SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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: 1-6732
Danielson Holding Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-6021257
(State of Incorporation) (I.R.S. Employer Identification No.)
767 Third Avenue, New York, New York 10017-2023
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (212) 888-0347
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
---- ----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 10, 1999
----- ----------------------------
Common Stock, $0.10 par value 15,576,276 shares
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
DANIELSON HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share information)
(Unaudited)
For the Three Months Ended March 31,
1999 1998
----------- --------
Revenues:
Gross premiums earned $ 15,363 $ 16,956
Ceded premiums earned (2,869) (2,941)
--------- --------
Net premiums earned 12,494 14,015
Net investment income 1,906 2,339
Net realized investment gains -- 37
Other income 185 178
--------- --------
Total revenues 14,585 16,569
--------- --------
Losses and expenses:
Gross losses and loss adjustment expenses 10,609 11,987
Ceded losses and loss adjustment expenses (2,137) (2,054)
---------- --------
Net losses and loss adjustment expenses 8,472 9,933
Policyholder dividends 279 112
Policy acquisition expenses 3,331 3,317
General and administrative expenses 2,388 2,357
--------- --------
Total losses and expenses 14,470 15,719
--------- --------
Income before provision for income taxes 115 850
Income tax provision 14 43
--------- --------
Net income $ 101 $ 807
========== ==========
Earnings per share of Common Stock :
Basic $ .01 $ .05
========== ==========
Diluted $ .01 $ .05
========== ==========
See accompanying Notes to Consolidated Financial Statements.
DANIELSON HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share information)
March 31, 1999 December 31,
(Unaudited) 1998
Assets:
Fixed maturities, available for sale at fair value
(Cost: $114,733 and $112,131) $ 116,081 $ 114,683
Equity securities, at fair value (Cost: $20,129 and $20,129) 16,104 16,889
Short term investments, at cost which
approximates fair value 5,373 3,287
-------- ---------
Total investments 137,558 134,859
Cash 20 870
Accrued investment income 1,533 1,427
Premiums and fees receivable, net of allowances
of $ 124 and $136 10,310 9,972
Reinsurance recoverable on paid losses, net of allowances
of $374 and $374 2,689 7,714
Reinsurance recoverable on unpaid losses, net of
allowances of $589 and $559 18,759 18,187
Prepaid reinsurance premiums 1,432 1,668
Property and equipment, net of accumulated depreciation
of $8,463 and $8,322 1,942 1,930
Deferred acquisition costs 2,520 2,381
Other assets 1,837 1,887
-------- ---------
Total assets $ 178,600 $ 180,895
========== ==========
Liabilities and Stockholders' Equity:
Unpaid losses and loss adjustment expenses $ 92,607 $ 95,653
Unearned premiums 14,351 13,705
Policyholder dividends 231 181
Reinsurance premiums payable 4,147 2,143
Funds withheld on ceded reinsurance 1,504 1,442
Other liabilities 4,375 4,498
-------- ---------
Total liabilities 117,215 117,622
Preferred stock ($0.10 par value; authorized
10,000,000 shares; none issued and outstanding) __ __
Common stock ($0.10 par value; authorized
20,000,000 shares; issued 15,586,994 shares;
outstanding 15,576,276 shares) 1,559 1,559
Additional paid-in capital 46,673 46,673
Accumulated other comprehensive loss (2,677) (688)
Retained earnings 15,896 15,795
Treasury stock (Cost of 10,718 shares) (66) (66)
-------- ---------
Total stockholders' equity 61,385 63,273
-------- ---------
Total liabilities and stockholders' equity $ 178,600 $ 180,895
========== ==========
See accompanying Notes to Consolidated Financial Statements.
DANIELSON HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
(In thousands, except share amounts)
(Unaudited)
Comprehensive
Income (Loss) for the
Three Months Ended
March 31,
March 31, 1999 1999 1998
-------------- ----- ----
Common stock
Balance, beginning of year $1,559
-----
Balance, end of period 1,559
-----
Additional paid-in capital
Balance, beginning of year 46,673
------
Balance, end of period 46,673
------
Retained earnings
Balance, beginning of year 15,795
Net income 101 $ 101 $ 807
------ ------ ------
Balance, end of period 15,896
------
Accumulated other comprehensive loss
Balance, beginning of year (688)
Net unrealized gain (loss) on available-for-sale securities (1) (1,989) 43
------- -------
Other comprehensive income (loss) (1,989) (1,989) 43
------- ------- -------
Total comprehensive income (loss) $ (1,888) $ 850
======== ======
Balance, end of period (2,677)
-------
Treasury stock
Balance, beginning of year (66)
-------
Balance, end of period (66)
-------
Total stockholders' equity $ 61,385
========
______________________________________________________________________________________________________________________
Common stock, shares
Balance, beginning of year 15,586,994
----------
Balance, end of period 15,586,994
==========
Treasury stock, shares
Balance, beginning of year 10,718
------
Balance, end of period 10,718
======
(1) Disclosure of reclassification amount: 1999 1998
---- ----
Unrealized holding gains (losses)
Arising during the period $ (1,989) $ 80
Less: reclassification adjustment
for loss included in net income -- (37)
----- ----
Net unrealized gains (losses) on securities $ (1,989) $ 43
====== ===
See accompanying Notes to Consolidated Financial Statements.
