-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WBVXZ2Bz5NhIn63YbZbaDDxB7ZUliCz/LIlVoOwws8UK8RA6vbsk+nPhfdu3xU52 DlJCU1aub9x7jOcMGNj2cw== 0000898430-95-002205.txt : 19951118 0000898430-95-002205.hdr.sgml : 19951118 ACCESSION NUMBER: 0000898430-95-002205 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: US FACILITIES CORP CENTRAL INDEX KEY: 0000798085 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 330097221 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15196 FILM NUMBER: 95588798 BUSINESS ADDRESS: STREET 1: 650 TOWN CENTER DR STE 1600 CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7145491600 MAIL ADDRESS: STREET 1: 650 TOWN CENTER DRIVE STREET 2: STE 1600 CITY: COSTA MESA STATE: CA ZIP: 92626-1925 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [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 ___________________ Commission file Number: 0-15196 US FACILITIES CORPORATION ------------------------- (Exact name of Registrant as specified in its charter) DELAWARE 33-0097221 - ----------------------------------- ------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 650 Town Center Drive, Suite 1600, Costa Mesa, CA 92626 - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (714) 549-1600 -------------- (Registrant's telephone number, including area code) Not applicable -------------- (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. YES X NO ---- ---- Number of shares outstanding of each class of the Registrant's Common Stock as of November 3, 1995: Common Stock, par value $.01 per share: 5,723,098 Common Stock Purchase Rights: 5,723,098 INDEX Part I FINANCIAL INFORMATION Item 1. FINANCIAL INFORMATION Consolidated Financial Statements: Condensed Balance Sheets as of September 30, 1995 and December 31, 1994.................................... 3 Income Statements for the Quarters and Nine Months Ended September 30, 1995 and 1994.................... 4 Statements of Stockholders' Equity for the Nine Months Ended September 30, 1995 and 1994............. 5 Condensed Statements of Cash Flows for the Nine Months Ended September 30, 1995 and 1994............. 6 Notes to Consolidated Financial Statements........... 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................. 8 Part II OTHER INFORMATION Item 6. EXHIBITS and REPORTS ON FORM 8-K..................... 14 SIGNATURES.......................................................... 16
2 PART I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Consolidated Financial Statements: US FACILITIES CORPORATION Condensed Consolidated Balance Sheets (000 omitted)
SEPTEMBER 30, 1995 DECEMBER 31, 1994 ------------------ ----------------- ASSETS: Investments, at market (amortized cost $148,284 at September 30, 1995, $137,072 at December 31, 1994) $154,651 $133,075 Cash and invested cash 5,107 4,502 Restricted cash and short term investments 22,672 21,340 Accrued investment income 2,118 1,844 Receivables: Reinsurance losses and reserves 15,774 14,301 Premiums 14,647 9,434 Prepaid reinsurance premiums 5,578 3,950 Deferred income taxes 976 3,277 Other assets 7,944 8,014 -------- -------- Total assets $229,467 $199,737 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Insurance liabilities: Amounts due insurance companies $ 23,254 $ 20,418 Losses and loss adjustment expenses 76,011 69,647 Unearned premiums 19,466 14,613 Note payable 25,000 25,000 Accounts payable and accrued expenses 4,500 6,980 -------- -------- Total liabilities 148,231 136,658 Stockholders' Equity 81,236 63,079 -------- -------- Total liabilities and stockholders' equity $229,467 $199,737 ======== ========
See accompanying notes to consolidated financial statements 3 US FACILITIES CORPORATION Consolidated Income Statements (000 omitted, except for per share data) ----------------------------------------
