SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR SECTION 15 (d) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~FOR~~OF THE ~~QUARTERLY~~SECURITIES ~~PERIOD~~EXCHANGE ~~ENDED~~ACT ~~JUNE~~OF ~~30, 2000~~1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

LOOMIS, FARGO & CO.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction) 333-24689 (Commission File Number) 76-0521092 (IRS Employer Identification No.)

Delaware		333-24689		76-0521092
(State or other jurisdiction)		(Commission File Number)		(IRS Employer Identification No.)

File No. 333-24689-01 LFC Holding Corporation (Exact Name of Registrant as Specified in its Charter) File No. 333-24689-02 Loomis, Fargo & Co. (Exact Name of Registrant as Specified in its Charter) File No. 333-24689-04 Loomis, Fargo & Co. of Puerto Rico (Exact Name of Registrant as Specified in its Charter)

File No. 333-24689-01		File No. 333-24689-02		File No. 333-24689-04
LFC Holding Corporation		Loomis, Fargo & Co.		Loomis, Fargo & Co. of Puerto Rico
(Exact Name of Registrant as Specified in its Charter)		(Exact Name of Registrant as Specified in its Charter)		(Exact Name of Registrant as Specified in its Charter)

Delaware (State or other jurisdiction of incorporation or organization) Texas (State or other jurisdiction of incorporation or organization) Tennessee (State or other jurisdiction of incorporation or organization)

Delaware		Texas		Tennessee
(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)

75-2371825 (I.R.S. Employer Identification No.) 75-0117200 (I.R.S. Employer Identification No.) 66-0215016 (I.R.S. Employer Identification No.)

75-2371825		75-0117200		66-0215016
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

2500 CityWest Blvd., Suite 900 Houston, Texas (Address of principal executive offices) 77042 (Zip Code)

2500 CityWest Blvd., Suite 900 Houston, Texas		77042
(Address of principal executive offices)		(Zip Code)

Registrants’ telephone number, including area code: (713) 435-6700

Indicate by check mark whether the registrants: (1) have 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 ~~August~~November 12, 2000, 10,000,000 shares of the Common Stock, $0.01 par value, of Loomis, Fargo & Co.; 2,652,705 shares of the Class A Common Stock, $0.01 par value, of LFC Holding Corporation; 1,000 shares of the Common Stock, $10.00 par value, of Loomis, Fargo & Co. (a Texas corporation); and 250 shares of Common Stock, no par value, of Loomis, Fargo & Co. of Puerto Rico, were outstanding.

PART I—FINANCIAL INFORMATION

~~ITEM~~Item 1. ~~FINANCIAL~~ ~~STATEMENTS~~Financial Statements

~~LOOMIS~~Loomis, ~~FARGO~~Fargo & COCo.

~~CONSOLIDATED~~Consolidated ~~BALANCE~~Balance ~~SHEETS~~Sheets

(Unaudited, in thousands)

	June 30, 2000		December 31, 1999
	September 30, 2000		December 31, 1999
Assets
Current assets:
Cash and cash equivalents	$ 42,~~239~~962		$ 3,905
Accounts receivable, net	2526,~~462~~581		25,757
Prepaid expenses and other current assets	5,~~949~~758		4,915
Total current assets	35,~~650~~301		34,577
Property and equipment, net	4750,~~728~~775		46,744
Deferred taxes, net	78,~~521~~017		6,823
Intangible assets, net	9492,~~202~~784		96,468
Other assets, net	32,~~010~~635		3,445
Total Assets	$188,111		$188,057
Total assets	$189,512		$188,057
Liabilities and Stockholders' Deficit
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$ 1613,~~984~~958		$ 18,937
Accrued expenses and other current liabilities	2931,~~797~~229		29,501
Current portion, long-term debt—affiliates	—		2,904
Current portion, capital lease obligations	~~146~~70		292
Total current liabilities	4645,~~927~~257		51,634
Long-term liabilities:
Long-term debt	~~132~~133,~~000~~650		128,700
Capital lease obligations	7351		37
Other long-term liabilities	9,~~828~~891		10,796
Total long-term liabilities	~~141~~143,~~901~~592		139,533
Stockholders’ deficit:
Stockholders’ equity (deficit):
Common stock	100		100
Additional paid-in capital	24,755		24,755
Accumulated deficit	(2524,~~572~~192	)	(27,965	)
Total stockholders’ deficit	(717	)	(3,110	)
Total stockholders’ equity (deficit)	663		(3,110	)
Total liabilities and stockholders’ deficit	$188,111		$188,057
Total liabilities and stockholders’ equity (deficit)	$189,512		$188,057

