banks pursuant to a $50 million four year unsecured
amortizing term loan agreement. The agreement provides for a floating interest
rate based on LIBOR plus 1.125 percent.
Installment notes, other than the term loan, consist of fixed rate, fixed
term notes with interest rates ranging from 9.7 percent to 10.0 percent.
Pursuant to agreements with the lenders dated May 2, 1994, the $100 million
unsecured revolving bank credit facility and the unsecured amortizing term loan
are being combined into one secured reducing revolving credit facility of $116
million, maturing on April 30, 1995. The Company reduced the principal
outstanding under the prior facilities by $17 million in May 1994. The total
commitment under the new facility reduces periodically to $104 million during
the term of the facility. Borrowings under the revolving facility are based on
a ratio of defined assets to defined recourse debt of the Company.
The additional revolving credit facility of $8.3 million at May 2, 1994 was
also changed to a secured, amortizing term loan maturing on April 30, 1995.
Unsecured installment notes of $8.5 million were changed to secured notes with
modifications made to the principal repayment schedule to proportionately match
the principal amortization of the new secured, reducing revolving credit
facility. These notes also mature on April 30, 1995. The remaining $2.6
million of unsecured installment notes have been changed to secured notes and
mature, as originally scheduled, on August 31, 1994.
Prior to entering into these new agreements, the Company had obtained
waivers from the lenders for any potential loan covenant violations, such as
asset sales or financial ratio requirements that may have resulted from
implementation of the Company's strategic plan as discussed in Notes 7 and 8.
Under the terms of the new loan agreements, the Company is required to
maintain certain liquidity, leverage, and net worth ratios. The covenants also
prohibit the payment of cash dividends and place restrictions on the amount of
borrowing under the facility.
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<TABLE>
5. Nonrecourse Lease Financing
Nonrecourse lease financing consists of the following:
<CAPTION>
April 30, January 31,
1994 1994
----------- -----------
<S> <C> <C>
Nonrecourse discounted lease rentals:
Financial institutions . . . . . . . . . $169,682 $182,713
Commercial paper . . . . . . . . . . . . 119,491 114,081
----------- -----------
Total . . . . . . . . . . . . . . . . $289,173 $296,794
=========== ===========
</TABLE>
Nonrecourse discounted lease rentals consist of fixed rate capital obtained
from financial institutions on a nonrecourse basis. The lender has a security
interest in the lease rental stream and the underlying asset, but has no
recourse to the Company in the case of default by the lessee.
The Company has also established two asset-backed financing programs to fund
lease transactions on a nonrecourse basis through the use of commercial paper
securitized by lease rental receivables. Both programs are rated A-1 by
Standard & Poor's or P-1 by Moody's.
Under one of the programs, the Company sold lease receivables to a
wholly-owned subsidiary that issued commercial paper backed by an annually
renewing five year $60 million letter of credit. At April 30, 1994, $44.7
million of commercial paper was outstanding under this program. Effective May
1, 1994, one of the financial institutions which issued a $50 million letter of
credit under this program has not extended its 5-year letter of credit for new
leases to be financed. Leases funded previously will continue to amortize
under the terms of the existing agreement.
A second securitized program provides for the financing of up to $75
million of lease receivables to an unaffiliated special purpose corporation
which issues nonrecourse commercial paper. This program is backed by a $75
million surety bond. At April 30, 1994, $74.8 million of commercial paper was
outstanding under this program. On June 3, 1994, the Company executed a letter
agreement to increase this program to $125 million. Availability of the
increased program size is subject to review and completion of various documents
and credit reviews by the program providers.
6. Subordinated Notes
In 1991, the Company issued $10 million of 9.375 percent convertible
subordinated notes, with interest payable semiannually, maturing in August
2000. Prior to May 1994, the notes were convertible into shares of the
Company's common stock. The notes require annual repayments of $2.5 million
beginning in August 1997. The notes are callable by the Company at a premium
of 109 3/8 beginning in August 1994, with the premium declining ratably to par
in August 1999.
In conjunction with the initial transaction, the Company issued 45,496
warrants. Each warrant is exercisable by the holder for five years into one
share of the Company's common stock. The exercise price is subject to
adjustment for stock dividends, splits and certain other issuances of common
stock.
On May 2, 1994, the notes were amended to eliminate the conversion feature,
to adjust the exercise price of the outstanding warrants to $6.35 per share,
and to issue 1,529,307 additional warrants with the same exercise price, terms,
and expiration date as the previously-issued warrants.
In exchange, the holder of the notes agreed to permit the Company to grant
security interests to its recourse lenders. Additionally, the Company and the
holder of the notes agreed to modify certain other terms and conditions of the
notes.
