-----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, Bn++p0rdMvDTMnXseXDAUt0lYDfof0/S5Z82HSzHnxK3SnQyFLqWlMVEQXUusiyT 12cC/XXZ978nwf+RSmEikQ== 0000908834-96-000086.txt : 19960702 0000908834-96-000086.hdr.sgml : 19960702 ACCESSION NUMBER: 0000908834-96-000086 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN GROUP INC CENTRAL INDEX KEY: 0000906609 STANDARD INDUSTRIAL CLASSIFICATION: 4213 IRS NUMBER: 222902315 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13586 FILM NUMBER: 96566196 BUSINESS ADDRESS: STREET 1: 2746 OLD U S 20 W STREET 2: PO BOX 1168 CITY: ELKHART STATE: IN ZIP: 46514 BUSINESS PHONE: 2192952200 10-Q 1 FORM 10-Q FOR THE MORGAN GROUP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------------------ FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - - ------- EXCHANGE ACT OF 1934 For the period ended March 31, 1996 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-13586 THE MORGAN GROUP, INC. Delaware 22-2902315 (State of other jurisdiction of (I.R.S. Employer identification no.) of incorporation or organization) 2746 Old U.S. 20 West Elkhart, Indiana 46514-1168 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (219) 295-2200 (Registrant's telephone number, include 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. X Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, $0.15 Par Value: Class A - 1,514,975 shares as of March 31, 1996 Class B - 1,200,000 shares as of March 31, 1996 1 The Morgan Group, Inc. INDEX PAGE NUMBER PART I FINANCIAL INFORMATION Item 1 Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995 2 - 3 Condensed Consolidated Statements of Operations for the Three Month Periods Ended March 31, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements as of March 31, 1996 6 - 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 12 PART II OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K 13 Signatures 14 PART I FINANCIAL INFORMATION Item 1 Financial Statements The Morgan Group, Inc. and Subsidiaries Condensed Consolidated Balance Sheets Mar. 31 Dec. 31, 1996 1995 ---------- -------- (Unaudited) (Note) (Dollars in thousands) Assets Current assets: Cash and cash equivalents $ 2,663 $ 2,851 Trade accounts receivable, less allowance for doubtful accounts of $50,000 in 1996 and $102,000 in 1995 13,135 11,285 Accounts receivable , other 801 514 Prepaid expenses and other current assets 2,781 2,875 Deferred income taxes 586 586 ------- ------- Total current assets 19,966 18,111 Property and equipment, net 6,725 6,902 Intangible assets, net 5,179 5,285 Other assets 560 497 ------- ------- Total assets $32,430 $30,795 ======= ======= The Morgan Group, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (continued)
Mar. 31, Dec. 31, 1996 1995 ----------- ---------- (Unaudited) (Note) (Dollars in thousands) Liabilities and Shareholders' Equity Current liabilities: Note payable to bank $1,800 $ - - - Trade accounts payable 3,155 3,845 Accrued liabilities 1,994 2,039 Accrued driver pay 1,081 206 Accrued claims payable 3,783 3,623 Refundable deposits 1,321 1,607 Current portion of long-term debt 784 784 ------- -------- Total current liabilities 13,918 12,104 Long-term debt 2,385 2,491 Deferred income taxes 622 622 Commitments and contingencies - - - - - - Shareholders' equity Preferred stock without par value Authorized shares - 50,000 - - - - - - No shares issued and outstanding Common stock, $.015 par value Class A 23 23 Authorized shares - 7,500,000; Issued and outstanding shares - 1,514,975 and 1,449,554 Class B 18 18 Authorized shares - 2,500,000; Issued and outstanding shares - 1,200,000 Additional paid-in capital 12,441 12,441 Retained earnings 4,335 4,370 ----- ----- Total shareholders' equity 16,817 16,852 Less - treasury stock , 90,578 shares,at cost (752) (1,274) - loan to officer for purchase of stock (560) - - - ------- ------ Total shareholders' equity 15,505 15,578 ------ ------ Total liabilities and shareholders' equity $32,430 $30,795 ======= =======