Quarter Ended Nine Months Ended September 30, September 30, ----------------- ------------------ 1995 1994 1995 1994 ------- ------- -------- ------- Revenues: Premiums earned $27,507 $22,419 $ 84,843 $69,637 Commissions and fees 6,133 5,573 19,381 17,978 Net investment income 2,329 1,500 6,904 4,300 Realized investment gains 361 13 593 244 ------- ------- -------- ------- Total revenues 36,330 29,505 111,721 92,159 ------- ------- -------- ------- Operating Expenses: Losses and loss adjustment expenses incurred 18,663 15,012 56,762 49,185 Policy acquisition expenses 8,562 7,561 26,807 23,735 General and administrative expenses 3,964 4,100 11,925 13,125 Other -- -- 1,242 -- Interest 535 -- 1,624 3 ------- ------- -------- ------- 31,724 26,673 98,360 86,048 Unusual charges: Expenses related to unsolicited takeover proposal -- -- -- 1,504 Restructuring expenses -- -- -- 654 ------- ------- -------- ------- Total operating expenses 31,724 26,673 98,360 88,206 ------- ------- -------- ------- Income before income taxes 4,606 2,832 13,361 3,953 Income tax expense 1,129 725 3,113 485 ------- ------- -------- ------- Net Income $ 3,477 $ 2,107 $ 10,248 $ 3,468 ======= ======= ======== ======= Net income per common and common equivalent share $.60 $.35 $1.81 $.58 ======= ======= ======== ======= Weighted average number of common and common equivalent shares outstanding during period 5,824 6,093 5,670 5,995 ======= ======= ======== =======
See accompanying notes to consolidated financial statements 4 US FACILITIES CORPORATION Consolidated Statements of Stockholders' Equity (000 omitted)
Net unrealized gain (loss) Common Paid in on Retained Treasury stock capital securities earnings stock Total ------ ------- ---------- -------- --------- ------- Balance at December 31, 1993 $59 $43,156 $ 443 $20,306 $ (631) $63,333 Cumulative effect of adoption of SFAS 115 at January 31, 1994 -- -- 3,838 -- -- 3,838 Net income -- -- -- 1,361 -- 1,361 Exercise of stock options -- 368 -- -- 300 668 Unrealized investment loss, net -- -- (4,737) -- -- (4,737) --- ------- -------- ------- ------- ------- Balance at September 30, 1994 $59 $43,524 $ (456) $21,667 $ (331) $64,463 === ======= ======== ======= ====== ======= - ---------------------------------------------------------------------------------------------------- Balance at December 31, 1994 $59 $44,261 $(2,637) $26,544 $(5,148) $63,079 Net income -- -- -- 10,248 -- 10,248 Exercise of stock options 2 225 -- -- 1,680 1,907 Dividends paid -- -- -- (837) -- (837) Unrealized investment gain, net -- -- 6,839 -- -- 6,839 --- ------- ------- ------- ------- ------- Balance at September 30, 1995 $61 $44,486 $ 4,202 $35,955 $(3,468) $81,236 === ======= ======= ======= ======= =======
See accompanying notes to consolidated financial statements. 5 US FACILITIES CORPORATION Condensed Consolidated Statements of Cash Flows (000 omitted)
Nine Months Ended September 30, --------------------------------- 1995 1994 --------------- --------------- Cash provided by operating activities $ 9,965 $ 9,371 -------- -------- Cash flows from investing activities: Purchases of fixed maturity investments (92,260) (13,076) Purchases of equity securities (2,401) (6,351) Proceeds from sales of investment securities 73,216 15,418 Net sales (purchases) of short-term investments 11,241 (7,976) Purchases of property and equipment (226) (174) -------- -------- Cash used in investing activities (10,430) (12,159) -------- -------- Cash flows from financing activities: Dividends paid (837) -- Exercise of stock options 1,907 1,082 -------- -------- Cash provided by financing activities 1,070 1,082 -------- -------- Net increase (decrease) in cash and invested cash 605 (1,706) Cash and invested cash at beginning of period 4,502 2,851 -------- -------- Cash and invested cash at end of period $ 5,107 $ 1,145 ======== ======== Supplemental Disclosure of Cash Flow Information: Interest paid $ 1,583 $ --- -------- -------- Income taxes paid $ 3,815 $ 525 -------- -------- See accompanying notes to consolidated financial statements.
