<PAGE>
UNITED STATES UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996 or
---------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission file number 0-19239
-----------
LAW COMPANIES GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-0537111
- --------------------------------- ------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
114 TownPark Drive, Kennesaw, Georgia 30144
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 590-4600
----------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
----- -----
The number of shares of Common Stock of the Company, par value $1.00 per share,
outstanding at July 31, 1996 was 1,913,095.
<PAGE>
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
as of June 30, 1996 and December 31, 1995...................... 1
Condensed Consolidated Statements of Income
for the Quarters Ended June 30, 1996 and June 30, 1995
and Six Month Periods Ended June 30, 1996 and June 30, 1995...... 3
Condensed Consolidated Statements of Cash Flows
for the Six Month Periods Ended June 30, 1996 and June 30, 1995.. 4
Notes to Condensed Consolidated
Financial Statements............................................. 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.......................................... 6
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................... 12
SIGNATURE................................................................ 14
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
LAW COMPANIES GROUP, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 9,318 $ 4,913
Billed fees receivable, net of allowance 55,970 58,399
Unbilled work in progress 32,592 32,863
Other receivables 1,105 1,970
Employee advances 734 560
Prepaid expenses 3,031 2,626
Deferred income taxes 1,638 1,616
---------- ----------
Total current assets 104,388 102,947
Property and equipment:
Land and buildings 8,762 8,589
Equipment 34,963 34,621
Automobiles 4,026 4,345
Furniture and fixtures 13,865 14,028
Leasehold improvements 4,160 4,258
---------- ----------
65,776 65,841
Less accumulated depreciation and
amortization 41,184 39,786
---------- ----------
24,592 26,055
Other Assets:
Equity investments 1,382 1,402
Goodwill, net 13,574 13,938
Deposits and other assets 2,410 3,962
---------- ----------
17,366 19,302
---------- ----------
$146,346 $148,304
========== ==========
</TABLE>
See accompanying notes.
1
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
LAW COMPANIES GROUP, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- -------------
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $ 908 $ 1,201
Accounts payable 21,018 20,855
Billings in excess of costs and fees earned
on contracts in progress 10,685 9,515
Accrued payroll and other employee benefits 7,329 9,455
Accrued professional liability reserve 6,300 6,349
Other accrued expenses 21,212 17,248
Income taxes payable 5,127 4,181
Current portion of long-term debt 35,146 3,759
---------- ----------
Total current liabilities 107,725 72,563
Long-term debt 10,138 47,463
Deferred income taxes 10,965 10,948
Minority interest in equity of subsidiaries 1,221 1,504
Shareholders' equity:
Class A common stock--$10 par value: stated at
$1.00; authorized: 5,000,000 shares; issued and
outstanding: 0 shares in 1996 and 1,533,106
shares in 1995 -- 1,533
Common stock--$1 par value: authorized: 10,000,000
shares; issued and outstanding: 1,913,227
shares in 1996 and 361,266 in 1995 1,913 361
Additional paid in capital 15,123 14,823
Retained earnings 4,480 3,792
Foreign currency translation adjustment (5,219) (4,683)
---------- ----------
16,297 15,826
---------- ----------
$146,346 $148,304
========== ==========
</TABLE>
See accompanying notes.