Note:The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles or complete financial statements. See notes to condensed consolidated financial statements. The Morgan Group, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended ------------------------ March 31, March 31, 1996 1995 -------- ------ (Dollars in thousands except per share data) Operating revenues: Manufactured housing outsourcing $15,553 $13,261 Specialized transport 7,148 7,639 Driver outsourcing 5,259 4,103 Other service revenues 2,546 1,800 ----- ----- Total operating revenues 30,506 26,803 Costs and expenses: Operating costs 28,199 23,972 Depreciation and amortization 362 261 Selling, general and administrative 1,993 1,833 ----- ----- Operating income (loss) (48) 737 Net interest income (expense) (63) 18 ------- ------- Income (loss) before income taxes (111) 755 Income tax expense (benefit) (120) 292 ------ --- Net income 9 463 Less preferred stock dividends - - - 60 ----- -- Net income applicable to common stock $9 $403 == ==== Net income per common share: Primary $- - - $.015 ====== ===== Fully diluted $- - - $0.15 ====== ===== Average number of common shares and common stock equivalents 2,686,610 2,646,565 ========= ========= See notes to condensed consolidated financial statements. The Morgan Group, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flow (Unaudited) Three Months Ended March 31, 1996 1995 -------- ------ (Dollars in thousands) Operating activities Net income $ 9 $ 463 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 362 261 Debt amortization 10 8 ------- ------- 381 732 Changes in operating assets and liabilities: Accounts receivable (1,850) (695) Accounts receivable, other (287) (59) Prepaid expenses and other current expenses 74 491 Accounts payable (680) (547) Accrued liabilities (45) 281 Accrued drivers pay 875 207 Accrued insurance claims 160 102 Refundable deposits (286) (234) ------- ------- Net cash provided by (used in) operating activities (1,658) 278 Investing activities Purchases of property and equipment, net of disposals (79) (556) Increase in other assets (63) (147) ------- ------- Net cash used in investing activities (142) (703) Financing activities Net proceeds from (payment on) bank and seller financed notes and credit line 1,694 (166) Dividends on common and preferred stock (44) (160) Treasury stock purchase, net of officer loan (38) (76) ------- ------- Net cash provided by (used in) financing activities 1,612 (402) ------- ------- Net decrease in cash and equivalents (188) (827) Cash and cash equivalents at beginning of period 2,851 6,694 ------- ------- Cash and cash equivalents at end of period $ 2.663 $ 5,867 ======= ======= See notes to condensed consolidated financial statements. The Morgan Group, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) March 31, 1996 Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of The Morgan Group, Inc. and Subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three months ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto, for the year ended December 31, 1995. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, Morgan Drive Away, Inc. ("Morgan"), TDI, Inc. ("TDI"), Interstate Indemnity Company ("Interstate"), and Morgan Finance, Inc. ("Finance") all of which are wholly owned. Significant intercompany accounts and transactions have been eliminated in consolidation. Note 2. Indebtedness The Company has extended, through July 31, 1996, various credit facilities with banks at terms similar to those terms disclosed in the December 31, 1995 financial statements. The Company expects to renew or extend these agreements in the normal course of business. Note 3. In February of 1996, Morgan Drive Away adopted a Special Employee Stock Purchase Plan ("Plan") under which Morgan Drive Away's President and Chief Executive Officer purchased 70,000 shares of Class A Common stock from treasury stock at the then current market value price of $560,000. Under the terms of the Plan, $56,000 was delivered to the Company and a promissory note was executed in the amount of $504,000 bearing an interest rate of five (5%) percent per annum due in 2003. The Plan allows for repayment of the note using shares at $8.00 per share. Morgan Drive Away has the right to repurchase, at $8.00 per share, 56,000 shares during the first year of the agreement and 28,000 during the second year. PART I - FINANCIAL INFORMATION Item 2 - Management Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The following table sets forth the percentage relationships of operations data to revenue for the periods indicated. Three Months Ended March 31, 1996 1995 -------- ------ (Unaudited) Statement of Operations Data: Operating revenue 100.0% 100.0% Operating costs 92.4 89.4 Depreciation and amortization 1.2 1.0 Selling, general and administrative 6.5 6.8 ----- ----- Operating income (.1) 2.8 Net interest expense (.2) .0 ----- ----- Income before income taxes (.3) 2.8 Income taxes .3 (1.1) ----- ----- Net income 0% 1.7% ===== ===== Operating Revenues Operating revenues for the first quarter of 1996 totaled $30.5 million, representing an increase of 14% when compared to $26.8 million in the first quarter of 1995. Prior to giving effect to the acquisition of TDI, Inc. which closed on May 22, 1995, comparable operating revenues increased 6.5%. The