6 US FACILITIES CORPORATION Notes to Consolidated Financial Statements 1. GENERAL. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles and with the instructions to Form 10-Q. Accordingly, they do not include all of 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 accruals) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 1995, are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant's 1994 Annual Report to Stockholders. 2. OTHER. Other expenses include $547,000 incurred, resulting from the closure of the Registrant's US MedCare Review, Inc. operations effective May 31, 1995 and expenses of $695,000 pertaining to the resignation of the Registrant's former Chief Executive Officer in March, 1995. 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations - --------------------- The Registrant's consolidated revenues for the third quarter ended September 30, 1995 increased 23% to $36,330,000 from $29,505,000 in the 1994 quarter, and increased 21% to $ 111,721,000 for the first nine months of 1995 from $92,159,000 for the 1994 period. Consolidated net income for the third quarter of 1995 increased 65% to $ 3,477,000 from $2,107,000 for the third quarter of 1994, and increased 195% to $10,248,000 for the first nine months of 1995 from $3,468,000 in the 1994 nine month period. The 1995 results reflect continuing improvements in profitability in each of the Registrant's business segments resulting from growth in revenues due to increased marketing efforts, lower claims cost and the effect of the Registrant's cost control programs which began during 1994. The Registrant incurred expenses of $547,000 resulting from the closure of its US MedCare Review, Inc. operations effective May 31,1995, and expenses of $695,000 pertaining to the resignation of the Registrant's former Chief Executive Officer in March, 1995. Net income for the 1994 nine month period was negatively impacted by several events. The Registrant became the target of an unsolicited takeover proposal and involved in a proxy contest with Fidelity National Financial, Inc. The expenses of responding to those issues reduced the Registrant's pretax income by $1,504,000 for the nine months ended September 30, 1994. The Registrant also posted a non-recurring restructuring charge during the second quarter of 1994 which reduced pretax income by $654,000. In addition to the unusual expenses noted above, claims incurred as a result of the Northridge, California earthquake in January 1994 reduced pre-tax income by $2,100,000 for the nine month period ended September 30, 1994. Consolidated net investment income increased 55% to $2,329,000 in the 1995 quarter compared to $1,500,000 in the 1994 quarter, and increased 60% to $6,904,000 for the 1995 nine month period from $4,300,000 in the 1994 nine month period, reflecting continuing growth in USF RE's asset base and generally higher rates of income earned on securities acquired between September, 1994 and June, 1995. Additionally, during 1995 the Registrant invested new funds in taxable bonds rather than tax-exempt bonds. However, tax-exempt bonds continue to account for the major portion of the Registrant's investment portfolio. Consolidated general and administrative expenses declined 3% to $3,964,000 in the 1995 quarter from $4,100,000 in the 1994 quarter, and 8 decreased 9% to $11,925,000 for the 1995 nine month period from $13,125,000 in the 1994 nine month period, primarily due to cost savings realized from a restructuring involving closings of branch offices, reductions in personnel, and the continuation of expense control measures implemented during the second half of 1994. Income tax as a percentage of pre-tax income fluctuates depending on the proportion of tax-exempt investment income to total pre-tax income. Business Segments - ----------------- The Registrant conducts business in two segments: (a) Medical stop-loss and employee benefit products, which includes all commission and fee-based revenues of the Registrant and reinsurance of 50% of the medical stop-loss business generated by the Registrant's wholly owned subsidiary, USBenefits Insurance Services, Inc. ("USBenefits"). USBenefits acts as the underwriting manager and marketing organization for medical stop-loss coverages issued for The Continental Insurance Company, an unaffiliated party which during the second quarter of 1995 became a member of the CNA Insurance Companies Group. USBenefits also markets other employee benefits related products. (b) Property/casualty insurance and reinsurance underwriting conducted by the Registrant's wholly-owned