FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the period ended MARCH 31, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-5599
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INTERNATIONAL CONTROLS CORP.
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(Exact name of registrant as specified in its charter)
FLORIDA 54-0698116
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(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2016 North Pitcher Street, Kalamazoo, Michigan 49007
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (616) 343-6121
----------------
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Indicate by check mark whether Registrant (1) 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
Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
----- -----
There were 9,036,700 shares of Registrant's only class of common stock
outstanding as of May 2, 1994.
<PAGE-1>
INDEX
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
Page Number
-----------
PART I FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements (Unaudited):
Consolidated Balance Sheets at March 31, 1994,
and December 31, 1993 2-3
Consolidated Statements of Operations for the
Three Months Ended March 31, 1994, and March 31,
1993 4
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1994, and March 31,
1993 5-6
Notes to Consolidated Financial Statements 7-11
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-14
PART II OTHER INFORMATION
Item 1 Legal Proceedings 15
Item 6 Exhibits and Reports on Form 8-K 15
SIGNATURE 16
<PAGE-2>
CONSOLIDATED BALANCE SHEETS
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
March 31,
1994 December 31,
(unaudited) 1993
----------- ------------
ASSETS
Cash and cash equivalents $ 32,608 $ 40,078
Accounts receivable, less
allowance for doubtful
accounts of $883 (1993--$748) 100,819 75,701
Inventories 86,060 94,112
Other current assets 13,344 11,823
---------- ----------
Total current assets 232,831 221,714
Property, plant and equipment, net 123,111 122,355
Insurance Subsidiary's investments 89,134 90,838
Insurance Subsidiary's reinsurance
receivable 11,405 11,378
Cost in excess of net assets
acquired, net of accumulated
amortization of $6,565
(1993--$6,252) 43,430 43,743
Trademark, net of accumulated
amortization of $1,838
(1993-$1,750) 11,608 11,696
Other assets 15,639 15,612
---------- ----------
Total Assets $ 527,158 $ 517,336
========== ==========
<PAGE-3>
March 31,
1994 December 31,
(unaudited) 1993
----------- ------------
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 77,932 $ 77,876
Notes payable 5,000 5,000
Income taxes payable 12,466 7,726
Accrued compensation 16,435 15,838
Accrued interest 6,018 11,746
Other accrued liabilities 37,647 38,071
Current portion of long-term debt 46,994 14,321
---------- ----------
Total current liabilities 202,492 170,578
Long-term debt, excluding current
portion:
Shareholders 30,000 30,000
Other 210,119 246,952
---------- ----------
240,119 276,952
Insurance Subsidiary's unpaid losses
and loss adjustment expenses 72,077 71,179
Unearned insurance premiums 16,239 9,547
Deferred income taxes 9,950 9,803
Postretirement benefits other than
pensions 50,012 49,609
Other noncurrent liabilities 39,909 39,053
Minority interest 39,898 40,132
---------- ----------
Total liabilities 670,696 666,853
Shareholders' deficit:
Common stock, par value $0.01:
Authorized 15,000,000 shares
Outstanding 9,036,700 shares 90 90
Additional paid-in capital 14,910 14,910
Retained earnings deficit (29,831) (36,217)
Unrealized appreciation (depreciation)
on Insurance Subsidiary's invest-
ments in certain debt and equity
securities--Note E (334) 73
Notes receivable from shareholders (625) (625)
Amount paid in excess of Checker's
net assets (127,748) (127,748)
---------- ----------
Total shareholders' deficit (143,538) (149,517)
---------- ----------
Total Liabilities and Shareholders'
Deficit $ 527,158 $ 517,336
========== ==========
See notes to consolidated financial statements.
<PAGE-4>
CONSOLIDATED STATEMENTS OF OPERATIONS
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,
1994 1993
---------- ----------
Revenues $ 271,680 $ 204,933
Cost of revenues (230,835) (175,631)
---------- ----------
Gross profit 40,845 29,302
Selling, general and administrative
expense (21,454) (19,986)
Interest expense (10,044) (10,465)
Interest income 1,660 2,018
Other income, net 604 991
---------- ----------
Income before income taxes and
accounting changes 11,611 1,860
Income tax expense (5,225) (2,604)
---------- ----------
Income (loss) before accounting changes 6,386 (744)
Accounting changes, net of income taxes --- (46,626)
---------- ----------
Net income (loss) $ 6,386 $ (47,370)
========== ==========
Weighted average number of shares
used in per share computations 9,037 9,037
========== ==========
Income (loss) per share:
Before accounting changes $ 0.71 $ (0.08)
Accounting changes --- (5.16)
---------- ----------
Net income (loss) per share $ 0.71 $ (5.24)
========== ==========
See notes to consolidated financial statements.
