10-Q 1 k60237e10-q.txt FORM 10-Q 1 ================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended December 31, 2000 Commission file number 0-14299 SECOM GENERAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 87-0410875 (State or other jurisdiction (IRS Employer I.D. Number) of incorporation or organization) 46035 GRAND RIVER AVENUE 48374 (Address of principal executive offices) (Zip Code) Registrant's telephone number: 248-305-9410 Indicate by check mark whether the registrant (1) has filed all reports 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 requirement for the past 90 days. Yes X No [ ] --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Title of Class Number of Shares Outstanding Common Stock 1,006,272 ================================================================================ 2 SECOM GENERAL CORPORATION (IN PROCESS OF LIQUIDATION) FORM 10-Q QUARTER ENDED DECEMBER 31, 2000 INDEX

Page ---- PART I FINANCIAL INFORMATION ~~Page ----~~ Item 1. Financial Statements Consolidated Statement of Net Assets (in Liquidation ~~Basis)......................1~~as ~~Consolidated~~of ~~Balance~~December ~~Sheet~~31, 2000....................................................2..1 Consolidated Statement of ~~Changes in~~ Net Assets (in Liquidation ~~Basis)~~as of September 30, 2000................................................~~4 Consolidated Statements of Operations~~.....~~....................................5~~2 Consolidated ~~Statements~~Statement of ~~Cash~~Changes ~~Flows~~in Net Assets in Liquidation for the Period from October 1, 2000 to December 31, 2000.....................~~....................6~~3 Notes to Interim Consolidated Financial Statements............................7...4 Item 2. Management's Discussion & Analysis of Financial Condition, ~~Results of Operations~~ and Changes in Net Assets (Liquidation Basis)...........10.........................8 PART II OTHER INFORMATION Item 1. Legal Proceedings..................................................................1511 Item 2. Changes in Securities..............................................................1511 Item 3. Defaults in Securities.............................................................1511 Item 4. Submission of Matters to a Vote of Security Holders................................1511 Item 5. Other Information..................................................................1511 Item 6. Exhibits and Reports on Form 8-K...................................................1511

3 UNAUDITED SECOM GENERAL CORPORATION AND SUBSIDIARIES (In process of liquidation) CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION --------------------------------------------------------------------------------

~~Sept.~~December ~~30,~~31 ~~1999~~2 0 0 0 ------------------- ~~Current~~ASSETS ~~assets~~ Cash and cash equivalents $ ~~497~~2,~~200~~015,700 Accounts receivable Trade 329,~~272,000~~900 Other, principally notes ~~525~~315,~~300~~000 ~~Inventories~~Buildings and real estate held for sale 2,~~896~~351,~~500~~000 ~~Prepaid~~Other ~~expenses~~assets 93298,~~100~~200 ~~Deferred~~---------- ~~tax~~Total assets ~~105~~$5,~~900~~009,800 ~~Real~~========== ~~estate~~LIABILITIES ~~and~~Accounts ~~buildings~~payable ~~held~~$ ~~for sale 834~~57,~~600~~300 ~~Property,~~Accrued ~~plant,~~wages ~~equipment~~ and ~~inventory~~benefits of77,700 ~~discontinued~~Federal ~~subsidary~~income ~~- Machinery~~ and ~~equipment~~Michigan ~~held~~Single ~~for~~Business ~~sale~~tax 1108,~~203,~~900 ~~------------------~~Debt ~~Total~~secured ~~current~~by ~~assets~~computer ~~9,428,500~~equipment ~~Notes receivable~~33,200 ~~net~~Debt ofsecured ~~current~~by ~~portion~~buildings ~~975,400~~and ~~Property,~~real ~~plant~~estate ~~and~~held ~~equipment,~~for ~~net~~sale 61,~~930~~550,~~000~~700 Other ~~assets~~liabilities ~~285~~474,~~500~~800 ---------- Total liabilities 2,302,600 ---------- ~~Total~~NET ~~assets~~ASSETS IN LIQUIDATION $2,707,200 17========== Number of common shares outstanding 1,~~619~~006,~~400~~300 ========== NET ASSETS IN LIQUIDATION PER COMMON SHARE $ 2.69 ==========

The accompanying notes are an integral part of these consolidated liquidation basis financial statements. 1 4 SECOM GENERAL CORPORATION AND SUBSIDIARIES (In process of liquidation) CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION --------------------------------------------------------------------------------

