UNITED STATES
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 0-4366
Regan Holding Corp.
(Exact name of registrant as specified in its charter)
California 68-0211359
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1179 N. McDowell Blvd., Petaluma, California 94954
(Address of Principal Executive Offices) (Zip Code)
(707) 778-8638
(Registrant's Telephone Number, Including Area Code)
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
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
---------- ----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of the registrant's common stock,
as of April 30, 1999:
Common Stock-Series A 25,798,543
Common Stock-Series B 598,633
Page 1
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
REGAN HOLDING CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1999 December 31, 1998
-------------- -----------------
(unaudited)
ASSETS
Cash and cash equivalents $ 5,882,978 $ 5,916,731
Investments 20,095,210 16,987,628
Accounts receivable 2,096,214 1,704,265
Prepaid expenses 1,246,177 768,913
Income taxes receivable -- 884,089
Deferred income taxes-current 427,415 359,421
Marketing supplies inventory 527,920 385,616
----------------- -----------------
Total Current Assets 30,275,914 27,006,663
----------------- -----------------
Net fixed assets 2,888,381 2,982,267
Deferred income taxes-non current 1,017,061 904,974
Other assets 359,889 392,109
----------------- -----------------
Total Non-Current Assets 4,265,331 4,279,350
----------------- -----------------
TOTAL ASSETS $ 34,541,245 $ 31,286,013
================= =================
LIABILITIES, REDEEMABLE COMMON STOCK,
AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable $ 364,244 $ 418,821
Accrued sales convention costs 1,048,974 894,713
Accrued liabilities 3,423,796 4,388,401
Income taxes payable 1,161,150 --
----------------- -----------------
Total Current Liabilities 5,998,164 5,701,935
----------------- -----------------
Loan payable 132,285 132,285
Incentive compensation payable 412,194 530,523
----------------- -----------------
Total Non-Current Liabilities 544,479 662,808
----------------- -----------------
TOTAL LIABILITIES 6,542,643 6,364,743
----------------- -----------------
COMMITMENTS AND CONTINGENCIES -- --
REDEEMABLE COMMON STOCK, Series A and B 11,219,276 11,225,431
----------------- -----------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value:
Authorized: 100,000,000 shares
No shares issued or outstanding
Series A common stock, no par value:
Authorized: 45,000,000 shares; Issued and
outstanding: 20,821,488 and 20,530,224 shares at
March 31, 1999 and December 31, 1998, respectively 3,618,779 3,248,874
Paid-in capital from retirement of common stock 890,561 888,109
Paid-in capital from producer stock options 106,000 25,000
Retained earnings 12,381,523 9,587,775
Accumulated other comprehensive income-net (217,537) (53,919)
----------------- -----------------
TOTAL SHAREHOLDERS' EQUITY 16,779,326 13,695,839
----------------- -----------------
TOTAL LIABILITIES, REDEEMABLE COMMON
STOCK AND SHAREHOLDERS' EQUITY $ 34,541,245 $ 31,286,013
================= =================
See accompanying notes to consolidated financial statements
Page 2
REGAN HOLDING CORP. AND SUBSIDIARIES
Consolidated Income Statements
(Unaudited)
For the Three Months Ended
March 31,
1999 1998
INCOME:
Marketing allowances $ 7,876,090 $ 4,380,278
Commission income 4,040,988 2,140,484
Administrative fees 2,288,243 1,349,216
Investment income 198,658 215,043
Seminar income 130,789 40,883
Other income 53,313 18,355
-------------- --------------
TOTAL INCOME 14,588,081 8,144,259
-------------- --------------
EXPENSES:
Salaries and related benefits 5,557,313 3,486,726
Sales promotion and support 2,097,833 1,021,107
Professional fees 385,973 280,909
Occupancy 381,958 238,620
Depreciation and amortization 562,268 204,867
Courier and postage 244,828 162,756
Equipment 179,034 108,673
Stationery and supplies 178,021 124,790
Travel and entertainment 93,448 84,802
Insurance 88,117 39,557
Other miscellaneous expenses 53,014 37,707
-------------- --------------
TOTAL EXPENSES 9,821,807 5,790,514
-------------- --------------
INCOME FROM OPERATIONS 4,766,274 2,353,745
PROVISION FOR INCOME TAXES 1,972,526 947,829
-------------- --------------
NET INCOME $ 2,793,748 $ 1,405,916
============== ==============
EARNINGS PER SHARE:
Weighted average shares outstanding--basic 26,395,692 26,694,872
Basic earnings per share $ .11 $ .05
============== ==============
Weighted average shares outstanding--diluted 27,413,090 26,694,872
Diluted earnings per share $ .10 $ .05
============== ==============
See accompanying notes to consolidated financial statements.
