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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
[ 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: 0-22604
WHITE RIVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 93-1011071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Westchester Avenue, Suite 201, 10604
White Plains, New York (Zip Code)
(Address of principal executive offices)
(914) 251-0237
(Registrant's telephone number, including area code)
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 ___
---
As of August 1, 1996, 4,874,756 shares of White River Corporation common stock,
par value $0.01 per share, were outstanding.
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WHITE RIVER CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Interim Statements of Financial Condition,
June 30, 1996 (Unaudited), and December 31, 1995 3
Consolidated Interim Statements of Operations (Unaudited),
Quarters and Six Months Ended June 30, 1996, and 1995 4
Consolidated Interim Statements of Cash Flows (Unaudited),
Six Months Ended June 30, 1996, and 1995 5
Notes to Consolidated Interim Financial Statements
(Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
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 Information 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
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WHITE RIVER CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL CONDITION
- ------------------------------------------------------------------------------
Dollars in thousands, except per share amounts June 30, 1996 Dec. 31, 1995
- ------------------------------------------------------------------------------
Assets (Unaudited)
Cash and cash equivalents $ 141,560 $ 139,245
Accounts receivable, net (reserves: $1,541
and $1,472) 11,210 9,899
Investment securities, at market value
(adjusted cost: $34,034 and $35,356) 64,986 48,154
Other current assets 3,675 4,583
---------- ---------
Total current assets 221,431 201,881
Goodwill, net (accumulated amortization:
$12,425 and $9,489) 28,770 34,806
Other investments, at adjusted cost (fair
value: $47,241 and $34,495) 27,849 28,103
Purchased software and equipment, net
(accumulated amortization and
depreciation: $32,360 and $32,085) 21,708 25,791
Other assets 7,778 6,174
---------- ---------
Total assets $ 307,536 $ 296,755
==============================================================================
Liabilities
Accounts payable and accrued expenses $ 26,420 $ 21,197
Current portion of notes payable and other debt 8,151 7,660
Current deferred revenues 4,482 5,063
Current portion of contract funding 1,205 3,328
---------- ---------
Total current liabilities 40,258 37,248
Deferred income tax liability 23,874 17,961
Notes payable and other debt 21,386 27,220
Other liabilities 14,144 12,790
---------- ---------
Total liabilities 99,662 95,219
---------- ---------
Redeemable preferred stock 8,336 8,275
---------- ---------
Stockholders' equity
Series B, Participating Cumulative Preferred
Stock - par value $1.00
per share; 50,000 shares designated; none
issued -- --
Common stock - par value $0.01 per share;
62,500,000 shares authorized; 6,370,000
shares issued 64 64
Common paid-in surplus 199,936 199,936
Retained earnings 27,939 32,693
Net unrealized investment gains, net of tax 20,119 8,319
Common stock in treasury, at cost (1,495,244
and 1,467,079 shares) (48,520) (47,751)
---------- ---------
Total stockholders' equity 199,538 193,261
---------- ---------
Total liabilities, redeemable preferred
stock and stockholders' equity $ 307,536 $ 296,755
==============================================================================
The accompanying notes are an integral part of these consolidated interim
financial statements.
3
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WHITE RIVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
- ------------------------------------------------------------------------------
Quarter Ended Six Months Ended
In thousands, June 30, June 30,
-------------------- --------------------
except per share amounts 1996 1995 1996 1995
- ------------------------------------------------------------------------------
Revenues
Insurance-related services $ 31,956 $ 28,612 $ 63,325 $ 56,622
Investment income 1,936 2,352 3,905 4,251
-------- -------- -------- --------
Total revenues 33,892 30,964 67,230 60,873
-------- -------- -------- --------
Operating expenses
Compensation and benefits 16,079 11,786 30,284 24,840
Provision for litigation -- 4,500 -- 4,500
Other operating expenses 17,686 18,589 34,551 35,383
-------- -------- -------- --------
Total operating expenses 33,765 34,875 64,835 64,723
-------- -------- -------- --------
Operating income (loss) 127 (3,911) 2,395 (3,850)
-------- -------- -------- --------
Net investment gains
Net realized investment gains 996 9,010 996 9,377
Change in net unrealized
investment gains and losses -- 7,305 -- 16,103
-------- -------- -------- --------
Net investment gains 996 16,315 996 25,480
-------- -------- -------- --------
Interest expense 950 3,325 1,982 5,782
-------- -------- -------- --------
Pretax income 173 9,079 1,409 15,848
Income tax expense 2,869 2,751 5,613 5,862
-------- -------- -------- --------
Net income (loss) (2,696) 6,328 (4,204) 9,986
Dividends and accretion on
redeemable preferred stock 147 144 296 288
-------- -------- -------- --------
Net income (loss) applicable
to common stock $ (2,843) $ 6,184 $ (4,500) $ 9,698
======== ======== ======== ========
Primary income (loss) per
common share $ (0.58) $ 1.13 $ (0.92) $ 1.76
Fully-diluted income (loss)
per common share $ (0.58) $ 1.10 $ (0.92) $ 1.72
==============================================================================
The accompanying notes are an integral part of these consolidated interim
financial statements.
