<PAGE> 1
Cedar GROUP, INC.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From __________ To __________
CEDAR GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-10372 23-2577796
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
500 Notre Dame Street
Lachine, Quebec CANADA H8S 2B2
(Address of principal executive offices)
Registrant's Telephone Number: (514) 634-3550
Indicate by ( X ) whether 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 and (2) has been subject to such filing requirements
for the past 90 days.
(1) Yes X No _____
(2) Yes X No _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS.
Check whether Registrant filed all documents and reports required to be filed
by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a Court.
Yes X No _____
APPLICABLE ONLY TO CORPORATE ISSUERS.
As of February 8, 1996, there were 15,497,582 shares of Common Stock, par
value $.001 per share, outstanding.
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INDEX
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<CAPTION>
PAGE
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<S> <C> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets at December 31, 1995 (unaudited)
and September 30, 1995 3
(Unaudited) Consolidated Statement of Operations for the three
months ended December 31, 1995 and December 31, 1994 4
(Unaudited) Consolidated Statement of Cash Flows for the three
months ended December 31, 1995 and December 31, 1994 5-6
Notes to Consolidated Financial Statements (Unaudited) 7-8-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Events 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE> 3
CEDAR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1995 and September 30, 1995
<TABLE>
<CAPTION>
DECEMBER 31, 1995 SEPTEMBER 30, 1995
----------------- ------------------
<S> <C> <C>
Unaudited Audited
(in thousands of U.S. dollars)
ASSETS
CURRENT ASSETS
Cash..................................................... 12,752 4,765
Short term deposits and investments...................... 3,665 4,467
Accounts receivable, net of allowances of $843 (Dec. 95)
and $863 (Sept. 95).................................... 48,096 44,169
Current portion of assets transferred under contractual
arrangements........................................... 180 --
Inventories.............................................. 7,725 12,746
Prepaid expenses and other assets........................ 326 1,822
-------- --------
TOTAL CURRENT ASSETS..................................... 72,744 67,969
-------- --------
Property, plant and equipment, net....................... 19,917 20,661
Advances to a shareholder................................ 731 1,198
Assets of business transferred under contractual
arrangements (preferred shares)........................ 3,460 3,640
Pension assets........................................... 1,592 1,619
Other assets............................................. 1,435 1,312
-------- --------
TOTAL ASSETS............................................. 99,879 96,399
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Indebtedness........................................ 3,052 6,688
Accounts payable and accrued expenses.................... 24,090 31,991
Customer Advances........................................ 6,535 6,062
-------- --------
TOTAL CURRENT LIABILITIES................................ 33,677 44,741
-------- --------
Advance from unincorporated joint venture................ 262 750
Note payable............................................. 473 488
Deferred income taxes.................................... 6,107 5,994
Accrued post-retirement benefits other than pensions..... 520 522
Minority Interest........................................ 21,257 10,161
-------- --------
STOCKHOLDERS' EQUITY
Common stock............................................. 17 15
Additional paid-in capital............................... 38,310 36,345
Retained earnings (Deficit).............................. 1,105 (874)
Cumulative translation adjustment........................ 36 142
-------- --------
39,468 35,628
Subscription Receivable.................................. (1,885) (1,885)
-------- --------
TOTAL STOCKHOLDERS' EQUITY............................... 37,583 33,743
-------- --------
TOTAL LIABILITIES AND EQUITY............................. 99,879 96,399
======== ========
</TABLE>
3
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CEDAR GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
3 MONTHS 3 MONTHS
ENDED ENDED YEAR-TO-DATE YEAR-TO-DATE
31/12/95 31/12/94 31/12/95 31/12/94
<S> <C> <C> <C> <C>
(in thousands of U.S. dollars)
SALES........................... $ 51,441 $ 34,387 $ 51,441 $ 34,387
---------- ---------- ---------- ----------
Cost of Sales................... 43,712 30,776 43,712 30,776
Selling, General and
Administrative
Expenses...................... 5,033 2,444 5,033 2,444
---------- ---------- ---------- ----------
48,745 33,220 48,745 33,220
---------- ---------- ---------- ----------
Profit from Operations.......... 2,696 1,167 2,696 1,167
Interest income, net............ 46 16 46 16
Income -- operations of
joint-venture................. 488 -- 488 --
Other Income.................... 173 256 173 256
---------- ---------- ---------- ----------
Net income before income taxes
and minority interest......... 3,403 1,439 3,403 1,439
---------- ---------- ---------- ----------
Income Taxes
Current....................... (1,198) (500) (1,198) (500)
Deferred...................... (113) -- (113) --
---------- ---------- ---------- ----------