<PAGE-5>
CONSOLIDATED STATEMENTS OF CASH FLOWS
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(in thousands)
(unaudited)
Three Months Ended March 31,
1994 1993
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 6,386 $ (47,370)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Accounting changes --- 46,626
Depreciation and amortization 5,631 5,571
Deferred income tax benefit (581) (1,834)
Amortization of cost in excess
of net assets acquired 313 312
Amortization of debt discount 393 324
Net (gain) loss on sale of
property, plant and equipment --- (18)
Investment gains (274) (103)
Other noncash charges 2,626 1,446
Changes in operating assets and
liabilities:
Accounts receivable (25,281) (21,933)
Inventories 8,052 (7,084)
Insurance Subsidiary's
reinsurance receivable (27) 5,101
Other assets (1,149) (3,477)
Accounts payable 56 8,533
Income taxes 5,840 1,523
Unpaid losses and loss
adjustment expenses 897 (4,898)
Unearned insurance premiums 6,692 2,999
Postretirement benefits other
than pension 403 ---
Other liabilities (7,791) (433)
---------- ----------
Net cash flow provided by (used in)
operating activities 2,186 (14,715)
<PAGE-6>
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(in thousands)
(unaudited)
Three Months Ended March 31,
1994 1993
---------- ----------
Cash flows from investing activities:
Purchases of property, plant and
equipment $ (6,903) $ (7,843)
Proceeds from disposal of property,
plant and equipment and other
productive assets 516 1,466
Purchase of investments available
for sale (3,901) ---
Purchase of investments held to
maturity (20,493) (6,789)
Proceeds from sale of investments
available for sale 346 ---
Proceeds from maturities and
redemption of investments
held to maturity 25,423 13,845
Other 143 54
---------- ----------
Net cash flow provided by (used in)
investing activities (4,869) 733
Cash flows from financing activities:
Proceeds from borrowings --- 15,091
Repayments of borrowings (4,553) (4,755)
Return of limited partner's capital (234) (217)
---------- ----------
Net cash flow provided by (used in)
financing activities (4,787) 10,119
---------- ----------
Decrease in cash and cash
equivalents (7,470) (3,863)
Beginning cash and cash equivalents 40,078 42,199
---------- ----------
Ending cash and cash equivalents $ 32,608 $ 38,336
========== ==========
See notes to consolidated financial statements.
<PAGE-7>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
MARCH 31, 1994
(unaudited)
NOTE A--BASIS OF PRESENTATION
The accompanying consolidated financial statements of International
Controls Corp. and Subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information, the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In Management's opinion, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months
ended March 31, 1994, are not necessarily indicative of the results that
may be expected for the year ending December 31, 1994. For further
information, refer to the audited consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1993.
NOTE B--PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of International
Controls Corp. and its subsidiaries, including a wholly-owned trailer
leasing company, Checker Motors Co., L.P. ("Partnership") and the
Partnership's wholly-owned subsidiaries, including American Country
Insurance Company ("Insurance Subsidiary").
NOTE C--INVENTORIES
Inventories are summarized below (dollars in thousands):
March 31, December 31,
1994 1993
---------- ----------
Raw materials and supplies $ 53,457 $ 53,105
Work-in-process 12,619 10,956
Finished goods 19,984 30,051
---------- ----------
$ 86,060 $ 94,112
========== ==========
NOTE D--INCOME TAXES
The Company's estimated effective tax rate differs from the statutory rate
because of state income taxes as well as the impact of the reporting of
certain income and expense items in the financial statements which are not
taxable or deductible for income tax purposes. The values of assets and
liabilities acquired in a transaction accounted for as a purchase are
recorded at estimated fair values which result in an increase in the net
asset value over the tax basis for such net assets.
<PAGE-8>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(unaudited)
NOTE E--ACCOUNTING CHANGES
Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." In accordance with this
statement, prior period financial statements have not been restated to
reflect the change in accounting principle. The opening balance of
shareholders' deficit was decreased by $1.4 million (net of $0.8 million in
deferred income taxes) to reflect the net unrealized holding gains on
securities classified as available-for-sale previously carried at amortized
cost or lower of cost or market.