2
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
LAW COMPANIES GROUP, INC.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Quarters For the Six Month Periods
Ended June 30, Ended June 30,
------------------ -------------------------
1996 1995 1996 1995
-------- -------- ---------- -----------
<S> <C> <C> <C> <C>
Gross fees $82,241 $95,317 $165,257 $190,013
Less: Cost of outside services 9,353 13,718 19,701 27,278
-------- -------- -------- --------
Net fees 72,888 81,599 145,556 162,735
Direct costs and expenses:
Payroll 21,425 22,739 42,904 45,967
Job related expenses 7,716 9,475 15,263 17,410
-------- -------- -------- --------
Gross profit 43,747 49,385 87,389 99,358
Indirect costs and expenses:
Payroll 15,918 17,764 32,580 35,105
Other expenses 24,528 27,502 49,461 55,178
-------- -------- -------- --------
Operating income 3,301 4,119 5,348 9,075
Other income (expense):
Interest expense (1,295) (1,519) (2,395) (2,925)
Deferred financing costs (562) (34) (1,632) (34)
Other income (expense) 178 37 165 66
-------- -------- -------- --------
Income before income taxes,
minority interests, and
equity investments
1,622 2,603 1,486 6,182
Income tax (provision) (747) (1,085) (847) (2,782)
Minority interests -- (50) -- (104)
Equity investments 49 (91) 49 (191)
-------- -------- -------- --------
Net income $ 924 $ 1,377 $ 688 $ 3,105
======== ======== ======== ========
Net income per common share $.48 $.67 $.36 $1.51
======== ======== ======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LAW COMPANIES GROUP, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Six Month Periods
Ended June 30,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 688 $ 3,105
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 5,484 4,290
Provision for losses on receivables 822 1,063
Provision for losses on claims 107 --
Deferred income taxes provision (benefit) (6) 1,059
Undistributed (income) losses from equity investments (49) 191
Minority interest in income of subsidiaries -- 104
(Gain) loss on disposal of property and equipment (202) 235
Changes in operating assets and liabilities:
Billed fees receivable 1,607 (1,886)
Unbilled work in progress 271 (10,415)
Other current assets 286 1,184
Accounts payable and accrued expenses 2,790 (957)
Billings in excess of costs and fees earned
on contracts in progress 1,170 939
------------- -------------
Net cash provided by operating activities 12,968 (1,088)
INVESTING ACTIVITIES
Purchases of property and equipment (2,613) (3,535)
Proceeds from disposal of property and equipment 76 1,200
Other, net 484 924
------------- -------------
Net cash provided by (used in) investing activities (2,053) (1,411)
FINANCING ACTIVITIES
Net (payments) proceeds on short-term borrowings (293) 385
Net (payments) proceeds on revolving line of credit
and long-term borrowings (5,939) 233
Deferred financing costs (600) --
Issuance of shares of common stock 319 --
Treasury stock repurchases
(1996 - 0 shares; 1995 - 75 shares) -- (2)
------------- -------------
Net cash provided by (used in) financing activities (6,513) 616
Effect of exchange rate changes on cash 3 67
------------- -------------
Increase in cash and cash equivalents 4,405 (1,816)
Cash and cash equivalents at beginning of period 4,913 6,061
------------- -------------
Cash and cash equivalents at end of period $ 9,318 $ 4,245
============= =============
</TABLE>
See accompanying notes.
4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LAW COMPANIES GROUP, INC.
NOTE 1 - There have been no significant changes in the accounting policies of
the Company during the periods presented, except as noted below. For a
description of these policies, see Note 1 of Notes to Consolidated Financial
Statements for the year ended December 31, 1995 in the Company's Form 10-K.
NOTE 2 - The unaudited condensed consolidated financial statements presented
herein have been prepared in accordance with the instructions to Form 10-Q and
do not include all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in conjunction
with the Consolidated Financial Statements and Notes for the year ended December
31, 1995 included in the Company's Form 10-K. The accompanying condensed
consolidated financial statements have not been audited by independent auditors
in accordance with generally accepted auditing standards, but in the opinion of
management such financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to summarize fairly the Company's
consolidated financial position and results of operations. The results of
operations for the six months ended June 30, 1996 may not be indicative of the
results that may occur during the year ending December 31, 1996.
NOTE 3 - On May 10, 1996, the Company obtained an amended credit facilities
commitment from its banks, extending the maturity date of the existing credit
facilities through January 15, 1997. Consequently, the long-term debt of
approximately $31 million under these amended credit facilities has been
classified as current as of June 30, 1996.