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<PAGE> 9
7. Restructuring Charges
During the year ended January 31, 1994, the Board of Directors determined
the need to commence a strategic realignment of operations of the Company and
to discontinue certain business segments. The strategic plan includes the
sales or other divestiture of certain product lines and non-strategic
businesses, the closing of facilities, and other measures to improve the
Company's overall profitability. The estimated cost of implementing the plan
is $6.6 million, recorded in the Company's fourth quarter.
The estimated costs included $4.3 million attributable to disposing of
certain product lines and businesses, $1.7 million to employee severance and
terminations and $0.6 million to close facilities. Reserves and liabilities of
$3.6 million relating to these items were reported in the balance sheet as of
January 31, 1994.
During the quarter ended April 30, 1994, the Company sold certain assets of
its retail services unit and continued the phasing-out of operations of its
retail distribution unit. Losses of $0.7 million incurred during the quarter
ended April 30, 1994 were charged to reserves for restructured operations. As
of May 31, 1994, the Company sold LDI Computer Systems Inc., which sells
microcomputers and related equipment to commercial accounts.
8. Discontinued Operations
During the year ended January 31, 1994, management of the Company initiated
a comprehensive plan to exit the retail computer superstores, retail PC outlet
stores, catalog distribution, and software distribution business segments.
Also, the Board of Directors approved the retention of corporate advisors to
assist management in the planning and divestiture process that is expected to
be completed during the first and second quarters of 1994.
As a result of these actions and subsequent implementation of the plan, the
Company recorded for its fourth quarter a pretax charge of $11.7 million
(after-tax $7.1 million), consisting of $10.8 million for estimated losses
during the phase-out period and $0.9 million for employee severance and
termination costs. Reserves and liabilities of $3.9 million relating to these
items were reported in the balance sheet at January 31, 1994.
Assets of the discontinued operations, consisting primarily of inventory and
accounts receivable at April 30, 1994, are reported on the balance sheets as
net assets of discontinued operations. The consolidated financial statements
disclose the operating results of discontinued operations separately from
continuing operations. Prior period's financial statements have been restated.
During the quarter ended April 30, 1994, the Company continued the
phasing-out of operations of its retail computer superstores, retail PC outlet
stores,catalog distribution and software distribution business segments.
Losses relating to these segments of $1.7 million incurred during the quarter
were charged to reserves for discontinued operations. The Company expects to
complete the liquidation of the retail computer superstores in June 1994. All
retail PC outlet stores were closed in April 1994. The software distribution
segment was sold in March 1994. The catalog distribution segment was sold in
May 1994.
<TABLE>
9. Supplemental Disclosures of Cash Flow Information
<CAPTION>
FOR THE THREE MONTHS ENDED
APRIL 30,
1994 1993
-------- --------
<S> <C> <C>
Cash paid for:
Interest . . . . . . . . . . . . . . . $7,629 $9,298
Income taxes . . . . . . . . . . . . . NONE NONE
</TABLE>
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<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LDI CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Three Months Ended April 30, 1994
===============================================================================
LIQUIDITY AND CAPITAL RESOURCES
Financial Policies
- - ------------------
Through April 1994, the Company used a combination of unsecured revolving
bank credit, unsecured lines of credit and internally generated cash flow to
finance, on an interim basis, the acquisition of equipment for lease or sale.
As a result of the strategic actions of the Company, the unsecured revolving
bank credit and unsecured lines of credit have been changed to secured
facilities.
The Company generally finances the present value of the future lease rentals
by the assignment of such rentals to banks, insurance companies, or other
lenders on a discounted, nonrecourse basis. In this manner, substantial
portion of the equipment cost is financed on a long-term basis and the Company
limits its risk, if any, to its equity investment in the equipment.
Liquidity
- - ---------
Liquidity is provided primarily by cash generated from continuing operating
activities, which amounted to $42 million and $46 million for the three months
ended April 30, 1994 and 1993, respectively. Cash flow from continuing
operating activities for the three months ended April 30, 1994 decreased by $4
million from the prior year's first quarter due primarily to the net loss from
continuing operations. Cash flow used in investing activities decreased by $19
million due primarily to lower purchases of equipment for lease. Cash flow
used in financing activities increased by $9 million due primarily to a
decrease in revolving and line of credit facilities in the current year's
quarter compared with a substantial increase in the prior year's quarter, and
increased cash provided by nonrecourse lease financings.
Capital Resources
- - -----------------
As of April 30, 1994, the Company's revolving and line of credit facilities
consisted of a $100 million revolving credit facility with a group of banks and
$8.3 million of additional revolving credit facilities. The Company also had
unsecured installment notes of $11.1 million with a group of insurance
companies which mature in 1997 and $35.0 million with banks which mature in
1996.
The revolving credit agreements provided several borrowing options with
varying interest rates depending on the mix of borrowing options used. At
April 30, 1994, $106.3 million was outstanding on these facilities.