subsidiaries, USF RE INSURANCE COMPANY ("USF RE") and USF Insurance Company ("USFIC"). Business lines included in this segment are property/casualty reinsurance assumed nationwide from unaffiliated insurance companies, primarily through reinsurance intermediaries, and surplus lines insurance underwritten by USFIC. During the second quarter of 1995 USF RE ceased writing new business in its plate glass insurance line of business, which line accounted for 5% of earned premiums in 1994. The tables set forth below present pre-tax operating information for each of the Registrant's business segments and for its holding company operations (including realized gains) for the quarters and nine month periods ended September 30, 1995 and 1994. Segment amounts differ from those reported for the third quarter of 1994 due to reclassification of general and administrative expenses between segments to conform to the 1995 presentation. 9
Quarter Ended Nine Months Ended September 30 September 30 ---------------------------- --------------------------- 1995 1994 % Change 1995 1994 % Change ------ ------ -------- ------- ------ --------- Stop-Loss and Employee - ---------------------- Benefit Products - ---------------- (000 omitted) Revenues: Premiums earned $19,524 $17,346 13% $60,462 $54,617 11% Commissions & fees 6,133 5,573 10% 19,381 17,978 8% Investment income 824 571 4% 2,444 1,637 49% ------- ------- ------- ------- Total Revenues 26,481 23,490 13% 82,287 74,232 11% ------- ------- ---- ------- ------- ---- Expenses: Losses & loss adjustment expenses 13,105 11,699 12% 39,783 36,838 8% Policy acquisition expenses 6,388 5,699 12% 20,082 18,026 11% General and administrative expenses 2,779 3,189 (13)% 8,642 10,313 (16)% ------- ------- ------- ------- Total Expenses 22,272 20,587 10% 68,507 65,177 5% ------- ------- ---- ------- ------- ---- Income before income taxes $ 4,209 $ 2,903 45% $13,780 $ 9,055 52% ======= ======= ==== ======= ======= ====
Medical stop-loss production increased 12% in the 1995 quarter and 10% in the 1995 nine month periods over the 1994 comparable periods, generating the indicated gains in premiums earned and commissions and fees revenues. The changes in medical stop-loss production were primarily due to strong retention of in-force accounts and continuing growth in new business. The increase in profitability of medical stop-loss is due, in part, to the declining rate of increase in the cost of healthcare over the prior year, reduction in general and administrative expenses and improved underwriting selection. The increases in acquisition expenses are primarily related to the additional revenues produced.
Quarter Ended Nine Months Ended September 30 September 30 --------------------------- -------------------------------- 1995 1994 % Change 1995 1994 % Change ------ ------ -------- ------- --------- ---------- Property/Casualty - ----------------- Underwriting - ------------ (000 omitted) Revenues: Premiums earned $7,983 $5,073 57% $24,381 $15,020 62% Investment income 1,493 929 60% 4,430 2,663 66% ------ ------ ------- -------- Total revenues 9,476 6,002 58% 28,811 17,683 63% ------ ------ --- ------- -------- --- Expenses: Losses & loss adjustment expenses 5,558 3,313 68% 16,979 12,347 37% Policy Acquisition expenses 2,174 1,862 17% 6,725 5,709 18% General and Administrative expenses 852 649 31% 2,457 2,126 15% ------ ------ ------- -------- Total Expenses 8,584 5,824 47% 26,161 20,182 23% ------ ------ --- ------- -------- --- Income (loss) before income taxes $ 892 $ 178 401% $ 2,650 $( 2,499) -- ====== ====== === ======= ======== ===
10 The increases in property/casualty premiums earned during the 1995 periods as compared to the 1994 periods result from the continued growth of USF RE's property/casualty reinsurance operations due to marketing efforts, increased production from its client base, and an increase in its policyholders' surplus. Also contributing to this increase was growth in surplus lines premium writings as USFIC expanded its operations into additional states. The increases in losses and loss adjustment expenses in 1995 resulted directly from the increase in earned premiums, while the nine months ended September 30, 1994 includes $2.1 million of claims incurred as a result of the Northridge, California earthquake in January 1994. Increases in policy acquisition expenses, which include commissions and a portion of general and administrative expenses, result from the increases in earned premiums, and vary depending on the mix of business written and the total amount of general and administrative expenses.
