SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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 1-8254
THACKERAY CORPORATION
---------------------
(Exact name of registrant as specified in its charter)
DELAWARE 04-2446697
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 MADISON AVENUE, SUITE 1508, NEW YORK, NEW YORK 10017
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 759-3695
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- -------------------
Common Stock, $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy materials or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Aggregate market value of the voting stock (which consists solely of shares of
Common Stock) held by non-affiliates of the registrant as of March 24, 1997
computed by reference to the closing sale price of the registrant's Common Stock
on the New York Stock Exchange on such date: $7,336,128.
Number of shares of the registrant's Common Stock outstanding as of March 24,
1997: 5,107,401.
[cover page 1 of 2 pages]
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
1. Certain portions of the registrant's Annual Report to Stockholders for the
fiscal year ended December 31, 1996 (the "Annual Report") are incorporated
by reference into Parts I and II of this report.
2. Certain portions of the registrant's definitive Proxy Statement to be
filed pursuant to Regulation 14A of the Securities Exchange Act of 1934,
as amended, in connection with the Annual Meeting of Stockholders of the
registrant to be held on May 8, 1997 are incorporated by reference into
Part III of this report.
[cover page 2 of 2 pages]
<PAGE>
PART I
Item 1. Business
GENERAL DEVELOPMENT OF BUSINESS
Thackeray Corporation ("Thackeray" or the "Company") is a Delaware
corporation which holds real estate for investment.
DESCRIPTION OF BUSINESS
Thackeray's business is the management of its real estate
investments. The Company does not presently intend to acquire additional real
estate assets. For information with respect to Thackeray's real estate, see
Notes 1 and 3 of Notes to Consolidated Financial Statements included in the
Annual Report, which Notes are incorporated herein by reference.
On May 20, 1996, the Company and affiliates of Belz Enterprises
("Belz") entered into an Agreement of Limited Partnership of BT Orlando Limited
Partnership. Pursuant to this agreement, the Company agreed to contribute
approximately 140 acres of its Orlando, Florida property to the partnership,
which property was valued at $15,246,000 for capital account purposes. The
partnership, with an affiliate of Belz and Brennand-Paige Industries, Inc., a
subsidiary of the Company, as general partners, will develop, construct, operate
and lease a retail and entertainment shopping center complex on the property.
The Company will participate in the cash flow, sales proceeds and refinancing
proceeds from the development, financing or disposition of such project.
In addition, on May 20, 1996, the Company and Belz Investco entered
into a letter agreement regarding the development of the remaining approximately
78 acres of the Company's Orlando, Florida property, which property will be
valued at $8,487,000 for capital account purposes. Pursuant to this letter
agreement, the parties agreed to form a new partnership to develop 22.5 acres of
such property as commercial property and 55.5 acres thereof as multi-family
residential property. The Company, through a subsidiary, and Belz, or one of its
affiliates, will be 50% owners of such partnership.
In August 1996, the Company sold its 90.9 acre Dade County, Florida
property for $2,159,000, realizing a gain on the transaction of $1,009,000.
<PAGE>
In November 1996, the Company entered into an agreement for the sale
of its Sumter County, Florida property for $104,000, generating a loss on the
transaction of $49,000. The transaction closed in January 1997. For financial
reporting purposes the transaction is being recorded as having closed in 1996.
Indebtedness
For information with respect to the Company's indebtedness, see Note
4 of Notes to Consolidated Financial Statements included in the Annual Report,
which Note is incorporated herein by reference.
General
As of December 31, 1996, the Company had two employees.
Item 2. Properties
For additional information with respect to the Company's investments
in real estate and to its lease obligations, see Notes 1, 3 and 7 of Notes to
Consolidated Financial Statements included in the Annual Report, which Notes are
incorporated herein by reference.
Thackeray's executive offices are located at 400 Madison Avenue, New
York, New York. The lease at this location expires in December 1997 and provides
for an annual base rent of $32,000.
Item 3. Legal Proceedings
There are no legal proceedings currently pending against the Company
or its subsidiaries.
Item 4. Submission of Matters to a Vote of Stockholders
During the quarter ended December 31, 1996, no matters were
submitted to a vote of stockholders through the solicitation of proxies or
otherwise.