NOTE 4 - Effective as of January 1, 1996, pursuant to the Company's Third
Restated Articles of Incorporation, all shares of Class A stock automatically
converted into shares of Common Stock on a one-for-one basis.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, (i) the percentage of
net fees represented by certain items reflected in the Company's condensed
consolidated statements of income and (ii) the percentage increase or decrease
in each of such items in 1996 from the comparable period in the prior year. The
Company measures its operating performance on the basis of net fees since a
substantial portion of gross fees flow through to clients as costs of
subcontractors and other project-specific outside services. Net fees are
determined by deducting the cost of these outside services from gross fees.
This table and the subsequent discussion should be read in conjunction with the
Condensed Consolidated Financial Statements and notes to Condensed Consolidated
Financial Statements contained elsewhere in this Form 10-Q.
<TABLE>
<CAPTION>
Qtr to Qtr Year to Year
Percentage Percentage
Quarters Ended Increase Six Month Periods Ended Increase
June 30, (Decrease) June 30, (Decrease)
-------------- ------------ ----------------------- ------------
1996 1995 1996 vs 1995 1996 1995 1996 vs 1995
----- ----- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net fees 100.0% 100.0% (10.7%) 100.0% 100.0% (10.6%)
Gross profit 60.0 60.5 (11.4) 60.0 61.1 (12.0)
Indirect costs and
expenses 55.5 55.5 (10.6) 56.4 55.5 (9.1)
Operating income 4.5 5.0 (19.9) 3.6 5.6 (41.1)
Net income 1.3 1.7 (32.9) 0.5 1.9 (77.8)
</TABLE>
RESULTS OF OPERATIONS
Consolidated net fees of $145.6 million for the first six months of 1996
decreased 10.6% from net fees of $162.7 million for the same period in 1995.
Second quarter 1996 net fees decreased 10.7% to $72.9 million compared to second
quarter 1995 net fees of $81.6 million. The Domestic Group's net fees decreased
13.3% from $113.1 million for the first six months of 1995 to $98.1 million for
the same period in 1996. Second quarter net fees for the Domestic Group
decreased 13.7% from $57.5 million in 1995 to $49.7 million in 1996. These
decreases were due to the following reasons: several weeks of inclement winter
weather in the North and East regions of the United States, the effects of the
Company's focus on its cost structure and competitiveness as opposed to growth,
lack of regulatory pressure to drive environmental markets, and overall
competitiveness in the markets for the Domestic Group's services. For 1996 and
future years, the Company has initiated a domestic national marketing
development program designed to increase the Company's market share and net
fees. Specifically, the goals are to position the Company to take further
advantage of major work opportunities that exist in the market for the Company's
core
6
<PAGE>
competencies and services by targeting specific large national clients. Another
goal of this program is to develop a structure for quick and effective response
to marketing opportunities as they are identified at all levels -- national,
regional, and local. A separate business development and project management
program is underway that is designed to assist local offices with local business
development capabilities and to improve local profitability through better
pricing strategies.
The International Group's net fees decreased 4.2% from $49.6 million in the
first six months of 1995 to $47.5 million in 1996. Second quarter net fees for
the International Group decreased 3.5% from $24.1 million in 1995 to $23.2
million in 1996. These net fee changes were primarily a result of decreases in
the average value of the dollar: 4.5% in the first six months of 1996 and 4.4%
in the second quarter of 1996.
The consolidated gross profit margin decreased from 61.1% in the first six
months of 1995 to 60.0% for the same period in 1996. For the second quarter, the
consolidated gross profit margin also decreased from 60.5% in 1995 to 60.0% in
1996. The Domestic Group's gross profit margin decreased to 65.5% in the first
six months of 1996 from 66.1% for the same period in 1995. This decrease was
attributable to a slight increase in non-billable job-related expenses and an
increase in direct labor costs. For the second quarter, the Domestic Group's
gross profit margin increased slightly to 65.3% in 1996 from 65.2% in 1995. The
International Group's gross profit margin decreased slightly from 49.0% in the
first six months of 1995 to 48.8% for the same period in 1996. For the second
quarter, the International Group's gross profit margin decreased to 48.8% in
1996 from 48.9% in 1995. These decreases resulted from an increase in non-
billable job-related expenses, which were slightly offset by a decrease in
direct labor costs.