manufactured housing outsourcing revenues, which includes specialized transportation to companies who produce new manufactured homes, modular homes, and office trailers, increased 17% from $13.3 million in the first quarter of 1995 to $15.6 million in the first quarter of 1996. Unit shipments by the manufactured housing industry (considering double-wides as two units) in the United States, increased by approximately 9% through February 28, 1996. Specialized transport revenues, which consist of the transportation of van conversions, automobiles, semi-trailers, military vehicles, and other commodities by utilizing specialized equipment, decreased from $7.6 million in the first quarter of 1995 to $7.1 million in the first quarter of 1996. A slight reduction in van conversion production and reduced orders for new van trailers in the market place lead to the decline in specialized transport revenues. The increase in driver outsourcing revenues of 28% from $4.1 million in 1995 to $5.3 million in 1996 was aided by the acquisition of TDI, Inc. Other service revenues, which include revenues from Interstate Indemnity, Morgan Finance, permit ordering services, and labor services, increased 41% to $2.5 million in the first quarter of 1996 over the same period of the prior year. Operating Costs Operating costs as a percent of revenue increased from 89.4% in the first quarter of 1995 to 92.4% in the first quarter of 1996. Drivers pay on a percentage of revenue increased over 1.5%. The higher pay percentage was principally attributed to margin compression in the Company's Specialized Transport Division, harsh winter conditions in the Northwest and Southeast, and a change in mix of manufactured housing business to lower margin accounts. Operating costs also increased due to higher investment in safety, dispatching, and sales personnel without a corresponding increase in revenue levels. Higher operating costs as a percentage of revenues will continue throughout the year, although they should be partially mitigated by rate increases which are expected to be implemented primarily during the second quarter. Depreciation and Amortization Depreciation and amortization increased from $261,000, or 1% of revenue, in the first quarter of 1995 to $362,000, or 1.2%, of revenue in 1996. The increase in depreciation and amortization relates to higher capital expenditure levels in 1995 and amortization of the TDI acquisition.. Selling General and Administrative Expenses Selling, general and administrative expenses increased from $1,833,000, or 6.8% of revenue, in the first quarter of 1995 to $1,993,000, or 6.5% of revenue, in 1996. The growth in selling, general and administrative expenses for the quarter was attributed to additional general and administrative costs of $130,000 added with the acquisition of TDI, and higher computer lease expense related to the automation of dispatch locations. Operating Income (Loss) Operating loss of $48,000 for the first quarter of 1996 compared unfavorably to $737,000 of operating income in the first quarter of 1995. The reduced operating income was attributed to higher operating expenses, which were affected during the first quarter by several factors, including reduced recreational vehicle margins with declining revenues and harsh winter conditions in the Northwest and Southeast. In addition, due to seasonality, the TDI operation produced an operating loss of $30,000 during the first quarter of 1996. Interest Expense, Net During the first quarter of 1996, the Company had net interest expense of $63,000 compared to interest income of $18,000 in the first quarter of 1995. The generation of expense in 1996 relates to interest expense costs of $38,000 associated with the TDI acquisition and higher interest expense associated with the financing of independent contractor loans through Morgan Finance. Pretax Income (Loss) During the first quarter of 1996, the Company had a pretax loss of $111,000, or .3% of revenue, versus pretax income of $755,000, or 2.8% of revenue in the first quarter of 1995. Income Taxes The benefit recorded for federal and state income taxes in the first quarter of 1996 of $120,000 relates to tax benefits associated with the losses from The Morgan Group, Inc.'s subsidiaries, excluding the earnings of Interstate Indemnity. This tax benefit compares with a 39% federal and state tax rate in the first quarter of 1995. Net Income Net income was $9,000 in the first quarter of 1996, compared to net income of $463,000, or 15(cent) primary earnings per common share in the first quarter of 1995. Seasonality Shipments of manufactured housing tend to decline in the winter months in areas