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<PAGE> 11
The Company has established nonrecourse securitized lease financing
facilities, consisting of commercial paper and notes, with $135 million of
available funding capacity. As of April 30, 1994, $119.5 million of this
amount was utilized. Effective May 1, 1994, one of the financial institutions
which issued a $50 million letter of credit for one of the asset-backed
financing programs has not extended its letter of credit for new leases,
reducing the total available funding capacity to $120 million. Leases funded
previously will continue to amortize under the terms of the existing agreement.
On June 3, 1994, the Company executed a letter agreement to increase one of
the programs from $75 million to $125 million. Availability of the increased
program size is subject to review and completion of various documents and
credit reviews by the program providers.
The Company is actively seeking replacement letters of credit as well as
discussing the extension of the letter of credit with the existing provider.
The Company has multiple sources of nonrecourse financing and does not expect
this action to have a material adverse effect on its ability to finance new
lease activity.
On May 2, 1994, the lenders issued commitments to combine the $100 million
unsecured revolving bank credit facility and the unsecured amortizing term loan
agreement into one $116 million secured reducing revolving credit
facility maturing on April 30, 1995. The Company reduced the principal
outstanding under the prior facilities by $17 million in May 1994. The
Company's ability to borrow additional amounts under the revolving facility is
based on a ratio of defined assets to defined recourse debt of the Company.
The additional revolving credit facility of $8.3 million at May 2, 1994 was
also changed to a secured, amortizing term loan maturing on April 30, 1995.
Unsecured installment notes of $8.5 million were changed to secured notes with
modifications made to the principal repayment schedule to proportionately match
the principal amortization of the new secured, reducing revolving credit
facility. These notes also mature on April 30, 1995. The remaining $2.6
million of unsecured installment notes have been changed to secured notes and
mature on August 31, 1994.
At April 30, 1994, the Company had $441 million of total interest-bearing
obligations, including $254 million of floating rate financings. Of the total
floating rate financings, only $86 million was subject to interest rate
fluctuations, with $152 million of floating-rate financing being converted to
fixed-rate financing through interest rate swap agreements and $16 million of
floating-rate financings subject to interest rate ceilings through interest
rate cap agreements.
Effect On Liquidity Of Strategic Plan
- - -------------------------------------
Under the strategic restructuring plan, liquidity will be provided by (1)
cash generated from operating activities; (2) cash realized from the sale or
liquidation of discontinued and non-strategic businesses; (3) cash realized
from the sale of certain core business assets that are considered non-strategic
by management; (4) cash proceeds from the financing of the present value of
future lease rentals and (5) potential availability under the new revolving
credit facility.
LDI's management believes that the Company will be able to generate
sufficient liquidity to meet principal amortization and the operating
requirements of the core business from the sources detailed above.
Other
- - -----
Net assets of discontinued operations decreased from January 31, 1994 to
April 30, 1994 due primarily to sales of inventory and collection of accounts
receivable of the retail computer superstores operation and the PC brokerage
and outlet business.
Inventories increased from January 31, 1994 to April 30, 1994 by
approximately $7.3 million primarily due to $3.8 million of additional
equipment purchased under lease agreements and the purchase of a mainframe
for $3.4 million, currently on hold for a pending sale.
The Company does not have any material commitments for capital expenditures.
The Company believes that inflation has not been a significant factor in its
business.
Page 11
<PAGE> 12
LDI CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
Three Months Ended April 30, 1994 as
Compared to the Three Months Ended April 30, 1993
===============================================================================
<TABLE>
LEASING:
A summary of the operating results from leasing for the three months ended
April 30, 1994 and 1993 is as follows:
<CAPTION>
(In Thousands) 1994 1993
- - ----------------------------------------------------------------
<S> <C> <C>
Leasing Revenues $20,675 $34,102
Cost of Leasing 10,943 19,443
Gross Leasing Margin 9,732 14,659
Percent of Revenue 47.1% 43.0%
</TABLE>
For the three months ended April 30, 1994, leasing revenues declined by 39%
from the comparable period in the prior year. During the quarter ended April
30, 1994, the Company experienced a decrease in the number of lease
transactions in comparison with the first quarter of 1993. The average lease
transaction also decreased in size (dollars). This reflected the ongoing trend
in customer demand away from large mainframe computer leases and toward
mid-range and smaller computer systems.
A change in the mix of leases recorded in the first quarter of 1994 versus the
first quarter of 1993 also occurred. The number of direct financing leases,
which spread revenue recognition evenly over the term of the lease, increased
by over 400%, while the number of sales-type leases, which recognize a
substantial portion of total lease revenue at lease commencement, declined by
53%.