4
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WHITE RIVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
- --------------------------------------------------------------------------------
Six Months Ended June 30,
----------------------------
In thousands 1996 1995
- ------------------------------------------------------------------------------
Net income (loss) $ (4,204) $ 9,986
Adjustments to reconcile net income (loss) to
net cash and cash equivalents provided from
operations:
Amortization and depreciation of
purchased software and equipment 6,939 7,096
Change in accounts payable and accrued expenses 5,288 4,598
Amortization of goodwill 2,936 3,032
Repayment of contract funding balances (2,258) (6,594)
Deferred income tax expense 2,174 8,367
Net investment gains (996) (25,480)
Change in current deferred revenues (581) 875
Provision for litigation -- 4,500
Other, net 51 (5,955)
----------- -----------
Net cash and cash equivalents provided from
operations 9,349 425
----------- -----------
Cash flows provided from investing activities:
Proceeds from sales of investment
securities and other investments 2,318 11,356
Purchases of software and equipment (1,827) (1,245)
Other, net 24 678
----------- -----------
Net cash and cash equivalents provided from
investing activities 515 10,789
----------- -----------
Cash flows provided from (used for) financing
activities:
Principal payments on notes payable and
other debt (16,181) (3,456)
Proceeds from notes payable and other debt 9,750 42,000
Purchases of treasury stock (1,165) (5,580)
Dividends paid on redeemable preferred stock (236) (236)
Pledge of collateral relating to proceeds
from notes payable and other debt,
net of repayments -- (5,444)
Other, net 283 --
----------- -----------
Net cash and cash equivalents provided from
(used for) financing activities (7,549) 27,284
----------- -----------
Net increase in cash and cash equivalents
during period 2,315 38,498
Cash and cash equivalents balance at beginning
of period 139,245 94,985
----------- -----------
Cash and cash equivalents balance at end of
period $ 141,560 $ 133,483
==============================================================================
Supplemental information:
Interest paid $ 1,745 $ 4,767
Non-cash equipment financing $ 1,088 $ 412
Income taxes refunded $ 766 $ 417
Minority interest in CCC other investment
distribution $ 254 $ --
Exchange of other investments in
settlement of notes payable and other
debt $ -- $ 35,051
==============================================================================
The accompanying notes are an integral part of these consolidated interim
financial statements.
5
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WHITE RIVER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION
White River Corporation (together with its wholly-owned subsidiaries, unless the
context requires otherwise, "White River" or, together with all of its
subsidiaries, the "Company") commenced operations in its present form on
September 24, 1993, concurrent with the purchase and other transfer of selected
assets and the assumption of certain liabilities (collectively, the
"Capitalization") from its former parent company, Fund American Enterprises
Holdings, Inc., and certain of its subsidiaries (together, "Fund American"). On
December 22, 1993, Fund American distributed (the "Distribution") approximately
75% of the outstanding shares of White River common stock, par value $0.01 per
share (the "Common Stock"), to all holders of Fund American common stock.
Based upon the composition of its assets at the time of the Capitalization,
White River met the definition of an investment company (an "Investment
Company") under the Investment Company Act of 1940 (the "Investment Company
Act"). In anticipation of the Distribution, White River submitted an
application to the Securities and Exchange Commission (the "Commission") seeking
exemptive relief from various provisions of the Investment Company Act. During
December 1993, White River received from the Commission a temporary exemption
from registering as an Investment Company for a period of up to two years.
During October 1995, White River filed a report with the Commission which
concluded that, based upon the composition of its assets, White River no longer
met the definition of an Investment Company. Since the filing of such report,
White River has conducted and intends to continue to conduct its business
operations so as to avoid having to register as an Investment Company under the
Investment Company Act.