DANIELSON HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Three
Months Ended March 31,
1999 1998
------------- ---------
Cash flows from operating activities:
Income from continuing operations $ 101 $ 807
Adjustments to reconcile income from continuing operations
to net cash provided by (used in) operating activities:
Net realized investment gains -- (37)
Depreciation and amortization 175 185
Change in accrued investment income (106) 453
Change in premiums and fees receivable (338) (2,411)
Change in reinsurance recoverables 5,025 (1,192)
Change in reinsurance recoverable on unpaid losses 1,757 (8)
Change in prepaid reinsurance premiums 236 (119)
Change in deferred acquisition costs (139) (403)
Change in unpaid losses and loss adjustment expenses (5,375) (1,183)
Change in unearned premiums 646 1,861
Change in reinsurance payables and funds withheld 2,066 1,363
Change in policyholder dividends payable 50 (138)
Other, net (125) (563)
--------- ----------
Net cash provided by (used in) operating activities 3,973 (1,385)
--------- ---------
Cash flows from investing activities:
Proceeds from sales:
Fixed income maturities available-for-sale 5,348 295
Investments, matured or called:
Fixed income maturities available-for-sale 1,925 23,268
Investments, purchased:
Fixed income maturities available-for-sale (9,857) (11,175)
Proceeds from sale of property and equipment -- 6
Purchases of property and equipment (153) (34)
--------- ---------
Net cash provided by (used in) investing activities (2,737) 12,360
--------- ---------
Net increase in cash and short term investments 1,236 10,975
Cash and short term investments at beginning of year 4,157 1,818
-------- --------
Cash and short term investments at end of period $ 5,393 $ 12,793
======= ========
See accompanying Notes to Consolidated Financial Statements.
DANIELSON HOLDING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1) BASIS OF PRESENTATION
The accompanying unaudited Consolidated Financial Statements of
Danielson Holding Corporation ("DHC" or "Registrant") and subsidiaries
(collectively with DHC, the "Company") have been prepared in accordance with
generally accepted accounting principles. However, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete consolidated financial statements. In the opinion of
management, 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, 1999 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1999. For further
information, reference is made to the Consolidated Financial Statements and
footnotes thereto included in DHC's Annual Report on Form 10-K for the year
ended December 31, 1998.
2) PER SHARE DATA
Per share data is based on the weighted average number of
shares of common stock of DHC, par value $0.10 per share ("Common Stock"),
outstanding during a particular year or other relevant period. Diluted earnings
per share computations, as calculated under the treasury stock method, include
the average number of shares of additional outstanding Common Stock issuable for
stock options, whether or not currently exercisable. Such average shares were
15,731,971 and 16,164,082 for the three months ended March 31, 1999, and 1998
respectively. Basic earnings per share are calculated using only the average
number of outstanding shares of Common Stock and disregarding the average number
of shares issuable for stock options. Such average shares were 15,576,276 and
15,576,287 for the three months ended March 31, 1999, and 1998 respectively.
3) INCOME TAXES
DHC files a Federal consolidated income tax return with its
subsidiaries and certain trusts that assumed various liabilities of certain
present and former subsidiaries of DHC. The Company records its interim tax
provisions based upon estimated effective tax rates for the year.
The Company has made provisions for certain state and local taxes. Tax
filings for these jurisdictions do not consolidate the activities of the trusts
referred to above. For further information, reference is made to Note 12 of the
Notes to Consolidated Financial Statements included in DHC's Annual Report on
Form 10-K for the year ended December 31, 1998.
4) FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS
During 1998, DHC's main operating subsidiary, National American
Insurance Company of California ("NAICC") invested approximately $10.3 million
in Japanese yen based equity securities. In order to hedge the currency risk of
these investments, during the second quarter of 1998 NAICC purchased a foreign
currency option to sell Japanese yen at a fixed price on a given date in 1999.