~~Sept.~~September 30, ~~1999~~2 0 0 0 ------------------- ~~Current~~ASSETS ~~liabilities~~Cash ~~Current~~and ~~maturities~~cash ofequivalents ~~secured debt~~ $ 113,~~073~~397,~~300~~600 Accounts ~~payable~~receivable ~~1,314,400~~Trade ~~Accrued wages and benefits 749~~251,~~400~~100 Other, ~~accrued~~principally ~~expenses~~notes ~~830~~350,~~600~~000 ~~Debt~~Buildings ~~secured by buildings~~ and real estate held for sale -2,351,000 ~~Debt~~Other ~~secured~~assets ~~by property~~417,600 ~~plant and equipment of discontinued subsidiary~~ - ----------~~-----~~ Total ~~current~~assets ~~liabilities 3~~$16,~~967~~767,~~700~~300 ~~Long-term~~=========== ~~debt~~LIABILITIES ~~obligations~~Accounts 3payable $ 113,~~527,900~~100 ~~Deferred~~Accrued ~~tax~~wages ~~liabilities~~and ~~401~~benefits 194,~~300~~700 ~~---------------~~Federal ~~Total~~income ~~liabilities~~and ~~7,896,900~~Michigan ~~---------------~~Single ~~Stockholders'~~Business ~~equity~~tax ~~Common stock~~136,400 ~~$.10~~Debt ~~par~~secured ~~value,~~by ~~authorized~~computer 10equipment 55,~~000,000~~100 ~~shares;~~Debt ~~outstanding~~secured ~~1,038,200~~by ~~shares~~buildings ~~104,400~~and ~~Additional~~real ~~paid-in~~estate ~~capital~~held 18for sale 1,~~757~~602,~~700~~000 ~~Accumulated~~Other ~~deficit~~liabilities (9827,~~139,600)~~300 -----------~~----~~ Total ~~stockholders'~~liabilities ~~equity 9~~2,~~722~~928,~~500~~600 -----------~~----~~ ~~Total~~NET ~~liabilities~~ASSETS ~~and~~IN ~~stockholders'~~LIQUIDATION ~~equity~~ $ 1713,~~619~~838,~~400~~700 =========== Number of common shares outstanding 977,900 =========== NET ASSETS IN LIQUIDATION PER COMMON SHARE $ 14.15 ===========

The accompanying notes are an integral part of these consolidated liquidation basis financial statements. 2 5 UNAUDITED SECOM GENERAL CORPORATION AND SUBSIDIARIES (In process of liquidation) CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION FOR THE PERIOD FROM OCTOBER 1, 2000 TO DECEMBER 31, 2000 -------------------------------------------------------------------------------- Net assets in liquidation as of September 30, 2000 $ 13,838,700 Decrease in net assets due to payment of October 31, 2000 liquidating distribution of $11.55 per share of common stock (11,585,700) Decrease in net assets due to retirement of 22,700 shares of common stock, principally occasioned by termination of defined contribution plan (220,900) Increase in net assets resulting from exercising of 51,000 common stock options 489,400 Gain from activities during the "wind down" period from October 1, 2000 through December 31, 2000 185,700 ------------ NET ASSETS IN LIQUIDATION AS OF DECEMBER 31, 2000 $ 2,707,200 ============

The accompanying notes are an integral part of these consolidated liquidation basis financial statements. 3 6 SECOM GENERAL CORPORATION (IN PROCESS OF LIQUIDATION) NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. FINANCIAL STATEMENT PRESENTATION General The consolidated financial statements included herein have been prepared by Secom General Corporation (the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of the Company, the accompanying unaudited consolidated financial statements reflect all liquidation adjustments required to present fairly its Net Assets in Liquidation as of December 31, 2000 and September 30, 2000, respectively, and its Changes in Net Assets in Liquidation for the Period from October 1, 2000 to December 31, 2000. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-K and Annual Report for the fiscal year ended September 30, 2000. On August 24, 2000 the Company's shareholders approved a Plan of Liquidation. Background and Reasons for the Plan of Liquidation During the fall of 1998, Secom's Board of Directors engaged the investment banking firm of Goldsmith, Agio, Helms Securities, Inc. ("GAHS") to assist it in developing strategic alternatives to increase stockholder value. Secom's Board initially contacted GAHS because it believed that the value of the Company was greater than the aggregate value of the then trading price of the Company's shares of Common Stock. Among the alternatives discussed with GAHS was a possible merger, sale or similar transaction of the entire Company or its subsidiaries. While other parties expressed an interest in engaging in a transaction with the entire Company, the price proposed by such parties was below what the Board believed was fair market value. GAHS also advised the Board that, because of the different industries represented by our two segments, many potential purchasers would not be interested in purchasing both segments. Therefore, the Board believed it was necessary to pursue other alternatives to accomplish its goal of increasing stockholder value, including selling the Company's assets and properties in separate transactions and ultimately liquidating it. In August 1999, the Company entered into a letter of intent with a potential purchaser for the sale of the assets of the Tooling Segment, which was comprised of Form Flow, L&H Die and Micanol. After signing the letter of intent, the potential purchaser asked the Company for certain concessions on the terms which Secom was unwilling to provide. The letter of intent also contained certain contingencies that were not satisfied so the letter of intent terminated. 