During June 1994, White River completed its acquisition of a majority of the
total outstanding common stock, par value $0.10 per share (the "CCC Common
Stock"), of CCC Information Services Group Inc. (together with its
subsidiaries, unless the context requires otherwise, "CCC", formerly InfoVest
Corporation). CCC, through CCC Information Services Inc. and certain other
subsidiaries, primarily provides automobile claims information and processing,
claims management software and value-added communication services. As of June
30, 1996, White River held: (i) approximately 52% of the total outstanding CCC
Common Stock, and (ii) CCC preferred stock (the "CCC Preferred Stock") with a
redemption value of $39.6 million, including accrued but unpaid dividends.
During June 1996, CCC filed a registration statement on Form S-1 with the
Commission for an initial public offering (the "CCC IPO") of 5.5 million (before
exercise of underwriters' over-allotment option) newly issued shares of CCC
Common Stock, representing 25% of the total such shares expected to be
outstanding after such offering. Subject to prevailing market conditions and
other factors, CCC expects to complete the CCC IPO during the third quarter of
1996 at a price of between $10 to $12 per share. CCC intends to use the net
proceeds of the CCC IPO to reduce existing bank debt and redeem a portion of the
shares of the CCC Preferred Stock, including accrued but unpaid dividends
thereon. Upon consummation of the CCC IPO, White River expects to hold
approximately 39% of the total outstanding CCC Common Stock, and through its
ownership of CCC Preferred Stock expects to hold 51% of the total voting power
associated with CCC's total outstanding voting stock. There can be no assurance
as to whether and on what terms the CCC IPO
6
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WHITE RIVER CORPORATION AND SUBSIDIARIES
will be consummated.
NOTE 2. BASIS OF PRESENTATION
The accompanying consolidated interim financial statements include the accounts
of White River and its subsidiaries, including those of CCC. The consolidated
interim financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). All significant intercompany balances
have been eliminated in consolidation. The consolidated interim financial
statements include all adjustments (consisting solely of normal recurring
adjustments) considered necessary by management to fairly present the financial
condition, results of operations and cash flows of the Company. Notwithstanding
the foregoing, these consolidated interim financial statements may not be
indicative of financial results for the full year. Such consolidated interim
financial statements should be read in conjunction with White River's 1995
Annual Report to Stockholders and Form 10-K.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities as well as the disclosure of contingent assets and
liabilities as of the date of the financial statements. Such estimates also
have a pervasive affect upon the reported amounts of revenues and expenses
reflected in the consolidated interim statements of operations. Actual results
could differ from these estimates.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121
establishes standards of financial accounting and reporting for the impairment
of long-lived assets, certain identifiable intangibles and related goodwill.
Under the provisions of SFAS No. 121, companies are required to review such
assets for impairment whenever events or changes in circumstances indicate that
the carrying amount of such assets may not be recoverable. White River adopted
SFAS No. 121 effective January 1, 1996; such adoption had no effect upon the
financial condition as of June 30, 1996, or the operating results of the Company
for the six months then ended.
NOTE 3. INCOME (LOSS) PER COMMON SHARE
The calculation of primary income (loss) per common share is computed by
dividing net income (loss) applicable to common stock for the quarters and six
months ended June 30, 1996, and 1995, by the weighted average number of
outstanding shares of Common Stock for such periods, which was 4.9 million
shares for each of the 1996 periods and 5.5 million for each of the 1995
periods. The calculation of fully-diluted income (loss) per common share is
computed by dividing net income (loss) applicable to common stock for the
quarters and six months ended June 30, 1996, and 1995, by the sum of the
weighted average number of outstanding shares of Common Stock and potentially
dilutive securities for such periods, which was 4.9 million for each of the 1996
periods, and 5.6 million and 5.7 million for the quarter and six months ended
June 30, 1995, respectively. No dividends were declared on shares of Common
Stock during such periods.
7
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WHITE RIVER CORPORATION AND SUBSIDIARIES
NOTE 4. INCOME TAXES
The Company's effective tax rate of 398.4% and 37.0% for the six months ended
June 30, 1996, and 1995, respectively, exceeds the Federal statutory tax rate of
35.0% due primarily to the effects of the amortization of goodwill and the
undistributed earnings and accretion of preferred stock relating to CCC.
NOTE 5. SUBSEQUENT EVENT
During July 1996, White River received $14.5 million in exchange for its
interest, including accrued but unpaid dividends, in NEWFLO Corporation common
and preferred stock. As a result of this disposition, White River will record
after tax net investment gains of $8.5 million during the quarter ended
September 30, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition - As of June 30, 1996, and December 31, 1995
Book value per common and common equivalent share increased 5.2% to $41.02 at
June 30, 1996, from $39.01 at December 31, 1995, due primarily to unrealized
gains from White River's investment in Cross Timbers Oil Company.