Consolidated indirect costs and expenses decreased to $82.0 million, or 56.4% of
net fees, for the first six months of 1996 compared to $90.3 million, or 55.5%
of net fees, in 1995. For the second quarter of 1996, indirect costs and
expenses decreased to $40.4 million, or 55.5% of net fees, compared to $45.3
million, or 55.5% of net fees, for the same period in 1995. These decreases
($8.3 million, or 9.1%, for the first six months of 1996 and $4.9 million, or
10.6%, for the second quarter of 1996) were attributable to the Company's 1996
cost reduction and labor utilization initiatives. In addition to the domestic
marketing and business development initiatives mentioned above, the Company has
initiated other programs, focused on the domestic business, with overall goals
to maximize efficiency and profitability and to positively effect change in the
Company's culture. These programs include an initiative to measure and improve
contribution to the Company's overall goals and objectives, on both an
individual and an organizational level. These initiatives focus on specific
financial drivers and help determine how individual and organizational efforts
can positively impact these drivers.
Another program is focused on technical delivery, quality control, and quality
assurance. The central objectives to this program are to reassess technical
delivery throughout the Company and to enable the Company to make immediate
improvements in the utilization of staff; to reassess quality assurance, quality
control rules, responsibilities, and structure in order to improve work quality;
and to define and implement standard procedures for technical execution and
delivery. The Company has also focused on
7
<PAGE>
improving procurement activities designed to reduce material and service costs
by development and negotiation of national contracts to take advantage of the
Company's overall purchasing power. The areas of initial focus include office
supplies, travel management, office equipment, telecommunications and cellular
services, offsite data management, forms management, and vehicle leasing.
In addition, the Company has begun to review its overhead cost structure. This
review will analyze the functions provided by each department, the value related
to these functions, and the cost to perform and maintain these functions. This
review is intended to provide that the Company is making the most efficient use
of the capital required to support these areas. While the intent of these
programs is to increase profits, there can be no assurance they will be
successful.
Interest expense decreased to $2.4 million in the first six months of 1996
compared to $2.9 million in 1995. For the second quarter of 1996, interest
expense decreased to $1.3 million compared to $1.5 million for the second
quarter of 1995. These decreases were related to lower average outstanding debt
and interest on a rates rebate in the International Group. Deferred financing
costs of $1.6 million related to the renegotiation of the Company's credit
facilities were also expensed in the first six months of 1996 ($.5 million in
the second quarter of 1996).
The effective income tax rates for the first six months of 1996 and 1995 were
56.7% and 45.0%, respectively. The 1996 second quarter effective income tax rate
was 46.0%, as compared to the 1995 second quarter tax rate of 41.7%. The
effective tax rates were higher than the statutory federal rate of 34% due
primarily to the effect of state income taxes and certain nondeductible
expenses.
Net income for the six months ended June 30, 1996 was $688,000, or $.36 per
share. This compares with net income of $3,105,000, or $1.51 per share, for the
first six months of 1995. The net income for the second quarter of 1996 was
$924,000, or $.48 per share, compared with net income of $1,377,000, or $.67 per
share, for the second quarter of 1995.
CURRENCY TRANSLATION
The translation of the Company's foreign subsidiaries' financial statements into
U.S. dollars is done in multiple steps. First, all foreign operations are
measured into the functional currencies of the foreign subsidiaries' economic
environments by utilizing a combination of current, average, and historic
exchange rates, with translation impacts being included in income. The foreign
subsidiaries' functional currency financial statements are translated into U.S.
dollars, the Company's reporting currency, utilizing current and average
exchange rates, resulting in an adjustment to shareholders' equity. In addition,
transactions denominated in different currencies result in exchange gains or
losses which are included in income. The impact of foreign currency translation
and exchange transactions included in income was not significant in the first
six months of 1996. The translation of the Company's foreign subsidiaries' in
the first six months of 1996 resulted in a $.5 million change in the Foreign
Currency Translation Adjustment component of shareholders' equity. This change
was caused by a 0.8% decrease in the strength of the dollar relative to the
pound sterling from the rate at December 31, 1995 to the rate at June 30, 1996.