4 7 SECOM GENERAL CORPORATION (IN PROCESS OF LIQUIDATION) NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- At the same time, the Company was negotiating with Alken-Ziegler Livonia, LLC ("Alken-Ziegler") for the sale of the operating assets of the Metal Parts Forming Segment, which was comprised of Uniflow. The Company ultimately entered into a letter of intent for that sale in October 1999. When the letter of intent with respect to the Tooling Segment terminated, Alken-Ziegler expressed interest in purchasing the assets of the Tooling Segment. In November 1999, Secom's Board authorized execution of a non-binding letter of intent with Alken-Ziegler for the sale of the assets of the Tooling Segment. At that time, however, Secom believed that it was in its best interest to focus on closing the sale of the Metal Parts Forming Segment before entering into a definitive agreement for the sale of the assets of the Tooling Segment. On February 9, 2000, Secom sold the operating assets of its Metal Parts Forming Segment to Alken-Ziegler for a purchase price of approximately $2.4 million in cash. Alken-Ziegler also agreed to assume certain liabilities of the Metal Parts Forming Segment. The Company then continued negotiating with Alken-Ziegler and GL Ziegler Investments, LLC ("GLZ") on the terms of a definitive agreement for the sale of the assets of the Tooling Segment. On March 29, 2000, the Company's Board of Directors authorized the execution of an Asset Purchase Agreement with Alken-Ziegler and GLZ. On May 10, 2000, the sale of the Tooling Group was approved by the written consent of more than fifty-one (51%) percent of the outstanding shares of Secom's Common Stock. Prior to the closing, Alken-Ziegler assigned its interests under the Asset Purchase Agreement to its affiliate, Alken-Ziegler Tool Company, LLC ("A-Z Tool Company"; A-Z Tool Company and GLZ are collectively referred to as "Purchaser"). The sale was completed on June 30, 2000. In connection with the sale of the operating assets of the Tooling Segment, the Company received a cash purchase price of approximately $8 million on June 30, 2000. The Company received the balance of approximately $1.6 million on August 31, 2000 upon the closing of the sale of the Tooling Segments real estate to Purchaser. The Purchaser also agreed to assume certain liabilities of the Tooling Segment. Based on the above asset sales and Secom's Board of Directors recommendation, the Company's stockholders approved a Plan of Liquidation on August 24, 2000. Under its Plan of Liquidation, the Company expects to distribute to its stockholders, on a pro rata basis, all of its remaining property and assets, after payment of or the provision for the payment of claims and obligations. 2. SIGNIFICANT LIQUIDATION BASIS OF ACCOUNTING POLICIES Liquidation Basis of Accounting As a result of the Company signing the Asset Purchase Agreement on March 29, 2000 to sell substantially all of the operating assets of the Tooling Segment, and the Company's expectation of obtaining from its stockholders formal approval of a plan of liquidation upon the consummation of the sale of the Tooling Segment, the Company adopted the liquidation basis of accounting. Such adoption was effected beginning on April 1, 2000 for administrative convenience coincident with the close of the Company's second fiscal quarter ended March 31, 2000. Because of the approval of the Plan of Liquidation, comparative financial information 5 8 SECOM GENERAL CORPORATION (IN PROCESS OF LIQUIDATION) NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- from previous years and certain other disclosures are not meaningful and have not been presented in the consolidated financial statements. The liquidation basis of accounting requires that assets be valued at their estimated liquidation values and that liabilities be valued at their estimated settlement values. Assets and liabilities that have not been revalued to liquidation value are disclosed as such on the face of the financial statements. In addition, under the liquidation basis of accounting, gains and losses from dispositions of assets are displayed as net amounts versus gross revenue and expenses as under the going concern basis of accounting. The primary financial statements required under the liquidation basis of accounting are Statements of Net Assets in Liquidation as of December 31, 2000 and September 30, 2000, respectively, and a Statement of Changes in Net Assets in Liquidation for the period from October 1, 2000 to December 31, 2000. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles, including those applicable to the liquidation basis of accounting, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, and the accompanying notes. Significant estimates include the fair values of assets held for sale, collectibility of accounts and notes receivables, future rental and royalty receipts and future liability settlement amounts. Such estimates have been developed pursuant to the Plan of Liquidation. Actual results may differ from amounts estimated. Buildings and Real Estate Held for Sale The estimated value of real estate and buildings held for sale represents an expected selling price of $2.7 million, less estimated taxes and costs to sell. The Company currently receives rental income with respect to these facilities. Other Liabilities Other liabilities primarily represents estimated payroll and benefits, professional, interest and other costs expected to be incurred after December 31, 2000 in connection with the implementation and execution of the Plan of Liquidation. 3. COMMON STOCK OPTIONS During the quarter ended December 31, 2000, the Company's Board of Directors approved the vesting of any and all unvested options outstanding under the 1991 Plan and those outside of the 1991 Plan. Accordingly, all 16,000 options outstanding under the 1991 Plan and all 35,000 options outstanding outside of the 1991 Plan were exercised. Based upon the exercise prices of the options, the Company received approximately $489,000 in cash. 6 9 SECOM GENERAL CORPORATION (IN PROCESS OF LIQUIDATION) NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 4. COMMITMENTS AND CONTINGENCIES Payment of Liquidating Distribution On October 31, 2000 the Company paid a cash liquidating distribution to stockholders in the amount of $11.55 per share. The Company believes that if it is successful in liquidating its remaining assets at their estimated current market value, stockholders could receive liquidating distributions totaling approximately $2 to $3 per share over the next three to four years, in addition to the first distribution of $11.55 per share paid on October 31, 2000. Trading of Common Stock In December 2000 the Company filed its Certificate of Dissolution with the Delaware Secretary of State with an effective date of December 31, 2000. The Company also filed a "No Action Letter" with the Securities and Exchange Commission requesting relief from the periodic reporting requirements of sections 13A and 15(d) of the Securities Exchange Act of 1934. In conjunction with the filing of its Certificate of Dissolution, the Company requested that NASDAQ delist and cease trading in the Company's common stock at the close of business on December 29, 2000. Litigation The Company is involved in certain legal proceedings arising in the normal course of business. In the opinion of management, based on the advice of counsel, the outcome of such litigation will not have a material adverse effect on the reported amount of the Company's net assets in liquidation or changes in net assets in liquidation. Royalty Agreement Receipts As a result of certain asset sales, the Company has the right to receive royalty payments from the purchasers. The royalty payments are for stated percentages of the net selling price of parts to certain customers, for either a period of up to five years or the service life of the part. 7 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES IN NET ASSETS (LIQUIDATION BASIS) OVERVIEW The Company and its representatives may from time to time make written or oral statements concerning expectations for the future which are forward-looking statements, including statements in the Company's filings with the Securities and Exchange Commission. Whenever possible, the Company has identified these forward-looking statements by words or phrases such as "will likely