Page 3
REGAN HOLDING CORP. AND SUBSIDIARIES
Consolidated Statement of Shareholders' Equity
(Unaudited)
Paid-in
Paid-in Capital Capital Accumulated Other
from Retirement from Comprehensive
Series A Common Stock of Producer Retained
Shares Amount Common Stock Options Earnings Income Total
------ ------ ------------ ------- -------- ------ -----
Balance
January 1, 1999 20,530,224 $3,248,874 $ 888,109 $ 25,000 $9,587,775 $ (53,919) $13,695,839
Comprehensive Income:
Net income for the
three months ended
March 31, 1999 2,793,748 2,793,748
Net unrealized losses on
investments (270,985) (270,985)
Deferred tax on net
unrealized losses 107,367 107,367
------------
Total Comprehensive
Income 2,630,130
------------
Redemption and
retirement of
common stock 2,452 2,452
Stock awarded to
producers 291,264 369,905 369,905
Producer stock option
expense 81,000 81,000
---------- ---------- ---------- -------- ----------- ---------- -----------
Balance
March 31, 1999 20,821,488 $3,618,779 $ 890,561 $106,000 $12,381,523 $(217,537) $16,779,326
========== ========== ========== ======== =========== ========== ===========
See accompanying notes to consolidated financial statements.
Page 4
REGAN HOLDING CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,793,748 $ 1,405,916
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization of fixed assets 544,512 187,579
Amortization of intangible assets 17,757 --
Common stock awarded to producers 369,905 --
Producer stock option expense 81,000 6,300
Amortization/accretion of investments (21,576) (17,217)
Realized losses on sales of investments 87,652 --
Change in accounts receivable (391,949) (171,783)
Change in prepaid expenses (477,264) 52,162
Change in income taxes receivable and payable 2,045,239 199,503
Change in deferred tax assets (72,714) 87,986
Change in marketing supplies inventory (142,304) 31,943
Change in accounts payable (54,577) (50,865)
Change in accrued sales convention costs 154,261 --
Change in accrued liabilities (964,605) 309,049
Change in other assets and liabilities (103,866) (74,117)
-------------- -------------
Net cash provided by operating activities 3,865,219 1,966,456
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments (12,032,709) (5,687,309)
Proceeds from sales and maturities of investments 8,588,066 1,572,275
Purchases of fixed assets (450,626) (221,841)
-------------- -------------
Net cash used in investing activities (3,895,269) (4,336,875)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption and retirement of common stock (3,703) (36,638)
-------------- -------------
Net cash provided by (used in) financing activities (3,703) (36,638)
-------------- ------------
DECREASE IN CASH AND CASH EQUIVALENTS (33,753) (2,407,057)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,916,731 5,194,332
-------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,882,978 $ 2,787,275
============== =============
See accompanying notes to consolidated financial statements.
Page 5
REGAN HOLDING CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Organization and Summary of Significant Accounting Policies
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles and include the
accounts of Regan Holding Corp. and its wholly-owned subsidiaries, Legacy
Marketing Group ("LMG"), Legacy Financial Services, Inc., Legacy Advisory
Services, Inc., Legacy Reinsurance Company, and LifeSurance Corporation.