8
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DEBT AND SHORT-TERM BORROWINGS
The Company reported debt and short-term borrowings of $46.2 million at June 30,
1996, compared to $52.4 million at December 31, 1995. At December 31, 1995, the
Company was not in compliance with all the restrictive covenants in the bank
credit facility agreements. On March 8, 1996, the Company received a waiver from
its banks for the restrictive covenant violations. On April 30, 1996, the
Company received a 10-day extension from its banks. On May 10, 1996, the Company
received a commitment from its banks to modify and extend its credit facilities
to January 15, 1997. These revised credit facilities are secured by
substantially all assets of the Company and substantially all stock of its
subsidiaries. The revised credit facilities, in addition to customary
restrictions normally contained in credit facilities of this type, include
certain restrictions relating to, among other things, maintaining debt within
approved limits, maintaining a minimum specified tangible net worth, limitations
on capital expenditures and share repurchases, and achievement of certain fixed
charge and interest coverage ratios.
LIQUIDITY AND CAPITAL RESOURCES
Prior to 1995, certain of the Company's subsidiaries filed their federal income
tax returns on the cash basis of accounting. Effective January 1, 1995, these
subsidiaries changed their method of accounting from the cash to the accrual
method for federal income tax purposes. Accordingly, previously deferred income
of approximately $47 million at January 1, 1995 will be included in taxable
income over a four year period beginning in 1995. The Company anticipates income
tax payments of approximately $2.5 million in 1996 related to this change in
income tax accounting.
The Company believes that its cash provided by operations and borrowings
available under the bank credit facilities will be sufficient to meet its base
operating requirements and capital expenditures through December 31, 1996. The
Company's ability to fund growth, other than at minimum levels, will depend on
profitability and working capital management, primarily in the areas of accounts
receivable and work in progress. The Company believes that a moderate shortfall
in operating profits could be offset by more intense accounts receivable
collection efforts. However, should the Company's profitability and working
capital management both fall below management's minimum expectations, the
Company would be required to evaluate alternative means of raising debt or
equity capital. There can be no assurance that the Company will be able to
negotiate an extension to the 1996 revised credit facilities beyond January 15,
1997. As a result, all debt under these revised credit facilities as of June 30,
1996 has been classified as current liabilities.
The Company has engaged a financial advisor, Alex. Brown & Sons Incorporated, to
assist in developing a financial plan consistent with the Company's strategic
objectives. Within the scope of the financial advisor's role is the analysis and
review of the Company's current capital structure and evaluation of alternative
means of raising debt or equity capital.
9
<PAGE>
The bank credit facilities prohibit principal payments on existing notes of
approximately $13.1 million (as of June 30, 1996) or any future notes owed by
the Company to former shareholders. Principal payments scheduled to be due in
1996 on these notes are approximately $2.5 million. The existing notes as well
as any future notes to former shareholders state that they are subordinated to
the bank credit facilities.
The Company's 401(k) Savings Plan (the Plan) permits employees to elect to
invest their Plan contributions in Company Common Stock, and provides that the
Company's matching contributions, if any, under the Plan are made in the form of
Company Common Stock. As of May 10, 1996, the Board of Directors of the Company
determined to temporarily terminate all purchases of Company Common Stock under
the Plan whether as employee contributions or as Company matching contributions.
This termination was effected in light of conditions regarding the Company's
financial position, including (i) negotiations regarding extension of the
Company's credit facilities, (ii) the Company's failure to timely file its 1995
Annual Report on Form 10-K, and (iii) the related unavailability of a current
appraisal of the fair market value of the Common Stock. While these conditions
have been addressed by the Company, the Company has continued the suspension of
trading in Company Common Stock under the 401(k) Plan pending completion of the
work of its financial advisor, Alex. Brown & Sons Incorporated. The Company has
determined, however, to arrange for its former employees to liquidate their
Company Common Stock under the 401(k) plan.