result", "expects", "anticipates", "believes", "forecast", "estimate", "project" or similar expressions within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's forward-looking statements reflect the Company's best judgment based on current information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned that they should not place undue reliance on any forward-looking statements because such statements speak only as of the date they are made. The methods used by the Board of Directors and management in estimating the value of the Company's property and assets do not, with certainty, result in an exact determination of value nor are they intended to indicate the amount, if any, a stockholder may receive in liquidation. The amount of liquidation proceeds depends largely on factors beyond the Company's control, including, without limitation, the price at which the Company will be able to sell its remaining assets and properties, the rate of inflation, changes in interest rates, the condition of the real estate and financial markets, the availability of financing to prospective purchasers, the amount and nature of any unknown contingent liabilities and the ability to collect its receivables. The Company cautions that the foregoing list of important factors may not be all-inclusive, and it specifically declines to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of any anticipated or unanticipated events. During the fall of 1998, Secom's Board of Directors engaged the investment banking firm of Goldsmith, Agio, Helms Securities, Inc. ("GAHS") to assist it in developing strategic alternatives to increase stockholder value. Secom's Board initially contacted GAHS because it believed that the value of the Company was greater than the aggregate value of the then trading price of the Company's shares of Common Stock. Among the alternatives discussed with GAHS was a possible merger, sale or similar transaction of the entire Company or its subsidiaries. While other parties expressed an interest in engaging in a transaction with the entire Company, the price proposed by such parties was below what the Board believed was fair market value. GAHS also advised the Board that, because of the different industries represented by our two segments, many potential purchasers would not be interested in purchasing both segments. Therefore, the Board believed it was necessary to pursue other alternatives to accomplish its goal of increasing stockholder value, including selling the Company's assets and properties in separate transactions and ultimately liquidating it. In August 1999, the Company entered into a letter of intent with a potential purchaser for the sale of the assets of the Tooling Segment, which was comprised of Form Flow, L&H Die and Micanol. After signing the letter of intent, the potential purchaser asked the Company for certain concessions on the terms which Secom was unwilling to provide. The letter of intent also contained certain contingencies that were not satisfied so the letter of intent terminated. 8 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES IN NET ASSETS (LIQUIDATION BASIS) (CONTINUED) At the same time, the Company was negotiating with Alken-Ziegler Livonia, LLC ("Alken-Ziegler") for the sale of the operating assets of the Metal Parts Forming Segment, which was comprised of Uniflow. The Company ultimately entered into a letter of intent for that sale in October 1999. When the letter of intent with respect to the Tooling Segment terminated, Alken-Ziegler expressed interest in purchasing the assets of the Tooling Segment. In November 1999, Secom's Board authorized execution of a non-binding letter of intent with Alken-Ziegler for the sale of the assets of the Tooling Segment. At that time, however, Secom believed that it was in its best interest to focus on closing the sale of the Metal Parts Forming Segment before entering into a definitive agreement for the sale of the assets of the Tooling Segment. On February 9, 2000, Secom sold the operating assets of its Metal Parts Forming Segment to Alken-Ziegler for a purchase price of approximately $2.4 million in cash. Alken-Ziegler also agreed to assume certain liabilities of the Metal Parts Forming Segment. The Company then began negotiating with Alken-Ziegler and GL Ziegler Investments, LLC ("GLZ") on the terms of a definitive agreement for the sale of the assets of the Tooling Segment. On March 29, 2000, the Company's Board authorized the execution of an Asset Purchase Agreement with Alken-Ziegler and GLZ. On