2
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder
Matters
Reference is made to the information set forth in the section
entitled "Market for Thackeray's Common Stock and Related Stockholder Matters"
in the Annual Report, which section is incorporated herein by reference.
Item 6. Selected Financial Data
Reference is made to the information set forth in the section
entitled "Selected Financial Data" in the Annual Report, which section is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Reference is made to the information set forth in the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report, which section is incorporated
herein by reference.
Item 8. Financial Statements and Supplementary Data
Reference is made to the information set forth in the following
sections of the Annual Report, which sections are incorporated herein by
reference:
1. Report of Independent Public Accountants.
2. Consolidated Balance Sheets -- December 31, 1996 and 1995.
3. Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994.
4. Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.
5. Notes to Consolidated Financial Statements -- December 31,
1996, 1995 and 1994.
3
<PAGE>
Item 9. Change in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Reference is made to the information to be set forth in the section
entitled "Election of Directors" in the definitive proxy statement involving the
election of directors in connection with the Annual Meeting of Stockholders of
the Company to be held on May 8, 1997 (the "Proxy Statement"), which section is
incorporated herein by reference. The Proxy Statement will be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1996 pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended.
Item 11. Executive Compensation
Reference is made to the information to be set forth in the section
entitled "Election of Directors" in the Proxy Statement, which section is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Reference is made to the information to be set forth in the sections
entitled "Ownership of Voting Securities" and "Election of Directors - Security
Ownership of Management" in the Proxy Statement, which sections are incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
Reference is made to the information to be set forth in the section
entitled "Election of Directors - Compensation and Interest of Management in
Certain Transactions" in the Proxy Statement, which section is incorporated
herein by reference.
4
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
(a)(1) and (2) - The response to this portion of Item 14 is
submitted as a separate section of this report entitled "List of Financial
Statements and Financial Statement Schedules."
(3) - Exhibits:
3(a)(i) - Certificate of Incorporation of the Company. (1)
3(a)(ii) - Certificate of Designation of $4.15 Cumulative Preferred
Stock. (2)
3(a)(iii) - Amendment to Certificate of Incorporation of the
Company.(3)
3(b) - By-Laws of the Company. (1)
10(a) - Agreement of Limited Partnership of BT Orlando Limited
Partnership, dated May 20, 1996, among BEF, Inc.,
Brennand-Paige Industries, Inc., BT Partnership and EST
Orlando, Ltd.
(4)
10(b)-Number 2 Partnership Letter Agreement, dated May 20, 1996,
between the Company and Belz Investco L.P. (4)
11 - Statement re Computation of Per Share Data.
13 - The Company's 1996 Annual Report to Stockholders.
21 - Subsidiaries of the Company.
27 - Financial Data Schedule.
--------------------
5
<PAGE>
(1) Incorporated by reference to the Company's Registration Statement on Form
S-14 (SEC File No. 2-73435).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC File No. 2-84299).
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
(4) Incorporated by reference to the Company's Proxy Statement, dated August
5, 1996.
(b) - During the quarter ended December 31, 1996, the Company did
not file any reports on Form 8-K.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 26, 1997 THACKERAY CORPORATION
(Registrant)
By: /s/ Martin J. Rabinowitz
---------------------------------
Name: Martin J. Rabinowitz
Title: President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Chairman of the Board,
President and Director
/s/ Martin J. Rabinowitz (Principal Executive Officer) March 26, 1997
- ---------------------------
Martin J. Rabinowitz
Vice President, Finance,
Treasurer, Secretary and Director
(Principal Financial
/s/ Jules Ross and Accounting Officer) March 26, 1997
- ---------------------------
Jules Ross
/s/ Ronald D. Rothberg Director March 26, 1997
- ---------------------------
Ronald D. Rothberg
/s/ Moses Rothman Director March 26, 1997
- ---------------------------
Moses Rothman
/s/ John Sladkus Director March 26, 1997
- ---------------------------
John Sladkus
7
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1996
THACKERAY CORPORATION
NEW YORK, NEW YORK
8
<PAGE>
Form 10-K -- Items 14(a)(1) and (2)
THACKERAY CORPORATION
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Thackeray Corporation,
included in the Annual Report to Stockholders for the year ended December 31,
1996, are incorporated by reference in Item 8 of this report.
1. Report of Independent Public Accountants.
2. Consolidated Balance Sheets -- December 31, 1996 and 1995.
3. Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994.
4. Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.
5. Notes to Consolidated Financial Statements -- December 31,
1996, 1995 and 1994.
The following financial statement schedules of Thackeray Corporation are filed
herewith:
Report of Independent Public Accountants on Financial Statement
Schedules
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
9
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Thackeray Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Thackeray Corporation's 1996
Annual Report to Stockholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated March 24, 1997. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in the List of Financial Statements and Financial Statement Schedules is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen LLP
New York, New York
March 24, 1997
10
<PAGE>
<TABLE>
<CAPTION>
THACKERAY CORPORATION AND SUBSIDIARIES SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Allowance for possible investment losses
(Deducted from "Investments in real estate")
-----------------------------------------
Balance at beginning of year $713,000 $633,000 $197,000
Charged to costs and expenses - 80,000 436,000
Other (713,000)(a) - -
--------- --------- ---------
Balance at end of year $ 0 $713,000 $633,000
========= ========= =========
<FN>
- --------------------
(a) Elimination of reserves relating to real estate recognized as sold in 1996.
</FN>
</TABLE>
11
<PAGE>
EXHIBIT INDEX
TO
THACKERAY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1996
Exhibit No. Description of Document
- ----------- -----------------------
3(a)(i) -- Certificate of Incorporation of the Company. (1)
3(a)(ii) -- Certificate of Designation of $4.15 Cumulative
Preferred Stock. (2)
3(a)(iii)-- Amendment to Certificate of Incorporation of
the Company. (3)
3(b) -- By-laws of the Company. (1)
10(a) -- Agreement of Limited Partnership of BT Orlando
Limited Partnership, dated May 20, 1996, among
BEF, Inc., Brennand-Paige Industries, Inc., BT
Partnership and EST Orlando, Ltd. (4)
10(b) -- Number 2 Partnership Letter Agreement, dated May
20, 1996, between the Company and Belz Investco
L.P. (4)
11 -- Statement re Computation of Per Share Data.*
13 -- The Company's 1996 Annual Report to Stockholders.*
21 -- Subsidiaries of the Company.*
27 -- Financial Data Schedule.*
___________________________________
* Filed herewith
(1) Incorporated by reference to the Company's Registration Statement on Form
S-14 (SEC File No. 2-73435).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC File No. 2-84299).
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
(4) Incorporated by reference to the Company's Proxy Statement, dated August 5,
1996.
12
EXHIBIT 11
THACKERAY CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE DATA
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
PRIMARY AND FULLY DILUTED
-------------------------
1996 1995 1994
---- ---- ----
Weighted average shares outstanding
during the year 5,107,401 5,107,401 5,107,401
Net Income (loss) attributable to
common stock:
Continuing Operations $594,000 ($719,000) ($861,000)
Discontinued Operations - (1,216,000) 1,031,000
---------- ----------- ---------
$594,000 ($1,935,000) $170,000
========== =========== =========
Net Income (loss) Per Share
Continuing Operations $.12 ($.14) ($.17)
Discontinued Operations - (.24) .20
----- --- ---
$.12 ($.38) $.03
===== ==== ====
THACKERAY CORPORATION
ANNUAL REPORT
1996
<PAGE>
THE COMPANY
Thackeray Corporation ("the Company") is a Delaware corporation which holds
real estate for investment.
1
<PAGE>
THACKERAY CORPORATION
DEAR STOCKHOLDER:
Thackeray Corporation ended 1996 with $4.6 million in cash and cash
equivalents, its largest cash position in years. We believe such balances will
be more than sufficient to fund the Company's cash requirements for the
foreseeable future.
In 1996, Thackeray sold properties in Dade and Sumter Counties, Florida,
thereby generating real estate sales of approximately $2.3 million and income of
approximatley $1 million.
With the disposition of these properties, Thackeray's focus is now centered
on its principal real property asset, its 220 acre tract in Orlando, Florida.
Thackeray entered into a joint venture agreement in May 1996 with Belz
Enterprises to develop the Orlando property, with its initial phase being a
600,000 sq.ft retail/entertainment center. The venture is actively involved in
the process of design, marketing and tenant solicitation. We will keep you
advised of its progress.