where poor weather conditions inhibit transport. This may reduce revenues in the first and fourth quarters of the year. RV movements are generally stronger in the spring when dealers build stock in anticipation of the summer vacation season and in late summer and early fall when new vehicle models are introduced. The Company's revenues, therefore, are generally stronger in the second and third quarters of the year. LIQUIDITY AND CAPITAL RESOURCES Net working capital increased from $6,007,000 at December 31, 1995 to $6,048,000 as of March 31, 1996. Cash and cash equivalents decreased from $2,851,000 as of December 31, 1995 to $2,663,000 as of March 31, 1996. Net cash used for operating activities was $1,658,000 in the first quarter compared to cash provided from operations in the first quarter of 1995 of $278,000. In addition, to the reduction in net income during the first quarter, cash used in operating activities was affected by growth in accounts receivables of $1,850,000 compared to receivable growth in the first quarter of 1995 of $695,000. The growth in accounts receivable in 1996 compared to 1995 is directly related to a 14% growth in operating revenues and increased days sales outstanding from 28 in the first quarter of 1995 to 29 in the first quarter of 1996. The increase in accounts receivable, other of $287,000 in the first quarter of 1996 is attributed to communication cost discounts earned but not yet received and increased receivables from insurance companies for health costs. The decline in prepaid expenses during the first quarter of 1995 is principally attributed to reduced prepayments of insurance premiums of $466,000. This decline also occurred in the first quarter of 1996, but was partially offset by increased prepaid expenses for driver recruiting and retention programs that will benefit the Company throughout the year. The increase in accrued drivers pay of $875,000 for the first quarter is attributed to higher revenue levels. Financing activities were comprised of borrowing to fund working capital of $1.8 million, principal payments made on acquisition debt and mortgage debt of over $100,000, and treasury stock issuance in conjunction with the Special Employee Stock Purchase Plan (Note 3). At March 31, 1996, the Company had $2,663,000 in cash, marketable securities and short-term investments. Additionally, the Company had over $12,000,000 of unused credit facilities. The Company expects that current cash flow from existing operations, existing cash, and the line of credit will be adequate to fund the Company's existing operations for the foreseeable future. PART II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K (a) No reports on Form 8-K were filed during the three months ended March 31, 1996. (b) The following exhibits are included herein: Exhibit 4.1 Amendment to Line of Credit Loan Agreement dated as of May 8, 1996 between TDI, Inc. and Key Bank National Association. Exhibit 4.2 Fourth Amendment to Transactional Line of Credit Agreement dated as of May 8, 1996 between Morgan Group, Inc., and Key Bank National Association. Exhibit 4.3 Second Amendment to Standby Letter of Credit Facility Agreement dated May 8, 1996 between Morgan Drive Away, Inc., Interstate Indemnity Company and Key Bank National Association. Exhibit 4.4 Third Amendment to Finance Line of Credit Agreement dated May 8, 1996 between Morgan Finance, Inc. and Key Bank National Association. Exhibit 11 Statement re: computation of earnings per share. Exhibit 27 Financial Data Schedule SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE MORGAN GROUP, INC. BY: /s/ Richard B. DeBoer ------------------------------ Richard B. DeBoer Vice President and Chief Financial Officer Date: May 14, 1996 EX-4.1 2 AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT Exhibit 4.1 AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT THIS AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT is made and entered on this 8th day of May, 1996 by and between TDI, INC., an Indiana corporation ("Company") and KEYBANK NATIONAL ASSOCIATION, formerly known as Society National Bank, Indiana ("Bank"). RECITALS A. On or about July 26 1995, Company and Bank entered into a Line of Credit Loan Agreement ("Loan Agreement"). B. The parties wish to amend the Loan Agreement to extend the Termination Date. NOW, THEREFORE, in consideration of the covenants and agreements herein contained and other valuable consideration, the parties hereto agree that the Recitals above set forth are part of this amendment for all purposes and further agree as follows: 1. The definition of "Termination Date" contained in Section 1.2 shall be amended by deleting "April 30, 1996" and replacing that date with "July 31, 1996." 