All intercompany transactions have been eliminated.
The statements are unaudited but reflect all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the Company's financial position and
results of operations. The consolidated balance sheet data at December 31,
1998 was derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting principles. The
results for the three months ended March 31, 1999 are not necessarily
indicative of the results to be expected for the entire year. Users of
these financial statements are encouraged to refer to the Annual Report on
Form 10-K for the year ended December 31, 1998 for additional disclosure.
2. Building Purchase and Loan Agreement
On May 7, 1999, the Company purchased the building which houses its
headquarters and an adjacent parcel of land in Petaluma, California for
$4.3 million. The Company paid $2.2 million of the purchase price in cash
and entered into a loan payable for the remaining $2.1 million. The loan
has a ten year term and is payable in monthly installments plus one balloon
payment of approximately $1.8 million, due on May 10, 2009. The loan bears
interest at 0.5% per annum above the Prime Rate, as published in the West
Coast Edition of the Wall Street Journal. The loan is fully guaranteed by
each of the Company's subsidiaries. In addition, the loan agreement
contains certain covenants with which the Company must comply, including
restrictions on indebtedness or investments outside the ordinary course of
business and restrictions on dividends or other changes in the Company's
capital structure. Pursuant to the loan agreement, the Company was required
to place approximately $650,000 in reserve to cover loan payments in the
event of default and to provide for certain repair costs.
3. Redeemable Common Stock
The Company is obligated to repurchase certain of its shares of common
stock pursuant to various agreements under which the stock was issued.
During the three months ended March 31, 1999, redeemable common stock was
redeemed and retired as follows:
Series A Redeemable Series B Redeemable Total Redeemable
Common Stock Common Stock Common Stock
------------ ------------ ------------
Carrying Carrying Carrying
(Issuance) (Issuance) (Issuance)
Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ -----
Balance
December 31, 1998 5,171,447 $ 9,428,047 599,128 $1,797,384 5,770,575 $11,225,431
Redemption and
retirement of common
stock (2,248) (4,670) (495) (1,485) (2,743) (6,155)
---------- ----------- -------- ---------- --------- -----------
Balance
March 31, 1999 5,169,199 $ 9,423,377 598,633 $1,795,899 5,767,832 $11,219,276
========== =========== ======== ========== ========= ===========
Page 6
REGAN HOLDING CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
4. Amendments to Marketing and Processing Agreements
In May, 1999, LMG and American National amended the terms of the Marketing
Agreement and Insurance Processing Agreement to extend the term to July 1,
1999. LMG and American National are in the process of negotiating a
five-year extension.
5. Segment Information
The table below presents information about the Company's operating
segments:
Legacy Legacy
Marketing Financial Reconciling
Group Services, Inc. Other Items Total
----- -------------- ----- ----- -----
Net Income (Loss) for the
three months ended:
March 31, 1999 $ 3,538,202 $ (85,964) $ 2,650,115 $(3,308,605) $ 2,793,748
March 31, 1998 $ 1,543,784 $ (88,070) $ 1,404,804 $(1,455,155) $ 1,405,363
Total Assets at:
March 31, 1999 $38,354,442 $ 707,360 $25,516,890 $(30,037,447) $ 34,541,245
December 31, 1998 $30,087,878 $ 816,741 $27,110,236 $(26,728,842) $ 31,286,013
"Other" items above include Regan Holding Corp. (stand-alone) and its
remaining subsidiaries, LifeSurance Corporation, Legacy Advisory Services,
Inc., and Legacy Reinsurance Company. Such entities' operations do not
currently factor significantly into management decision making and,
accordingly, were not separated for purpose of this disclosure.
"Reconciling Items" consist solely of eliminations of intercompany amounts
such as investment in, and income from, subsidiaries.