Very truly yours,
MARTIN J. RABINOWITZ
Chairman of the Board
March 27, 1997
New York, New York
2
<PAGE>
SELECTED FINANCIAL DATA
FIVE YEAR SUMMARY
The following tabulation presents selected financial data as restated for
comparability with continuing operations for Thackeray for each of the five
years in the period ended December 31, 1996 (amounts stated in thousands except
for per share data):
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Real estate revenues................. $ 2,333 $ 80 $ 472 $ 99 $ 95
Income (loss) from continuing opera-
tions.............................. 594 (719) (861) (643) (757)
Income (loss) from discontinued
operations, net.................... -- (1,216) 1,031 1,201 138
Net income (loss).................... 594 (1,935) 170 558 (619)
Net income (loss) per share.......... .12 (.38) .03 .11 (.12)
Total assets......................... 10,884 10,203 12,506 13,450 13,447
Real estate and mortgage loans....... 5,756 7,121 7,254 7,869 7,881
Stockholders' equity................. 10,348 9,754 11,689 11,519 10,961
</TABLE>
No dividends were declared on Thackeray's common stock during the period
covered by this tabulation. (See Notes 2 and 4 of Notes to Consolidated
Financial Statements for discussion of discontinued operations.)
QUARTERLY FINANCIAL DATA (UNAUDITED)
Financial data for interim periods were as follows (amounts stated in
thousands except for per share data):
<TABLE>
<CAPTION>
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
1996
Real estate revenues..................... $ 18 $ 17 $2,177 $ 121
Income (loss) from real estate
operations............................ (54) (20) 1,026 (28)
Net income (loss)........................ (120) (111) 975 (150)
Net income (loss) per share.............. (.02) (.02) .19 (.03)
1995
Real estate revenues..................... $ 20 $ 21 $ 20 $ 19
Income (loss) from real estate
operations............................ (43) (60) (59) (190)
Net income (loss)........................ (201) (1,430) (53) (251)
Net income (loss) per share.............. (.04) (.28) (.01) (.05)
</TABLE>
3
<PAGE>
OPERATING REVIEW
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that its current cash balance will be sufficient to
fund its requirements for the foreseeable future.
At December 31, 1996, the Company had no commitments for capital
expenditures.
RESULTS OF OPERATIONS
1996 vs. 1995
Total real estate revenues for 1996 were $2,333,000; which was $2,253,000
higher than the prior year. 1996 operations included real estate sales of
$2,263,000 versus $7,000 in 1995. The aggregate cost of properties sold in 1996
was $1,303,000, resulting in a gain on such sales totaling $960,000.
Property carrying costs for 1996 were $106,000 or 70% lower than the amount
incurred for 1995. The decrease is due to the Partnership Agreement with Belz
Enterprises, wherein certain expenditures of the related property are paid by
the Company, but are charged to the Partnership (see Note 3). During the year
ended December 31, 1996 there were $198,000 of such expenditures charged to the
Partnership.
General and administrative expenses for 1996 decreased by $17,000 or 3.8%
from amounts incurred in 1995.
1995 vs. 1994
Total real estate revenues for 1995 were $80,000 versus $472,000 for the
prior year. 1994 included a real estate sale in the amount of $330,000, as well
as other revenues of $50,000, resulting from a forfeited real estate deposit.
Property carrying costs for 1995 were $25,000 or 7.6% higher than the
amount incurred for 1994. The increase is largely due to an increase in
professional fees relating to the real estate properties.
General and administrative expenses for 1995 were essentially level with
amounts incurred in 1994.
In 1995, the Company increased its allowance for possible losses on real
estate by $80,000, reducing the carrying value to reflect current market
conditions.
IMPACT OF INFLATION
The Company acknowledges that the costs of carrying and operating its real
estate may be affected by inflation, however it expects that cost increases
would be offset by commensurate increases in market value.