Cash and cash equivalents as of June 30, 1996, totalled $141.6 million, as
compared to $139.2 million as of December 31, 1995. Substantially all of the
cash and cash equivalent balances were deposited with several major banking
institutions in interest-bearing accounts with maturities of six days or less.
As of June 30, 1996, such deposits earned a weighted average interest rate of
5.2% per annum, as compared to 5.4% per annum as of December 31, 1995. The
White River board of directors (the "White River Board") continues to consider
the level of capital available to White River in light of its current operating
needs and the prospects for the acquisition of additional operating businesses.
If, as the result of such analysis, it is determined that stockholder value
would best be enhanced through the return of capital to stockholders, White
River may distribute to stockholders, through share repurchases or other means
approved by the White River Board, funds which the White River Board concludes
are in excess of the current and projected capital needs of White River.
Results of Operations -- Quarters and Six Months Ended June 30, 1996, and 1995
The Company reported a net loss applicable to common stock of $2.8 million, or
$0.58 per fully-diluted common share, for the quarter ended June 30, 1996, as
compared to net income of $6.2 million, or $1.10 per fully-diluted common
share, for the quarter ended June 30, 1995. The 1996 results reflect pretax
operating income of $0.1 million as compared to a pretax operating loss of $3.9
million for the same period in 1995. The 1996 results also reflect after tax
net investment gains of $0.6 million, as compared to $10.6 million for the same
period in 1995. Due to the adoption of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," during the third quarter of 1995,
after tax unrealized net investment gains of $12.3 million which arose during
the second quarter of 1996 were recorded as a separate component of
stockholders' equity. Additionally, after tax unrealized net investment gains
of $7.5 million relating to changes in the value of White River's portfolio of
other investments during the quarter ended June
8
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WHITE RIVER CORPORATION AND SUBSIDIARIES
30, 1996, were not recognized in either earnings nor stockholders' equity. Net
income for the second quarter of 1995 included an after tax investment gain of
$3.2 million relating to the transfer of White River's entire interest in Mid
Ocean Limited common stock and related options to Fund American in partial
settlement of the balance borrowed under a $40.0 million revolving credit
facility.
For the six months ended June 30, 1996, White River reported a net loss
applicable to common stock of $4.5 million, or $0.92 per fully-diluted common
share, as compared to net income of $9.7 million, or $1.72 per fully-diluted
common share, for the six months ended June 30, 1995. The 1996 year-to-date
results reflect pretax operating income of $2.4 million, as compared to a pretax
operating loss of $3.9 million for the same period in 1995. The 1996 year-to-
date results also reflect after tax net investment gains of $0.6 million, as
compared to $16.6 million for the same period in 1995.
White River's pretax investment income totalled $1.9 million for the quarter
ended June 30, 1996, and $3.9 million for the six months then ended, as compared
to $2.4 million and $4.3 million for the quarter and six months ended June 30,
1995, respectively. These decreases are primarily due to a reduction in
dividend income recorded during 1996, as compared to 1995, resulting from sales
of investment securities and other investments primarily during 1995.
Insurance-Related Services
CCC's revenues from insurance-related services increased $3.3 million, or 11.7%,
to $32.0 million for the quarter ended June 30, 1996, from $28.6 million for the
same period last year. For the six months ended June 30, 1996, such revenues
increased $6.7 million, or 11.8%, to $63.3 million, as compared to $56.6 million
for the same period last year. This improvement was due primarily to higher
revenues from collision estimating software licensing, from communications
services and from integrated claims services, which offset lower revenues from
CCC's total loss valuation services. Collision estimating software licensing
revenue increased primarily because of an increase in the number of software
licenses implemented principally to collision repair facilities. This volume
increase more than offset a reduction in prices caused by competitive pressures.
The increase in communication services was due to additional transactions at a
slightly higher average price per transaction. The increase in integrated
claims services was due primarily to higher transaction volume. The decrease in
total loss valuation services revenue resulted from a reduction in transaction
volume offset in part by a higher average price per transaction.