The decline in leasing revenues and transactions was also impacted by the
disruption faced by the Company and its employees during the quarter ended
April 30, 1994 while the strategic plan was being implemented.
Gross leasing margin (in dollars) decreased by 34% from the prior year's
quarter due primarily to the lower lease volume. Lower finance income and
additional writedowns of off-lease equipment also contributed to the margin
decline. However, the margin as a percent of revenue improved, primarily as a
result of the change in mix of the revenue components, as finance income
constituted a larger portion of total revenues for the quarter ended April 30,
1994 compared with the corresponding quarter in the prior year.
<TABLE>
DIRECT SALES:
A summary of the operating results from direct sales for the three months
ended April 30, 1994 and 1993 is as follows:
<CAPTION>
(In Thousands) 1994 1993
- - ----------------------------------------------------------------
<S> <C> <C>
Direct Sales $24,049 $21,644
Cost of Direct Sales 20,577 18,787
Gross Sales Margin 3,472 2,857
Percent of Sales 14.4% 13.2%
</TABLE>
For the three months ended April 30, 1994, direct sales increased by 11% in
comparison with the first quarter of 1993. The increase was attributed
primarily to additional sales of PC's and related equipment of $3.0 million by
LDI Computer Systems Inc., one of the units in the restructuring program.
Additional sales of off-lease computer equipment to dealers and end-users in
the core business also contributed to the increase, while a substantial decline
in sales attributable to a restructured unit being phased out partially offset
the total increase.
Page 12
<PAGE> 13
Gross sales margin (in dollars) improved by 22%, due principally to the higher
sales volume and an increase in profitability as a percent of sales. The
margin improvement resulted from sales of computer equipment to dealers and
end-users and from sales of microcomputers and related accessories sold to
commercial accounts attributable to LDI Computer Systems Inc.
TECHNICAL SERVICES:
A summary of the operating results from technical services for the three
months ended April 30, 1994 and 1993 is as follows:
(In Thousands) 1994 1993
- - ---------------------------------------------------------
Services Revenues $3,923 $4,757
Cost of Services 2,264 3,040
Gross Margin 1,659 1,717
Percent of Revenues 42.3% 36.1%
For the three months ended April 30, 1994, technical services revenues
decreased by 18% from the prior year's first quarter. This was due primarily
to a decline of $944,000 in disaster recovery services as a result of an
agreement, effective May 1, 1993, to form a strategic marketing relationship
with SunGard Recovery Services Inc. Through this alliance, the Company is one
of SunGard's agents, marketing business recovery services on a nationwide basis
and receives a fee for service contracts consummated. The Company's base of
business recovery customers and two "hot site" recovery centers were merged
into SunGard's operations and are operated by SunGard as part of the agreement.
Gross margin (in dollars) declined by 3%, reflecting the decrease in revenues.
This was partially offset by improved profitability as a percent of sales due
to the absence, beginning in the second quarter of 1993, of disaster recovery
operations, which bore higher direct costs per revenue dollar.
INTEREST EXPENSE:
For the three months ended April 30, 1994, interest expense decreased by 18%
from the prior year's quarter due to lower interest rates and a reduction in
the average amount of debt outstanding.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
For the three months ended April 30, 1994, selling, general and
administrative expenses declined by 1% from the comparable quarter in the prior
year. The Company's management expects that the cost benefits of the
restructuring program will be more fully realized in the second and third
quarters of 1994.
STRATEGIC BUSINESS PLAN:
During the year ended January 31, 1994, the Company initiated a strategic
business plan that includes the sale or other divestiture of certain product
lines and non-core businesses, the closing of facilities, and other cost
reduction measures to improve the Company's profitability.
The Board of Directors approved the retention of corporate advisors to assist
management in the divestiture of non-strategic businesses. The Company expects
to complete these divestitures by the end of the third quarter of 1994.
Prior to implementing the plan, the Company engaged in the distribution of
personal computers and related peripherals through direct sales to corporate
customers and retail sales through its computer superstores and computer outlet
stores.
Page 13
<PAGE> 14
During 1992 and 1993, the two dominant factors in the PC marketplace were
intense price competition among manufacturers and the rapid move to Intel 486
and similar processor technology. Overall price levels in the PC market
declined, while gross margin percentages remained relatively constant. The
decrease in margins in absolute dollars put intense pressure on regional-based
distributors such as LDI to maintain sales volume and profitability levels.
The continued price erosion coupled with new entrants in the retail PC business
led the Company to decide that the financial returns in these marketplaces
would not be acceptable.
As a complement to its end user marketing, the Company also engaged in the
direct catalog marketing of telecommunications equipment, components and
accessories related to data communications. It also offered to small and
medium-size specialty retailers turnkey PC-based point-of-sale installations
with complete engineering, software system design and technical support
services.