4
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS
AND STOCKHOLDERS OF
THACKERAY CORPORATION:
We have audited the accompanying consolidated balance sheets of Thackeray
Corporation (a Delaware corporation) and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations and cash flows
for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Thackeray Corporation and
subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
New York, New York
March 24, 1997
5
<PAGE>
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................ $ 4,615,000 $ 3,020,000
Receivables from real estate partnership................. 198,000 --
Mortgage loans........................................... -- 62,000
Investments in real estate (net of allowance of $713,000
in 1995).............................................. 5,756,000 7,059,000
Other assets, net........................................ 315,000 62,000
------------ ------------
$ 10,884,000 $ 10,203,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses.................... $ 100,000 $ 83,000
Accrued income and other taxes........................... 308,000 238,000
Other liabilities........................................ 128,000 128,000
------------ ------------
Total liabilities................................ 536,000 449,000
------------ ------------
Commitments
Stockholders' equity:
Common stock, $.10 par value (20,000,000 shares
authorized; 6,187,401 shares issued)................ 619,000 619,000
Capital in excess of par value........................ 53,424,000 53,424,000
Accumulated deficit................................... (33,705,000) (34,299,000)
Treasury stock (1,080,000 shares)..................... (9,990,000) (9,990,000)
------------ ------------
Total stockholders' equity....................... 10,348,000 9,754,000
------------ ------------
$ 10,884,000 $ 10,203,000
============ ============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
6
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- ----------
<S> <C> <C> <C>
REVENUES FROM REAL ESTATE OPERATIONS:
Rental and mortgage income..................... $70,000..... $ 73,000 $ 82,000
Sales of real estate, net...................... 2,263,000 7,000 340,000
Other revenues................................. -- ....... -- 50,000
----------- ----------- ----------
Total real estate revenues............. 2,333,000 80,000 472,000
----------- ----------- ----------
EXPENSES OF REAL ESTATE OPERATIONS:
Property carrying costs including real estate
taxes....................................... 106,000 352,000 327,000
Cost of property sold.......................... 1,303,000 -- 100,000
Provision for possible losses on real estate... -- 80,000 436,000
----------- ----------- ----------
Total real estate expenses............. 1,409,000 432,000 863,000
----------- ----------- ----------
Income (loss) from real estate operations...... 924,000 (352,000) (391,000)
----------- ----------- ----------
General and administrative expenses............ 435,000 452,000 447,000
Interest (income) expense, net................. (175,000) (85,000) 23,000
----------- ----------- ----------
Income (loss) from continuing operations before
income taxes................................ 664,000 (719,000) (861,000)
Income taxes................................... 70,000 -- --
----------- ----------- ----------
Income (loss) from continuing operations....... 594,000 (719,000) (861,000)
Income (loss) of discontinued operations (net
of
state income tax expense of $56,000 in 1995
and $175,000 in 1994)....................... -- (43,000) 1,031,000
Loss on sale of discontinued operations........ -- (1,173,000) --
----------- ----------- ----------
Net income (loss)...................... $ 594,000 $(1,935,000) $ 170,000
============ ============ ==========
INCOME (LOSS) PER SHARE FROM:
Continuing operations.......................... $ .12 $ (0.14) $ (0.17)
Discontinued operations........................ -- (0.24) 0.20
----------- ----------- ----------
Income (loss) per share........................ $ .12 $ (0.38) $ 0.03
============ ============ ==========
Number of shares............................... 5,107,401 5,107,401 5,107,401
============ ============ ==========
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).............................. $ 594,000 $(1,935,000) $ 170,000
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
(Income) loss relating to discontinued
operations............................. -- 1,216,000 (1,031,000)
Depreciation and amortization............. 30,000 18,000 6,000
Gain on sale of real estate............... (960,000) -- (230,000)
Provision for possible real estate
losses................................. -- 80,000 436,000
Changes in assets and liabilities:
Increase in receivables from real estate
partnership............................ (198,000) -- --
Increase (decrease) in accounts payable
and accrued liabilities................ 87,000 4,000 (43,000)
Other, net................................ (279,000) 19,000 16,000
---------- ----------- -----------
Net cash flows used in operating
activities........................... (726,000) (598,000) (676,000)
---------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of subsidiaries............. -- 3,854,000 --
Collections of mortgage loans.................. 60,000 53,000 79,000
Proceeds from sale of real estate.............. 2,263,000 -- 330,000
Proceeds from sale of other investment......... -- 38,000 --
Additions to property, plant and equipment..... (2,000) (7,000) --
---------- ----------- -----------
Net cash flows provided by investing
activities........................... 2,321,000 3,938,000 409,000
---------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayment) of short-term debt........ -- (450,000) 200,000
---------- ----------- -----------
Net cash flows provided by (used in)
financing activities................. -- (450,000) 200,000
---------- ----------- -----------
Increase (decrease) in cash and cash
equivalents............................ 1,595,000 2,890,000 (67,000)
Cash and cash equivalents--beginning of year... 3,020,000 130,000 197,000
---------- ----------- -----------
Cash and cash equivalents--end of year......... $4,615,000 $ 3,020,000 $ 130,000
========== ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Thackeray
Corporation ("Thackeray" or the "Company") and its subsidiaries, all of which
are wholly owned. All significant intercompany transactions and balances have
been eliminated.