Insurance company management evaluated the investment portfolio and, based
on the Insurance Subsidiary's ability and intent, has classified securities
between the held-to-maturity and available-for-sale categories. Held-to-
maturity securities are stated at amortized cost. Debt securities not
classified as held-to-maturity and marketable equity securities are
classified as available-for-sale. Available-for-sale securities are stated
at fair value, with the unrealized gains and losses, net of tax, reported
as a separate component of shareholders' deficit.
Following is a summary of held-to-maturity and available-for-sale
securities as of March 31, 1994:
Held-To-Maturity
--------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
-------- -------- -------- --------
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 4,297 $ 154 $ 35 $ 4,416
Obligations of states
and political sub-
divisions 11,338 144 178 11,304
Mortgage-backed
securities 3,659 28 35 3,652
Corporate and other debt
securities 25,178 592 381 25,389
-------- -------- -------- --------
Total held to maturity $ 44,472 $ 918 $ 629 $ 44,761
======== ======== ======== ========
<PAGE-9>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(unaudited)
NOTE E--ACCOUNTING CHANGES--Continued. . .
Available-For-Sale
--------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
-------- -------- -------- --------
Obligations of states
and political sub-
divisions $ 10,287 $ 29 $ 279 $ 10,037
Corporate and other debt
securities 19,253 1,023 499 19,777
-------- -------- -------- --------
Total debt securities 29,540 1,052 778 29,814
Equity securities 15,773 371 1,296 14,848
-------- -------- -------- --------
Total available for sale $ 45,313 $ 1,423 $ 2,074 $ 44,662
======== ======== ======== ========
The amortized cost and estimated market value of debt and marketable equity
securities at March 31, 1994, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.
Held-To-Maturity
--------------------------
Estimated
Fair
Cost Value
-------- ---------
Due in one year or less $ 5,448 $ 5,508
Due after one year through five years 24,904 25,178
Due after five years through ten years 8,032 8,062
Due after ten years 2,429 2,360
-------- --------
40,813 41,108
Mortgage-backed securities 3,659 3,653
-------- --------
$ 44,472 $ 44,761
======== ========
<PAGE-10>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(unaudited)
NOTE E--ACCOUNTING CHANGES--Continued. . .
Available-For-Sale
--------------------------
Estimated
Fair
Cost Value
-------- ---------
Due in one year or less $ 550 $ 577
Due after one year through five years 645 673
Due after five years through ten years 15,381 15,432
Due after ten years 12,964 13,132
-------- --------
29,540 29,814
Equity securities 15,773 14,848
-------- --------
$ 45,313 $ 44,662
======== ========
Effective January 1, 1994, the Company adopted the provisions of SFAS No.
112, "Employers' Accounting for Postemployment Benefits." The adoption of
this SFAS did not affect net income. In accordance with this Statement,
prior period financial statements have not been restated to reflect the
change in accounting method.
Effective January 1, 1993, the Company adopted the provisions of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." The Company recorded a charge of $29.7 million (net of taxes of
$16.5 million), or $3.29 per share, during the quarter ended March 31, 1993
to reflect the cumulative effect of this change in accounting principle.
Effective January 1, 1993, the Company adopted the provisions of SFAS No.
109, "Accounting for Income Taxes." The Company recorded a charge of $16.9
million, or $1.87 per share, during the quarter ended March 31, 1993, to
reflect the cumulative effect of this change in accounting principle.
During the quarter ended March 31, 1993, the Company adopted the provisions
of SFAS No. 113, "Accounting and Reporting for Reinsurance of Short
Duration and Long Duration Contracts". Because of the type of insurance
contracts the Company's Insurance Subsidiary provides, the adoption of this
statement had no impact on earnings; however, it requires the disaggrega
tion of various balance sheet accounts.
