______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_______________________
For the Quarterly Period ended Commission File Number
September 30, 1995 0-12926
_______________________
JMC GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2627415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9710 Scranton Road, Suite 100, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 619-450-0055
_______________________
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
-----
As of September 30, 1995, the registrant had 6,198,898
shares of its common stock, $.01 par value, issued and
outstanding.
_____________________________________________________________________________
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements as of and for the periods
ended September 30, 1995 reflect all adjustments which
are, in the opinion of management, necessary for a fair
presentation of the financial position and the results
of operations for the periods presented.
The balance sheet at December 31, 1994 has been derived
from the audited financial statements at that date. It
is recommended that these financial statements be read
in conjunction with the Company's financial statements
and notes thereto included in the Company's Form 10-K
for the year ended December 31, 1994. Certain balance
sheet items at December 31, 1994 were reclassified to
conform with the format of the balance sheet at
September 30, 1995.
JMC GROUP,INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
1995 1994
ASSETS -------------- ------------
CURRENT ASSETS
Cash and cash equivalents $ 2,516,521 $ 3,610,888
Short-term investments 700,000 536,000
Cash segregated under securities regulations 701,358 47,746
Receivables from insurance companies 941,664 1,425,466
Receivable from financial institution 3,869,007 -
Income taxes receivable - 168,992
Deferred tax asset 12,067 424,584
Other assets 370,859 354,261
-------------- ------------
TOTAL CURRENT ASSETS 9,111,476 6,567,937
Furniture, equipment and leasehold improvements-
net of accumulated depreciation and
amortization of $1,569,576 in 1995 and
$1,321,307 in 1994 480,119 677,155
Asset-based fees purchased - net of accumulated
amortization of $379,720 in 1995 and $ 261,290 1,017,410 1,135,839
in 1994 -------------- ------------
TOTAL ASSETS $ 10,609,005 $ 8,380,931
-------------- ------------
LIABILITIES & STOCKHOLDERS' EQUITY -------------- ------------
CURRENT LIABILITIES
Accrued fees to financial institutions $ 641,678 $ 978,542
Customer funds segregated under securities
regulations 701,358 47,746
Accrued expenses and other liabilities 1,039,194 878,172
Income tax payable 575,343 -
Accrued restructuring expenses 103,678 294,675
Allowance for contract cancellations 77,224 390,539
Accrued payroll and related expenses 293,851 531,559
-------------- ------------
TOTAL CURRENT LIABILITIES 3,432,326 3,121,233
STOCKHOLDERS' EQUITY
Preferred stock, no par value; authorized
5,000,000 shares - -
Common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
6,198,898 shares in 1995 and 1994 61,989 61,989
Additional paid-in-capital 624,851 624,851
Retained earnings 6,489,839 4,572,858
-------------- ------------
TOTAL STOCKHOLDERS' EQUITY 7,176,679 5,259,698
-------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,609,005 $ 8,380,931
-------------- ------------
-------------- ------------
JMC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended,
September 30,
1995 1994
REVENUES ----------- ------------
Commissions $ 3,453,664 $ 7,708,117
Net gain on sale of rights to certain
future asset-based fee revenues 3,311,948 -
Interest 50,891 67,317
Other 444,265 4,500
------------ -----------
TOTAL REVENUES 7,260,768 7,779,934
----------- ------------
----------- ------------
EXPENSES
Employee compensation and benefits 1,805,432 3,079,108
Fees to financial institutions 1,541,022 3,004,612
Professional fees 120,196 94,329
Rent 130,958 187,028
Telephone 86,834 96,934
Depreciation and amortization 102,628 312,886
Other general and administrative expenses 418,608 445,931
Goodwill write-off - 2,516,683
Restructuring charges - 557,002
----------- ------------
TOTAL EXPENSES 4,205,678 10,294,513
----------- ------------
INCOME (LOSS) BEFORE INCOME TAXES 3,055,090 (2,514,579)
INCOME TAX PROVISION 1,222,301 90,126
----------- ------------
NET INCOME (LOSS) $ 1,832,789 $(2,604,705)
----------- ------------
----------- ------------
EARNINGS (LOSS) PER SHARE:
NET INCOME (LOSS) $ 0.30 $ (0.40)