On a stand-alone basis, CCC reported net income of $4.1 million and $6.7 million
for the quarter and six months ended June 30, 1996, respectively, as compared to
a net loss of $2.0 million and $1.1 million for the same periods in 1995. Such
stand-alone results exclude the effects of White River's amortization and
adjustment of goodwill and purchased software associated with the CCC
acquisition, which totalled $4.3 million and $7.8 million during the quarter and
six months ended June 30, 1996, respectively, and $2.2 million and $4.4 million
for the respective periods in 1995. The 1996 adjustment includes income tax
benefits of $1.8 million and $3.1 million for the quarter and six months ended
June 30, 1996, respectively, which had been recorded by CCC but which were
reflected by White River as a reduction of goodwill.
As previously disclosed, CCC was involved in litigation with MacLean Hunter
Market Reports, Inc. ("MacLean Hunter") and certain licensees of the MacLean
Hunter data concerning certain claims including alleged
9
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WHITE RIVER CORPORATION AND SUBSIDIARIES
copyright infringement. During December 1995, CCC had conditionally agreed to a
settlement structure that would resolve all outstanding disputes between these
parties. During April 1996, all conditions precedent to the settlement
agreement were satisfied, accordingly, all issues arising out of the litigation
between the parties have been fully and completely settled and each civil action
has been dismissed with prejudice. The final settlement amounts, including
related expenses, approximated the $4.5 million pretax charge recorded during
the second quarter of 1995 in connection with this litigation.
Operating Expenses
Compensation and benefits expense increased 36.4%, to $16.1 million for the
quarter ended June 30, 1996, as compared to $11.8 million for the same period in
1995. The 1996 quarterly result reflects a $3.4 million increase in White
River's provision for stock-based incentive awards, which was primarily due to
changes in the market value of Common Stock during such period. For the six
months ended June 30, 1996, compensation and benefits expense totalled $30.3
million, as compared to $24.8 million for the 1995 period.
Other operating expenses decreased 4.9%, to $17.7 million for the quarter ended
June 30, 1996, as compared to $18.6 million for the same period in 1995. For
the six months ended June 30, 1996, other operating expenses totalled $34.6
million, as compared to $35.4 million for the 1995 period, representing a
decrease of 2.4%. The decrease in other operating expenses during the 1996
periods is attributable to effective cost containment initiatives and the
deferral by CCC of certain operating expenditures that it would have made in the
absence of the covenants under its existing bank credit facility.
Interest Expense
Interest expense totalled $1.0 million and $2.0 million for the quarter and six
months ended June 30, 1996, respectively, as compared to $3.3 million and $5.8
million, respectively, for the same periods in 1995. Such decreases are due
primarily to the repayment of balances due under the credit agreement between
White River and Fund American, reduction of balances due under CCC's bank credit
agreement and lower outstanding contract funding balances.
Liquidity and Capital Resources
White River
As of June 30, 1996, the Company had consolidated cash and cash equivalents of
$141.6 million, of which $136.9 million relate to balances held by White River
primarily in accounts with banks with maturities of six days or less. White
River's primary sources of additional cash include sales of investments as well
as interest earned on cash equivalents and dividends earned from the investment
portfolio. For the foreseeable future, White River does not expect to receive
cash dividends on its holdings of CCC Common Stock. Based upon the terms of the
CCC Preferred Stock, White River expects to receive 50% of the net proceeds
(subject to a minimum of $20.0 million) from the CCC IPO in partial redemption,
including accrued but unpaid dividends, of the CCC Preferred Stock. There can
be no assurances that the CCC IPO will be consummated. White River has not made
any formal or informal commitment to make additional investments in or advances
to CCC and is not a direct or indirect guarantor of any CCC indebtedness.
10
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WHITE RIVER CORPORATION AND SUBSIDIARIES
During the quarter ended June 30, 1996, the Company repurchased approximately
15,000 shares of Common Stock for an aggregate cost of $0.6 million. Cumulative
repurchases of shares of Common Stock during the period from the Distribution
through June 30, 1996, totalled approximately 1,495,000 shares at an aggregate
cost of $48.9 million. As of June 30, 1996, White River may repurchase
approximately 523,000 additional shares of Common Stock under its existing share
repurchase authorization.
Although no assurances can be given, management believes that available cash
will be sufficient for White River to satisfy its working capital requirements
for the foreseeable future. The White River Board continues to consider the
level of capital available to White River in light of its current operating
needs and prospects for the acquisition of additional operating businesses.
If, as the result of such analysis, it is determined that stockholder value
would best be enhanced through the return of capital to stockholders, White
River may distribute to stockholders, through share repurchases or other means
approved by the White River Board, funds which the White River Board concludes
are in excess of the current and projected capital needs of White River.