NOTE F--CONTINGENCIES
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit naming
the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-119MA, United States District Court for the
District of Oregon. In that lawsuit, Boeing sought damages and declaratory
relief for past and future costs resulting from alleged groundwater
contamination at a location in Gresham, Oregon, where the three prior
subsidiaries of the Company formerly conducted business operations. On
December 22, 1993, the Company entered into a settlement with Boeing,
settling all claims asserted by Boeing in the lawsuit. Pursuant to the
settlement terms, the Company will pay Boeing $12.5 million over the course
of five years, $5 million of which has been committed by certain insurance
<PAGE-11>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
(unaudited)
NOTE F--CONTINGENCIES--Continued. . .
companies in the form of cash or irrevocable letters of credit. In
accordance with the settlement agreement, Boeing's claims against the
Company and the three former subsidiaries have been dismissed with
prejudice and Boeing has released and indemnified the Company with respect
to certain claims.
On March 4, 1992, Checker received notice that the Insurance Commissioner
of the State of California, as Conservator and Rehabilitator of Executive
Life Insurance Company of California ("ELIC"), a limited partner of the
Partnership, had filed an Amendment to the Application for Order of
Conservation filed in Superior Court of the State of California for the
County of Los Angeles (the "Court"). The amendment seeks to add to the
Order, dated April 11, 1991, Checker, the Partnership and Checker Holding
Corp. III ("Holding III"), a limited partner of the Partnership. The
amendment alleges that the action by Checker invoking provisions of the
Partnership Agreement that alter ELIC's rights in the Partnership upon the
occurrence of certain events is improper and constitutes an impermissible
forfeiture of ELIC's interest in the Partnership and a breach of fiduciary
duty to ELIC. The amendment seeks (a) a declaration of the rights of the
parties in the Partnership and (b) damages in an unspecified amount. The
Partnership believes that it has meritorious defenses to the claims of
ELIC. On April 15, 1994, the Company and the Conservator entered into a
letter agreement pursuant to which the Company agreed to purchase ELIC's
interest in the Partnership for $37 million, subject to completion of the
refinancing described under the caption, "Item 2--Management's Discussion
and Analysis of Financial Condition and Results of Operations." The letter
agreement has been submitted to the Court for approval.
<PAGE-12>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
GENERAL
From the time that present management assumed control of the Company in
January 1989, it has been continually reassessing the Company's financial
condition and prospects. During March 1990, Great Dane obtained a loan
commitment of $80 million. A substantial portion of the loan proceeds was
utilized to repurchase, in the open market, a portion of the Company's
outstanding 12-3/4% Senior Debentures due 2001 (the "12-3/4% Debentures") and
Subordinated Discount Debentures due January 1, 2006 (the 14-1/2%
Debentures"). During September 1992, the Partnership entered into a Loan and
Security agreement with a bank pursuant to which the bank provided a $30
million term loan. Approximately $18 million of the proceeds from the loan
was used to repay certain indebtedness of a subsidiary of Checker, which debt
had been guaranteed by the Partnership, and to pay certain costs associated
with the financing and repayments.
The Company was hampered in its efforts to achieve a refinancing of its
debt in recent years, in part because of the Boeing litigation. That lawsuit
has now been settled. The Company has also been engaged in litigation with
the Conservator of ELIC, a limited partner in the Partnership, seeking, among
other things, a declaratory judgment regarding ELIC's rights in the
Partnership.
With the settlement of the Boeing litigation and negotiations in
progress to settle the ELIC litigation, the ability of the Company to achieve
a successful refinancing has been enhanced. Accordingly, in February 1994,
the Company filed a Registration Statement on Form S-1 with the Securities
and Exchange Commission in connection with an overall refinancing of the
Company's outstanding indebtedness. The proposed refinancing, as described
in the registration statement, involves the Company entering into a credit
facility consisting of a $50 million (adjusted from $60 million) term loan
and a revolving credit facility which would provide up to $115 million,
subject to the Company's ability to meet certain financial tests (the term
loan and the revolving credit facility being known as the "New Credit
Facility"). Additionally, the Company is proposing to offer $265 million
(adjusted from $225 million) of new Senior Secured Notes (the "Senior
Notes"). If the refinancing is successfully completed, the proceeds from the
New Credit Facility would be utilized to redeem substantially all of the
currently outstanding indebtedness of the Company's subsidiaries and the
proceeds from the offering of the Senior Notes would be used to redeem parent
company indebtedness and to redeem the Minority Interest held by ELIC in the
Partnership, in each case together with any accrued interest and transaction
fees and expenses. A successful completion of the refinancing, the terms of
which are still subject to change, is expected to help the Company achieve
increased liquidity from reduced principal debt amortization requirements,
the removal of certain restrictions on the use of cash from the Company's
subsidiaries and more flexible and efficient cash management at the holding
company level.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Available cash and cash equivalents, cash flow generated from operations
and proceeds from disposal of assets have provided sufficient liquidity and
capital resources for the Company to conduct its operations.