(1,311) (500) (1,311) (500)
---------- ---------- ---------- ----------
Net income before minority
interest...................... 2,092 939 2,092 939
---------- ---------- ---------- ----------
Minority interest
Dividends on preferred
shares..................... (74) -- (74) --
Common stock.................. (39) 44 (39) 44
---------- ---------- ---------- ----------
NET INCOME...................... 1,979 983 1,979 983
---------- ---------- ---------- ----------
Retained earnings (deficit),
beginning of period........... (874) (1,860) (874) (1,860)
---------- ---------- ---------- ----------
RETAINED EARNINGS (DEFICIT), END
OF THE PERIOD................. 1,105 (877) 1,105 (877)
---------- ---------- ---------- ----------
NET INCOME PER COMMON SHARE AND
COMMON SHARE EQUIVALENT
PRIMARY....................... 0.12 0.07 0.12 0.07
FULLY DILUTED................. 0.11 0.07 0.11 0.07
---------- ---------- ---------- ----------
WEIGHTED AVERAGE NUMBER OF COM-
MON SHARES AND COMMON SHARE
EQUIVALENTS OUTSTANDING
PRIMARY....................... 16,311,013 13,754,241 16,311,013 13,754,241
FULLY DILUTED................. 17,984,225 13,754,241 17,984,225 13,754,241
========== ========== ========== ==========
</TABLE>
4
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CEDAR GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
(in thousands of U.S. dollars)
CASH FLOW FROM OPERATING ACTIVITIES
Net income............................................... $ 1,979 $ 939
Adjustment to reconcile net income to net cash
provided by (used for) operating activities
Depreciation and amortization.......................... 819 1,122
Deferred income tax.................................... 113 --
Income from operations of a joint venture.............. (488) --
(Increase) decrease in accounts receivable............. (3,927) 2,614
(Increase) decrease in contractual arrangements........ -- 739
(Increase) decrease in due from an officer............. -- 565
(Increase) decrease in prepaid expenses and other
assets.............................................. 1,496 955
(Increase) decrease in inventories..................... 5,021 2,076
(Decrease) increase in accounts payable................ (7,901) (3,062)
(Decrease) increase in customer advances............... 473 (441)
-------- ---------
Net cash used in operating activities.................... $(2,415) $ 5,507
-------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Decrease (increase) in short term investments............ $ 802 --
Proceeds from sale of investments........................ -- 1,039
Repayment by (advance to) a shareholder.................. 467 --
Redemption of minority interest.......................... -- (8,667)
Decrease (increase) of pension assets.................... 27 --
Decrease (increase) of other assets...................... (123) --
Cash payment for purchase of equipment................... (75) (463)
Investment in other assets............................... -- (2)
-------- ---------
Net cash provided by (used in) investing activities...... $ 1,098 $ (8,083)
======== =========
</TABLE>
5
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CEDAR GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1994
--------------- --------------
<S> <C> <C>
Unaudited
(in thousands of U.S. dollars)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock....................... $ 1,967 $ 3,203
Post-retirement benefits other then pension.................. (2) --
Minority Interest (Issue of preferred shares of
subsidiary)................................................ 11,096 --
Net repayment of bank indebtedness........................... (3,636) --
Payment of other obligations................................. (15) --
-------- --------
Net cash provided by financing activities.................... 9,410 3,203
-------- --------
Effect of foreign exchange rate changes on cash.............. (106) 86
Net increase (decrease) in cash.............................. 7,987 703
Cash at beginning of year.................................... 4,765 5,578
-------- --------
Cash at end of year.......................................... $12,752 $ 6,281
======== ========
</TABLE>
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the consolidated
accounts of CEDAR GROUP, INC. and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in the
consolidation.
The condensed consolidated financial statements do not include footnotes
and certain financial information normally presented annually under
generally accepted accounting principles and, therefore, should be read in
conjunction with the Company's September 30, 1995 annual report on Form
10-KSB. Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year-end. The results of operations for the
three months ended December 31, 1995 are not necessarily indicative of
results that can be expected for the full year.
The condensed consolidated financial statements included herein are
unaudited however, they contain all adjustments (consisting of normal
recurring accruals) which, in the opinion of the Company, are necessary to
present fairly its consolidated financial position at December 31, 1995 and
its consolidated results of operations for the three months ended December
31, 1995 and 1994 and cash flows for the three months ended December 31,
1995 and 1994.
2. BUSINESS
The Company through its operating subsidiaries, participates in two
principal market segments: infrastructure engineering and manufacturing
services, and industrial speciality fasteners, respectively.
