EXHIBIT 99.1
CHANCELLOR CORPORATION
PRO FORMA COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1998
(IN THOUSANDS)
PRO FORMA PRO FORMA
CHANCELLOR MRB ADJUSTMENTS COMBINED
ASSETS
Cash and cash equivalents $ 612 $ 32 $ 644
Receivables, net 2,880 375 3,255
Inventory 37 10,721 10,758
Net investment in direct finance lease 359 359
Equipment on operating lease, net 702 702
Residual values, net 219 219
Furniture and equipment, net 808 191 999
Other investments 3,681 3,681
Intangibles, net 3,251 4,290 (1) 7,541
Other assets, net 1,262 149 1,411
13,811 11,468 4,290 29,569
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable & accrued expenses 5,062 1,303 6,365
Deferred reimbursable expenses 1,068 - 1,068
Indebtedness:
Revolving credit line - 9,063 9,063
Notes payable 115 828 943
Non recourse debt 889 - 889
Recourse debt 4,234 - 4,234
11,368 11,194 - 22,562
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Commitments and contingencies
Stockholders' Equity:
Preferred stock, Series AA 50 50
APIC, Series AA 964 964
Common stock 385 80 (35) (2) 430
APIC 28,978 - 4,275 (3) 33,253
Retained earnings/accumulated deficit (27,934) 194 50 (4) (27,690)
2,443 274 4,290 7,007
------------ ---------- ------------- ----------
$ 13,811 $ 11,468 $ 4,290 $ 29,569
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<FN>
SUMMARY NOTES TO PRO FORMA ADJUSTMENTS:
(1) Adjustment to reflect i) acquisition costs of $3,405,000, ii) issuance
of 4,500,000 shares of Chancellor's Common Stock valued at $0.96 per share or
$4,320,000, and iii) elimination of $80,000 of MRB common stock and $50,000 of
accumulated deficit. Intangibles include the allocated purchase price in the
amounts of $995,000, $750,000, and $5,950,000 for non-compete agreements,
customer lists, and goodwill, respectively, net of accumulated amortization of
$154,000. Intangibles have been amortized using the straight-line method over
their useful economic lives ranging from 5 to 40 years.
(2) Adjustment to reflect i) elimination of MRB common stock of $80,000 and
ii) record issuance of 4,500,000 shares of Chancellor Common Stock, $.01 par
value.
(3) Adjustment to reflect additional paid-in capital associated with the
issuance of 4,500,000 shares of Chancellor Common Stock, $.01 par value, valued
at $0.96 per share.
Adjustment to eliminate accumulated deficit of MRB as of July 31, 1998.
CHANCELLOR CORPORATION
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA PRO FORMA
CHANCELLOR MRB ADJUSTMENTS COMBINED
Revenues:
Transportation equipment sales $ 6,165 $ 39,074 $ 45,239
Rental income 942 942
Lease underwriting income 74 74
Direct finance lease income 110 110
Interest income 194 194
Gains from portfolio remarketing 1,374 1,374
Fees from remarketing income 1,407 1,407
Other 442 442
10,708 39,074 - 49,782
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Cost of Sales:
Cost of transportation equipment sales 5,646 32,753 38,399
Selling, general & administrative 3,613 5,491 9,104
Interest 201 445 646
Depreciation & amortization 642 40 682
10,102 38,729 - 48,831
----------- ---------- ------------ ---------
Net income $ 606 $ 345 $ - $ 951
=========== ========== ============ =========
Basic net income per share $ 0.03
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Diluted net income per share $ 0.02
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Shares used in computing basic net
Net income per share 36,695,162
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Shares used in computing diluted net
Income per share 52,941,579
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CHANCELLOR CORPORATION
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA PRO FORMA
CHANCELLOR MRB ADJUSTMENTS COMBINED
Revenues:
Transportation equipment sales $ - $ 27,332 $ 27,332
Rental income 870 870
Lease underwriting income 293 293
Direct finance lease income 272 272
Interest income 44 44
Gains from portfolio remarketing 801 801
Fees from remarketing income 1,488 1,488
Other 665 665
4,433 27,332 - 31,765
------------ ---------- ------------ ----------
Cost of Sales:
Cost of transportation equipment sales - 22,604 22,604
Selling, general & administrative 6,412 4,207 10,619
Interest 281 406 687
Depreciation & amortization 459 47 506
7,152 27,264 - 34,416
------------ ---------- ------------ ----------
Income (loss) before extraordinary item
and income tax provision (2,719) 68 - (2,651)
Income tax provision 13 - - 13
------------ ---------- ------------ ----------
Income (loss) before extraordinary item (2,732) 68 - (2,664)
Extraordinary item-gain on debt forgiveness 930 - - 930
------------ ---------- ------------ ----------
Net income (loss) $ (1,802) $ 68 $ - $ (1,734)
============ ========== ============ ==========
Basic net loss per share:
Loss before extraordinary item $ (0.17)
Extraordinary item 0
Net loss $ (0.11)
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Shares used in computing basic net
loss per share 15,224,432
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