The foreign currency option is considered a derivative investment. Investments
in equity securities denominated in foreign currencies are translated into U.S.
dollars using current rates of exchange and the related translation adjustments
are recorded in accumulated other comprehensive loss in stockholders' equity net
of the unrealized exchange gain or loss associated with any related foreign
exchange hedging instruments. For the three months ended March 31, 1999, the
Company recorded an unrealized loss on the Japanese yen based equity securities
of $637,602, of which a gain of $725,197 was a result of changes in foreign
currency exchange rates, which is included in accumulated other comprehensive
loss in the accompanying consolidated balance sheets.
In June 1998 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for
fiscal years beginning after June 15, 1999 and establishes standards for the
reporting for derivative instruments. It requires any changes in the fair value
of a derivative instrument and any changes in the fair value of the assets or
liabilities hedged by such instrument to be included in income. To the extent
that the hedge transaction is effective, income is equally offset by both
investments. Currently the changes in fair value of derivative instruments and
hedged items are reported in net unrealized gain (loss) on securities. The
Company has not adopted SFAS 133. However, the effect of adoption on the
consolidated financial statements at March 31, 1999 would not be material.
5) SUBSEQUENT EVENT
Effective April 14, 1999, the Company entered into a Stock Purchase and
Sale Agreement with Samstock, L.L.C. ("Samstock"), which agreement was assigned
with the Company's consent by Samstock to its sole member SZ Investments, L.L.C.
("SZ"), pursuant to an amendment and assignment agreement (such Purchase and
Sale Agreement, as amended and assigned, the "Purchase Agreement"). Pursuant to
the Purchase Agreement, the Company agreed to sell to SZ 2,000,000 shares of
Common Stock at $4.50 per share and a four year warrant (subject to extension in
certain circumstances) to purchase an additional 2,000,000 shares of Common
Stock at $4.75 per share subject to downward adjustment under certain
circumstances. Since the Company does not currently have sufficient shares of
Common Stock available to issue upon the full exercise of the warrant, the
Certificate of Incorporation must be amended in order for the transactions
contemplated by the Purchase Agreement to be consummated.
The consummation of the transaction is subject to, among other things,
approval by insurance regulators of the transaction and the approval by the
Registrant's shareholders of an amendment to the Registrant's Certificate of
Incorporation increasing the authorized number of shares of Common Stock from
20,000,000 to 55,000,000 and eliminating cumulative voting for Directors. It is
anticipated that a meeting of shareholders to approve the amendment will be held
in July.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. GENERAL
Danielson Holding Corporation ("DHC") is organized as a holding company
with substantially all of its operations conducted by subsidiaries (collectively
with DHC, the "Company"). DHC, on a parent-only basis, has limited continuing
expenditures for rent and administrative expenses and derives revenues primarily
from investment returns on portfolio securities. Therefore, the analysis of the
Company's financial condition is generally done on an operating subsidiary
basis.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and the information in Item 3, " Qualitative and
Quantitative Disclosures About Market Risk" contain forward-looking statements,
including statements concerning capital adequacy, adequacy of reserves,
goals, future events, Year 2000 compliance or performance and underlying
assumptions and other statements which are other than statements of historical
facts. Such forward-looking statements may be identified, without limitation,
by the use of the words "believes", "anticipates", "expects", "intends",
"plans" and similar expressions. All such statements represent only
current estimates or expectations as to future results and are subject to
risks and uncertainties which could cause actual results to materially differ
from current estimates or expectations. See "RISK FACTORS THAT MAY AFFECT FUTURE
RESULTS".
2. RESULTS OF NAICC'S OPERATIONS
The operations of DHC's principal subsidiary, National American
Insurance Company of California ("NAICC"), are primarily in specialty property
and casualty insurance. At March 31, 1999, NAICC had a B++ rating from A.M. Best
Company ("Best").
PROPERTY AND CASUALTY INSURANCE OPERATIONS
Net premiums earned were $12.5 million and $14.0 million for the three
months ended March 31, 1999 and 1998, respectively. The decrease in net premiums
earned is directly related to the change in net premiums written. Net premiums
written were $13.4 million and $15.8 million for the three months ended March
31, 1999 and 1998, respectively.
The overall decrease in net written premiums for 1999 over the
comparable period in 1998 is attributable to increased competition and an
increase in reinsurance coverage associated with several new treaties that
significantly reduce NAICC's workers' compensation retention. The participant in
the new treaties is a reinsurer with an A.M. Best rating of A- ("Excellent").