See Accompanying Notes.

~~LOOMIS, FARGO & CO.~~ 1

~~CONSOLIDATED~~ ~~STATEMENTS~~Loomis, OFFargo ~~OPERATIONS~~& Co.

Consolidated Statements of Operations

(Unaudited, in thousands)

	Three Months Ended June 30,		Six Months Ended June 30,
	Three Months Ended September 30,		Nine Months Ended September 30,
	2000	1999	2000	1999
Revenues	$93,~~576~~248	$94,~~802~~665	$~~190~~283,~~268~~516	$~~188~~283,~~852~~517
Cost of operations:
Payroll and related expense	58,~~754~~179	58,~~439~~392	~~119~~177,~~770~~949	~~116~~174,~~323~~715
Vehicle expense	10,~~362~~331	10,~~879~~402	2131,~~029~~360	2132,~~870~~272
Facilities expense	4,~~025~~033	4,~~063~~205	812,~~055~~088	812,~~161~~366
Other operating expenses	1415,~~492~~181	16,~~583~~718	3045,~~256~~437	3349,~~274~~992
Restructuring expense	~~482~~—	—	482	—
	88,115	89,964	179,592	179,628
	87,724	89,717	267,316	269,345
Operating income	5,~~461~~524	4,~~838~~948	1016,~~676~~200	914,~~224~~172
Interest expense	3,~~348~~465	3,~~334~~426	610,~~773~~238	610,~~784~~210
Income before income taxes	2,~~113~~059	1,~~504~~522	35,~~903~~962	23,~~440~~962
Income taxes	~~794~~679	~~752~~761	12,~~510~~189	1,~~220~~981
Net income	$ 1,~~319~~380	$ ~~752~~761	$ 23,~~393~~773	$ 1,~~220~~981

See Accompanying Notes.

~~LOOMIS, FARGO & CO.~~ 2

~~CONSOLIDATED~~ ~~STATEMENTS~~Loomis, OFFargo ~~CASH~~& ~~FLOWS~~Co.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2000		1999
Operating activities
Net income	$ 23,~~393~~773		$ 1,~~220~~981
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	69,~~291~~509		69,~~457~~648
Amortization of financing costs	~~342~~587		~~482~~722
Accretion of discount on NOL note	—		12
Deferred income taxes	~~263~~538		1,~~092~~777
Gain on disposal of property and equipment	(128	)	(2849	)
Provision for doubtful accounts	(~~131~~89	)	(~~379~~326	)
Changes in current assets and liabilities:
Accounts receivable	~~426~~(735	)	4,~~549~~649
Prepaid expenses and other current assets	(940	)	(1,883	)
Prepaid expenses and other assets	(619	)	(1,434	)
Accounts payable	(14,~~953~~979	)	(25,~~699~~877	)
Accrued expenses and other liabilities	~~(672~~823	)	62,~~922~~378
Net cash provided by operating activities	68,~~007~~800		1513,~~745~~481
Investing activities
Investing Activities
Acquisition of property and equipment	(611,~~218~~802	)	(811,~~089~~901	)
Proceeds from sale of property and equipment	~~259~~274		97102
Net cash used in investing activities	(511,~~959~~528	)	(711,~~992~~799	)
Financing activities
Net borrowings of debt	34,~~300~~950		26,~~888~~900
Repayment of long-term debt—affiliates	(2,904	)	(3,~~084~~096	)
Repayments of capital lease obligations	(~~110~~261	)	(~~221~~329	)
Net cash provided by (used in) financing activities	286		(417	)
Net cash provided by financing activities	1,785		3,475
Net increase in cash and cash equivalents	334		7,336
Net increase (decrease) in cash and cash equivalents	(943	)	5,157
Cash and cash equivalents at beginning of period	3,905		2,548
Cash and cash equivalents at end of period	$ 42,~~239~~962		$ 97,~~884~~705