The direct catalog marketing and PC-based point-of-sale businesses have also
been affected by the changes in the PC marketplace during the past two years.
In addition, the limited size and market share of these operations influenced
management's decision to exit these businesses.
The businesses the Company has identified as discontinued or non-strategic can
generally be characterized as transactional in nature, commodity oriented and
not conducive to building long-term customer relationships. These attributes
have translated into low-margin, low-return businesses which do not match the
Company's new strategy of focusing on a core business, emphasizing exceptional
customer service, building long-term relationships with customers and providing
value-added services. These core business attributes, in conjunction with the
proposed facilities closing and other cost saving measures, are expected to
result in higher margins and financial returns after the strategic plan is
completely implemented.
RESTRUCTURING CHARGES:
Under the strategic plan, businesses subject to sale or other divestiture
(other than those included in Discontinued Operations) included (1) LDI Retail
Services, which provides hardware, software, and system integration for retail
chain stores; (2) LDI Computer Systems Inc., which sells microcomputers and
related equipment to commercial accounts; (3) SeaTech Communications, a
ship-to-shore satellite telecommunications venture; and (4) LDI Canada, Ltd., a
leasing subsidiary based in Toronto, Canada.
The estimated cost of implementing the plan is $6.6 million, which was recorded
in the Company's fourth quarter ($4.3 million after-tax, or $.62 per share).
The estimated cost included $4.3 million attributable to disposing of the
previously named businesses, $1.7 million for employee severance and
terminations and $0.6 million for closing facilities.
During the quarter ended April 30, 1994, the Company sold certain assets of its
retail services unit and continued the phasing-out of operations of its retail
distribution unit. Losses of $0.7 million incurred during the quarter ended
April 30, 1994 were charged to reserves for restructured operations. As of May
31, 1994, the Company sold LDI Computer Systems Inc.
INCOME TAXES:
The effective income tax benefit rate for continuing operations decreased to
38.0% for the three months ended April 30, 1994 compared to a tax expense rate
of 38.6% for the prior period, reflecting a slight decrease in the Company's
estimate of the annual effective tax rate for the year ending January 31, 1995.
Page 14
<PAGE> 15
DISCONTINUED OPERATIONS:
Under the restructuring plan, discontinued segments include (1) LDI Computer
Superstores, the retail PC superstores; (2) LDI Computer Outlets, the retail PC
outlet stores; (3) MST Distribution Supply, a catalog distribution business
selling PC peripheral equipment and modems; and (4) LDI Open Software, a
software distributor company selling UNIX-based systems.
As a result of discontinuing these businesses, the Company recorded for its
fourth quarter a charge of $11.7 million ($7.1 million after-tax), consisting
of $10.8 million for estimated losses during the phase-out period and $0.9
million for employee severance and termination costs.
During the quarter ended April 30, 1994, the Company continued the phasing-out
of operations of its retail computer superstores, retail PC outlet stores,
catalog distribution and software distribution business segments. Losses
relating to these segments of $1.7 million incurred during the quarter were
charged to reserves for discontinued operations. The Company expects to
complete the liquidation of the retail computer superstores in June 1994. All
retail PC outlet stores were closed in April 1994. The software distribution
segment was sold in March 1994. The catalog distribution segment was sold in
May 1994.
NET EARNINGS AND EARNINGS PER SHARE
Changes in net earnings resulted primarily from the factors discussed
previously. Primary earnings per share have been computed based on the
weighted average number of shares of common stock outstanding during each
period. For the three months ended April 30, 1993, fully diluted earnings per
share were computed on the basis of the weighted average number of common
shares outstanding and the dilutive effect of the assumed conversion of the
convertible notes, with related interest expense adjusted accordingly, and the
assumed exercise of stock options and warrants. For the three months ended
April 30, 1994, fully diluted earnings per share are not shown since the effect
would be anti-dilutive.
Common shares used for computing earnings per share are as follows:
Three Months Ended
April 30, April 30,
(In thousands) 1994 1993
- - ------------------------------------------------------------
Primary 6,727 6,727
Fully diluted - 7,383
Page 15
<PAGE> 16
<TABLE>
LDI CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Amounts in Thousands, Except Per Share Data)
<CAPTION>
THREE MONTHS ENDED
APRIL 30
1994 1993
----------- -----------
<S> <C> <C>
Average Shares Outstanding
--------------------------
1. Average common shares outstanding 6,727 6,727
2. Net additional shares outstanding assuming stock
options exercised and proceeds used to purchase
treasury stock (A) -
3. Dilutive shares contingently issuable upon conversion
of debentures (See Note 6 of the Notes to Consolidated
Financial Statements) (A) 656
4. Adjusted average common shares outstanding for
fully diluted computation 6,727 7,383
Net Earnings
------------
5. Net earnings (loss) as reported in statements of
consolidated earnings $(837) $1,210
6. Decrease in interest expense and amortization of
debt issuance costs relating to the subordinated
debentures, net of income tax benefit - 148
7. Adjusted net earnings (loss) $(837) $1,358
Earnings Per Share
------------------
8. Net earnings (loss) per average common share
outstanding $ (.12) $ .18
9. Net earnings per common share on a fully diluted basis (A) $ .18
<FN>
(A) Antidilutive
</TABLE>
Page 16
<PAGE> 17
SIGNATURE
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.