6. Recent Accounting Pronouncements--Internal Use Software Cost
The Company has adopted the American Institute of Certified Public
Accountants Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP
98-1 provides guidance on determining whether computer software is
internal-use software and on accounting for the proceeds of computer
software originally developed or obtained for internal use and then
subsequently sold to the public. It also provides guidance on
capitalization of the costs incurred for computer software developed or
obtained for internal use. The adoption of SOP 98-1 did not have a material
impact on the consolidated results of operations or consolidated financial
position of the Company during the first quarter of 1999.
7. Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform with 1999 classifications. Such reclassifications had no impact on
net income or retained earnings.
Page 7
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Except for the historical information contained herein, certain of the
matters discussed in this Form 10-Q are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995. These "forward-looking
statements" involve certain risks and uncertainties. All forecasts and
projections in this report are "forward-looking statements", and are based on
management's current expectations of the Company's near-term results, based on
current information available. Actual results could differ materially.
Results of Operations
Summary--The Company's net income for the quarter ended March 31, 1999,
increased approximately $1.4 million, or 98.7%, from the corresponding quarter
in 1998.
Income--The Company's major sources of income are marketing allowances,
commission overrides and administrative fees from sales and administration of
annuity and life insurance products on behalf of the three insurance companies
for which the Company markets and administers policies (the "Carriers"). Levels
of marketing allowances and commission overrides are directly related to, and
increase with, the volume of sales of such products. Administration fees are a
function not only of product sales, but also administration of policies inforce
and producer appointments. Total income increased $6.4 million, or 79.1% during
the three months ended March 31, 1999, compared to the three months ended March
31, 1998.
Marketing allowances and commission income, combined, increased
approximately $5.4 million, or 82.8%, in the first quarter of 1999, compared to
the first quarter of 1998. This increase is due primarily to increases in volume
of sales by the Company's distribution network on behalf of the Carriers.
Premium placed inforce for the Carriers totaled approximately $496.6 million
during the three months ended March 31, 1999, compared to $278.3 million during
the same period in 1998, representing an increase of 78.5%. Also contributing to
increases in income during the first three months of 1999 is a shift in sales
mix to sales of products which yield higher marketing allowances and higher
commission income.
Administrative fees increased approximately $939,000, or 69.6%, in the
first quarter of 1999, compared to the same period in 1998. This increase is due
primarily to an increase in the number of policies sold and administered during
the period and to a shift in policies administered to those which generate
higher administrative fees.
During the three months ended March 31, 1999, 8.9%, 80.4%, and 6.4% of
the Company's total revenue resulted from agreements with American National
Insurance Company ("American National"), IL Annuity and Insurance Company (IL
Annuity"), and Transamerica Life Insurance and Annuity Company ("Transamerica"),
respectively. During the three months ended March 31, 1998, 17.9% and 76.2% of
the Company's total revenue resulted from agreements with American National and
IL Annuity, respectively. Sales and administration of Transamerica products did
not begin until the third quarter of 1998.
Expenses--Total expenses increased approximately $4.0 million, or
69.6%, during the three months ended March 31, 1999, compared to the three
months ended March 31, 1998. This increase is attributable primarily to
increases in compensation, sales promotion and support, professional fees,
occupancy and depreciation and amortization, as discussed below.
As a service organization, the Company's primary expenses are salaries
and related employee benefits, which increased approximately $2.1 million, or
59.4%, during the three months ended March 31, 1999, compared to the same period
in 1998. This increase resulted primarily from an increase in the average number
of full-time equivalent employees, which rose to 375 during the quarter ended
March 31, 1999, from 218 during the quarter ended March 31, 1998. This increase
in employment was necessary to accommodate increases in sales volume, as
discussed above. Salaries and employee benefits expenses did not increase in
proportion to the increase in the number of employees due to the lower pay
levels of the new employees.
