Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended September 30, 1995 Commission File Number 811-407
1150 LIQUIDATION CORPORATION
(formerly SBM Company)
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0557530
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4440 IDS Center
Minneapolis, Minnesota 55402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 338-5254
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 ___
2,179,714 Common Shares were outstanding as of September 30, 1995
1150 LIQUIDATION CORPORATION
I N D E X
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Statement of Net Assets in Liquidation
and Consolidated Balance Sheet 1
Statement of Changes in Net Assets in Liquidation 2
Condensed Statements of Income 3
Condensed Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
PART II. OTHER INFORMATION 10-11
Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
1150 LIQUIDATION CORPORATION
(formerly SBM COMPANY AND SUBSIDIARIES)
STATEMENT OF NET ASSETS IN LIQUIDATION as of September 30, 1995 (Note 1)
CONSOLIDATED BALANCE SHEET (going concern historical cost basis)
as of December 31, 1994
<TABLE>
<CAPTION>
September 30, December 31,
Assets 1995 1994
(Unaudited)
<S> <C> <C>
Investments:
Debt securities available-for-sale at market -- $ 653,207,076
Debt securities held-to-maturity at amortized cost -- 13,944,234
Marketable equity securities at market -- 683,089
Mortgage loans -- 36,257,214
Policy loans -- 22,153,936
Other invested assets -- 1,694,506
Short-term investments -- 37,602,490
Total investments -- 765,542,545
Cash and cash equivalents 6,970,412 3,565,693
Accrued investment income -- 8,470,103
Receivable from reinsurer -- 105,806,093
Deferred policy acquisition costs, less accumulated
amortization -- 76,950,470
Land, building and equipment, at cost, less accumulated
depreciation of $2,470,302 -- 1,417,796
Deferred income taxes -- 3,091,000
Refundable income taxes -- 3,003,386
Other assets 206,104 1,517,067
$ 7,176,516 $ 969,364,153
Liabilities and Stockholders' Equity (Deficit)
Future policy benefits -- $ 910,104,179
Face amount certificate reserves -- 60,355,015
Accounts payable and other liabilities 1,259,953 9,252,047
Income taxes payable 1,075 --
Deferred compensation and retirement benefits for officers -- 1,227,284
Total liabilities 1,261,028 980,938,525
Mandatory redeemable voting convertible preferred stock,
par value $1,000 (includes dividends in arrears:
September 30, 1995 - $0, December 31, 1994 - $760,000);
authorized 19,000 shares; issued 19,000 shares, liquidation
value $19,000,000, plus dividends in arrears -- 18,485,868
Common stock, held by employee benefit plans; 304,693 shares - Note 2 825,718 1,916,519
Commitments and contingencies
Common stock, no par value, authorized 20,000,000 shares; issued and
outstanding 2,179,714 shares; less 304,693 shares held by employee
benefit plans -- 2,945,606
Unrealized losses on marketable equity securities, net of income tax
benefit of $0 and $131,048, respectively -- (254,388)
Unrealized losses on debt securities, net -- (59,691,765)
Retained earnings -- 25,023,788
Total stockholders' equity (deficit) -- (31,976,759)
$ 969,364,153
Net assets in liquidation $ 5,089,770
Number of common shares outstanding less 304,693 shares held by
employee benefit plans 1,875,021
Net assets in liquidation per outstanding share $ 2.71
</TABLE>
See Notes to Consolidated Financial Statements.
1150 LIQUIDATION CORPORATION
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
For the Period from December 31, 1994 to September 30, 1995
(Unaudited)
Shareholders' equity (deficit) at December 31, 1994
(going concern historical cost basis) $(31,976,759)
Net loss from operations January 1 - May 31, 1995 (844,592)
Decrease in unrealized losses on marketable equity
and debt securities, net of taxes January 1 - May 31, 1995 50,736,738
Shareholders' equity at May 31, 1995
(going concern historical cost basis) 17,915,387
Loss from sale of Company operations (Note 1) (6,542,608)
Net loss from operations June 1 - September 30, 1995 (99,791)
Preferred stock liquidation amount in excess of carrying value (1,279,805)
Common stock dividend distribution - $2.75 per share (5,994,214)
Allocation of common stock dividend distribution to
common stock held by employee benefit plans 837,906
Allocation of net loss and carrying value to common stock held
by employee benefit plans 252,895
Net assets in liquidation at September 30, 1995 $ 5,089,770
See Notes to Consolidated Financial Statements.