<PAGE-13>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
The Company's Great Dane Subsidiary's debt agreement with certain banks
matures in March 1995. Accordingly, this debt is classified as a current
liability at March 31, 1994. Refinancing is anticipated to be accomplished
prior to maturity and, accordingly, it is not anticipated that working
capital will be adversely affected.
During the quarter ended March 31, 1994, the Company adopted the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." While
the adoption of this SFAS has a significant effect on the Company's financial
position, it does not adversely affect liquidity and capital resources.
The Company is a holding company and is, therefore, dependent on cash
flow from its subsidiaries in order to meet its obligations.
Purchases of property, plant and equipment have averaged approximately
$18.0 million per year over the past three years and have been funded
principally by cash flow generated from operations as well as proceeds from
disposal of assets. Purchases of property, plant and equipment for 1994 are
anticipated to be approximately $26.0 million and are expected to be funded
principally by cash flow generated from operations.
During the fourth quarter of 1993, the Company entered into a settlement
of the Boeing litigation. It is anticipated that the settlement ($12.5
million over five years) will be paid by the Company through recoveries from
insurance carriers, the sale of assets of certain of the subsidiaries, cash
currently on hand and cash flow generated from operations.
General Motors Corporation ("GM"), a major customer of the Company's
automotive products segment, is resorting to many measures, including
obtaining significant price reductions from its suppliers, in an effort to
reduce its operating costs. Management of the Company's automotive products
segment is currently engaged in discussions with GM concerning future pricing
of parts presently being manufactured. Automotive products segment
management believes that it has adequately provided in its near-term
financial plans for any price reductions which may result from its current
discussions with GM. However, price reductions in excess of those
anticipated could have a material adverse effect on the automotive products
operations.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1994,
Compared to Three Months Ended March 31, 1993
-------------------------------------------------
Revenues increased $66.7 million during the three months ended March 31,
1994, as compared to the same period of 1993. The higher revenues are
principally attributed to higher Trailer Manufacturing revenues ($61.4
million), primarily associated with a higher volume of sales of containers
and chassis and trailers. Automotive Products revenues increased $3.6
million during the three months ended March 31, 1994, as compared to the same
period in 1993. General increases in volume to accommodate automotive
customers' demands were the principal reason for the revenue increases.
<PAGE-14>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
The Company's operating profit (gross profit less selling, general and
administrative expenses) increased $10.1 million in the 1994 period compared
to the 1993 period. This increase is attributed to an increase of Trailer
Manufacturing operating profits ($9.2 million) which is principally due to
higher sales and improved margins and an increase of Automotive Products
operating profits ($0.9 million) principally due to higher sales.
Income tax expense is higher for financial statement purposes than would
be computed if the statutory rate were used because of state income taxes and
the impact of the reporting of certain income and expense items in the
financial statements which are not taxable or deductible for income tax
purposes.
<PAGE-15>
PART II
OTHER INFORMATION
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
Item 1: Legal Proceedings
The following events have occurred in connection with the Executive
Life Litigation, reported under the caption, "Item 3. Legal
Proceedings," in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993:
On April 15, 1994, the Company and the Conservator entered
into a letter agreement pursuant to which the Company agreed
to purchase ELIC's interest in the Partnership for $37
million, subject to completion of the refinancing described
under the caption, "Item 2--Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The letter agreement has been submitted to the Court for
approval.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
--------
10.1 Eleventh Amendment, dated as of March 11, 1994, to the
Loan and Security Agreement dated as of March 21, 1990, by and
among Great Dane Trailers, Inc., Great Dane Trailers Los
Angeles, Inc., Great Dane Trailers Nebraska, Inc., and Great
Dane Trailers Tennessee, Inc., and certain lending institu-
tions and Security Pacific Business Credit Inc., as Agent.
(b) Reports on Form 8-K
-------------------
None
<PAGE-16>
INTERNATIONAL CONTROLS CORP. AND SUBSIDIARIES
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.
INTERNATIONAL CONTROLS CORP.
----------------------------------------
(Registrant)
/s/ Marlan R. Smith
----------------------------------------
Marlan R. Smith
Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Date: May 2, 1994