FORWARD LOOKING STATEMENTS
The above statements contained herein under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things,
business conditions and growth in the economy, including the construction sector
in particular, competitive factors, including price pressures, the ability to
control internal costs that are not passed on to the Company's clients, the
ability to manage cash flow and working capital, the ability to obtain longer
term financing on acceptable terms to support the Company's operations and other
factors referenced elsewhere herein.
EFFECT OF INFLATION
General economic inflation had the effect of increasing the Company's basic
costs of operations. These increased costs were generally recovered through
increases in contract prices.
CASH PROVIDED BY OPERATIONS
Cash provided by operations in the first six months of 1996 was $13.0 million
compared to cash used of ($1.1) million for the same period in 1995. This
increase was primarily attributable to better working capital management in the
areas of accounts receivable and unbilled work in progress.
10
<PAGE>
CAPITAL EXPENDITURES
Capital expenditures for the first six months of 1996 were $2.6 million. This
represents a decrease of $.9 million from the first six months of 1995. This
decrease was in line with the Company's 1996 capital expenditures plan, as well
as within the limits imposed by the revised credit facilities. Pursuant to the
revised credit facilities, the Company is required to limit capital spending to
$6.0 million in 1996. During this period, the Company completed the installation
of its new project and financial accounting system and continued to upgrade
existing computer equipment. The Company has no other material commitments for
purchases of additional equipment.
DIVIDENDS
Dividends are prohibited by the bank credit facilities.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 - Computation of Earnings Per Share Page: 13
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during
the quarter ended June 30, 1996.
12
<PAGE>
EXHIBIT 11
LAW COMPANIES GROUP, INC.
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Quarters For the Six Month Periods
Ended June 30, Ended June 30,
------------------- --------------------------
1996 1995 1996 1995
--------- -------- ------- --------
<S> <C> <C> <C> <C>
Net income $ 924 $ 1,377 $ 688 $ 3,105
======== ======== ======= =======
Average number of shares of
capital stock outstanding 1,910 1,930 1,907 1,930
Assuming exercise of options based
on the treasury stock method using
average market price -- 126 -- 130
-------- -------- ------- -------
Average number of primary shares of
capital stock outstanding 1,910 2,056 1,907 2,060
======== ======== ======= =======
Primary earnings per share $ .48 $ .67 $ .36 $ 1.51
========= ========= ======= =======
Average number of shares of
capital stock outstanding 1,910 1,930 1,907 1,930
Assuming exercise of options based
on the treasury stock method using
previous year end
market price -- 126 -- 130
-------- -------- ------- -------
Average number of shares of capital
stock outstanding assuming full
dilution 1,910 2,056 1,907 2,060
======= ======= ======== =======
Fully diluted earnings per share $ .48 $ .67 $ .36 $ 1.51
======= ======== ======== ========
</TABLE>
13
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, Law Companies Group, Inc., has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
LAW COMPANIES GROUP, INC.
/s/ R. B. Fooshee
- ---------------------------------------
Robert B. Fooshee
Chief Financial Officer and Treasurer
Dated: August 13, 1996
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 9,318
<SECURITIES> 0
<RECEIVABLES> 59,462
<ALLOWANCES> 3,492
<INVENTORY> 32,592
<CURRENT-ASSETS> 104,388
<PP&E> 65,776
<DEPRECIATION> 41,184
<TOTAL-ASSETS> 146,346
<CURRENT-LIABILITIES> 107,725
<BONDS> 0
0
0
<COMMON> 1,913
<OTHER-SE> 14,384
<TOTAL-LIABILITY-AND-EQUITY> 146,346
<SALES> 165,257
<TOTAL-REVENUES> 165,257
<CGS> 0
<TOTAL-COSTS> 77,868
<OTHER-EXPENSES> 81,219
<LOSS-PROVISION> 822
<INTEREST-EXPENSE> 2,395
<INCOME-PRETAX> 1,486
<INCOME-TAX> 847
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 688
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