LDI CORPORATION
Date: June 14, 1994 By: /s/ Frank G. Skedel
----------------------
Frank G. Skedel, Executive
Vice President
Chief Financial Officer and
Treasurer
Page 17
<PAGE> 18
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following exhibits required by Item 601 of Regulation S-K
are furnished herewith:
Exhibit No. Description of Exhibits
------------- -----------------------
3.01 Restated Certificate of Incorporation
3.02 By-laws, as amended
4.01 Specimen Stock Certificate
4.02 Note Purchase Agreement dated August 31, 1988,
among the Registrant, Northwestern National Life
Insurance Company and the other parties listed in
Appendix I thereto
4.03 Amendment dated as of January 31, 1992, to the
Note Purchase Agreement dated August 31, 1988,
among the Registrant, Northwestern National Life
Insurance Company and the other parties listed in
Appendix I thereto
4.04 Note Purchase Agreement dated as of August 1,
1989, among the Registrant, Northwestern
National Life Insurance Company and the other
parties listed in Appendix I thereto
4.05 Amendment dated as of January 31, 1992, to the
Note Purchase Agreement dated August 31, 1989,
among the Registrant, Northwestern National Life
Insurance Company and the other parties listed in
Appendix I thereto
4.06 Form of Indemnification Agreement
4.07 Stockholders' Agreement dated May 22, 1987, among
the Registrant, Robert S. Kendall, Michael R.
Kennedy, Thomas A. Cutter, Ronald M. Lipson, Jay J.
Ross, Primus Capital Fund and National City
Venture Corporation, as amended
4.08 Amended and Restated Credit Agreement dated as of
November 16, 1990, between LDI Lease Funding
Corporation and the Dai-Ichi Kangyo Bank Ltd.,
Chicago Branch, and Specimen Nonrecourse
Promissory Note of LDI Lease Funding Corporation
4.09 First Amendment dated August 1, 1991, to Amended
and Restated Credit Agreement dated November 16,
1990, between LDI Lease Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd., Chicago Branch
<PAGE> 19
Exhibit No. Description of Exhibits
------------- -----------------------
4.10 Second Amendment dated November 15, 1991, to
Amended and Restated Credit Agreement dated
November 16, 1990, between LDI Lease Funding
Corporation and the Dai-Ichi Kangyo Bank Ltd.,
Chicago Branch
4.11 Third Amendment dated January 15, 1992, to Amended
and Restated Credit Agreement dated November 16,
1990, between LDI Lease Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd., Chicago Branch
4.12 Fourth Amendment dated April 29, 1992, to Amended
and Restated Credit Agreement dated November 16,
1990, between LDI Lease Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd., Chicago Branch
4.13 Fifth Amendment dated October 1, 1992, to Amended
and Restated Credit Agreement dated November 16,
1990, between LDI Lease Funding Corporation and the
Dai-Ichi Kangyo Bank Limited, Chicago Branch
4.14 Sixth Amendment dated July 15, 1993, to Amended
and Restated Credit Agreement dated November 16,
1990, between LDI Lease Funding Corporation and the
Dai-Ichi Kangyo Bank Limited, Chicago Branch
4.15 Seventh Amendment dated October 1, 1993, to
Amended and Restated Credit Agreement dated
November 16, 1990, between LDI Lease Funding
Corporation and the Dai-Ichi Kangyo Bank Limited,
Chicago Branch
4.16 Amended and Restated Lease Receivables Transfer
Agreement dated February 15, 1994, among the
Registrant, CXC Incorporated and Citicorp North
America, Inc.
4.17 Amended and Restated Credit Agreement dated as of
December 14, 1992, among the Registrant; National
City Bank; Society National Bank (successor by
merger to Ameritrust Company National Association);
Comerica Bank (successor by merger between
Manufacturers Bank, N.A., formerly known as
Manufacturers National Bank of Detroit); Michigan
National Bank, The Daiwa Bank, Limited; The
Fifth Third Bank; Star Bank, N.A.; First National
Bank of Ohio; and The Bank of Tokyo Trust Company
4.18 Open-end Mortgage and Security Agreement dated
January 31, 1991, between LDI Realty Corp., as
Trustee under LDI Realty Trust, and Metropolitan
Life Insurance Company
4.19 Note Secured by Mortgage dated January 31, 1991,
between LDI Realty Corp., as Trustee under LDI
Realty Trust, and Metropolitan Life Insurance
Company
<PAGE> 20
Exhibit No. Description of Exhibits
------------- -----------------------
4.20 Note Purchase Agreement dated as of July 2, 1991,
between Registrant and Olympus Private Placement
Fund, L.P.