----------- ------------
----------- ------------
WEIGHTED AVERAGE SHARES 6,198,898 6,524,898
JMC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended,
September 30,
1995 1994
REVENUES ----------- ------------
Commissions $12,147,822 $26,773,898
Net gain on sale of rights to certain
future asset-based fee revenues 3,311,948 -
Interest 165,611 137,635
Other 1,803,211 61,737
----------- ------------
TOTAL REVENUES 17,428,592 26,973,270
----------- ------------
EXPENSES
Employee compensation and benefits 5,999,296 10,417,906
Fees to financial institutions 5,416,232 10,866,293
Professional fees 532,141 1,190,247
Rent 396,161 538,549
Telephone 282,081 378,235
Depreciation and amortization 305,333 951,372
Other general and administrative expenses 1,289,457 1,771,461
Goodwill write-off - 2,516,683
Restructuring charges - 557,002
----------- ------------
TOTAL EXPENSES 14,220,701 29,187,748
----------- ------------
INCOME (LOSS) BEFORE INCOME TAXES 3,207,891 (2,214,478)
INCOME TAX PROVISION 1,290,910 352,538
----------- ------------
NET INCOME (LOSS) $1,916,981 $(2,567,016)
----------- ------------
----------- ------------
EARNINGS (LOSS) PER SHARE:
NET INCOME (LOSS) $ 0.31 $ (0.39)
----------- ------------
----------- ------------
WEIGHTED AVERAGE SHARES 6,198,898 6,522,439
JMC GROUP,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended,
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: ------------ ------------
Net income (loss) $ 1,916,981 $(2,567,016)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 305,333 951,372
Goodwill write-off - 2,516,683
Amortization of asset-based fees purchased 118,429 129,210
Deferred tax provision 412,517 173,405
Changes in assets and liabilities:
Cash segregated under securities regulations (653,612) -
Receivables from insurance companies 483,802 457,347
Receivable from financial institution (3,869,007) -
Income taxes payable, net 744,335 947,138
Other assets (57,862) (83,518)
Accrued fees to financial institutions (336,864) (577,936)
Customer funds segregated under securities
regulations 653,612 -
Accrued expenses and other liabilities 161,022 (214,938)
Accrued restructuring expenses (190,997) 546,199
Allowance for contract cancellations (313,315) (268,886)
Accrued payroll and related expenses (237,708) (144,268)
Reserve for discontinued operations - (426,380)
------------ ------------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES (863,334) 1,438,412
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture, equipment and leasehold
improvements (67,033) (121,850)
Purchase of short-term investments (164,000) (1,802,090)
Redemption of short-term investments - 2,559,055
------------ ------------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (231,033) 635,115
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock - (1,963,331)
Proceeds from stock options exercised - 57,360
Dividends paid - (478,391)
Other financing activities - 6,909
------------ ------------
NET CASH USED BY FINANCING ACTIVITIES - (2,377,453)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,094,367) (303,926)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,610,888 1,418,936
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,516,521 $ 1,115,010
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest $ - $ 4,305
Income taxes $ 89,450 $ 75,175
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
1995 Compared to 1994
The Company realized net income of $1,833,000 (or $0.30 per share) in the
third quarter of 1995 compared to a net loss of $2,605,000 (or $0.40 per
share) in the third quarter of 1994. As more fully described below, third
quarter 1995 results include revenues totaling $3,755,000 from the
Company's Florida financial institution client which consist of the net
gain of $3,312,000 ($1,987,000 or $0.32 per share after estimated tax
provision) on the sale of the rights to certain future asset-based fee
revenues and $443,000 in transition fees which are included in other
revenues. See "Trends and Uncertainties--Barnett Banks, Inc." Included in
the net loss for the third quarter of 1994 were one-time pre-tax charges
totaling $3,074,000 related to the acceleration of the write-off of
goodwill and restructuring charges. Excluding the net gain on the sale of
the rights to certain future asset-based fee revenues from the third
quarter of 1995, the Company would have reported a net loss of $154,000
(after estimated tax benefit of $103,000) or $0.02 per share.