See Accompanying Notes.

LOOMIS, FARGO & CO.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2000

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 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. The information included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and footnotes of Loomis, Fargo & Co. (the “Company”) as of December 31, 1999 included in the Form 10-K filed with the Securities and Exchange Commission on March 30, 2000. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~six~~nine months ended ~~June~~September 30, 2000 are not necessarily indicative of the results that may be expected for the full year.

Certain prior period amounts have been reclassified to conform with the 2000 presentation.

NOTE 2. RECENT PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). SFAS No. 133 requires that all derivatives be recognized as assets and liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. In June 1999, the Financial Accounting Standards Board delayed the effective date of SFAS 133, requiring the Company to adopt SFAS 133 effective January 1, 2001. The Company does not anticipate that the new standard will have a material impact on ~~the~~its financial statements.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101), which provides the staff’s views in applying generally accepted accounting principles to selected revenue recognition issues. InThe ~~June~~new ~~2000~~standard, ~~the~~which ~~SEC~~was ~~issued~~adopted ~~SAB~~by ~~101B, which delayed~~ the Company effective ~~date of this bulletin until~~ October 1, 2000., ~~The~~did ~~Company does~~ not ~~anticipate that the new standard will~~ have a material impact on ~~the~~these financial statements.

In March 2000, the FASB issued interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, which poses and answers questions dealing with the application of Accounting Principles Board Opinion No. 25 (APB 25). The Interpretation will be applied prospectively to new awards, modifications to outstanding awards, and changes in employee status on or after July 1, 2000, with some exceptions. The ~~Company~~adoption ~~does~~of ~~not anticipate~~this ~~that~~interpretation ~~the~~did ~~new~~not ~~standard will~~ have a material impact on ~~the~~these financial statements.

NOTE 3. AMENDMENT TO CREDIT FACILITY

NOTE 4. RESTRUCTURING EXPENSE

The Company restructured its operations from five divisions to four divisions during the second quarter of 2000. The restructuring expense, approximately 5069% of which has been paid, primarily relates to expenditures for severance pay to nine division employees whose positions were eliminated during the quarter.

~~NOTE 5. INCOME TAXES~~4

~~The~~ ~~Company~~NOTE ~~continually~~5 ~~reviews~~INCOME the adequacy of the valuation allowance related to deferred tax assets and reduced the reserve by $0.9 million during the quarter ended June 30, 2000. The reduction resulted from a reassessment by the Company, which indicates that it is more likely than not that additional benefits will be realized. Of the total decrease, $0.4 million resulted in the reduction of goodwill related to purchase accounting and the remainder resulted in a reduction to income tax expense.TAXES

~~NOTE~~ The 6Company continually reviews the adequacy of the valuation allowance related to deferred tax assets and reduced the reserve by $1. ~~SIGNIFICANT~~2 ~~CUSTOMER~~million during the quarter ended September 30, 2000. The reduction resulted from a reassessment by the Company, which indicates that it is more likely than not that additional benefits will be realized. Of the total decrease, $0.8 million resulted in the reduction of goodwill related to purchase accounting and the remainder resulted in a reduction to income tax expense.