May 10, 2000, the sale of the Tooling Segment was approved by the written consent of more than fifty-one (51%) percent of the outstanding shares of Secom's Common Stock. Prior to the closing, Alken-Ziegler assigned its interests under the Asset Purchase Agreement to its affiliate, Alken-Ziegler Tool Company, LLC ("A-Z Tool Company"; A-Z Tool Company and GLZ are collectively referred to as "Purchaser"). The sale was completed on June 30, 2000. In connection with the sale of the operating assets of the Tooling Segment, the Company received a cash purchase price of approximately $8 million on June 30, 2000. The Company received the balance of approximately $1.6 million on August 31, 2000 upon the closing of the sale of the Tooling Segment's real estate to Purchaser. The Purchaser also agreed to assume certain liabilities of the Tooling Segment. Based on the sales of substantially all of the operating assets of Uniflow and the Tooling Segment and Secom's Board of Directors recommendation, the Company's shareholders approved a Plan of Liquidation on August 24, 2000. Under its Plan of Liquidation, the Company will distribute to its shareholders, on a pro rata basis, all of its remaining property and assets, after payment of or the provision for the payment of claims and obligations. The first distribution of $11.55 per share was paid on October 31, 2000. The Company believes that if it is successful in liquidating its remaining assets at their estimated current market value, stockholders could receive liquidating distributions of approximately $2.00 to $3.00 per share over the next three to four years, in addition to the first distribution of $11.55 per share paid on October 31, 2000. ADOPTION OF LIQUIDATION BASIS OF ACCOUNTING As a result of the Company signing an Asset Purchase Agreement on March 29, 2000 to sell substantially all of the operating assets of the Tooling Segment, and the Company's expectation of obtaining from its shareholders formal approval of a plan of liquidation upon the consummation of the sale of the Tooling Segment, the Company adopted the liquidation basis of accounting. Such adoption was effected beginning on April 1, 2000 for administrative convenience coincident with the close of the Company's second fiscal quarter ended March 31, 2000. Because of the approval of the Plan of Liquidation, comparative financial information and certain other disclosures are not meaningful and have not been presented. In addition, under the liquidation basis of accounting, gains and losses from dispositions of assets are displayed as net amounts versus gross revenue and expenses under the going concern basis of accounting. The primary financial statements required under the liquidation basis of accounting are Statements of Net Assets in Liquidation and a Statement of Changes in Net Assets in Liquidation. 9 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES IN NET ASSETS (LIQUIDATION BASIS) (CONTINUED) CORPORATE The Company's Board retained three employees, Robert Clemente, Paul Clemente and Scott Konieczny to facilitate the implementation of the Plan of Liquidation. In addition to payroll and the related benefits expenses for the three employees, the Company will incur interest, professional and general office and administrative expenses. The Company believes much of the implementation will be concluded by March 31, 2001 which will enable it to substantially reduce "wind down" expenses at that time. The Company anticipates that future cash flows from rental and royalty agreements and certificates of deposits are likely to minimize any negative cash flows from the Company during the period up to March 31, 2001 and beyond. CHANGES IN NET ASSETS FOR THE PERIOD OCTOBER 1, 2000 TO DECEMBER 31, 2000 The decrease in net assets in liquidation of approximately $11.1 million was due primarily to the payment of the October 31, 2000 liquidating distribution of approximately $11.6 million. The Company also used approximately $221,000 to repurchase approximately 23,000 shares of its common stock, primarily from the Company's 401(k) Plan. The repurchases of stock were in accordance with the terms of the 401(k) Plan. The preceding decreases in net assets were offset by approximately $489,000 received from the exercising of 51,000 common stock options. The Company also generated a gain of approximately $186,000 during the period as cash flows from rental and royalty agreements and certificates of deposits exceeded payroll and the related benefits expenses as well as professional and general administrative expenses. 