For the nine months ended September 30, 1995, the Company reported net
income of $1,917,000 (or $0.31 per share) compared to a net loss of
$2,567,000 (or $0.39 per share) during the first nine months of 1994. In
addition to the previously-mentioned net gain on the sale of the rights to
certain future asset-based fee revenues and transition fees, 1995 nine-
month results include revenues of $1,308,000 ($785,000 or $0.13 per share
after estimated tax provision) related to the Company's Florida client
financial institution's payment for the right to hire certain employees of
the Company's wholly-owned subsidiary and certain other services.
Excluding the payment for the right to hire personnel and the net gain on
the sale of the rights to certain future asset-based fee revenues in the
nine-month period in 1995, the Company would have realized a net loss of
$855,000 or $0.14 per share for the nine-month period ending September 30,
1995.
Total revenues for the quarter ended September 30, 1995 were $7,261,000, a
decrease of $519,000 or 7% from $7,780,000 in the third quarter of 1994.
Third quarter 1995 revenues include the following:
- - A net gain in the amount of $3,312,000 on the sale of the rights to
certain future asset-based fee revenues to the Company's Florida financial
institution client. This net gain reflects a sales price of $3,435,000
offset by expenses of $123,000 related to the shutdown of operations which
would have been used to support the future asset-based fee revenues sold.
- - Transition fees of $443,000 which are included in other revenues. The
transition fees were intended to cover the cost of operating the Florida
operations during a transitional period prior to termination of the
Company's relationship with its Florida financial institution client. See
"Trends and Uncertainties--Barnett Banks, Inc." Revenues recognized in
the third quarter of 1995 represent those transition fees earned through
September 30, 1995. For purposes of analyzing revenues from operations,
these transition fees have been included as they relate to services
performed. As such, all expenses related to transition operations through
September 30, 1995 are included in total operating expenses for the third
quarter.
Excluding the net gain in the third quarter of 1995, total revenues would
have been $3,949,000, a decrease of $3,831,000 or 49% from the third
quarter of 1994. The decrease in revenues is primarily a result of lower
sales volumes which declined $68 million or 61% in the third quarter of
1995 from the similar quarter in 1994. The sales decline is the result of
the reconfiguration and ultimate termination of the Company's Florida
operations as well as interest rate competition, particularly from
Certificates of Deposit. In addition, declining gross revenue rates
resulting from changes in product mix negatively impacted third quarter
1995 revenues. During the third quarter of 1995, mutual fund sales were
48% of total sales compared to 11% in the third quarter of 1994. The
Company also experienced a significant shift in the mix of insurance
products sold. Fixed annuities accounted for 83% of annuity sales in the
third quarter of 1994 but only 47% of annuity sales in the comparable 1995
third quarter. This change in product mix resulted in a 21% decrease in
the gross revenue rate on all products sold in the third quarter of 1995
versus the third quarter of 1994. See "Trends and Uncertainties--Declining
Revenues."
Total revenues for the first nine months of 1995 were $17,429,000 versus
$26,973,000 in the same period of 1994, a decrease of $9,544,000 or 35%.