~~One~~NOTE of6 ~~the~~SIGNIFICANT ~~Company’s customers accounted for approximately 14% and 13% of the Company’s consolidated revenue for the six months ended June 30, 2000 and 1999, respectively.~~CUSTOMER

~~ITEM~~ One ~~2. MANAGEMENT~~of the Company’Ss ~~DISCUSSION~~customers ~~AND~~accounted ~~ANALYSIS~~for OFapproximately ~~FINANCIAL~~14% ~~CONDITION~~and ~~AND~~13% ~~RESULTS~~of OFthe ~~OPERATIONS~~Company’s consolidated revenue for the nine months ended September 30, 2000 and 1999, respectively.

Loomis, Fargo & Co. (the “Company”) provides armored car transport services to a variety of financial, commercial, industrial and retail establishments within the United States and Puerto Rico. The Company offers secure, expedited transportation and protection for valuable commodities, provides extensive automatic teller machine (“ATM”) services, cash management and related services to financial institutions and other commercial customers. The Company also provides contract security officers to patrol and control access to customer facilities in Puerto Rico.5

ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Loomis, Fargo & Co. (the “Company”) provides armored car transport services to a variety of financial, commercial, industrial and retail establishments within the United States and Puerto Rico. The Company offers secure, expedited transportation and protection for valuable commodities and provides extensive automatic teller machine (“ ATM”) services, cash management and related services to financial institutions and other commercial customers. The Company also provides contract security officers to patrol and control access to customer facilities in Puerto Rico.

FORWARD-LOOKING INFORMATION

Certain statements in this report including such terms as “believe”, “estimate”, “ should”, “may”, “expect”, “ anticipate” and similar expressions which are not historical are forward-looking statements that involve risks and uncertainties. Such statements include, without limitation, the Company’s expectation as to future performance. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Important factors that could cause the actual results, performance or achievements of the Company to differ materially from the Company’s expectations (“Cautionary Statements”) are disclosed in this report. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Factors that could cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to leverage and debt service, changes in interest rates, risks inherent in the armored transport industry, general economic and business conditions, restrictions imposed by the bank credit facility, the ability to attract and retain qualified employees, environmental and other regulatory matters and future legal proceedings. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by the Cautionary Statements.

RESULTS OF OPERATIONS

The following table sets forth the Company’s consolidated results of operations expressed as a percentage of revenue.

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
	2000		1999		2000		1999
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of operations:
Payroll and related expense	62.84		61.67		62.98		61.6
Vehicle expense	11.1		11.50		11.10		11.64
Facilities expense	4.3		4.34		4.23		4.34
Other operating expense	1516.53		17.57		1516.90		17.6
Restructuring expense	~~0.5~~—		—		0.32		—
Operating Income	5.8		5.1		5.6		4.9
Operating income	5.9		5.2		5.7		5.0
Interest expense	3.67		3.56		3.56		3.76
Income before taxes	2.2		1.6		2.1		1.24
Income taxes	0.87		0.8		0.8		0.67
Net income	1.45	%	0.8	%	1.3	%	0.67	%

Revenues. Revenues decreased by approximately $1.25 million (1.36%) for the three-month period ended September ~~June~~ 30, 2000 from last year’s corresponding period, ~~but~~and ~~increased~~remained byflat ~~$1.4 million~~ for the ~~six~~nine-month period ended ~~June~~September 30, 2000 from last year’s corresponding period.

The following table analyzes revenues by type of service. The increase in the armored transport services represents additional customers being serviced as well as normal rate increases to existing customers. With respect to the ATM revenue, long-term revenue management initiatives and partnerships with certain ATM manufacturers resulted in a shift in the business mix of certain customers, resulting in reduced ATM services. Management believes the strategic partnerships with the manufacturers will provide an opportunity for additional revenues in future periods.6

As The afollowing ~~result~~table analyzes revenues by type of service. The increase in the ~~rising~~armored ~~fuel~~transport ~~prices,~~services represents additional customers being serviced as ~~discussed~~well ~~below,~~as additional services and normal rate increases to existing customers. With respect to the ~~Company~~ATM ~~initiated~~revenue, a ~~fuel~~change ~~fee~~in ~~during~~service ~~February~~requirements ~~2000~~by certain customers resulted in a reduction in such revenue, which ~~favorably~~occurred ~~impacted~~early in the ~~2000~~year. ~~revenues~~Management ~~when~~believes ~~comparing them~~that ongoing efforts of the Company’s sales force will continue to increase the ~~respective~~ATM ~~1999~~services ~~periods~~line, as reflected by the slight increase in ATM services from the second to third quarters.