Quarter Ended Nine Months Ended September 30 September 30 ----------------------------- ----------------------------------- 1995 1994 % Change 1995 1994 % Change ------- ------- -------- -------- ----------- ---------- Holding Company Operations - -------------------------- (000 omitted) Revenues: Investment income $ 12 $ - - $ 30 $ - - Realized gains 361 13 - 593 244 - ----- ----- ------- -------- Total revenues 373 13 - 623 244 - ----- ----- ------- ------- -------- ------- Expenses: General and administrative expenses 333 262 27% 826 686 20% Expenses related to unsolicited takeover proposal - -- - - 1,504 - Restructuring expenses - -- - - 654 - Other expenses - -- - 1,242 - - Interest expense 535 -- - 1,624 3 - ----- ----- ------- -------- Total expenses 868 262 231% 3,692 $ 2,847 30% ----- ----- ------- ------- -------- ------- Loss before income taxes $(495) $(249) (99)% $(3,069) ( 2,603) 18% ===== ===== ======= ======= ======== =======
Increases in realized gains for the 1995 quarter and nine month period as compared to the 1994 periods result from changes in the mix of portfolio assets in response to market interest rate changes. The increase in interest expense resulted from a $25,000,000 bank loan obtained by the Registrant in December 1995. Of this amount, $20,000,000 was contributed to the surplus of USF RE and USFIC to support additional growth in both medical stop-loss and property/casualty premiums in 1995 and beyond. 11 Accounting Policies - ------------------- Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments," will be adopted by the Registrant for the year ending December 31,1995. Adoption is not expected to have a material effect on the financial statements of the Registrant. Inflation - --------- The healthcare marketplace has been subject to the effects of increasing costs for provider services. Such growth in the costs of healthcare tends to generate not only increases in premiums for medical stop-loss coverage, resulting in greater revenues, but also higher claim payments. Inflation can negatively impact insurance and reinsurance operations by causing higher claim settlements than may have originally been estimated, while not necessarily allowing an immediate increase in premiums to a level necessary to maintain profit margins. The Registrant makes no explicit provisions for inflation, but trends are considered when setting underwriting terms and claim reserves. Such reserves are subjected to a continuing review process to assess their adequacy and are adjusted as deemed appropriate. Overall economic trends also affect interest rates, which in turn affect investment income and the market value of the Registrant's investment portfolio. Liquidity and Financial Resources - --------------------------------- The Registrant utilizes cash from operations and maturing investments to meet its insurance obligations to policyholders and claimants. Primary sources of cash from operations include premium collections, investment income and commissions and fees. The principal uses of cash from operations are for premium payments to insurance companies, payments of claims under insurance and reinsurance contracts, and operating expenses such as salaries, commissions, taxes and general overhead. The Registrant anticipates that it will continue to generate sufficient cash flow from operations to cover its short-term (1 to 18 months) and long-term (18 months to 3 years) liquidity needs. While the Registrant currently has no immediate plans for significant capital outlays, it is contemplating acquisition opportunities that complement its business operations. The Registrant invests primarily in the highest grades of bonds, equities, certificates of deposit and other short-term instruments. At September 30, 1995, 97% of its investment portfolio was rated AA or better. All such securities are carried at quoted market values as of the balance sheet date. 12 Other than as discussed above, the Registrant is not aware of any known trends, events or uncertainties that have had or are reasonably likely to have a material effect on the Registrant's liquidity, capital resources or operations. Legislative and Regulatory Developments. - --------------------------------------- Federal healthcare legislation, which was extensively considered but not adopted by Congress during 1994, has been taken up by the 1995 Congress. As with prior efforts, such legislation concerns government regulation and control of the financing and delivery of healthcare. Among the items