Page 8
Sales promotion and support expense consists primarily of costs
relating to the Company's annual national sales conventions, incentives paid to
the Company's higher level producers for recruitment and development of
additional producers, and costs relating to various sales meetings and training
activities. Also included in sales promotion and support expense is the cost of
designing and printing sales brochures for use by producers in the Company's
sales distribution network. It is expected that these expenses will continue to
be a major element of the Company's cost structure. This expense increased
approximately $1.1 million, or 105.4%, for the quarter ended March 31, 1999,
compared with the quarter ended March 31, 1998. This increase is due primarily
to common stock and additional commissions awarded to high level producers for
recruiting and developing other producers who reached certain high performance
sales criteria. Qualification for a national sales convention in Barcelona,
Spain will begin on April 1, 1999. As a result, monthly expenses of
approximately $70,000 are expected to be recognized through the end of the
qualification period which terminates on December 31, 1999.
Professional fees increased $105,000, or 37.4%, for the three months
ended March 31, 1999, compared with the corresponding periods in 1998. This
increase is primarily the result of consulting fees related to various
information systems projects.
Occupancy expense increased approximately $143,000, or 60.1%, during
the first quarter of 1999, compared to the first quarter of 1998. This increase
is due primarily to an increase in telephone expense, which is attributed to
increases in employment and sales volume, as discussed above, and to costs
related to the establishment of a customer service center in Rome, Georgia
during mid-1998.
Depreciation and amortization expense increased approximately $357,000,
or 174.5%, during the three months ended March 31, 1999, compared to the three
months ended March 31, 1998, due primarily to continued acquisitions of fixed
assets. These acquisitions consisted primarily of amounts paid for the
improvement of leased office space and purchases of computer equipment to
accommodate increases in employment.
Liquidity and Capital Resources
Included in investments at March 31, 1999, is $12.0 million
representing an equity investment in Indianapolis Life Group of Companies
("Indianapolis Group"), an affiliate of IL Annuity. The purpose of this
investment was to assure that IL Annuity, a subsidiariy of the Indianapolis
Group, would continue to offer the original VisionMark annuity (which is
marketed by LMG) until a modified version of the product is approved in all
states. Management expects that this investment will be redeemed by the
Indianapolis Group during late 1999 pursuant to the terms of the Investment and
Funding Agreement between LMG, Indianapolis Group and other parties. If,
however, certain events which trigger the redemption do not occur by December
31, 1999, this investment may remain outstanding for up to eight years at a
yield to equal that earned by the Indianapolis Group on this investment
portfolio.
On May 7, 1999, the Company purchased the building which houses its
headquarters in Petaluma, California for $4.3 million. In conjunction with the
building acquisition, the Company paid $2.2 million cash and entered into a loan
payable for the remaining $2.1 million. The loan has a ten year term and is
payable in monthly installments plus one balloon payment of approximately $1.8
million, due on May 10, 1999. Pursuant to the loan agreement, the Company has
placed approximately $650,000 in reserve to cover loan payments in the event of
payment default and to cover certain repair costs.
Management believes that cash and investments on hand, plus cash
generated by ongoing operating activities, are adequate to meet the Company's
needs for cash, both on a long-term and a short-term basis.
Year 2000
As the year 2000 approaches, a critical business issue has emerged
regarding whether existing application software and operating systems can
accommodate this date value. In brief, many existing application software
products in the marketplace were designed to accommodate only a two digit date
position (e.g., '95 is stored in the system and epresents the year 1995). As a
result, the year 1999 (i.e. '99) could be the maximum date value these systems
will be able to accurately process. Management has developed and implemented a
Page 9
plan to insure that the Company will be year 2000 compliant(the "Plan"). The
Plan consists of the following four stages: (i) conducting an inventory of all
hardware, software and support systems; (ii) assessing whether such hardware,
software and support systems are year 2000 compliant; (iii) correcting or
replacing any non-compliant hardware, software and support systems; and (iv)
testing to ensure that all corrections or replacements made pursuant to the
third phase of the plan are functioning properly. All four stages of the Plan
have been completed for mission-critical systems. Management believes that there
are no significant barriers to conducting normal business operations during the
transition to year 2000 and beyond. However, management intends to continue to
monitor relevant external year 2000 preparations and events and to continue to
cnduct year 2000 testing of internal system modifications throughout the
remainder of 1999. In addition, management is developing year 2000 contingency
plans in preparation for any unanticipated disruptions. Although management does
not anticipate any interruptions to normal business operations, there can be no
assurance that unforeseen year 2000-related disruptions would not havea material
adverse effect on the Company's business, financial condition, results of
operations and business prospects.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The Company invests its cash in a variety of financial instruments,
including government agency notes, corporate equity securities and fixed rate
corporate obligations. These investments are denominated in U.S.
dollars.