Excluding the previously-mentioned one-time payments for the right to hire
personnel and the net gain on the sale of the rights to certain future
asset-based fee revenues, revenues for the first nine months would have
been $12,809,000, a decrease of $14,164,000 or 53% from the same period in
1994. The decrease in revenues in the 1995 nine-month period is also
primarily a result of a decrease in sales volume (which decreased 63% when
compared to the 1994 period), and lower gross revenue rates as the sale of
mutual fund and variable annuity products increased as a percentage of
total sales. In addition, interest rate competition and the ongoing
regulatory climate negatively impacted sales volume. As previously
discussed, sales volumes decreased due to the reconfiguration and ultimate
shutdown of the Company's Florida operations. This factor alone accounted
for 85% of the decrease. During the first nine months of 1995, mutual fund
sales were 31% of total sales versus 10% in the same period of 1994. The
change in product mix resulted in a decrease of 10% in the gross revenue
rate for the nine months ended September 30, 1995.
Total expenses for the quarter ended September 30, 1995 were $4,206,000
compared to $10,295,000 (or $7,221,000 excluding the one-time charges of
$3,074,000) in the third quarter of 1994. Excluding the one-time charges
in the 1994 third quarter, expenses would have decreased $3,015,000 or 42%
in 1995 compared to the third quarter of 1994. The primary reasons for the
decrease are as follows:
- - A $1,464,000 or 49% reduction in fees to financial institutions due to
lower sales volume. The reduction in such fees is not in proportion to
the reduction in sales volume due to the increase in fee rates paid to
certain institutions which extended their contracts with JMC during the
second half of 1994. In addition, asset-based fees to financial
institutions increased due to an increase in the average accumulated value
of assets on which such fees are paid since the third quarter of 1994.
- - A $1,437,000 or 37% reduction in the remaining base operating expenses
primarily due to the restructuring and downsizing of the Company's
administrative and sales management functions during 1994 and early 1995
and a reduction in the number of field sales and administrative personnel
related to the reconfiguration and ultimate shutdown of the Company's
Florida operations.
Total expenses for the nine months ended September 30, 1995 and 1994 were
$14,221,000 and $29,188,000 (or $26,114,000 without one-time charges )
respectively. Excluding the one-time charges in 1994, total expenses would
have decreased $11,893,000 or 46% in the 1995 nine-month period versus the
comparable 1994 period. The decrease in expenses during the nine-month
period is also the result of a reduction in fees to financial institution
clients and base operating expenses. In addition, legal fees related to
the Company's administrative proceedings with the Florida Department of
Insurance decreased $590,000 or 81% when compared to the nine months ended
September 30, 1994.
Third Quarter 1995 Compared to Second Quarter 1995
The Company reported net income of $1,833,000 (after estimated tax
provision of $1,222,000) or $0.30 per share in the third quarter of 1995
compared to a net loss of $335,000 (after tax benefit of $224,000) or $0.05
per share in the second quarter of 1995. As more fully described above,
third quarter 1995 results include revenues totaling $3,755,000 from the
Company's Florida financial institution client which consist of the net
gain of $3,312,000 ($1,987,000 or $0.32 per share after estimated tax
provision) on the sale of the rights to certain future asset-based fee
revenues and $443,000 in transition fees which are included in other
revenues. Excluding the net gain but including the transition fees, the
Company would have reported a net loss of $154,000 (after estimated tax
benefit of $103,000) or $0.02 per share for the quarter ended September 30,
1995.
Total revenues for the third quarter of 1995 (excluding the gain on the
sale of the rights to certain future asset-based fee revenues) were
$3,949,000 compared to $4,214,000 in the second quarter of 1995 (a decrease
of $265,000 or 6%). Total expenses in the third quarter of 1995 were
$4,206,000 versus $4,773,000 in the second quarter of 1995, a reduction of
$567,000 or 12%.
Decreasing sales production levels, primarily due to the reconfiguration
and ultimate shutdown of the Company's Florida operations, interest rate
competition, and lower gross revenue rates due to changes in product mix
were the primary factors contributing to the results of operations
(excluding non-recurring revenue).