4.21 Amended and Restated Promissory Note of the
Registrant dated as of July 1, 1993, in favor of
National Westminster Bank USA
4.22 Credit Agreement dated as of August 3, 1992, among
Registrant, as the Borrower, certain Commercial
Lending Institutions, as the Lenders, and
Continental Bank N.A., as Agent
4.23 Commitment letter dated April 28, 1994 in favor of
Registrant and National City Bank, Society National
Bank and Continental Bank N.A., as Co-Agents
4.24 Credit Agreement dated as of May 2, 1994 among
Registrant, certain Commercial Lending Institutions,
and National City Bank, Society National Bank and
Continental Bank N.A., as Co-Agents
4.25 Security Agreement dated as of May 2, 1994 by
Registrant in favor of Continental Bank N.A., as
Collateral Agent
4.26 Amendment dated April 29, 1994 to Amended and
Restated Promissory Note of Registrant dated as
of July 1, 1993 in favor of National Westminster
Bank USA
4.27 Amendment dated April 29, 1994 to Note Purchase
Agreement dated as of July 2, 1991, between
Registrant and Olympus Private Placement Fund, L.P.
4.28 Amendment dated May 2, 1994 to Note Purchase
Agreement dated August 31, 1989, among Registrant,
Northwestern National Life Insurance Company and
the other parties listed in Appendix I thereto
11.01 Computation of Earnings Per Share for the period
ended April 30, 1994
<PAGE> 21
Sequential Page No.
or Incorporation by
Exhibit No. Description of Exhibits Reference *
------------- ----------------------- -------------------
3.01 Restated Certificate of
Incorporation (1)
3.02 By-laws, as amended (7)
4.01 Specimen Stock Certificate (1)
4.02 Note Purchase Agreement dated (2)
August 31, 1988, among the
Registrant, Northwestern
National Life Insurance Company
and the other parties listed in
Appendix I thereto
4.03 Amendment dated as of January (8)
31, 1992, to the Note Purchase
Agreement dated August 31, 1988,
among the Registrant,
Northwestern National Life
Insurance Company and the other
parties listed in Appendix I
thereto
4.04 Note Purchase Agreement dated as (3)
of August 1, 1989, among the
Registrant, Northwestern National
Life Insurance Company and the
other parties listed in Appendix
I thereto
4.05 Amendment dated as of January (8)
31, 1992, to the Note Purchase
Agreement dated August 31, 1989,
among the Registrant,
Northwestern National Life
Insurance Company and the other
parties listed in Appendix I
thereto
4.06 Form of Indemnification Agreement (1)
4.07 Stockholders' Agreement dated May (5)
22, 1987, among the Registrant,
Robert S. Kendall, Michael R.
Kennedy, Thomas A. Cutter, Ronald
M. Lipson, Jay J. Ross, Primus
Capital Fund and National City
Venture Corporation, as amended
4.08 Amended and Restated Credit (7)
Agreement dated as of November
16, 1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd.,
Chicago Branch, and Specimen
Nonrecourse Promissory Note
of LDI Lease Funding
Corporation
4.09 First Amendment dated August (7)
1, 1991, to Amended and Restated
Credit Agreement dated November
16, 1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd.,
Chicago Branch
<PAGE> 22
Sequential Page No.
or Incorporation by
Exhibit No. Description of Exhibits Reference *
------------- ----------------------- -------------------
4.10 Second Amendment dated
November 15, 1991, to
Amended and Restated Credit (7)
Agreement dated November 16,
1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Ltd.,
Chicago Branch
4.11 Third Amendment dated January (7)
15, 1992, to Amended and
Restated Credit Agreement
dated November 16, 1990,
between LDI Lease Funding
Corporation and the Dai-Ichi
Kangyo Bank Ltd., Chicago
Branch
4.12 Fourth Amendment dated April (8)
29, 1992, to Amended and
Restated Credit Agreement
dated November 16, 1990,
between LDI Lease Funding
Corporation and the Dai-Ichi
Kangyo Bank Ltd., Chicago
Branch
4.13 Fifth Amendment dated October (9)
1, 1992, to Amended and Restated
Credit Agreement dated November
16, 1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Limited,
Chicago Branch
4.14 Sixth Amendment dated July 15, (11)
1993, to Amended and Restated
Credit Agreement dated November
16, 1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Limited,
Chicago Branch
4.15 Seventh Amendment dated October (12)
1, 1993, to Amended and Restated
Credit Agreement dated November
16, 1990, between LDI Lease
Funding Corporation and the
Dai-Ichi Kangyo Bank Limited,
Chicago Branch
4.16 Amended and Restated Lease (4)
Receivables Transfer Agreement
dated February 15, 1994, among
the Registrant, CXC Incorporated
and Citicorp North America, Inc.