3. INVENTORIES
Work-in-process related to construction contracts is stated at accumulated
cost less amounts charged to income based on the percentage-of-completion
of individual contracts. Raw materials are stated at the lower of cost (
first-in, first-out) or net replacement cost. Finished goods comprise steel
and steel hardware products held for sale and are stated at the lower of
cost (first-in, first-out) or net realizable value.
4. CONSTRUCTION CONTRACTS
Income on construction contracts is recognized on the
percentage-of-completion basis. Provisions for anticipated losses on
uncompleted contracts are made in the period in which such losses are first
determined.
5. CAPITAL STOCK
Preferred stock: $.001 par value; 5,000,000 shares authorized, none issued.
Common Stock: $.001 par value, 20,000,000 shares authorized; as of December
31, 1995: 15,493,681 shares were issued and outstanding and 14,447,593
shares were issued and outstanding as of December 31, 1994.
6. FOREIGN CURRENCY TRANSLATION
Gains and losses on foreign currency transactions are recognized currently
in the Consolidated Statement of Operations, and are not significant. Gains
and losses on translation of the Company's subsidiaries operating outside
the United States are reported separately and accumulated in the
"Cumulative Foreign Currency Translation Adjustment" in the Consolidated
Balance Sheets.
7. COMMITMENTS AND CONTINGENCIES
The Company's wholly-owned Canadian subsidiary, Dominion Bridge, Inc.,
periodically enters into forward exchange contracts to hedge specific
anticipated currency inflows. It does not engage in speculation. The
foreign exchange contracts do not subject the Company to operating risk due
to exchange rate movements because gains and losses on these contracts
offset losses and gains on the transactions being hedged. The forward
exchange contracts generally have maturities which do not exceed one year
and are agreed to at the inception of the contracts. No significant foreign
exchange gains or losses are deferred in the consolidated balance sheets.
The Company leases office and warehouse space under non-cancellable
operating leases. The terms of the various leases run between one and five
years, the last of which expires in November, 1997. Future minimum lease
payments under all non-cancellable leases for the years subsequent to
December 31, 1995 consist of the following:
<TABLE>
<S> <C>
1996............................ $730,000
1997............................ $343,000
</TABLE>
7
<PAGE> 8
A number of claims and lawsuits seeking unspecified damages and other
relief are pending against the Company. It is impossible at this time for
the Company to predict with any certainty the outcome of such litigation.
However, management is of the opinion, based upon information presently
available, that it is unlikely that any liability, to the extent not
provided for through insurance or otherwise, would be material in relation
to the Company's consolidated financial position.
The Company is subject to a risk of claims for product liability. If a
product liability claim exceeding the company's insurance coverage or its
own available resources were to be successfully asserted against the
Company, it could have a material adverse effect on the Company's financial
condition. The Company has general liability insurance of approximately $5
million per occurrence, with a maximum of $5 million of claims payable
during any policy occurrence, with a maximum of $5 million of claims
payable during any policy year. There is no assurance that such coverage
will be sufficient to fully insure against claims brought against the
Company and its subsidiaries, or that the Company will be able to maintain
such insurance at affordable rates or obtain additional insurance covering
the products.
8
<PAGE> 9
ACQUISITION OF STEEN CONTRACTORS LIMITED
On July 31, 1995 (but effective April 1, 1995) Cedar Group, Inc. (the
"Company") acquired 75% of the outstanding common shares of Steen
Contractors Limited ("Steen") for a purchase price of Cdn$6,300,000
(US$4,575,000). Steen is an engineering company specializing in mechanical,
heating, ventilation, and air conditioning contracts for industrial,
commercial, manufacturing and processing plants. The Company is required to
purchase the remaining common shares of Steen in two instalments. The first
instalment amounting to 15% of Steen's outstanding shares are to be
acquired on May 1, 1996 at a price equal to the net book value per share of
Steen on December 31, 1995. The final instalment, amounting to the
remaining 10% of Steen's outstanding shares are to be purchased on May 1,
1997 at a price equal to the net book value per share of Steen on December
31, 1996.
The acquisition has been accounted for under the purchase method of
accounting and has been given effect from April 1, 1995, the date upon
which the Company's management assumed operational control of Steen.
Accordingly, the results of operations for the three months ended December
31, 1995 include the operations of Steen for the entire period but are
excluded from the comparative three month period ended December 31, 1994.