Subsequent to the sale in 1995 of Atlantic Hardware & Supply Corporation
("Atlantic"), as more fully described in Note 2 below, the Company's operations
are comprised exclusively of managing its real estate investments. Accordingly,
the Company elected to prepare an unclassified balance sheet. In addition, the
accompanying statements of operations reflect the activities of such operations.
The consolidated financial statements for all prior periods have been restated
for purposes of comparability.
Cash and Cash Equivalents
The Company considers investments in certificates of deposit which will
mature in three months or less, to be cash equivalents.
Mortgage Loans
Mortgage loans are stated at their remaining principal balances less, in
certain cases, a market valuation discount. Such discounts were established at
the time the loans were made to provide a market rate of return to Thackeray.
Real Estate
Substantially all of Thackeray's real estate was acquired through or in
lieu of foreclosure. The carrying value of such real estate includes unpaid
principal and any funded interest.
Real Estate--Allowance for Possible Losses
The allowance for possible losses represents the best estimate by
Thackeray's management of the losses that may ultimately be incurred upon the
disposition of its real estate investments over a period of time in an orderly
manner. This is in accordance with generally accepted accounting principles
which require that losses be anticipated and recorded when they can be estimated
or determined. However, unrealized gains or appreciation may not be anticipated
or recorded until actually realized through consummated transactions.
Accordingly, no consideration or recognition has been given to any unrealized
gains or appreciation which may ultimately be realized upon disposition of real
estate.
Long-Lived Assets
In 1996, the Company adopted Statement of Financial Accounting Standards
No. 121 ("SFAS No. 121") "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," which requires that long-lived assets
to be held and used be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. If such review indicates that the carrying amount of an asset
exceeds the sum of its expected future cash flows, on an undiscounted basis, the
asset's carrying amount should be written down to fair value. Additionally, SFAS
No. 121 requires that long-lived assets to be disposed of be reported at the
lower of carrying amount or fair value less cost to sell. There was no financial
statement impact to the Company upon adoption.
9
<PAGE>
Earnings Per Share
Net income (loss) applicable to common stock from continuing operations and
from discontinued operations in each of the years 1996, 1995 and 1994 was
divided by the weighted average number of shares outstanding during the period.
The Financial Accounting Standards Board has issued a new pronouncement
which would establish new standards for computing and presenting earnings per
share as well as new standards for disclosing information about an entity's
capital structure.
This statement is effective for years ending after December 15, 1997.
Management believes that the adoption will have no impact on the consolidated
financial statements.
Revenue Recognition
Rental income is recognized based upon the contractual terms of the lease.
Profit on sales of real estate is recognized in full when the profit is
determinable, an adequate down payment has been received, collectability of the
sales price is reasonably assured and the earnings process is substantially
complete. If the sales transaction does not meet the criteria, all profit or a
portion thereof is deferred until such criteria are met.
Accounting Estimates
The preparation of these consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
2. SALE OF BUSINESSES
On May 19, 1995, Brennand Paige Industries, Inc. ("BPI"), a direct
subsidiary of the Company, sold all of the outstanding capital stock of
Atlantic, BPI's wholly owned subsidiary, for $3,854,000 in cash. The purchase
price was negotiated at arms length between the respective managements of the
Company and the buyer of Atlantic. Proceeds from the sale in the amount of
$450,000 were used to repay advances previously made by Atlantic to the Company.
The remainder of the proceeds is being used for working capital purposes of the
Company.
The operating results of Atlantic are reflected in the accompanying
consolidated statements of operations for the years ended December 31, 1995 and
1994 as income (losses) of discontinued operations. Net sales of Atlantic from
January 1, 1995 through May 19, 1995 were $6,509,000, and for the year ended
December 31, 1994 were $18,741,000. Net assets of Atlantic as of May 19, 1995
were $4,949,000.