<PAGE> 23
Sequential Page No.
or Incorporation by
Exhibit No. Description of Exhibits Reference *
------------- ----------------------- -------------------
4.17 Amended and Restated Credit (10)
Agreement dated as of December
14, 1992, among the Registrant;
National City Bank; Society
National Bank (successor by
merger to Ameritrust Company
National Association); Comerica
Bank (successor by merger between
Manufacturers Bank, N.A.,
formerly known as Manufacturers
National Bank of Detroit);
Michigan National Bank, The
Daiwa Bank, Limited; The Fifth
Third Bank; Star Bank, N.A.;
First National Bank of Ohio;
and The Bank of Tokyo Trust
Company
4.18 Open-end Mortgage and Security (5)
Agreement dated January 31, 1991,
between LDI Realty Corp., as
Trustee under LDI Realty Trust,
and Metropolitan Life Insurance
Company
4.19 Note Secured by Mortgage dated (5)
January 31, 1991, between LDI
Realty Corp., as Trustee under
LDI Realty Trust, and Metropolitan
Life Insurance Company
4.20 Note Purchase Agreement dated as (6)
of July 2, 1991, between Registrant
and Olympus Private Placement Fund,
L.P.
4.21 Amended and Restated Promissory (12)
Note of the Registrant dated as
of July 1, 1993, in favor of
National Westminster Bank USA
4.22 Credit Agreement dated as of (7)
August 3, 1992, among Registrant,
as the Borrower, certain
Commercial Lending Institutions,
as the Lenders, and Continental
Bank N.A., as Agent
4.23 Commitment letter dated April 28, (13)
1994 in favor of Registrant and
National City Bank, Society
National Bank and Continental Bank
N.A., as Co-Agents
4.24 Credit Agreement dated as of May (13)
2, 1994 among Registrant, certain
Commercial Lending Institutions,
and National City Bank, Society
National Bank and Continental
Bank N.A., as Co-Agents
4.25 Security Agreement dated as of (13)
May 2, 1994 by Registrant in
favor of Continental Bank N.A.,
as Collateral Agent
4.26 Amendment dated April 29, 1994 (13)
to Amended and Restated
Promissory Note of Registrant
dated as of July 1, 1993 in
favor of National Westminster
Bank USA
4.27 Amendment dated April 29, 1994 (13)
to Note Purchase Agreement
dated as of July 2, 1991,
between Registrant and Olympus
Private Placement Fund, L.P.
4.28 Amendment dated May 2, 1994 (13)
to Note Purchase Agreement
dated August 31, 1989, among
Registrant, Northwestern
National Life Insurance
Company and the other
parties listed in Appendix
I thereto
11.01 Computation of Earnings Per Share for
the period ended April 30, 1994
-----------
*Page references are to the one sequentially paginated Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission
pursuant to SEC Rule 0-3(b) and (c). No other Quarterly Reports on
Form 10-Q are paginated.
(1) Included as an exhibit to the Registrant's Registration
Statement on Form S-1 (No. 33-14486) and incorporated herein
by reference.
<PAGE> 24
(2) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended October 31, 1988, and
incorporated herein by reference.
(3) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended October 31, 1989, and
incorporated herein by reference.
(4) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended October 31, 1990, and
incorporated herein by reference.
(5) Included as an exhibit to the Registrant's Annual Report on Form 10-K
(No. 0-15994) for the year ended January 31, 1991, and incorporated
herein by reference.
(6) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended July 31, 1991, and
incorporated herein by reference.
(7) Included as an exhibit to the Registrant's Annual Report on from 10-K
(No. 0-15994) for the year ended January 31, 1992, and incorporated
herein by reference.
(8) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended April 30, 1992, and
incorporated herein by reference.
(9) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended October 31, 1992, and
incorporated herein by reference.
(10) Included as an exhibit to the Registrant's Annual Report on Form 10-K
(No. 0-15994) for the year ended January 31, 1993, and incorporated
herein by reference.
(11) Included as an exhibit to the Registrant's Annual Report on Form 10-Q
(No. 0-15994) for the year ended April 30, 1993, and incorporated
herein by reference.
(12) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q (No. 0-15994) for the quarter ended October 31, 1993, and
incorporated herein by reference.
(13) Included as an exhibit to the Registrant's Annual Report on Form 10-K
(No. 0-15994) for the year ended January 31, 1994, and incorporated
herein by reference.