In order to complete the acquisition of Steen, the Company obtained a
bridge loan of US$5,000,000, which was secured by a pledge of the
securities owned by the Company of its two principal operating
subsidiaries, namely, Dominion Bridge, Inc. and Steen and was further
secured by a guarantee and a pledge of assets by Dominion Bridge, Inc. The
bridge loan was repaid on October 31, 1995.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated sales for the three-month period ended December 31, 1995 were
$51,441,000 versus $34,387,000 in the comparative period, resulting in gross
profits of $7,729,000 and $3,611,000 respectively. Gross margin as a percentage
of sales was 15.0% in the first quarter ended December 31, 1995 versus 10.5% for
the first quarter of fiscal 1995. Selling, general and administrative expenses
in the three-month period ended December 31, 1995 were $5,033,000 compared to
$2,444,000 for the comparative period. The increase is directly attributable to
the consolidation of the results of Steen, which company was acquired with
effect as at April 1, 1995.
Sales revenue increased in the quarter ended December 31, 1995 by $17
million compared to the comparative period ended December 31, 1994. The increase
of revenues is attributable to the consolidation of the results of Steen, ($11
million) and to an increase in sales in Dominion Bridge ($6 million).
Minority interests consist of United Dominion Industries Limited's
remaining balance of Cdn $9,552,000 of Class "A" Preferred shares in Dominion
Bridge and AHG-FRANCE's 30% ownership of the common stock of Unimetric
Corporation and US $11,042,000 of Preferred Shares of Cedar Group (TCI) Inc.
LLC. ("TCI")
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of operating capital have traditionally
been the private placement of its shares of Common Stock and cash generated from
operations. Currently, the Company's cash flow is being generated by the
operations of Dominion Bridge and Steen which are expected to cover the cash
flow requirements of the Company. In addition to the cash generated from
operations, the Company has received a line of credit from a Canadian chartered
bank to provide Dominion Bridge with a $12 million revolving line of credit for
working capital purposes. No funds have been advanced on this line of credit,
which is guaranteed by the Company. Steen presently has a line of credit of Cdn.
$7 million, which has not been drawn against except for the provision of a
letter of credit of Cdn. $2.4 million on behalf of Steen to cross guarantee its
joint venture partners in the Hibernia Construction project. Furthermore, the
Company is continuing to pursue expansion internally as well as through
acquisitions, and accordingly may require additional capital in the form of
debt, convertible debt or equity.
In order to complete the transactions for the purchase of Dominion Bridge
and Unimetric, the Company obtained approximately $10.9 million in cash in March
1994 through a private placement of the Company's securities consisting of
2,254,346 shares of Common stock and 3,354,346 two-year share purchase warrants.
The warrants were exercisable on a one-for-one basis for shares of Common stock
at US $3.75 for the first year and at US$4.00 thereafter. In July and August
1994, all of the 3,354,346 warrants were exercised at US $3.75, thereby adding
approximately $12.6 million to the Company's capital resources.
Additionally, the Company has established Cedar Group (TCI) Inc. LLC,
("TCI") a limited life company under the laws of the Turks and Caicos Islands,
which has commenced an offering consisting of 3,000,000 6% Convertible Preferred
shares at $8.50 per share. The Preferred shares are convertible into shares of
Common stock of the Company, at the option of the holder at any time after
January 31, 1997 and up until maturity on October 31, 1998 at a price of $8.50
per share. On the day following the maturity date of October 31, 1998, all of
the remaining unconverted 6% convertible Preferred shares will automatically
convert into shares of Common stock of the Company at a price equal to the
weighted average price of the Company's shares traded on NASDAQ during the 20
previous trading days. Accordingly, if the weighted average price of the shares
of Common stock of the Company is greater than $8.50, then the weighted average
price will be the actual conversion price. Consequently, investors will receive
a number of shares of Common stock of the Company such that the actual value of
those shares is equivalent to an investor's full investment of $8.50 per
Preferred share. At the request of investors, the Company is currently
evaluating whether to reduce the conversion price of $8.50 of TCI's preferred
shares.
10
<PAGE> 11
("TCI") completed its first closing of its private placement December 27,
1995 and accepted and deposited $11 million of subscriptions. Subsequent to the
quarter end, the first closing was reduced to $8.5 million. ("TCI") is
continuing to raise the balance of its private placement and has scheduled a
second closing on February 29, 1996. However there can be no assurance that the
placement will be able to be completed.
As is noted under "Recent Developments" below, the Company is planning a
tender offer to acquire the ordinary shares of McConnell Dowell Corporation
("MDC") that it does not presently own. In addition to using funds anticipated
to be raised in the second Closing of the Private Placement by T.C.I., the
Company is also attempting to finalize additional bank lines or debt financing
to fund the anticipated purchase of the ordinary shares of MDC. There can be no
assurances, however, of the completion of the Private Placement by T.C.I. and
the proposed bank lines or debt financing.