	Three Months Ended June 30,				Six Months Ended June 30,
	2000	1999	Change		2000	1999	Change
	(in millions)
Traditional armored transport services	$57.6	$55.0	$ 2.6		$116.3	$109.8	$ 6.5
ATM services	26.5	30.3	(3.8	)	55.5	60.3	(4.8	)
Cash management services	9.5	9.5	—		18.5	18.8	(0.3	)
Total Revenue	$93.6	$94.8	$(1.2	)	$190.3	$188.9	$ 1.4

As a result of the rising fuel prices, as discussed below, the Company initiated a fuel fee during February 2000 which favorably impacted the 2000 revenues when comparing them to the respective 1999 periods. Adjustments are periodically made to the fuel fee to compensate for additional fuel price fluctuations.

Payroll and related expense. Payroll and related expense increased by approximately $0.3 million (0.5%) and $3.4 million (3.0%) for the respective three and six-month periods ended June 30, 2000 from the corresponding periods in 1999. As a percent of revenue, payroll and related expense increased to 62.8% and 62.9% for the respective three and six-month periods ended June 30, 2000 from 61.6% for both of the comparative periods in 1999. Factors responsible for the increase include the business strategy of improved wages and fringe benefits throughout the Company as well as increases in the number of crew operating certain higher risk routes.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2000	1999	Change		2000	1999	Change
Traditional armored transport services	$57.1	$55.8	$ 1.3		$173.4	$165.6	$7.8
ATM services	26.8	30.0	(3.2	)	82.3	90.2	(7.9	)
Cash management services	9.3	8.9	0.4		27.8	27.7	0. 1

Total Revenue	$93.2	$94.7	$(1.5	)	$283.5	$283.5	$—

~~Vehicle~~ Payroll and related expense. ~~Vehicle~~ Payroll and related expense decreased by approximately $0.52 million (40.84%) for the three month period and increased $03.82 million (31.89%) for the ~~respective~~nine-month ~~three~~period ~~and six months~~ ended ~~June~~September 30, 2000 from the corresponding periods in 1999. ~~Vehicle~~As ~~expense as~~ a percent of revenue, ~~decreased~~payroll and related expense increased to 1162.14% ~~for~~and ~~both~~62.8% for the respective three and ~~six~~nine-month periods ofended September 30, 2000 from 1161.57% and 1161.6% for the corresponding periods in 1999. ~~These~~Factors ~~decreases were~~responsible ~~achieved~~for ~~despite~~the ~~fuel~~increase ~~prices~~include ~~rising~~the bycontinued ~~approximately~~strengthening ~~32.0%~~of ~~and~~management ~~39.0%~~staffing, ~~during~~ the ~~three~~business ~~and~~strategy ~~six-month~~of ~~periods~~improved ~~ended~~wages ~~June~~and 30fringe benefits, ~~2000,~~as ~~respectively.~~well ~~The~~as ~~continued~~increases ~~restructuring~~in ~~of routes and~~ the ~~integration~~number of ~~armored~~crew ~~and~~operating ~~ATM~~certain ~~routes~~higher ~~have~~risk ~~produced the majority of this favorable variance~~routes.