1150 LIQUIDATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(going concern historical cost basis)
(Unaudited)
<TABLE>
<CAPTION>
Two Months Three Months Five Months Nine Months
Ended Ended Ended Ended
May 31, September 30, May 31, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Net investment income $ 9,804,543 $ 15,344,109 $ 24,909,308 $ 47,298,415
Underwriting, sales service and
distribution fees 439,889 718,126 1,172,832 2,436,476
Life insurance premiums 70,263 112,435 171,103 309,453
Advisory and other fees from affiliated
mutual funds 247,495 374,097 617,996 1,105,949
Realized investment (losses) gains, net 43,115 (9,307,718) (408,498) (9,308,647)
Other income 371,840 475,743 989,332 1,384,788
Total revenues 10,977,145 7,716,792 27,452,073 43,226,434
Benefits and expenses:
Provisions for benefits:
Annuities and life insurance 7,013,400 10,682,258 17,893,660 31,880,456
Face amount certificate reserves (interest) 488,800 885,193 1,224,738 2,757,951
Loans and real estate losses 50,000 -- 50,000 200,000
Death and other benefits 113,665 141,077 234,599 465,123
Commissions, wages and benefits 1,408,838 1,776,316 3,260,594 5,463,360
Interest expense -- 40,507 -- 124,363
Amortization of deferred policy acquisition costs 1,193,555 (195,886) 2,971,790 2,136,665
Occupancy and equipment 242,418 367,360 557,763 1,059,805
State guaranty association assessments 50,587 225,659 126,137 678,167
Other expenses 661,319 1,283,215 1,388,370 2,575,937
Total benefits and expenses 11,222,582 15,205,699 27,707,651 47,341,827
Income (loss) from operations before income taxes (245,437) (7,488,907) (255,578) (4,115,393)
Income taxes (benefit) (130,834) (2,550,000) (139,834) (1,324,000)
Net income (loss) (114,603) (4,938,907) (115,744) (2,791,393)
Mandatory redeemable voting convertible
preferred stock dividends $ 268,840 -- $ 671,792 $ 760,000
Discount accretion on preferred stock 22,844 34,080 57,056 102,042
Net income (loss) applicable to common stock $ (406,287) $ (4,972,987) $ (844,592) $ (3,653,435)
Earnings per common share:
Primary $ (.19) $ (2.27) $ (.39) $ (1.67)
Fully diluted $ (.19) $ (2.27) $ (.39) $ (1.67)
Weighted average common shares
outstanding (primary) 2,179,714 2,179,714 2,179,714 2,190,098
Weighted average common shares
outstanding (fully diluted) 2,179,714 3,367,214 2,179,714 3,377,598
</TABLE>
See Notes to Consolidated Financial Statements.
1150 LIQUIDATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(going concern historical cost basis)
(Unaudited)
<TABLE>
<CAPTION>
Five Months Nine Months
Ended Ended
May 31, September 30,
1995 1994
<S> <C> <C>
Net cash provided by operating activities $ 25,874,110 $ 33,757,658
Cash flows from investing activities:
Proceeds from maturities and repayment of debt securities 5,764,960 85,407,578
Proceeds from sales of debt securities available-for-sale 54,978,153 178,739,005
Cost of debt securities acquired -- (203,800,750)
Sales (purchases) of short-term investments, net (43,117,345) (84,103,241)
Loan principal repayments 9,130,780 12,961,575
Loans funded (5,478,877) (8,773,902)
Proceeds from (additions to) land, building and equipment, net (39,394) 83,033
Net cash provided by (used in) investing activities 21,238,277 (19,486,702)
Cash flows from financing activities:
Payments to face amount certificate holders (11,117,664) (20,302,859)
Reserve payments from face amount certificate holders 6,022,253 14,496,615
Deposits received from annuitants, net 29,831,611 58,212,878
Payments to annuitants (74,190,148) (62,937,964)
Purchase of common stock -- (1,526,616)
Dividends on common stock -- (446,000)
Dividends on preferred stock -- (760,000)
Principal payments on notes payable -- (137,442)
Net cash used in financing activities (49,453,948) (13,401,388)
Net increase (decrease) in cash (2,341,561) 869,568
Cash:
Beginning of period 3,565,693 898,726
End of period $ 1,224,132 $ 1,768,294
</TABLE>
See Notes to Consolidated Financial Statements.