10
<PAGE>
3. INVESTMENTS IN REAL ESTATE
The various classifications of real estate owned by Thackeray, all of which
is located in Florida, at December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Undeveloped land............................................. $5,331,000 $5,762,000
Partially developed land..................................... -- 1,585,000
Land leased to others........................................ 425,000 425,000
---------- ----------
5,756,000 7,772,000
Less:
Allowance for possible losses............................ -- 713,000
---------- ----------
$5,756,000 $7,059,000
========== ==========
</TABLE>
The determination of the allowance for possible investment losses gives
effect to several variable factors, including estimates of selling prices and
net costs to be incurred during the assumed holding period. To the extent that
these variable factors change, the allowance may be changed.
On May 20, 1996, the Company and affiliates of Belz Enterprises ("Belz")
entered into an Agreement of Limited Partnership of BT Orlando Limited
Partnership (the "Partnership"). Pursuant to this agreement, the Company agreed
to contribute approximately 140 acres of its Orlando, Florida property to the
Partnership, which property was valued at $15,246,000 for capital account
purposes, when the requisite construction financing is obtained. The
Partnership, with an affiliate of Belz and BPI, as general partners, will
develop, construct, operate and lease a retail and entertainment shopping center
complex on the property. The Company will have a 35% general partner interest in
the Partnership and will be entitled to certain preferential distributions. The
Company will participate in the cash flow, sales proceeds and refinancing
proceeds from the development, financing or disposition of such project. The
Partnership will terminate if the construction financing is not obtained by May
20, 1998, unless such date is extended by the Company and Belz and certain other
conditions are satisfied.
In addition, on May 20, 1996, the Company and Belz Investco entered into a
binding letter agreement regarding the development of the remaining
approximately 78 acres of the Company's Orlando, Florida property, which
property will be valued at $8,487,000 for capital account purposes. Pursuant to
this letter agreement, the parties agreed to form a new partnership to develop
22.5 acres of such property as commercial property and 55.5 acres thereof as
multi-family residential property, upon completion of the development of the 140
acres and obtaining the requisite construction financing related to the 78
acres. The Company, through a subsidiary, and Belz, or one of its affiliates,
will be 50% owners and general partners of such partnership and the Company will
be entitled to certain preferential distributions.
In August, 1996, the Company sold its 90.9 acre Dade County, Florida
property for $2,159,000, realizing a gain on the transaction of $1,009,000.
In November 1996, the Company entered into an agreement for the sale of its
Sumter County, Florida property for $104,000, generating a loss on the
transaction of $49,000. The transaction closed in January 1997. For financial
reporting purposes, the transaction is being recorded as having closed in 1996.
4. DEBT
In connection with the sale of Atlantic (see Note 2), all outstanding
borrowings of the Company were repaid. For the year 1994, the weighted average
interest rate incurred was 8.7%.
There was no interest paid by continuing operations during the three years
ended December 31, 1996.
5. INCOME TAXES
On a consolidated basis the Company reported taxable income for each of the
years ended December 31, 1996 and 1994. However, the Company had net operating
loss carryforwards well in excess of the reported taxable income and, therefore,
no Federal income taxes are payable for the years ended December 31, 1996 and
1994. Accordingly, the 1996 and 1994 Federal income tax provisions
11
<PAGE>
($225,000 and $60,000, respectively) have been eliminated through utilization of
such loss carryforwards in the accompanying Consolidated Statements of
Operations through the reversal of the related valuation reserve (see below).
The 1996 provision for income taxes is comprised exclusively of state taxes
payable.
For the year 1995 on a consolidated basis, the Company reported a taxable
loss and, therefore, no Federal income taxes were provided.
As of December 31, 1996, Thackeray had net operating loss carryforwards for
Federal income tax purposes of approximately $5,350,000, which can be carried
forward to offset future taxable income. The net operating loss carryforwards
will expire in 1998 ($650,000), 2007 ($1,800,000), 2008 ($100,000) and 2010
($2,800,000). In addition, the Company has capital loss carryforwards of
$1,800,000, all of which expire in 2000.
The tax effect of these net operating loss carryforwards is recorded as a
deferred tax asset. However, because no substantial amount of these net
operating loss carryforwards are expected to be realized, a valuation reserve
equal to such deferred tax asset has been established.