2. All other terms, provisions and conditions of the Master Line of Credit Loan Agreement are hereby ratified and shall continue in full force and effect. IN WITNESS WHEREOF, the Company has hereunto set its hand by its duly authorized officers on the day and year first above mentioned. COMPANY: TDI, Inc. By: /s/ Richard B. DeBoer ---------------------------------- (Signature) Chief Financial Officer ---------------------------------- (Typed or Printed Name and Office) BANK: KeyBank National Association By: /s/ Constance S. Saltzgaber ---------------------------------- (Signature) Constance S. Saltzgaber, Vice President ---------------------------------- (Typed or Printed Name and Office) SIGNATURES CONTINUED ON PAGE 2 The undersigned, The Morgan Group, Inc. represents and warrants that it has read and reviewed this amendment and that it consents to the execution of this document by Morgan Drive Away, Inc. and agrees to be bound by the terms and conditions contained herein. THE MORGAN GROUP, INC.: By: /s/ Richard B. DeBoer ---------------------------------- (Signature) Chief Financial Officer ---------------------------------- (Typed or Printed Name and Office) EX-4.2 3 AMEND. 4 - TRANSACTIONAL LINE OF CREDIT AGREE. Exhibit 4.2 FOURTH AMENDMENT TO TRANSACTIONAL LINE OF CREDIT AGREEMENT This FOURTH AMENDMENT TO TRANSACTIONAL LINE OF CREDIT AGREEMENT is made and entered into this 8th day of May, 1996 by and between THE MORGAN GROUP, INC., a Delaware corporation ("Company") and KEYBANK NATIONAL ASSOCIATION, formerly known as Society National Bank, Indiana, ("Bank"). RECITALS A. On or about September 13, 1994, Company and Bank entered into a Transactional Line of Credit Agreement ("Agreement"). B. On or about September 26, 1994, the Agreement was amended. C. On or about May 12, 1995, the maturity date was extended by a Note Modification Agreement. D. On or about July 28, 1995, the Agreement was amended. E. The parties wish to again amend the Agreement to extend the Termination Date. NOW, THEREFORE, in consideration of the covenants and agreements herein contained and other valuable consideration, the parties hereto agree that the Recitals above set forth are part of this amendment for all purposes and further agree as follows: 1. The definition of "Termination Date" contained in Section 1.2 shall be deleted in its entirety and replaced with the following: Termination Date shall mean July 31, 1996 or such earlier date that an acceleration has occurred pursuant to Article VIII of this Agreement. 2. All other terms, provisions and conditions of the Transactional Line of Credit Agreement (as previously amended) are hereby ratified and shall continue in full force and effect. IN WITNESS WHEREOF, the Company has hereunto set its hand by its duly authorized officers on the day and year first above mentioned and effective as of May 1, 1996. "COMPANY": Morgan Finance, Inc. By: /s/ Richard B. DeBoer --------------------------------------- (Signature) Richard B. DeBoer Executive Vice President --------------------------------------- (Typed or Printed Name and Office) EX-4.3 4 AMEND. 2-STANDBY LETTER OF CREDIT FACILITY AGREE. Exhibit 4.3 SECOND AMENDMENT TO STANDBY LETTER OF CREDIT FACILITY AGREEMENT This SECOND AMENDMENT TO STANDBY LETTER OF CREDIT FACILITY AGREEMENT is made and entered this 8th day of May, 1996 by and between MORGAN DRIVE AWAY, INC., an Indiana corporation ("Morgan") and INTERSTATE INDEMNITY COMPANY, a Vermont corporation ("Interstate") (hereinafter collectively referred to as "Companies") and KEYBANK NATIONAL ASSOCIATION, formerly known as Society National Bank, Indiana ("Bank"). RECITALS A. On or about September 13, 1994, Companies and Bank entered into a Standby Letter of Credit Facility Agreement which was amended on or about July 28, 1995 ("Agreement"). B. The parties wish to amend the Agreement to extend the Termination Date. NOW, THEREFORE, in consideration of the covenants and agreements herein contained and other valuable consideration, the parties hereto agree that the Recitals above set forth are part of this amendment for all purposes and further agree as follows: 1. The definition of "Termination Date" contained in Section 1.2 shall be amended by deleting "April 30, 1996" and replacing that date with "July 31, 1996." 