1150 LIQUIDATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Sale and Liquidation of the Company:
Effective May 31, 1995, SBM Company (the "Company") sold substantially
all of the business operations and assets of the Company to ARM
Financial Group, Inc. (ARM) (the Transaction) for a purchase price of
$34.5 million, net of $4.1 million of liabilities assumed, pursuant to
an Amended and Restated Stock and Asset Purchase Agreement dated
February 16, 1995 between the Company and ARM. As part of the
Transaction, ARM acquired all of the outstanding stock of the
Company's wholly owned subsidiaries (State Bond and Mortgage Life
Insurance Company ("SBM Life"), SBM Certificate Company ("SBMC") and
SBM Financial Services, Inc.) and certain assets of the Company,
including the investment adviser function of six mutual funds, and
assumed certain liabilities of the Company. The following summarizes
the proceeds from and net assets sold of the Transaction:
Proceeds from the sale $ 34,445,877
Assets sold:
Investments 808,543,939
Receivable from reinsurer 85,202,588
Deferred acquisition costs 61,683,713
Other assets 14,863,970
970,294,210
Liabilities assumed:
Future policy benefits 861,067,924
Face amount certificate reserves 56,439,745
Accounts payable and other liabilities 12,508,983
930,016,652
Net assets sold 40,277,558
Less costs of the Transaction, including income
taxes of $408,000 710,927
Net loss on sale of Company operations $ (6,542,608)
The Company intends to wind up and liquidate the Company as soon as
practicable. The Company has adopted a Plan of Dissolution effective
May 31, 1995. At closing, the Series A Preferred Stock was redeemed
for $20.5 million (including $1.5 million of dividends in arrears) as
a result of its senior rights over the common stock.
The Company's shareholders approved the Transaction and the Plan of
Dissolution (the "Plan") at their regular shareholder meeting on May
18, 1995. The Company also changed its name to "1150 Liquidation
Corporation" effective June 14, 1995.
The accompanying financial statements for September 1995 have been
prepared on a liquidation basis of accounting and include adjustments
which would result from the Transaction and Plan of Dissolution.
Accordingly, assets have been valued at estimated net realizable value
and liabilities include estimated costs associated with carrying out
the plan of liquidation. Estimated costs include legal and audit fees
and potential tax liabilities. No provision has been made for normal
operating costs or normal costs of liquidation beyond September 30,
1995, because the Company expects that the income from investments
will approximate such costs. No provision has been made for the costs
of litigation with the trustee of the employee benefit plans (see Note
2 to the financial statements), or for other extraordinary costs of
liquidation, beyond December 31, 1995, as these costs are uncertain at
this time.
The financial statements included in this Form 10-Q have been prepared
by the Company without audit. The condensed consolidated statements of
income and the condensed consolidated statements of cash flows and the
consolidated balance sheet as of December 31, 1994 have been prepared
using the going concern historical cost basis of accounting. In the
opinion of management, all adjustments necessary to present fairly the
financial positions, results of operations and cash flows for all
periods presented have been made.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the SBM Company and
Subsidiaries' Annual Report on Form 10-K for the year ended December
31, 1994.
Accounts payable on the balance sheet include $671,582 payable to ARM
Financial Group, Inc. which was paid in October, 1995.
Note 2. Common Stock Held by Employee Benefit Plans:
The Company's two employee benefit plans ("Plans") own 304,693 shares
of Company common stock. The value of such shares has been classified
as a separate line outside of net assets in liquidation on the
Company's Statement of Net Assets in Liquidation as of September 30,
1995 and outside of stockholders' equity on the Company's Consolidated
Balance Sheet as of December 31, 1994 because of the Company's
obligation to repurchase such shares, under certain circumstances,
under a stock agreement, or stock repurchase agreement or put
agreement ("Put Agreement"), between the Company and the Plans'
trustee dated September 30, 1993.