~~Facilities~~ Vehicle expense. ~~Facilities~~ Vehicle expense decreased by approximately $0.1 million (0.7%) and $0.9 million (2.8%) for the respective three and nine months ended September 30, 2000 from the corresponding periods in 1999. Vehicle expense as a percent of revenue, remained relatively constant for the ~~three~~quarter ended September 30, 2000 with the corresponding period in 1999 and decreased ~~six-month~~to ~~periods~~11.0% offor ~~2000~~the nine months ended September 30, ~~remained~~2000 ~~relatively constant~~from ~~with~~11.4% for the corresponding ~~periods~~period in 1999. Reductions in the amounts paid for vehicle rentals and auto liability claims were the primary cause for this reduction. This decrease was achieved despite fuel prices rising by approximately 29.0% and 35.0% during the three and nine-month periods ended September 30, 2000, respectively.

~~Other~~ Facilities ~~operating expenses~~expense. ~~Other~~ ~~operating~~Facilities ~~expenses~~expense decreased by approximately $20.12 million (124.61%) and $3.0.3 million (92.12%) for the respective three and ~~six~~nine-month periods ended ~~June~~September 30, 2000 from the corresponding periods in 1999. ~~Other~~Facilities ~~operating~~expense ~~expenses~~ as a percent of ~~revenues~~revenue, ~~decreased to 15.5% and 15.9%~~ for the ~~respective~~ three and ~~six~~nine-month- periods ~~ended~~of ~~June 30~~2000, ~~2000~~remained ~~from~~relatively ~~17.5%~~constant ~~and~~with ~~17.6% for~~ the corresponding periods in 1999. Other operating expenses include such expenses as cargo insurance premiums and retained losses, costs of a centralized dispatch center, subcontracting costs and the testing, recruiting and training of employees. The decreases in other operating expenses are partially a result of the decline in combined cash-in-transit insurance premiums and cargo loss totals during the three and six-month periods ending June 30, 2000. In addition, the Company lowered its expenditures for recruiting and hiring by reducing employee turnover by approximately 5.0% during these periods.

~~Restructuring~~ Other ~~Expense~~operating expenses. ~~Restructuring~~ Other operating expenses ~~totaling~~decreased by approximately $01.5 million ~~were~~(9.2%) ~~recorded~~and in$4.6 million (9.1%) for the ~~second~~respective ~~quarter~~three ofand ~~2000~~nine-month ~~related~~periods toended ~~the~~September ~~transition~~30, 2000 from ~~five~~ ~~divisions~~the tocorresponding ~~four~~periods ~~divisions~~in 1999. ~~The~~Other operating ~~income~~expenses ~~margins,~~as ~~prior~~a topercent ~~these~~of ~~expenses,~~revenue ~~were~~decreased 6to 16.43% and 516.90% ~~during~~for the respective three and ~~six~~nine-month periods ended ~~June~~September 30, 2000 ~~compared~~from ~~to 5~~17.17% and 417.96% ~~during~~for the corresponding periods in 1999. Other operating expenses include such expenses as cargo insurance premiums and retained losses, costs of a centralized dispatch center, subcontracting costs and the testing, recruiting and training of employees. The decreases in other operating expenses are partially a result of a reduction in both ATM service revenue and expenses. Secondly, cost reduction efforts initiated earlier in the year have resulted in reduced travel costs, training, recruiting and hiring, and general office expenses. In addition, combined cash-in-transit insurance premiums and cargo loss totals have declined during the nine-month period ending September 30, 2000.

Interest expense. Interest expense and the expense as a percent of revenue for the three and six-month periods of 2000 remained relatively unchanged from the corresponding periods in 1999. While the average interest rates increased during 2000, the Company was able to maintain a relatively constant amount of interest expense. This was a result of the daily average borrowings under the Company’s credit facility decreasing by approximately $3.5 million and $3.0 million for the respective three and six-month periods ended June 30, 2000 from the corresponding periods in 1999.7

Restructuring Expense. Restructuring expenses totaling $0.5 million were recorded in the second quarter of 2000 related to the transition from five geographic divisions to four. The operating income margins, prior to these expenses, were 5.9% during the nine-month period ended September 30, 2000 compared to 5.0% during the corresponding period in 1999.