Interest income on the Company's investments is reflected in
"Investment Income" in the Company's consolidated financial statements. The
Company accounts for its investment instruments in accordance with Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS No. 115"). All of the cash equivalents and
short-term investments are treated as available-for-sale under SFAS 115.
Investments in fixed rate interest earning instruments carry a degree
of interest rate risk. Fixed rate securities may have their fair market value
adversely impacted due to a rise in interest rates. Due in part to these
factors, the Company's future investment income may fall short of expectations
due to changes in interest rates or the Company may suffer losses in principal
if forced to sell securities that have seen a decline in market value due to
changes in interest rates.
The Company's investment securities are held for purposes other than
trading. The weighted-average interest rate on investment securities at March
31, 1999 was 5.4%. The fair value of securities held at March 31, 1999 was
$20,095,210.
Page 10
PART II OTHER INFORMATION
Item 5. Other Events
(a) On May 7, 1999, the Company purchased the building which houses its
headquarters and an adjacent parcel of land in Petaluma, California for
$4.3 million. The Company paid $2.2 million of the purchase price in cash
and entered into a loan payable for the remaining $2.1 million. The loan
has a ten year term and is payable in monthly installments plus one balloon
payment of approximately $1.8 million, due on May 10, 2009. The loan bears
interest at 0.5% per annum above the Prime Rate, as published in the West
Coast Edition of the Wall Street Journal. The loan is fully guaranteed by
each of the Company's subsidiaries. In addition, the loan agreement
contains certain covenants with which the Company must comply, including
restrictions on indebtedness or investments outside the ordinary course of
business and restrictions on dividends or other changes in the Company's
capital structure. Pursuant to the loan agreement, the Company was required
to place approximately $650,000 in reserve to cover loan payments in the
event of default and to provide for certain repair costs.
Item 6. Exhibits and Reports on Form 8-K
(a) Index to Exhibits
Exhibit 10.1 Agreement of Purchase and Sale, dated March 8, 1999, by
and among Regan Holding Corp., North McDowell
Investments, and Jane Crocker
Exhibit 10.2 Business Loan Agreement, dated May 6, 1999, by and
between Regan Holding Corp. and National Bank of the
Redwoods
Exhibit 10.3 Promissory Note, dated May 6, 1999, by and between Regan
Holding Corp. and National Bank of the Redwoods
Exhibit 10.4 Amendment Seven to the Marketing Agreement by and
between Legacy Marketing Group and American National
Insurance Company, dated May 12, 1999.
Exhibit 10.5 Amendment Six to the Insurance Processing Agreement
by and between Legacy Marketing Group and American
National Insurance Company, dated May 12, 1999.
Exhibit 11.1 Computation of Earnings Per Share--Basic
Exhibit 11.2 Computation of Earnings Per Share--Diluted
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K was filed in April 1999 to report that, on March
31, 1999, Legacy Marketing Group, a wholly-owned subsidiary of the
registrant, acquired 15.40 shares of common stock of Indianapolis Life
Group of Companies, Inc. for a total purchase price of $12.0 million.
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.
REGAN HOLDING CORP.
Date: May 13, 1999 Signature: /s/ R. Preston Pitts
-----------------------------------
R. Preston Pitts,
President & Chief Operating Officer
Date: May 13, 1999 Signature: /s/ David A. Skup
-----------------------------------
David A. Skup,
Chief Financial Officer
Page 11