being considered are proposals concerning the scope of the present preemptive provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Some of these proposals would reinforce the ERISA preemption of state regulation of self- insured plans, while others would permit states the authority to regulate specific aspects of self-insured plans. For the past several years, various states have been initiating their own healthcare reforms. Many of these actions have focused primarily on the small group health insurance market, generally plans with 50 employees or less. Other state efforts include attempts to regulate self-insured plans directly or indirectly by regulating companies providing stop-loss coverage. The Registrant believes these state initiatives have not had, and are not expected to have, a significant effect on the Registrant's medical stop-loss business. In addition, the National Association of Insurance Commissioners ("NAIC") proposed in September 1995, a model act that would regulate medical stop-loss policies. The principal feature of the model act is a recommendation that stop-loss policies contain a minimum specific attachment point of $20,000. In order to be effective, the NAIC model act would have to be adopted by legislative action in each state. The Registrant believes that not all states will adopt the model act, and that of those states that do, some will adopt specific attachment point requirements lower than the $20,000 level recommended by the model act. Furthermore, the Registrant believes that if adopted by a state, the model act will be challenged on the basis that it is preempted by ERISA. Accordingly, at this time the Registrant believes that the proposed model act will not have a significant effect on its medical-stop loss business. The Registrant can not predict at this time the extent to which the federal or state legislative or regulatory initiatives discussed above will be adopted, or the extent of the impact they would have on the Company's business. Management believes, however, that changes to the healthcare system which ultimately may be adopted will continue to recognize employers' self-insurance of healthcare benefits as a viable and cost effective method of financing healthcare. Accordingly, management believes that its stop-loss products will 13 continue to be an appropriate component to assure the solvency of self-insured plans, and will remain a source of revenues to the Registrant. PART II OTHER INFORMATION Item 6. EXHIBITS and REPORTS ON FORM 8-K. (a) The following is a list of exhibits required to be filed as part of this Form 10-Q by Item 601 of Regulation S-K: 3.1, 4.1 Restated Certificate of Incorporation, as amended, as presently in effect. Filed as Exhibits 3.1 and 3.1.1 to the Registrant's Form S-1 Registration Statement declared effective by the Securities and Exchange Commission on October 31, 1986 (the "Registration Statement"), and incorporated herein by this reference; and as Exhibit 3 to the Registrant's Current Report on Form 8-K dated May 24, 1990, and incorporated herein by this reference. 3.2, 4.2 Bylaws of US Facilities Corporation, as amended, as presently in effect. Filed as Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, and incorporated herein by this reference. 4.3 Stock Certificate of US Facilities Corporation. Filed as Exhibit 4.1 to the Registrant's Registration Statement, and incorporated herein by this reference. 4.4 Rights Agreement. Filed as Exhibit 2 to the Registrant's Current Report on Form 8-K dated May 24, 1990, and incorporated herein by this reference. 4.5 First Amendment to Rights Agreement. Filed as Exhibit 1 to the Registrant's Current Report on Form 8-K dated January 16, 1992, and incorporated herein by this reference. 4.6 Second Amendment to Rights Agreement. Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated April 29, 1994, and incorporated herein by this reference. 14 4.7 Third Amendment to Rights Agreement. Filed on October 3, 1995, as Exhibit 4 to the Registrant's Current Report on Form 8-K dated September 28, 1995, and incorporated herein by this reference. 11 US Facilities Corporation and Subsidiaries Computation of Earnings Per Share. 15 Independent Auditors' letter regarding unaudited interim financial information. 27 Financial Data Schedules (b) No reports on Form 8-K were filed by the Registrant during the quarter ended September 30, 1995. 