-----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, JyIolHpbBIQ4F9J5bfhVIjouZetF37pA3G0IkbuXai1jrytbSZmXQQkQVv5LiPfs tTOOijb0Oi1yL05bT0KsnQ== 0000908834-97-000051.txt : 19970222 0000908834-97-000051.hdr.sgml : 19970222 ACCESSION NUMBER: 0000908834-97-000051 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961230 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970218 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN GROUP INC CENTRAL INDEX KEY: 0000906609 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 222902315 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13586 FILM NUMBER: 97537484 BUSINESS ADDRESS: STREET 1: 2746 OLD U S 20 W STREET 2: PO BOX 1168 CITY: ELKHART STATE: IN ZIP: 46514 BUSINESS PHONE: 2192952200 8-K/A 1 AMENDMENT NO. 2 TO FORM 8-K FILED 1/14/97 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 -------------------- FORM 8-K/A2 --------------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 30, 1996 THE MORGAN GROUP, INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 1-13586 22-2902315 (Commission File Number) (IRS Employer Identification No.) 2746 Old U.S. 20 West Elkhart, Indiana 46514-1168 (Address of principal executive offices) (Zip Code) (219) 295-2200 Registrant's telephone number, including zip code This Form 8-KA2 is filed to amend and restate only Item 7(b), Pro Forma Financial Statements, of the Registrant's Form 8-K for December 30, 1996, filed January 14, 1997 and first amended January 15, 1997. The remainder of such report is not amended hereby. Item 7b. Pro Forma Financial Information. (Refiled to correct information in the Pro Forma Condensed Combined Statements of Operations for the Nine Months Ended September 30, 1996 (unaudited) and for the Year Ended December 31, 1995 (unaudited)) The Morgan Group, Inc. and Transit Homes of America, Inc. pro forma condensed combined financial statements (unaudited) Pro Forma condensed combined balance sheet - September 30, 1996..............................................Pg. 4-5 Pro Forma condensed statement of operations - nine months ended September 30, 1996 and year ended December 31, 1995...............................................Pg. 6-7 Notes to pro forma financial statements........................Pg. 8-10 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION The Unaudited Pro Forma condensed Combined Balance Sheet is presented to give effect to the acquisition of Transit Homes of America, Inc. as if it had occurred on September 30, 1996 and combines the balance sheet of The Morgan Group, Inc. with that of Transit Homes of America, Inc. as of September 30, 1996. The Unaudited Pro Forma Condensed Combined Statements of Operations assume the transaction occurred at the beginning of the fiscal year ended December 31, 1996 and combines the statements of operations of The Morgan Group, Inc. for the year ended December 31, 1996 and the nine months ended September 30, 1996 with the statements of operations of Transit Homes of America, Inc. for the year ended December 31, 1995 and the nine months ended September 30, 1996. The pro forma information is based upon historical financial statement of Transit Homes of America, Inc. and The Morgan Group, Inc. after giving effect to the proposed transaction using the purchase method of accounting and assumptions and adjustments in the accompanying notes to the pro forma financial statements. The pro forma statements have been prepared by The Morgan Group, Inc. based upon the financial statements of Transit Homes of America, Inc. (filed with this report under Item 7a) which have been provided by Transit Homes of America, Inc.'s management. These pro forma statements may not be indicative of the results that would have actually occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. The pro forma financial statements should be read in conjunction with the audited financial statements and notes of Transit Homes of America, Inc. and the audited financial statements of The Morgan Group, Inc. THE MORGAN GROUP, INC. PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED) (In Thousands)
