UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-Q/A1
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the period ended June 30, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-13586
THE MORGAN GROUP, INC.
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Delaware 22-2902315
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(State of other jurisdiction of (I.R.S. Employer identification no.)
of incorporation or organization)
2746 Old U.S. 20 West Elkhart, Indiana 46514-1168
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(Address of principal executive offices) (Zip Code)
(219) 295-2200
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(Registrant's telephone number, include area code)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
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.
X Yes No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $0.15 Par Value:
Class A - 1,499,960 shares as of June 30, 1996
Class B - 1,200,000 shares as of June 30, 1996
<PAGE>
The Morgan Group, Inc.
INDEX
PAGE NUMBER
PART I FINANCIAL INFORMATION
This amended Form 10-Q is filed to correct information previously filed
under Item 1 of Form 10-Q for the quarter ended June 30, 1996, appearing on the
Condensed Consolidated Statements of Cash Flows for the six months ended June
30, 1995.
Item 1 Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 2 - 3
Condensed Consolidated Statements of
Operations for the Three and Six Month
Periods Ended June 30, 1996 and 1995 4
Condensed Consolidated Statements of
Cash Flows for the Six Month Periods Ended
June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements as of June 30, 1996 6 - 8
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
The Morgan Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30 Dec. 31,
1996 1995
---------- ---------
(Unaudited) (Note)
(Dollars in thousands)
Assets
Current assets:
Cash and cash equivalents $1,243 $2,851
Trade accounts receivable,
less allowance for doubtful
accounts of $50,000 in 1996 and
$102,000 in 1995 14,012 11,285
Accounts receivable, other 709 514
Prepaid expenses and other current assets 2,448 2,875
Deferred income taxes 586 586
--- ---
Total current assets 18,998 18,111
Property and equipment, net 6,658 6,902
Intangible assets, net 5,072 5,285
Other assets 664 497
--- ---
Total assets $31,392 $30,795
======= =======
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The Morgan Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (continued)
June, 30 Dec. 31,
1996 1995
---------- --------
(Unaudited) (Note)
(Dollars in thousands)
Liabilities and Shareholders' Equity
Current liabilities:
Note payable to bank $ 1,850 $- - -
Trade accounts payable 2,442 3,845
Accrued liabilities 1,566 2,039
Accrued driver pay 631 206
Accrued claims payable 3,910 3,623
Refundable deposits 1,576 1,607
Current portion of long-term debt 784 784
-------- --------
Total current liabilities 12,759 12,104
Long-term debt 2,199 2,491
Deferred income taxes 622 622
Commitments and contingencies - - - - - -
Shareholders' equity
Preferred stock without par value
Authorized shares - 50,000
No shares issued and outstanding
Common stock, $.015 par value
Class A
Authorized shares - 7,500,000;
Issued and outstanding shares -
1,499,960 and 1,449,554 23 23
Class B
Authorized shares - 2,500,000;
Issued and outstanding shares - 1,200,000 18 18
Additional paid-in capital 12,441 12,441
Retained earnings 4,719 4,370
-------- --------
Less - treasury stock, 105,593 shares, at cost (885) (1,274)
- loan to officer for purchase of stock (504) - - -
-------- --------
Total shareholders' equity 15,812 15,578
-------- --------
Total liabilities and shareholders' equity $ 31,392 $ 30,795
======== ========
Note: The balance sheet at December 31, 1995 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 or complete financial statements.