Interest expense. Interest expense and the expense as a percent of revenue for the three and nine-month periods of 2000 remained relatively unchanged from the corresponding periods in 1999. While the average interest rates increased during 2000, the Company was able to maintain a relatively constant amount of interest expense. This was a result of the daily average borrowings under the Company’s credit facility decreasing by approximately $0.3 million and $2.1 million for the respective three and nine-month periods ended September 30, 2000 from the corresponding periods in 1999.

LIQUIDITY AND CAPITAL RESOURCES

Total cash and cash equivalents at ~~June~~September 30, 2000 and 1999 were $43.20 million and $97.97 million, respectively. Changes in cash and cash equivalents are described in the statements of cash flows, which are summarized below.

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2000		1999
(in millions)	2000		1999
	(in millions)
Net cash provided by operating activities	$ 8.8		$13.5
Net cash provided by operating activities	$ 6.0		$15.7
Net cash used in investing activities	(11.5	)	(11.8	)
Net cash used in investing activities	(6.0	)	(8.0	)
Net cash provided by financing activities	1.8		3.5
Net cash provided by (used in) financing activities	0.3		(0.4	)
Net increase (decrease) in cash and cash equivalents	$(0.9	)	$ 5.2
Net increase in cash and cash equivalents	$ 0.3		$ 7.3

~~OPERATING~~Operating ~~ACTIVITIES~~Activities

Net cash of $68.08 million was provided by operating activities during the first ~~six~~nine months of 2000 as compared to $1513.75 million during the same period of 1999. This decrease is primarily attributable to the significant improvement made in collection of accounts receivable during 1999 and timing of payments for routine expenditures such as payroll. The successful collection efforts have continued through 2000 resulting in an improved accounts receivable portfolio; however, the month-end balances have remained more consistent.

~~INVESTING~~Investing ~~ACTIVITIES~~Activities

In the first ~~six~~nine months of 2000, cash of $611.08 million was used for acquisitions of property and equipment, which primarily related to the enhancement of the Company’s fleet and to enhanced information technology capabilities. Planned capital expenditures for the next twelve months are estimated to be approximately $1617.0 million.

~~FINANCING~~Financing ~~ACTIVITIES~~Activities

Net borrowings of $35.30 million were made on the Company’s bank credit facility during the first ~~six~~nine months of 2000. The Company’s average daily balance outstanding was $32.01 million less during this period than the corresponding period in 1999. The primary reasons the Company was able to reduce the level of debt have been the favorable results of operations and the continued focus on collections. In connection with the utilization of certain net operating losses in the 1999 Federal Income Tax return, the Company made a final payment, totaling $2.9 million, on the long-term debt to affiliates during the first quarter of 2000. The payment was financed through the Company’s revolving bank credit facility.

The Company’s balance sheet reflected a working capital deficit of $1110.30 million at ~~June~~September 30, 2000, an improvement from the December 31, 1999 working capital deficit of $17.1 million. The Company is highly leveraged, with long-term liabilities comprising 75.48% of total liabilities and stockholders’ ~~deficit~~equity at ~~June~~September 30, 2000. The Company’s consolidated balance sheet at September 30, 2000 reflected total stockholders’ equity of $0.7 million, as compared to a stockholders’ deficit totaling $3.1 million at December 31, 1999.

The Company’s revolving bank credit facility provided aggregate commitments of $85.6 million at June 30, 2000. Under the facility, funds can be borrowed either for unspecified periods of time at a base rate tied to the bank’s prime rate, or for set periods of time under variable rates tied to LIBOR. The facility includes letters of credit, of which approximately $18.8 ~~million were outstanding at June 30, 2000. Remaining commitments available under the facility at June 30, 2000 were $20.0 million.~~

The Company’s revolving bank credit facility provided aggregate commitments of $85.6 million at September 30, 2000. Under the facility, funds can be borrowed either for unspecified periods of time at a base rate tied to the bank’s prime rate, or for set periods of time under variable rates tied to LIBOR. The facility includes letters of credit, of which approximately $17.3 million were outstanding at September 30, 2000. Remaining commitments available under the facility at September 30, 2000 were $19.7 million.