Net investment income was $1.8 million and $2.2 million for the three
months ended March 31, 1999 and 1998, respectively. The decline is reflective of
a slight decrease in average portfolio yield on bonds purchased during the
three months ended March 31, 1999.
Net losses and loss adjustment expenses ("LAE") were $8.5 million and
$9.9 million for the three months ended March 31, 1999 and 1998, respectively.
The resulting loss and LAE ratios for the corresponding periods were 67.8
percent and 70.9 percent, respectively. The loss and LAE ratio decreased in 1999
over 1998 due to the reduction of the Company's workers' compensation retention.
Policy acquisition costs were $3.3 million for each of the three months
ended March 31, 1999 and 1998. As a percentage of net premiums earned, policy
acquisition expenses were 26.7 percent and 23.7 percent for the three months
ended March 31, 1999 and 1998, respectively. The increase in the policy
acquisition expense ratio in 1999 is due primarily to the overall decrease in
premium volume while fixed underwriting expenses of policy acquisition costs
remained relatively constant.
The combined ratios (which represent a ratio of losses and expenses to
net earned premiums in a particular period) were 112 percent and 108 percent for
the three months ended March 31, 1999 and 1998, respectively. Net income from
insurance operations for the three months ended March 31, 1999 and 1998 was $0.5
million and $1.3 million, respectively. The decrease in net income from
insurance operations during the first three months of 1999 compared to the same
period for 1998 is attributable to a decrease in premium volume.
CASH FLOW FROM INSURANCE OPERATIONS
Cash provided by operations was $4.2 million for the three months ended
March 31, 1999 and cash used in operations was $0.9 million for the three months
ended March 31, 1998. The decrease in cash used in operations is attributable to
the collection of reinsurance balances in dispute in excess of $5
million. Overall cash and invested assets, at market value, at March 31, 1999
were $131.6 million, compared to $128.9 million at December 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's insurance subsidiaries require both readily liquid assets
and adequate capital to meet ongoing obligations to policyholders and claimants,
as well as to pay ordinary operating expenses. The primary sources of funds to
meet these obligations are premium revenues, investment income, recoveries from
reinsurance and, if required, the sale of invested assets. NAICC's investment
policy guidelines require that all liabilities be matched by a comparable amount
of investment grade invested assets. Management of NAICC believes that NAICC has
both adequate capital resources and sufficient reinsurance to meet any
unforeseen events such as natural catastrophes, reinsurer insolvencies or
possible reserve deficiencies.
3. RESULTS OF DHC'S OPERATIONS
CASH FLOW FROM PARENT-ONLY OPERATIONS
Operating cash flow of DHC on a parent-only basis is primarily
dependent upon the rate of return achieved on its investment portfolio and the
payment of general and administrative expenses incurred in the normal course of
business. For the three months ended March 31, 1999 and 1998, cash used in
parent-only operating activities was $263,000 and $471,000, respectively. The
decrease in cash used was primarily attributable to the timing of certain
expense payments. For information regarding DHC's operating subsidiaries' cash
flow from operations, see "2. RESULTS OF NAICC'S OPERATIONS, CASH FLOW FROM
INSURANCE OPERATIONS."
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, cash and investments of DHC were approximately $6.6
million, compared to $6.8 million at December 31, 1998. As described above, the
primary use of funds was the payment of general and administrative expenses in
the normal course of business. For information regarding DHC's operating
subsidiaries' liquidity and capital resources, see "2. RESULTS OF NAICC'S
OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES."
4. AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for
fiscal years beginning after June 15, 1999 and establishes standards for the
reporting for derivative instruments. It requires changes in the fair value of a
derivative instrument and the changes in fair value of the assets or liabilities
hedged by that instrument to be included in income. To the extent that the hedge
transaction is effective, income is equally offset by both investments.
Currently the changes in fair value of derivative instruments and hedged items
are reported in net unrealized gain (loss) on securities. The Company has not
adopted SFAS 133. However, the effect of adoption on the consolidated financial
statements at March 31, 1999 would not be material.
5. YEAR 2000
The Company has undertaken a review of its systems for "Year 2000"
compliance at both the holding company and subsidiary levels. DHC has completed
an assessment of its hardware and software systems and has contacted the third
party vendors that it believes are critical to its operations. DHC has developed
a budget for bringing its systems into compliance and does not anticipate that
it will be required to make material expenditures. Although DHC expects that it
will be Year 2000 compliant prior to the end of 1999 and has received assurances
from its third party vendors that they will be Year 2000 compliant, DHC is
currently developing a contingency plan in the event that those assumptions are
incorrect.
