Weighted average shares outstanding ............ 9,679 9,849 10,499 11,299 11,379 Basic earnings per share . $ 1.91 $ 2.68 $ 2.15 $ 1.78 $ .85 ====== ======== ======== ======== ========
- - ---------- (1) Earnings per share data prior to 1997 have been restated as required under Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
The Company has an unsecured credit facility with a bank that allows for a maximum credit of $5,000,000. This facility was reduced in 1997 from a $10,000,000 amount available in 1996. The use of this credit facility will assist the Company as a source of short-term liquidity. In 1998 and 1996, amounts were borrowed to assist the insurance pools managed by the Company in the payment of gross losses. The amounts borrowed under the line of credit were fully repaid after collecting recoverables due from reinsurers on such losses.
The Company expects that its remaining software (which includes financial applications for accounts payable, general ledger and other packages) will be Year 2000 compliant by June 30, 1999. The Company has identified Year 2000 compliant systems and is evaluating and testing data to insure compliance of the remaining software systems. The Company is approximately 25% complete with respect to this phase of its Year 2000 evaluation efforts and is currently on schedule with its compliance plans. In the event such systems cannot be upgraded or remedied, the Company would purchase and/or license replacement software which is Year 2000 compliant.
In connection with the Company's Year 2000 plan, the Company is in the process of communicating with its various business relationships and vendors to determine the extent of their Year 2000 compliance. The Company mailed questionnaires to approximately 300 companies which the Company considers to have an important relationship with the Company. To date, the Company received responses from approximately 200 of such companies indicating that they are in the process of becoming Year 2000 compliant before January 1, 2000. In 1999, the Company selected the 10 largest producers for the Company, which accounts for approximately 64% of the Company's gross writings for the domestic insurance companies as of December 31, 1998, and requested additional information to evidence their Year 2000 Compliance. Also, the Company is soliciting the non-responding companies to determine the extent of their compliance. The Company is current with its timetable on this phase of its compliance plan and believes that it will complete analyzing the Year 2000 compliance of its business relationships by July 1999. In the event that a business relationship does not respond to the Company or does not demonstrate that its own systems are Year 2000 compliant, then such business relationships may need to be terminated which may result in a material and adverse effect on the Company's business, assets, prospects, liquidity and financial condition.
The Company is in the beginning stages of developing a contingency plan in the event that its insurance business operation software is not placed into use. This plan, which has not been finalized, includes a combination of purchasing personal computers and utilizing manual systems. The contingency plan also addresses Year 2000 issues relating to environmental concerns. This includes telephone and security systems, copiers, electrical availability, etc.