Prior to June 26, 2000, the Company’s revolving bank credit facility included commitment reductions over the final four years of the facility. On June 26, 2000, an amendment to the revolving bank credit facility was executed which removed all remaining commitment reductions and extended the termination date from January 2002 to April 2002, at a cost of $0.1 million. It is anticipated that letters of credit requirements, principally for casualty liabilities, should not exceed $20.0 million by December 31, 2000, leaving at least $65.6 million in available borrowing capacity. Management believes that the operating cash flow and this remaining financing commitment will be adequate to fund operating needs and capital expenditures during the next twelve months and for the foreseeable future beyond twelve months.

PART II OTHER INFORMATION

~~ITEM~~Item ~~6. EXHIBITS~~4 ~~AND~~Submission ~~REPORTS~~of ONMatters ~~FORM~~to ~~8-K~~a Vote of Security Holders.

On August 30, 2000, by unanimous written consent of the holders of all of the outstanding capital stock of Loomis, Fargo & Co., the stockholders approved the First Amendment to Loomis, Fargo & Co. 1997 Stock Option Plan.

Item 6 Exhibits and Reports on Form 8-K

(a) Exhibits

3.1		Certificate of Incorporation of Loomis, Fargo & Co. (Delaware), as amended. (1)
3.2		Bylaws of Loomis, Fargo & Co. (Delaware). (1)
3.3		Certificate of Incorporation of LFC Holding Corporation, as amended. (1)
3.4		Bylaws of LFC Holding Corporation, as amended. (1)
3.5		Articles of Incorporation of Loomis, Fargo & Co. (Texas), as amended. (1)
3.6		Bylaws of Loomis, Fargo & Co. (Texas), as amended. (1)
3.9		Amended and Restated Articles of Incorporation of Loomis, Fargo & Co. of Puerto Rico, as amended. (1)
3.10		Bylaws of Loomis, Fargo & Co. of Puerto Rico. (1)
4.1		Indenture, dated as of January 24, 1997, among Loomis, Fargo & Co. (Delaware), as Issuer, LFC Holding Corporation, Loomis, Fargo & Co. (Texas), LFC Armored of Texas Inc. (formerly known as Wells Fargo Armored Service Corporation of Texas), and Loomis, Fargo & Co. of Puerto Rico (formerly known as Wells Fargo Armored Service Corporation of Puerto Rico), as Guarantors, and Marine Midland Bank, as trustee. (1)
4.2		Form of New Note (included in Exhibit 4.1, Exhibit A-3). (1)
10.1		~~Second~~First Amendment, ~~dated~~to ~~as of June 26~~Loomis, ~~2000,~~Fargo to& ~~the~~Co. ~~Credit~~1997 ~~Agreement~~Stock ~~dated~~Option ~~as of January 24, 1997~~Plan. !*
27.1		Financial Data Schedule for Loomis, Fargo & Co.*

*	Filed herewith

!	Management contract or compensatory plan or arrangement

(1)	Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-24689) of Loomis, Fargo & Co. initially filed with the Securities and Exchange Commission on April 7, 1997, as amended.

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the quarter for which this report is filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the co-registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.

Loomis, Fargo & Co. (Delaware)

LFC Holding Corporation

Loomis, Fargo & Co. (Texas)

Loomis, Fargo & Co. of Puerto Rico

Date: ~~August~~November 23, 2000 By: /s/ James K. Jennings, Jr.

By: /s/ James K. Jennings, Jr.

James K. Jennings, Jr.

Executive Vice President and ~~Chief Financial Officer (Principal Financial and Accounting Officer of the Co-registrants)~~

Chief Financial Officer

(Principal Financial and

Accounting Officer of the

Co-registrants)

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