15 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. US FACILITIES CORPORATION Date: November 9, 1995 By: /S/DAVID L. CARGILE -------------------- DAVID L. CARGILE Chairman of the Board, President and Chief Executive Officer Date: November 9, 1995 By: /S/MARK BURKE -------------- MARK BURKE Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) 16 EXHIBIT INDEX 4.1 Restated Certificate of Incorporation, as amended, as presently in effect. Filed as Exhibits 3.1 and 3.1.1 to the Registrant's Form S-1 Registration Statement declared effective by the Securities and Exchange Commission on October 31, 1986 (the "Registration Statement"), and incorporated herein by this reference; and as Exhibit 3 to the Registrant's Current Report on Form 8-K dated May 24, 1990, and incorporated herein by this reference. 4.2 Bylaws of US Facilities Corporation, as amended, as presently in effect. Filed as Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, and incorporated herein by this reference. 4.3 Stock Certificate of US Facilities Corporation. Filed as Exhibit 4.1 to the Registrant's Registration Statement, and incorporated herein by this reference. 4.4 Rights Agreement. Filed as Exhibit 2 to the Registrant's Current Report on Form 8-K dated May 24, 1990, and incorporated herein by this reference. 4.5 First Amendment to Rights Agreement. Filed as Exhibit 1 to the Registrant's Current Report on Form 8-K dated January 16, 1992, and incorporated herein by this reference. 4.6 Second Amendment to Rights Agreement. Files as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated April 29, 1994, and incorporated herein by this reference. 4.7 Third Amendment to Rights Agreement. Filed on October 3, 1995, as Exhibit 4 to the Registrant's Current Report on Form 8-K dated September 28, 1995, and incorporated herein by this reference. 11 US Facilities Corporation and Subsidiaries Computation of Earnings Per Share. 15 Independent Auditors' letter regarding unaudited interim financial information. 27 Financial Data Schedules. 17 EX-11 2 COMPUTATION OF EARNINGS EXHIBIT 11 US FACILITIES CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE The computation of per share income is based upon the weighted average number of common and common equivalent shares outstanding during each quarter ended September 30, as follows: (000 omitted, except per share data)
Quarter Ended Nine Months Ended September 30 September 30 ---------------- ----------------- 1995 1994 1995 1994 ------ ------- -------- ------ Net Income $3,477 $2,107 $10,248 $3,468 ====== ====== ======= ====== Weighted average shares outstanding during the period 5,628 5,849 5,547 5,789 Common stock equivalent shares 196 244 123 206 ------ ------ ------- ------ Common and common stock equivalent shares outstanding for purposes of calculating income per share 5,824 6,093 5,670 5,995 Incremental shares to reflect full 46 (33) 102 4 dilution ------ ------ ------- ------ Total shares for purpose of calculating fully diluted income per share 5,870 6,060 5,772 5,999 ====== ====== ======= ====== Net income per common and common equivalent share $0.60 $0.35 $1.81 $0.58 ====== ====== ======= ======
EX-15 3 AUDITORS' REVIEW REPORT EXHIBIT 15 Independent Auditors' Review Report ----------------------------------- The Board of Directors and Shareholders US Facilities Corporation: We have reviewed the condensed consolidated balance sheet of US Facilities Corporation and subsidiaries as of September 30, 1995, and the related consolidated income statements for the three-month and nine-month periods ended September 30, 1995 and 1994, and the related consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the nine-month periods ended September 30, 1995 and 1994. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of US Facilities Corporation and subsidiaries as of December 31, 1994, and the related consolidated income statements, statements of stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated February 17, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ KPMG PEAT MARWICK LLP Los Angeles, California October 20, 1995 EX-27 4 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 9-MOS DEC-31-1995 DEC-31-1995 JUL-01-1995 JAN-01-1995 SEP-30-1995 SEP-30-1995 0 0 0 0 0 0 0 0 0 0 0 0 0 154,651 0 27,779 0 15,774 0 0 0 229,647 0 76,011 0 19,466 0 0 0 0 0 25,000 0 0 0 0 0 0 0 0 0 229,467 27,507 84,843 2,329 6,904 361 593 6,133 19,381 18,663 56,762 8,562 26,807 3,964 11,925 4,606 13,361 1,129 3,113 0 0 0 0 0 0 0 0 3,477 10,248 0.60 1.81 0.60 1.81 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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