Sept. 30, Sept. 30 Sept. 30, Sept. 30, 1996 1996 1996 1996 Condensed Transit Transit Transit Adj. Morgan Combined Balance Excluded Balance Balance Proforma Balance Sheet Assets Sheet Sheet Adjustmens Sheet ----- ------ ----- ----- ---------- ----- Assets Current Assets: Cash and cash equivalents $267 ($267) --- $3,126 ($1,592) 2/ $1,534 Trade accounts receivable, less allowance 2,892 (2,892) --- 13,109 --- $13,109 for doubtful accounts of $44,000 in 1996 and $102,000 in 1995 Accounts receivable, other 57 (57) --- 388 --- $388 Prepaid expenses and other current assets 953 (853) 100 2,860 --- $2,960 Deferred income taxes --- --- --- 586 --- $586 ----- ----- ----- --- ----- ---- Total current assets 4,169 4,069 100 20,069 (1,592) $18,577 Property and equipment, net 804 50 754 6,575 ($504) 1/ $6,825 Intangible assets, net --- --- --- 5,001 $5,001 Intangible assets, Transit $364 ($364) $442 1/ $3,988 $3,910 2/ Other assets 10 10 --- 607 --- $607 ----- ----- ----- --- ----- ---- Total assets $4,983 $4,493 $490 $32,252 $2,256 $34,998 ====== ====== ==== ======= ====== =======
See notes to unaudited pro forma condensed financial statements. THE MORGAN GROUP, INC. PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED) (In Thousands)
Sept. 30, Sept. 30 Sept. 30, Sept. 30, 1996 1996 1996 1996 Condensed Transit Transit Transit Adj. Morgan Combined Balance Excluded Balance Balance Proforma Balance Sheet Assets Sheet Sheet Adjustmens Sheet ----- ------ ----- ----- ---------- ----- Liabilities and Stockholders' Equity Current Liabilities: Note payable to bank $1,581 ($1,581) --- $2,500 $2,500 Trade accounts payable 1,092 ($1,092) --- 2,622 $160 2/ $2,782 Accrued liabilities 200 ($200) --- 1,691 $800 2/ $2,491 Accrued driver pay --- --- --- 228 $228 Accrued claims payable 2,020 ($2,020) --- 4,169 $200 2/ $4,369 Refundable deposits 336 --- 336 1,768 ($62) 1/ $2,042 Current portion of long-term debt 207 ($157) 50 784 $411 2/ $1,245 ------ ------- ---- ------- ------ ------- Total current liabilities 5,436 ($5,050) 386 13,762 $1,509 $15,657 Long-term debt, less current portion 104 --- 104 1,703 $747 2/ $2,554 Deferred income taxes 622 $622 Commitments and contingencies --- --- Shareholders' equity Common stock, Transit 145 ($145) Common stock, $.015 par value Class A: Authorized shares - 7,500,000 Issued and outstanding shares - 1,489,010 and 1,449,554 23 $23 Class B: Authorized shares - 2,500,000 Issued and outstanding shares - 1,200,000 18 $18 Additional paid-in capital 12,441 $12,441 Retained earnings (652) 652 --- 5,160 --- $5,160 ------ ------- ---- ------- ------ ------- (507) $507 (0) $17,642 $17,642 Less - treasury stock, 116,543 shares, at cost (50) 50 --- ($973) ($973) - loan to officer for purchase of stock --- --- --- ($504) --- ($504) ------ ------- ---- ------- ------ ------- Total shareholders' equity (557) $557 (0) $16,165 --- $16,165 ------ ------- ---- ------- ------ ------- Total liabilities and shareholders' equity $4,983 ($4,493) $490 $32,252 $2,256 $34,998 ====== ======== ==== ======= ====== =======
See notes to unaudited pro forma condensed financial statements. THE MORGAN GROUP, INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED) (in thousands)
Pro Forma Transit Morgan Adjustments Consolidated ------- ------ ----------- ------------ Operating Revenues: Manufactured housing outsourcing $17,601 $55,525 $73,126 Specialized transport 1,891 20,991 $22,882 Driver outsourcing --- 17,978 $17,978 Other service revenues 8,003 8,015 $5,250 4/ $10,768 ------ ------- ----- ------- Total operating revenues 27,495 102,509 5,250 124,754 Costs and Expenses: Operating costs 20,381 93,826 ($500) 3/ $113,657 ($5,250) 4/ $5,200 4/ Depreciation and amoritzation 0 1,095 $105 3/ $1,321 $121 4/ Selling, general and administrative 6,623 6,170 ($219) 3/ $7,253 ($121) 4/ ($5,200) 4/ ------ ------- ----- ------- Operating income 491 1,418 $614 $2,523 Net interest income (expense) ($185) ($280) $79 ($386) ------ ------- ----- ------- Income before income taxes 306 1,138 $693 2,137 Income taxes $0 $217 $320 $537 ------ ------- ----- ------- Net Income $306 $921 $373 $1,600 ====== ======= ===== ======= Net Income per share: Primary $0.34 $0.60 Fully diluated $0.34 $0.60 Average number of common shares and common stock equivalents 2,682,837 2,682,837 ========= =========
See notes to unaudited pro forma condensed financial statements. THE MORGAN GROUP, INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 (UNAUDITED) (In Thousands)