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of September 30, 1995, the Company had cash and cash equivalents plus
short-term investments of approximately $3,217,000, a decrease of
approximately $930,000 from $4,147,000 in cash and cash equivalents plus
short-term investments as of December 31, 1994. Significant uses of such
amounts include the following:
- - Payments totaling approximately $382,000 made in the first nine months
of 1995 in connection with the Company's restructuring and payroll related
expenses. The payroll related expenses were primarily vacation accruals
for employees terminated during the first quarter of 1995. All of these
amounts were accrued as of December 31,1994.
- - Pre-tax amounts used in operations of $548,000 in the first nine
months of 1995; while pre-tax income for the nine months was $3,208,000,
this includes revenues of $3,748,000 which were recognized in the first
nine months of 1995, but where cash payments will be made in the fourth
quarter of 1995. This amount relates to the sale of the rights to certain
future asset-based fee revenues plus the remaining payments due on
installment from the revenue recognized in the first quarter of 1995 on
the sale of rights to hire personnel.
The Company's liquidity and capital resources will be impacted
significantly as a result of the sale of the rights to certain future asset-
based fee revenues. The Company received $3.4 million in cash proceeds
from this transaction at the beginning of the fourth quarter. Assuming
certain contingencies are met, the remaining consideration for the sale is
expected to be received in the fourth quarter of 1995. However, as this
was a sale of the rights to receive certain future revenues, the Company
will not receive these asset-based fees in future periods. Accordingly,
commencing in September 1995, monthly asset-based fee revenues on the
existing block of annuity and insurance business as of September 30, 1995
will be reduced from a net of approximately $163,000 to a net of
approximately $82,000 per month ($196,000 in gross revenue less $114,000 in
related fees to financial institutions). The Company's asset-based fee
revenue is a function of the total accumulated value of annuity and
insurance assets in-force. This value continues to grow as new
annuity policies are sold and old policies continue to increase in value.
TRENDS AND UNCERTAINTIES
- ------------------------
Barnett Banks, Inc.
During the third quarter of 1995, the Company entered into an agreement in
principle with its Florida client, Barnett Banks, Inc. ("Barnett"), to
assist Barnett in the transition of its annuity marketing program to an
internal bank-operated program. Under the terms of the agreement in
principle, JMC would receive $4.5 million in transition fees and in
consideration for its sale to Barnett of the rights to certain future asset-
based fee revenue on the in force annuity business with Barnett customers.
Following the completion of the transition period, Barnett would assume
responsibility for all aspects of its ongoing annuity sales program
Definitive agreements consistent with the agreement in principle were
signed on October 19, 1995. The transition period ended on October 31,
1995 and JMC's Florida operations were shutdown in early November, 1995.
JMC recorded $3,755,000 in revenues during the third quarter from
transition fees and the net gain on the sale of the rights to certain
future asset-based fee revenues to Barnett. See "Results of Operation--
1995 Compared to 1994." If the remaining contingencies are met, the
Company will record additional revenues from the Barnett transaction in the
fourth quarter of 1995.
Declining Revenues
During the third quarter of 1995, the Company experienced a continued
decline in revenues. The decrease was primarily attributable to declining
sales volumes and reduced gross revenue rates resulting from a shift in the
mix of products sold away from fixed annuities towards variable annuities
and mutual funds which pay lower commission rates.
Gross sales volume declined approximately $8,015,000 or 16% from the second
quarter. This decline resulted from a sales volume decrease of 74% or
approximately $10,585,000 at Barnett offset, in part, by increased
production at other active bank clients. The transition of Barnett's
annuity sales program to an internal bank-operated program was the primary
reason for the reduced sales volume in the Company's Florida operations.
As in past quarters, management believes that interest rate competition
also affected sales volumes during the third quarter. Our financial
institution clients continued aggressively pursuing deposit growth by
offering attractive interest rates on bank deposits which compete with the
Company's products. As a result, the spread between fixed annuity rates
offered by the Company's provider companies and one-year CD rates available
at our financial institution clients remained narrow.