On the September 30, 1995 Statement of Net Assets in Liquidation the
value of the shares owned by the Plans has been shown as the pro-rata
estimated liquidation value of all of the Company's common shares,
after the $2.75 dividend paid in September, 1995, pursuant to the Plan
of Dissolution described above in Note 1; on the December 31, 1994
balance sheet the share value was shown as the appraised fair market
value of the shares since such value greatly exceeded the adjusted
book value of such shares as determined by the Company. The appraised
value at June 30, 1994 was used in the December 31, 1994 balance sheet
as an approximation of the December 31, 1994 appraised value because
the Company had not yet received an appraisal as of the latter date.
In January 1995, the trustee of the Plans notified the Company that it
was tendering all shares held by the Plans to the Company for purchase
by the Company under the Put Agreement. Under the Put Agreement, in
certain circumstances, the Company has agreed to purchase common
shares tendered to it by the Plans at a price equal to the higher of
adjusted book value (as defined in the Put Agreement) or fair market
value. The Plans' trustee asserted in its tender that the correct
basis under the Put Agreement to determine the value of the shares for
purposes of the Company's repurchase obligation is to determine their
adjusted book value at December 31, 1994 based on the books of the
Company but using the amortized cost of the Company's investment
portfolios, rather than their fair market value. The Company maintains
that such value under the Put Agreement must be based on the books of
the Company which, after the effectiveness of the SFAS 115 on January
1, 1994, must use the market value, rather than the amortized cost, of
the substantial portion of the Company's investment portfolios which
must be classified as "available-for-sale" under applicable accounting
principles. In the alternative, the Company maintains that the tender
was invalid in the circumstances under which it was made and, even if
valid, that the correct value under such circumstances is the pro-rata
estimated liquidation value of all of the Company's common shares
pursuant to the Plan of Dissolution, rather than any value based upon
the books of the Company as prepared on the going concern historical
cost basis.
The Company declined to repurchase such shares for various reasons
including those stated above and commenced a declaratory judgment
action in Minnesota District Court in March 1995 to determine its
repurchase obligation and the applicable price under the Put
Agreement. If the views of the Company or those of a large shareholder
which is a party to such litigation prevail, either the Company will
have no obligation to purchase the shares held by the Plans under the
Put Agreement or the price at which any such repurchase obligation
exists will be based either on the December 31, 1994 appraised value
of the shares ($5.38 per share) less the 1995 dividend distribution
($2.75 per share) or the pro-rata estimated liquidation value of all
of the Company's common shares pursuant to the Plan of Dissolution
(estimated for purposes of the September 30, 1995 statement of net
assets in liquidation to be $2.71 per share). If the view of the
Plans' trustee prevail, the Company will have the obligation to
repurchase all of the shares held by the Plans at the December 31,
1994 adjusted book value of such shares on the books of the Company
using the amortized cost of the Company's investment portfolios net of
the dividend distribution already received in 1995 (estimated to be
approximately $10-$11 per share).
While the Company believes its interpretation of the Put agreement is
correct, the determination that the views of the Trustee are correct
would have the effect at September 30, 1995 of increasing the value of
the shares held by the Plans by approximately $2.4 million and
reducing net assets in liquidation available for other shareholders by
a like amount, thereby reducing the anticipated per share liquidating
value under the Plan of Dissolution of all other shares by about $1.31
per share.
The litigation is expected to reach the trial state in early 1996 and
the court's decision at trial may be appealed. Accordingly, there may
not be a definitive resolution of this matter for as long as two years
or longer. However, the parties are presently involved in
substantitive settlement discussions, the ultimate outcome of which is
uncertain as of the date of filing.
1150 LIQUIDATION CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sale of Company Operations
The Company closed on the sale of its operations to ARM Financial Group, Inc.