CCC
CCC's principal liquidity requirements are to provide working capital, to fund
purchases of equipment and software, and to repay indebtedness (including the
CCC Preferred Stock). For the six months ended June 30, 1996, net cash provided
by CCC's operating activities was $8.7 million, net of $2.3 million which was
used to repay contract funding balances. CCC used $1.8 million of cash to
purchase equipment and software and $6.4 million to reduce debt outstanding
under CCC's existing bank credit agreement. CCC anticipates that its purchase
of equipment and software will total approximately $6.1 million during the year
ended December 31, 1996.
CCC intends to use the net proceeds of the CCC IPO to reduce existing bank debt
and to redeem a portion of the shares of the CCC Preferred Stock, including
accrued but unpaid dividends thereon. Additionally, CCC is negotiating a new
bank credit facility which would provide CCC with the ability to borrow under a
$20.0 million revolving credit facility and the option to borrow up to $15.0
million under a term loan, as long as the gross proceeds of the CCC IPO are
between $50.0 million and $70.0 million. CCC intends to use the proceeds of
this new borrowing to repay the remaining portion of existing bank debt.
Borrowings under the new bank agreement will bear interest at the prime rate (as
defined) or the LIBOR rate plus 1.5% per annum, as selected by CCC. If the new
bank agreement is not consummated, the existing bank credit facility will remain
in place. CCC continues to review various financing alternatives. CCC believes
that cash flows from operations and available bank lines of credit will be
sufficient to meet its liquidity needs over the next 12 months. There can be no
assurance, however, that CCC will be able to satisfy its liquidity needs in the
future without engaging in financing activities beyond those described above.
11
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WHITE RIVER CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
White River and CCC are parties to various claims and routine litigation
arising in the normal course of their businesses. Such claims and
litigation are not expected to have a material adverse effect upon the
Company.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On May 9, 1996, White River held its regular annual meeting (the "Annual
Meeting") of stockholders for purposes of (i) electing two Class III
Directors with terms ending in 1999, (ii) approving the appointment of
Ernst & Young LLP ("Ernst & Young") as White River's independent
auditors for 1996, and (iii) transacting such other business as may be
properly brought before the Annual Meeting or any adjournment thereof.
At the Annual Meeting, Patrick M. Byrne was elected as a Class III
Director with a term ending in 1999 with a total of 4,014,452 votes cast
for, zero votes cast against, and 47,150 votes withheld. In addition,
Robert T. Marto was re-elected as a Class III Director with a term
ending in 1999 with a total of 4,014,915 votes cast for, zero votes
cast against, and 46,687 votes withheld. After the Annual Meeting,
Andrew Delaney continued to serve as a Class I Director with a term
ending in 1997, and Gordon S. Macklin continued to serve as a Class II
Director with a term ending in 1998.
In addition, at the Annual Meeting, Ernst & Young was approved as White
River's independent auditors for 1996 with a total of 4,050,807 votes
cast for, 3,760 votes cast against, and 7,035 votes withheld.
No other business was conducted at the Annual Meeting.
Item 5. Other Information
None.
12
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WHITE RIVER CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule.
(b) Reports on Form 8-K
None.
13
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WHITE RIVER CORPORATION AND SUBSIDIARIES
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.
Date: August 7, 1996 White River Corporation
By: /s/ Robert T. Marto
--------------------------------
Name: Robert T. Marto
Title: President and
Chief Executive Officer
By: /s/ Brian P. Zwarych
--------------------------------
Name: Brian P. Zwarych
Title: Vice President and
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM JUNE 30, 1996 FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 141,560
<SECURITIES> 64,986
<RECEIVABLES> 11,210
<ALLOWANCES> 1,541
<INVENTORY> 0
<CURRENT-ASSETS> 221,431
<PP&E> 21,708
<DEPRECIATION> 32,360
<TOTAL-ASSETS> 307,536
<CURRENT-LIABILITIES> 40,258
<BONDS> 21,386
8,336
0
<COMMON> 64
<OTHER-SE> 199,474
<TOTAL-LIABILITY-AND-EQUITY> 307,536
<SALES> 63,325
<TOTAL-REVENUES> 67,230
<CGS> 0
<TOTAL-COSTS> 64,835
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,982
<INCOME-PRETAX> 1,409
<INCOME-TAX> 5,613
<INCOME-CONTINUING> (4,204)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,204)
<EPS-PRIMARY> (0.92)
<EPS-DILUTED> (0.92)
</TABLE>