NAICC is highly dependent on electronic data processing and information
systems in its operations. NAICC has reviewed its information systems, hardware
and software operations and applications in relation to the Year 2000. NAICC
believes that its hardware and operating system software are Year 2000
compliant. NAICC also believes that it has identified substantially all of the
application software programs which require modification in order to become Year
2000 compliant and has a formal plan to correct and test the programs affected
by the conversion of a two-digit year to a four-digit year. NAICC has completed
and tested the modifications to its insurance applications and believes that
they are Year 2000 compliant. All non-insurance applications (e.g. e-mail
software, accounting software, and report archiving software) are expected to be
upgraded and Year 2000 compliant by the end of the second quarter of 1999.
NAICC has identified the third parties it believes are material to its
operations and is continuing to monitor and, in the case of certain material
third parties, has been able to test its interface to the external systems of
these third parties and believes that they are Year 2000 compliant.
NAICC believes that it does not currently issue any insurance policies
with coverages under which claims for Year 2000 related losses or damages could
be successfully asserted. Management does not believe that material risk exists
that such claims will be made on previous policies.
NAICC is utilizing internal and external resources to meet its
deadlines for Year 2000 modifications. Management believes that the costs of
Year 2000 compliance related efforts are expected to be $150,000 for the year
ended December 31, 1999. Due to the complexities of estimating the cost of
modifying all applications to become Year 2000 compliant and the difficulties in
assessing third-party vendors' abilities to become Year 2000 compliant,
estimates are subject to and are likely to change.
The management of NAICC believes that its electronic data processing
and information systems will be Year 2000 compliant. However, should any
material system fail to correctly process information due to the century change,
operations could be interrupted and this could have a material adverse effect on
NAICC's results of operations.
6. RISK FACTORS THAT MAY AFFECT FUTURE RESULTS
As noted above, the foregoing discussion may include
forward-looking statements that involve risks and uncertainties. In addition to
other factors and matters discussed elsewhere herein, some of the important
factors that, in the view of the Company, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
following:
1. The insurance products sold by the Company are subject to
intense competition from many competitors, many of whom have substantially
greater resources than the Company. There can be no assurance that the Company
will be able to successfully compete and generate sufficient premium volume at
attractive prices to be profitable.
2. In order to implement its business plan, the Company has been
seeking to enter into strategic partnerships and/or make acquisitions of
businesses that would enable the Company to earn an attractive return on
investment. Restrictions on the Company's ability to issue additional equity in
order to finance any such transactions exist which could significantly affect
the Company's ability to finance any such transaction. The Company may have
limited other resources with which to implement its strategy and there can be no
assurance that any transaction will be successfully consummated.
3. The insurance industry is highly regulated and it is not
possible to predict the impact of future state and federal regulation on the
operations of the Company.
4. Unpaid losses and loss adjustment expenses ("LAE") are based on
estimates of reported losses, historical Company experience of losses reported
by reinsured companies for insurance assumed from such insurers, and estimates
based on historical Company and industry experience for unreported claims. Such
liability is, by necessity, based upon estimates which may change in the near
term, and there can be no assurance that the ultimate liability will not exceed,
or even materially exceed, such estimates.
Item 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT
MARKET RISK
The Company's objectives in managing its investment portfolio are to
maximize investment income and investment returns while minimizing overall
credit risk. Investment strategies are developed based on many factors including
underwriting results, overall tax position, regulatory requirements, and
fluctuations in interest rates. Investment decisions are made by management and
approved by the Board of Directors. Market risk represents the potential for
loss due to adverse changes in the fair value of securities. The market risks
related to the Company's fixed maturity portfolio are primarily interest rate
risk and prepayment risk. The market risks related to the Company's equity
portfolio are foreign currency risk and equity price risk. There have been no
material changes in the Company's market risk for the three month period ended
March 31, 1999. For further information, reference is made to Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in DHC's Annual Report on Form 10-K for the year ended December 31,
1998.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
NAICC is a party to various legal proceedings which are considered
routine and incidental to its business and are not material to the financial
condition and operation of its business. DHC is not a party to any legal
proceeding which is considered material to the financial condition and operation
of its business.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
Item 5. OTHER INFORMATION.
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
None
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.
Date: May 17, 1999
DANIELSON HOLDING CORPORATION
(Registrant)
By:/s/ DAVID BARSE
-----------------------------
David Barse
President & Chief Operating Officer
By:/s/ MICHAEL CARNEY
------------------------------
Michael Carney
Chief Financial Officer