("ARM") on June 14, 1995 which for accounting purposes became effective May 31,
1995 and incurred a loss of $6.5 million (see Note 1 to the consolidated
financial statements). The purchase price was determined pursuant to an Amended
and Restated Purchase Agreement dated February 16, 1995 between the Company and
ARM. The gain or loss on the sale recorded by the Company was subject to
fluctuation through the effective date based on the market value of the
available-for-sale securities and the associated unrealized gains/losses.
In 1994, as a result of a combination of factors as discussed below, the Company
was required to look to outside sources for capital and ultimately entered into
the sale of the Company's operations to ARM. The events leading to the sale of
the Company's operations to ARM included the following: The required adoption of
Statement of Financial Accounting Standards No. 115 (SFAS 115) effective January
1, 1994, in combination with the rapidly rising interest rates in 1994 resulted
in significantly reduced market values in the Company's investment portfolio,
especially its CMOs, which adversely impacted stockholders' equity through the
recording of unrealized losses. This decline in investment portfolio value and
stockholders' equity caused regulatory concerns regarding the capital adequacy
of the Company. In addition, A.M. Best reduced the Company's rating to B+ (as
discussed below) which caused significant concern in the marketplace along with
further concern by regulators as to the adequacy of the Company's capital base.
As such the sale of the Company's operations became the solution to the capital
issues.
Subsequent to the sale, the Company has no operations. Upon closing of the sale,
the Company redeemed its preferred stock at liquidation value ($19 million) plus
$1.5 million of dividends in arrears. The remaining proceeds from the
Transaction have been invested in a short-term government money market fund. The
Company is in the process of paying its remaining liabilities and has made an
initial distribution to shareholders. The remaining proceeds will be distributed
once the litigation with the trustee of the employee benefit plans has been
resolved (see Note 2 to the consolidated financial statements) and all other
liabilities are satisfied.
The results of operations for SBM Life, SBM Company and SBM Financial Services
are for the five months ended May 31, 1995 compared to the six months ended June
30, 1994, which must be taken into account in the following discussion.
Annuities and Life Insurance Segment - SBM Life
In November 1994, A.M. Best informed SBM Life that its rating was being reduced
from A- (excellent) to B+ (very good). A.M. Best indicated that the reasons for
the rating change were SBM Life's concentration in CMOs even after the
disposition of $186 million of CMOs earlier in 1994 and its desire that SBM Life
increase its capital level to at least replace losses realized by such sales of
CMOs. Also, during the third quarter of 1994, several adverse newspaper articles
were written concerning SBM Life's investment portfolio and the unrealized
depreciation associated with it. The combination of these announcements and the
reduction by A.M. Best of SBM Life's rating negatively impacted new sales,
especially in the Tax Sheltered Annuity ("TSA") marketplace. Policy withdrawals
and surrenders also increased as a result of the above. These factors should be
considered in the review of the following discussion.
The Company's life insurance subsidiary (SBM Life) has seen a decrease in
annuity premiums during the five months of 1995 compared to the six months of
1994 with premium being $28.5 million in 1995 compared to $38.3 million in 1994.
The decrease has been in both single premium deferred annuities and first year
premium on sales of 403(b) tax sheltered flexible premium deferred annuities.
This decrease is mainly due to the A.M. Best rating change and adverse publicity
discussed above and, to a lesser degree, product changes to its TSA product line
which have not been fully accepted by some agents and competition from
competitive products such as variable annuities.
Annuity surrenders and withdrawals for SBM Life for the five months ended May
31, 1995 compared to the six month period last year were $73.2 million and $41.6
million, respectively. This increase in withdrawals is mainly attributable to
the various factors discussed above. The higher interest rates during 1994 and
early 1995, as compared to the renewal crediting rates being paid on older
annuities, have also caused some increase in withdrawals as annuity holders look
for other investments or annuities which have higher rates of return.