Pro Forma Transit Morgan Adjustments Consolidated ------- ------ ----------- ------------ Operating Revenues: Manufactured housing outsourcing $25,108 $63,353 $88,461 Specialized transport 2,500 29,494 $31,994 Driver outsourcing 0 19,842 $19,842 Other service revenues 12,139 9,614 8425 4/ $13,328 ------- ------ ------ ------ Total operating revenues 39,747 122,303 8,425 153,625 Costs and Expenses: Operating costs 29,599 110,408 ($1,000) 3/ $139,744 ($8,425) 4/ $9,162 4/ Depreciation and amoritzation 0 1,264 $140 3/ $1,560 $156 4/ Selling, general and administrative 11,318 7,260 ($520) 3/ $8,740 ($156) 4/ ($9,162) 4/ ------- ------ ------ ------ Operating income (1,170) 3,371 $1,380 $3,581 Net interest income (expense) ($247) ($87) $85 ($249) ------ ----- --- ------ Income before income taxes (1,417) 3,284 $1,465 $3,332 Income taxes $0 $1,015 $ 100 $1,115 ------- ------ ------ ------ Net Income ($1,417) $2,269 $1,365 $2,217 less Preferred Dividends $221 $221 ------- ------ ------ ------ Net Income applicable to Common Stock ($1,417) $2,048 $1,365 $1,996 ======= ====== ====== ====== Net Income per share: Primary $0.80 $0.77 Fully diluated $0.80 $0.77 Average number of common shares and common stock equivalents 2,557,516 2,682,837 ========= =========
See notes to the unaudited pro forma condensed financial statements. The Morgan Group, Inc. and Transit Homes of America, Inc. Notes to Pro Forma Statement of Operations (Unaudited) (In Thousands) Note 1 The following pro forma adjustments are made to reflect estimated fair value of assets purchased and liabilities assumed as of September 30, 1996. Decrease in the fair market value of fixed assets $ (504) Decrease in the refundable deposits assumed 62 -------- Investment in Transit $ 442 ======== Note 2 The following pro forma adjustments reflect The Morgan Group, Inc.'s purchase of Transit Homes of America, Inc.'s business. Cash $1,592 Current portion of long-term debt 411 Long-term debt 747 Acquisition related payables 160 Unfavorable contracts 800 Cost of closing duplicative facilities 200 ------ $3,910 ====== Note 3 The following adjustments are incorporated in the pro forma condensed combined statements of operations (in thousands):
Year Nine Months Ended Ended Dec. 31, Sept. 30, 1995 1996 -------- ------------ Increase/(Decrease) in Income Operating Cost Adjustments Reduced insurance premium costs $ 400 $ 300 Amortization unfavorable contracts 600 200 ----- ----- $1,000 $ 500 ===== ===== General & Administrative Adjustments Elimination of owner's board of directors fees, life insurance policies, personal truck payments, and other miscellaneous expenses $ 120 $ 90 Elimination of Transit's consulting costs associated with the sale of the company --- 54 Elimination of duplicative overhead expenses 400 300 Incentive compensation to seller based upon profitability --- (225) ----- ----- $ 520 $ 219 ===== ===== Depreciation & Amortization - Purchase Price Adjustments Amortization over 20 years ($200) ($150) Decrease in depreciation expense due to evaluating assets at fair market value 60 45 ----- ----- ($140) ($105) ===== ===== Interest Expense Adjustments Elimination of interest expense related to Transit's line of credit charged at prime plus 5 $ 285 $ 210 Additional interest expense at prime 8.25 (as of September 30, 1996) based upon closing payment of $1.6 million (137) (100) Interest expense on seller's note (63) (31) ----- ----- $ 85 $ 79 ===== ===== Income Tax Adjustment $(100) ($320) ===== =====
Note 4 To adjust and reclassify revenues and cost so pro forma financials are reported on a basis consistent with Morgan (in thousands):
Year Nine Months Ended Ended Dec. 31, Sept. 30, 1995 1996 ------------ ---------- Reduce revenue and operating costs for billing which should be netted into operating costs $8,425 $5,250 Increase operating cost and reduce general and administrative expense for cost, Morgan classifies as operating expenses 9,162 5,200 Reclass Transit depreciation expense from general and administrative cost 156 121
Note 5 The Employment Agreement entered into between Morgan Drive Away, Inc. and Larry Kling provides for incentive payments up to $400,000; $300,000; $200,000 in year 1997, 1998, and 1999, and $100,000 in year 2000 and 2001. The incentive payments are based upon achieving certain profit levels in the Company's Manufactured Housing Group. No incentive compensation was recorded in 1995 due to Transit's losses. Incentive compensation for the nine months ended September 30, 1996 was recorded at three-fourths(3/4) of the maximum year two payout of $300,000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE MORGAN GROUP, INC. February 18, 1997 By: /s/ Richard B. DeBoer ------------------------- Richard B. DeBoer Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----