10 13 PART II OTHER INFORMATION Item 1. Legal Proceedings Not applicable. Item 2. Changes in Securities Not applicable. Item 3. Defaults in Securities Not applicable. Item 4. Submission of Matters to a Vote of Securities Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K. Form 8-K dated October 2, 2000, regarding the payment of the first liquidating distribution of $11.55 per share on October 31, 2000. 11 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SECOM GENERAL CORPORATION (Registrant) By:/s/ Paul D. Clemente February 12, 2001 --------------------------------- Paul D. Clemente Vice President By: /s/ Scott J. Konieczny February 12, 2001 --------------------------------- Scott J. Konieczny Chief Financial Officer 12

Three Months Six Months Nine Months Ended Jun. 30 Ended Mar. 31 Ended Jun. 30 1999 2000 1999 -------------------- -------------------- -------------------- Revenues $ 350,100 $ 668,200 $ 1,048,100 Costs and expenses: Depreciation and interest 196,900 308,800 608,500 Salaries and benefits 102,600 186,800 332,600 Professional services 55,200 59,200 193,700 Other 66,000 90,300 170,900 -------------------- -------------------- -------------------- Total costs and expenses 420,700 645,100 1,305,700 Loss from continuing operations before income taxes (70,600) 23,100 (257,600) Income tax benefit 25,500 (16,800) 49,000 -------------------- -------------------- -------------------- Loss from continuing operations (45,100) 6,300 (208,600) Discontinued operations: Income from operations of discontinued subsidiaries 181,900 597,700 228,800 Loss on disposal of subsidiary, net of applicable income tax benefit of $93,200 - (186,600) - -------------------- -------------------- -------------------- Net income $ 136,800 $ 417,400 $ 20,200 ==================== ==================== ==================== Income (loss) per common share (basic and diluted): Continuing operations $ (0.04) $ 0.01 $ (0.20) Discontinued operations 0.17 0.39 0.21 -------------------- -------------------- -------------------- Net Income per common share $ 0.13 $ 0.40 $ 0.01 ==================== ==================== ====================

Six Months Nine Months Ended Mar. 30 Ended Jun. 30 2000 1999 ---------------------- ---------------------- Cash flows from operating activities: Net income $ 417,400 $ 20,200 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 200,200 432,900 Deferred income tax benefit 16,800 49,000 Gain on sale of assets - (1,000) Changes in operating assets and liabilities which provided (used) cash: Prepaid expenses and other (138,200) (56,500) Trade accounts payable (6,300) (203,300) Accrued liabilities (183,400) 32,300 Net cash provided by discontinued operations (40,400) 1,441,000 ---------------------- ---------------------- Net cash provided by operating activities 266,100 1,714,600 ---------------------- ---------------------- Cash flows from investing activities: Proceeds from disposal of property, plant and equipment - 2,000 Net cash provided by discontinued operations 3,609,400 3,636,700 ---------------------- ---------------------- Net cash provided by investing activities 3,609,400 3,638,700 ---------------------- ---------------------- Cash flows from financing activities: Net change in bank line of credit - (1,745,000) Payments on long-term obligations (203,200) (280,100) Retirements of common stock (21,600) (18,200) Net cash used in discontinued operations (1,700,100) (3,341,800) ---------------------- ---------------------- Net cash used in financing activities (1,924,900) (5,385,100) ---------------------- ---------------------- Net increase (decrease) in cash and cash equivalents 1,950,600 (31,800) Cash and cash equivalents, beginning of period 497,200 104,600 ---------------------- ---------------------- Cash and cash equivalents, end of period $ 2,447,800 $ 72,800 ====================== ======================

(UNAUDITED) SIX MONTHS THREE MONTHS NINE MONTHS ENDED ENDED ENDED MAR 31, 2000 JUN 30, 1999 JUN 30, 1999 ------------------ ------------------- ----------------- Denominator: Weighted average shares outstanding, basic 1,043,100 1,064,900 1,066,200 Incremental shares from assumed conversion of options - - - ------------------ ------------------- ----------------- Weighted average shares outstanding, diluted 1,043,100 1,064,900 1,066,200 ================== =================== =================

Exhibit No. Description ----------- ----------- 27 Financial Data Schedule

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