Operating income (loss), before taxes, excluding the effect of realized
portfolio gains/losses, for SBM Life for the five months ended May 31, 1995, was
$(70,898) compared to $3,559,414 for the six month period in 1994. This decrease
was the result of two main items. First, the spread between investment income
earned on its investment portfolio and the interest credited on the outstanding
annuities significantly decreased. Return on invested assets excluding realized
gains and losses for the five months ended May 31, 1995 and six months of 1994
was 7.28% and 7.64%, respectively. This decrease in investment return was the
result of SBM Life carrying higher than normal levels of short term investments
to insure adequate liquidity during the previously described period of adverse
publicity and A.M. Best Rating downgrade and the reinvestment of the proceeds
from the CMO sales into lower yielding corporate bonds. The average rate of
interest credited on annuities was 5.53% and 5.53% for the periods ended May 31,
1995 and June 30, 1994, respectively, resulting in a year-to-date net spread of
1.75% in 1995 and 2.11% in 1994. Second, the increase in withdrawals and
surrenders during the first five months of 1995 resulted in increased
amortization of deferred acquisition costs. Amortization to date in 1995 was
$2,770,000 compared to $2,075,000 for the six month period last year.
Face Amount Certificate Segment - SBM Certificate Company ("SBMC")
Net investment income after income taxes for the five months ended May 31, 1995
was $184,000 compared to $125,000 for the six month period in 1994. The increase
in net investment income is mainly due to a higher spread earned on SBMC's
investment portfolio in relation to interest paid on outstanding certificates.
Administrative and building expense decreases also contributed to the increase
in net investment income.
As a result of the increasing interest rate environment through early 1995, SBMC
increased the interest rates offered on new Series 503 certificates throughout
1994 and on January 25, 1995. SBMC decreased the interest rates offered in May
1995 in response to the decrease in the interest rate environment in the second
quarter of 1995.
Sales of new certificates for the first five months of 1995 are approximately
88% of the level of sales for the six month period in 1994 and the average
monthly new sales for 1995 were slightly higher than 1994's average. In
addition, during the first five months of 1995, certificate renewal rates were
consistent with historical renewal levels and 1994's rates. SBMC has adjusted
its rates to remain as competitive as possible in order to attempt to maintain
its historical certificate renewal rates and generate new certificate sales
while still maintaining adequate operating spreads.
Also, in the first five months of 1995, SBMC recognized $(314,000) in investment
capital losses as a result of selling $5 million of various securities and
reinvesting the proceeds in commercial paper. This was done in anticipation of
greater amounts of scheduled maturities in the first half of 1995.
Mutual Fund Investment Advisory Segment
Mutual fund sales continued to decreased during 1995 with total fund sales
(excluding the State Bond Cash Management Fund) of approximately $5.3 million
for the five months ended May 31, 1995 compared to approximately $8.7 million
for the six month period in 1994. Redemptions increased from $8.9 million in
1994 to $12.1 million in 1995. Assets under management grew from $204 million at
December 31, 1994 to $217 million at May 31, 1995 as a result of increases in
value in both the stock and bond markets.
Capital Resources and Liquidity
As noted in Note 1 to the consolidated financial statements and under "Sale of
the Operations of the Company" herein, the Company has no remaining operations
and therefore no capital resources or liquidity issues. As previously discussed,
the Company is in the process of liquidating and distributing the proceeds from
the sale of its operations to the Company's shareholders. Additional
distributions will be made as soon as practicable after the litigation
(mentioned in Note 2 to the consolidated financial statements) is resolved and
all other liabilities are satisfied.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule (For SEC use only)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SBM COMPANY
Date By: /s/ Charles A. Geer
Charles A. Geer
Its: President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995<F2>
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 0
<CASH> 6,970,412
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 7,176,516
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
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0
0
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171,103
<INVESTMENT-INCOME> 24,909,308<F1>
<INVESTMENT-GAINS> (408,498)
<OTHER-INCOME> 2,780,160<F1>
<BENEFITS> 19,352,997
<UNDERWRITING-AMORTIZATION> 2,971,790
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> (255,578)<F1>
<INCOME-TAX> (139,834)<F1>
<INCOME-CONTINUING> (115,744)<F1>
<DISCONTINUED> 0
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<NET-INCOME> (115,744)<F1>
<EPS-PRIMARY> (.39)
<EPS-DILUTED> (.39)
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>January 01, 1995 through May 31, 1995.
<F2>The Company is currently using Liquidation Accounting.
<F3>Net assets in liquidation.
</FN>
</TABLE>