2. All other terms, provisions and conditions of the Standby Letter of Credit Facility Agreement (as previously amended) are hereby ratified and shall continue in full force and effect. IN WITNESS WHEREOF, the Companies have hereunto set their hands by their duly authorized officers on the day and year first written above and effective as of May 1, 1996. COMPANIES: Morgan Drive Away, Inc. By: /s/ Richard B. DeBoer --------------------------------------- (Signature) Richard B. DeBoer Executive Vice President --------------------------------------- (Typed or Printed Name and Office) SIGNATURES CONTINUED ON PAGE 2 Interstate Indemnity Company By: /s/ Richard B. DeBoer -------------------------------------------- (Signature) Richard B. DeBoer Executive V.P. -------------------------------------------- (Typed or Printed Name and Office) By: /s/ Constance S. Saltzgaber ---------------------------------- (Signature) Constance S. Saltzgaber, Vice President ---------------------------------- (Typed or Printed Name and Office) The undersigned, The Morgan Group, Inc. represents and warrants that it has read and reviewed this amendment and that it consents to the execution of this document by Morgan Drive Away, Inc. and agrees to be bound by the terms and conditions contained herein. THE MORGAN GROUP, INC.: By: /s/ Richard B. DeBoer -------------------------------------------- (Signature) Richard B. DeBoer Executive V.P. -------------------------------------------- (Typed or Printed Name and Office) EX-4.4 5 AMEND. 3 - FINANCE LINE OF CREDIT AGREEMENT Exhibit 4.4 THIRD AMENDMENT TO FINANCE LINE OF CREDIT AGREEMENT This THIRD AMENDMENT TO FINANCE LINE OF CREDIT AGREEMENT is made and entered into this 8th day of May, 1996 by and between MORGAN FINANCE, INC., an Indiana corporation ("Company") and KEYBANK NATIONAL ASSOCIATION, formerly known as Society National Bank, Indiana ("Bank"). RECITALS A. On or about September 13, 1994, Company and Bank entered into a Finance Line of Credit Agreement ("Agreement"). B. On or about September 26, 1994, the agreement was amended and it was further amended on or about July 28, 1995. C. The parties wish to again amend the Agreement to extend the Termination Date. NOW, THEREFORE, in consideration of the covenants and agreements herein contained and other valuable consideration, the parties hereto agree that the Recitals above set forth are part of this amendment for all purposes and further agree as follows: 1. The definition of "Termination Date" contained in Section 1.2 shall be amended by deleting "April 30, 1996" and replacing that date with "July 31, 1996." 2. All other terms, provisions and conditions of the Finance Line of Credit Agreement (as previously amended) are hereby ratified and shall continue in full force and effect. IN WITNESS WHEREOF, the Company has hereunto set its hand by its duly authorized officers on the day and year first above mentioned and effective as of May 1, 1996. COMPANY: Morgan Finance, Inc. By: /s/ Richard B. DeBoer --------------------------------------- (Signature) Richard B. DeBoer Executive Vice President --------------------------------------- (Typed or Printed Name and Office) SIGNATURES CONTINUED ON PAGE 2 By: /s/ Constance S. Saltzgaber ---------------------------------- (Signature) Constance S. Saltzgaber, Vice President ---------------------------------- (Typed or Printed Name and Office) EX-11 6 COMPUTATION OF PER SHARE EARNINGS Exhibit 11 The Morgan Group, Inc. and Subsidiaries Exhibit 11 - Statement re: Computation of Per Share Earnings (Unaudited) Three Months Ended March 31, ------------------------- 1996 1995 ----------- ---------- Primary Average shares outstanding 2,566,665 2,566,665 Exercise of warrants 88,888 -- Net effect of warrants which became exercisable beginning on August 3, 1993; price based upon the treasury stock method using the average stock prices - - - - 79,900 Redemption of shares of series A preferred stock 150,000 -- Treasury stock repurchased (118,943) - - - - ----------- ----------- Total 2,686,610 2,646,565 Fully Diluted Net effect of dilutive warrants, which will became exercisable on August 4, 1995, based upon the treasury stock method using the average stock prices - - - - 41,312 ----------- ----------- Total 2,686,610 2,687,877 =========== =========== Net Income $ 9 $ 463 Series A Redeemable Preferred Stock dividends -- 60 ----------- ----------- Net income $ 9 $ 403 =========== =========== Primary earnings per share $ -- $ .15 =========== =========== Fully diluted earnings per share $ -- $ .15 =========== =========== EX-27 7 FDS FOR THE MORGAN GROUP, INC.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000906609 The Morgan Group, Inc. 1,000 U.S. Dollars 3-mos Dec-31-1996 Jan-1-1996 Mar-31-1996 1.000 361 2,302 13,986 50 380 19,966 11,338 4,612 32,430 13,918 0 41 0 0 15,464 32,430 30,506 30,506 28,199 30,554 0 0 63 (111) (120) 9 0 0 0 9 0 0
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