The interest rate environment also impacted product mix and changes in the
product mix negatively impacted the Company's gross revenue rates. See
"Results of Operations--1995 Compared to 1994." As interest rates on fixed
annuities came under increasing competition and the stock market rose, the
product mix shifted to mutual fund and variable annuity products which
provide the opportunity for customers to realize higher returns, but pay
lower commission rates to the Company. Mutual funds represented 48% of
total sales in the third quarter of 1995 compared to 31% in the second
quarter. In addition, variable annuity products accounted for 53% of 1995
third quarter annuity sales volume versus 32% in the second quarter.
During the first quarter of 1995, mutual funds accounted for only 20% of
total sales and variable annuities represented 19% of annuity sales volume.
Most of these factors are outside the Company's control and, accordingly,
management cannot predict when or if they will change or cease to affect
revenues. If interest rates increase or the return on equity-type
investments decreases, management believes that the product mix will
stabilize and potentially move towards a higher percentage of fixed rate
annuity products. Management cannot predict interest rate movement or
stock market performance and their can be no assurance that product mix
will react as management anticipates.
Management has responded to these events by developing an expanded choice
of alternative programs for bank clients and intensifying its marketing
efforts for new case acquisition. In addition, management has also reduced
operating expenses in an effort to bring them in line with revenues.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 7, 1995, the Florida Department of Insurance
(the "Department") issued a Final Order in its
administrative proceeding against the Company which was
commenced on March 11, 1993. The enforcement of the
majority of the Final Order has been stayed pending
appeal and JMC has complied with all other aspects of
the Final Order.
The Final Order is similar in many respects to the
Recommended Order which was issued by an administrative
hearing officer in August 1994. The Department found
that JMC was not involved in an unlawful association
with its Florida financial institution client with
regard to the sale of annuities. JMC was ordered to
cease and desist from certain advertising and sales
practices which the Department found to be in violation
of provisions of Florida insurance law regarding
deceptive advertising and sales practices. It also
requires JMC to obtain an insurance agency license
prior to engaging in any activity which by state law
may be performed only by a licensed agent and revokes
the Florida insurance license of James K. Mitchell,
Chairman and Chief Executive Officer of the Company.
The Company has filed an appeal of the Final Order.
Until the Final Order was issued, JMC was limited to
participating in an administrative proceeding before
what management believes was a politically-motivated
state agency. Management believes that many of its
strongest arguments could not be raised in the
administrative proceeding. These issues will be raised
in the appeal before what management hopes is an
impartial judicial forum.
Effective October 31, 1995, JMC concluded its
relationship with its Florida financial institution
client. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Trends
and Uncertainties--Barnett Banks, Inc."
The Company's broker-dealer subsidiary, Priority
Investment Services, Inc. (formerly Spear Rees & Co.),
is named as a defendant in lawsuits arising out of the
sale of real estate limited partnerships to customers
of Spear Rees & Co. Spear Rees & Co. was a full
service brokerage firm. The sponsoring general partner
and the partnerships themselves are in bankruptcy
proceedings as a result of allegations of mismanagement
and improprieties in connection with the offering.
Although the ultimate outcome of these lawsuits cannot
be predicted with certainty, management believes that
the Company has meritorious defenses in these matters.
ITEM 2. CHANGES IN SECURITIES
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
a.) Exhibits.
The following exhibit is filed herewith:
27 Financial Data Schedule
b.) Reports on Form 8-K.
On September 1, 1995, the Company filed a report
on Form 8-K concerning the entry of a Final Order
in its proceedings before the Florida Department
of Insurance.
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: November 13, 1995 /s/James K. Mitchell
--------------------------------------
James K. Mitchell, Chairman and
Chief Executive Officer
Date: November 13, 1995 /s/D. Mark Carlson
--------------------------------------
D. Mark Carlson, Senior Vice President
and Chief Financial Officer