During the quarter ended December 31, 1995, the Company increased its net
working capital by $15.9 million. The source of this investment was funded by
$11.1 million of the TCI Preferred shares, $2.0 million of Cedar Common shares
issued for cash, $.4 million of shareholder loan repayment and approximately
$2.4 million of cash generated from operations.
EFFECT OF INFLATION
The Company's operating costs are subject to general economic and
inflationary pressures. While operating costs have increased during the past
years, the Company does not believe that its operations have been significantly
affected by inflation.
RECENT DEVELOPMENTS
On January 12, 1996, Cedar Group, Inc. (the "Company") executed an
Agreement whereby the Company acquired the right to purchase 19.9% of the total
issued ordinary shares of McConnell Dowell Corporation Limited ("MDC"), a
corporation publicly traded in Australia, from Morrison Knudsen Corporation
("MK") for a cash purchase price of Australian $10,341,000 (US$7,675,000). MDC
is an Australian infrastructure engineering and construction group including
pipeline, mechanical and electrical divisions, with operations throughout Asia,
Australia and New Zealand. The purchase of the shares of MDC is to occur in
three phases through a wholly-owned subsidiary of the Company. The first phase
occurred on January 19, 1996 which consisted of an acquisition of 6,194,570
shares of MDC, representing approximately 14.9% of the total issued ordinary
shares of MDC, in exchange for Australian $7,743,000 (US$5,747,000).
The second phase of the acquisition, whereby the Cedar subsidiary acquires
2,078,715 shares of MDC in exchange for Australian $2,598,000 ($US1,928,000) is
conditioned upon the Cedar subsidiary receiving certain approvals including
permission from the Australian Foreign Investment Review Board for the
acquisition of the additional 5% interest of MDC.
The amount of consideration paid by the Cedar subsidiary was determined by
negotiation between and among representatives of the Company and MK.
The third phase of the purchase will be made by tender offer by the Cedar
subsidiary for the balance of the shares not already acquired. The tender offer
will be for cash and will be subject to approval by the Australian Foreign
Investment Review Board. The offer will be contingent upon the Cedar subsidiary
acquiring an aggregate minimum of 40.1% of the ordinary shares for MDC pursuant
to the tender offer which is anticipated to bring its total interest in MDC to
60.0%. However there can be no assurance that the tender offer will be able to
be completed.
11
<PAGE> 12
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time disagreements with individual employees and disagreements
as to the interpretation, effect and nature of individual agreements arise
in the ordinary course of business and may result in legal proceeding being
commenced against the Company.
The Company is not currently involved in any litigation or proceedings
which are material, either individually or in the aggregate, and, to the
Company's knowledge, no other legal proceedings of a material nature
involving the Company are currently contemplated by any individuals,
entities or governmental authorities except outline below.
The company commenced an action against Stelco Inc. on December 20, 1994 in
the Ontario Court to obtain a declaration that it is the rightful owner of
75% of the common shares of Stelco Fasteners Ltd. and for damages as a
result of a dispute that arose between the parties in connection with the
acquisition by the Company of 75% of the common shares of Stelco Fasteners
Ltd., a company owned by Stelco Inc. The Ontario Court (General Division)
denied the Company's claim in a judgement released on December 21, 1995.
Upon reviewing the elements of the case, the Company has accepted the
recommendation of its counsel and of a further legal opinion that, based
upon significant errors of law, an appeal is warranted. Consequently, on
January 19, 1996 the Company filed a notice of appeal with the Ontario
Court of Appeal for the decision of the Ontario Court General Division.
By complaint dated November 7, 1995, certain shareholders (the
"Plaintiffs") brought a shareholders derivative suit in the Chancery Court
of the State of Delaware against Cedar Group, Inc. and Michel L. Marengere,
Micheline Prud'Homme, and Rene Amyot, individually. The complaint alleges
certain interest and self-dealing transactions by Mr. Marengere. Plaintiffs
seek judgement for the damages suffered by the Company as a result of the
alleged transactions, costs and expenses of the action, including
reasonable attorneys' fees and any other relief that the Court may deem
just and proper. The Company and the other defendants have filed a motion
for the dismissal of the suit, however, no date has yet been determined for
the hearing by the Chancery Court.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
12
<PAGE> 13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT. OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON BEHALF OF THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
<TABLE>
<S> <C>
CEDAR GROUP, INC
DATE : FEBRUARY 8, 1996
By: /s/ Michel L. Marengere
--------------------------------------------
Michel L. Marengere
Chairman and Chief Executive Officer
By: /s/ Robert Chartier
--------------------------------------------
Robert Chartier
Principal Accounting Officer
</TABLE>
13