<PAGE>
The Morgan Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------------- ----------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
Operating revenues:
<S> <C> <C> <C> <C>
Manufactured housing outsourcing $ 20,008 $ 16,338 $ 35,566 $ 29,552
Specialized transport 6,938 7,814 14,081 15,500
Driver outsourcing 6,871 5,002 12,130 9,105
Other service revenues 2,881 2,400 5,427 4,200
----------- ----------- ----------- -----------
Total operating revenues 36,698 31,554 67,204 58,357
Costs and expenses:
Operating costs 33,564 28,074 61,763 52,046
Depreciation and amortization 380 313 742 574
Selling, general and administrative 2,076 1,925 4,069 3,758
----------- ----------- ----------- -----------
Operating income 678 1,242 630 1,979
Net interest income (expense) (109) 1 (172) 19
Income before income taxes 569 1,243 458 1,998
Income tax expense 152 479 32 771
----------- ----------- ----------- -----------
Net income 417 764 426 1,227
Less preferred stock dividends - - - 62 - - - 122
----------- ----------- ----------- -----------
Net income applicable to common stock $ 417 $ 702 $ 426 $ 1,105
=========== =========== =========== ===========
Net income per common share:
Primary $ 0.15 $ 0.27 $ 0.16 $ 0.42
=========== =========== =========== ===========
Fully diluted $ 0.15 $ 0.27 $ 0.16 $ 0.42
=========== =========== =========== ===========
Average number of common shares
and common stock equivalents 2,708,128 2,635,273 2,677,957 2,643,780
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
The Morgan Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow
(Unaudited)
Six Months Ended
June 30,
---------------------
1996 1995
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(Dollars in thousands)
Operating activities
Net income $ 426 $ 1,227
Adjustment to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 742 574
Debt amortization 16 16
------- -------
1,184 1,817
Changes in operating assets and liabilities:
Accounts receivable (2,727) (2,481)
Accounts receivable, other (195) (60)
Prepaid expenses and other current expenses 411 (594)
Accounts payable (1,392) 83
Accrued liabilities (473) 827
Accrued drivers pay 425 525
Accrued insurance claims 287 204
Refundable deposits (31) (4)
------- -------
Net cash provided by (used in operating activities (2,511) 317
Investing activities
Purchases of property and equipment, net of disposals (285) (1,187)
Intangible purchase --- (2,311)
Increase in other assets (167) (359)
------- -------
Net cash used in investing activities (2,963) (3,857)
Financing activities
Net proceeds from (payment on) bank and seller
financed notes and credit line 1,558 1,573
Dividends on common and preferred stock (88) (204)
Treasury stock purchase, net of officer loan (115) (338)
Conversion of warrants --- 106
------- -------
Net cash provided by (used in) financing activities 1,355 1,137
------- -------
Net decrease in cash and equivalents (1,608) (2,403)
Cash and cash equivalents at beginning of period 2,851 6,694
------- -------
Cash and cash equivalents at end of period $ 1,243 $ 4,291
======= =======
See notes to condensed consolidated financial statements.
<PAGE>
The Morgan Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1996
Note 1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements of The Morgan Group, Inc. and Subsidiaries (the
"Company") have been prepared in accordance with generally
accepted accounting principles for interim financial reporting
and with instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of
normal recurring adjustments) considered necessary for fair
presentation have been included. Operating results for the
three months and six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for
the year ended December 31, 1996. These financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto, for the year ended December 31,
1995.
The condensed consolidated financial statements include the
accounts of the Company and its subsidiaries, Morgan Drive
Away, Inc. ("Morgan"), TDI, Inc. ("TDI"), Interstate Indemnity
Company ("Interstate"), and Morgan Finance, Inc. ("Finance")
all of which are wholly owned. Significant intercompany
accounts and transactions have been eliminated in
consolidation.
Note 2. Indebtedness
The Company has extended, through April 30, 1997, various
credit facilities with banks at terms similar to those terms
disclosed in the December 31, 1995 financial statements. The
Company expects to renew or extend these agreements in the
normal course of business.
Note 3. In February of 1996, Morgan Drive Away adopted a Special
Employee Stock Purchase Plan ("Plan") under which Morgan Drive
Away's President and Chief Executive Officer purchased 70,000
shares of Class A Common stock from treasury stock at the then
current market value price of $560,000. Under the terms of the
Plan, $56,000 was delivered to the Company and a promissory
note was executed in the amount of $504,000 bearing an
interest rate of five (5%) percent per annum due in 2003. The
Plan allows for repayment of the note using shares at $8.00
per share. Morgan Drive Away has the right to repurchase, at
$8.00 per share, 56,000 shares during the first year of the
agreement and 28,000 during the second year.
<PAGE>
SIGNATURES
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.
THE MORGAN GROUP, INC.
BY: /s/ Richard B. DeBoer
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Richard B. DeBoer
Vice President and CFO
Date: August 27, 1996