6. STOCKHOLDERS' EQUITY
Changes in stockholders' equity for the years ended December 31, 1996,
1995, and 1994 were as follows:
<TABLE>
<CAPTION>
Common Stock Capital Treasury Stock
---------------------- in excess --------------------------
Number of Accumulated Number
of Shares Amount Par Value Deficit of Shares Amount
---------- -------- ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1993............ 6,187,401 $619,000 $53,424,000 $(32,534,000) (1,080,000) $(9,990,000)
Net income for the year.............. -- -- -- 170,000 -- --
---------- -------- ----------- ------------ ---------- -----------
Balance December 31, 1994............ 6,187,401 619,000 53,424,000 (32,364,000) (1,080,000) (9,990,000)
Net loss for the year................ -- -- -- (1,935,000) -- --
---------- -------- ----------- ------------ ---------- -----------
Balance December 31, 1995............ 6,187,401 619,000 53,424,000 (34,299,000) (1,080,000) (9,990,000)
Net income for the year.............. -- -- -- 594,000 -- --
---------- -------- ----------- ------------ ---------- -----------
Balance December 31, 1996............ 6,187,401 $619,000 $53,424,000 $(33,705,000) (1,080,000) $(9,990,000)
========= ========= =========== ============= ========== ===========
</TABLE>
7. COMMITMENTS
Thackeray leases office space under a lease agreement which expires in
1997.
Total rent expense of continuing operations amounted to $31,000 in 1996 and
$30,000 in each of 1995 and 1994.
Future minimum rental revenue from the non-cancellable lease, relating to
one of the land parcels, in effect at December 31, 1996, is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
-------------------------------------------------------- ----------
<S> <C>
1997.................................................... $ 65,000
1998.................................................... 65,000
1999.................................................... 65,000
2000.................................................... 65,000
2001.................................................... 65,000
Thereafter.............................................. 4,615,000
</TABLE>
8. BUSINESS SEGMENTS
Subsequent to the sale of Atlantic, the remaining operations are comprised
exclusively of real estate.
12
<PAGE>
STOCKHOLDER REFERENCE
AVAILABILITY OF FORM 10-K
Stockholders may obtain a copy of Thackeray's Annual Report on Form 10-K for
the year ended December 31, 1996, without exhibits, free of charge by writing
to the Assistant Secretary,
Thackeray Corporation,
400 Madison Avenue, Suite 1508
New York, New York 10017
REGISTRAR AND TRANSFER AGENT
Chase Mellon
450 W. 33rd Street
New York, New York 10001
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
New York, New York
GENERAL COUNSEL
Weil, Gotshal & Manges LLP
New York, New York
MARKET FOR THACKERAY'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS
Thackeray's common stock is traded on the New York Stock Exchange. The
following table sets forth the reported high and low sales prices for
Thackeray's common stock during the periods indicated as reported in the record
of composite transactions for New York Stock Exchange listed securities.
<TABLE>
<CAPTION>
Quarter Ended
-----------------------------------------------
September December
March 31 June 30 30 31
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1996 High 5 1/2 4 3/4 3 5/8 2 7/8
Low 4 3/8 3 1/2 2 1/2 2 1/4
1995 High 4 3/4 5 5/8 5 1/4 4 5/8
Low 3 7/8 3 5/8 4 1/2 4 1/4
</TABLE>
As of the close of business on March 10, 1997, there were approximately 1,400
holders of record of Thackeray's common stock.
During the three years ended December 31, 1996, no dividends were paid on
Thackeray's common stock.
13
<PAGE>
DIRECTORS
MARTIN J. RABINOWITZ(1)
Limited Partner, Odyssey Partners, L.P.
an investment partnership
New York, New York
JULES ROSS(1)
Principal, Odyssey Partners, L.P.
RONALD D. ROTHBERG(2)
President, The RDR Group Inc., a private
investment company
Pomona, New York
MOSES ROTHMAN(2)
Chairman, Black Inc. A.G., a film distributor
London, England
JOHN SLADKUS(1)
Senior Vice President,
Peter Sharp & Co., Inc.,
a real estate management company
New York, New York
OFFICERS
MARTIN J. RABINOWITZ
Chairman of the Board and President
JULES ROSS
Vice President, Finance, Treasurer and Secretary
EXECUTIVE OFFICE
400 Madison Avenue, Suite 1508
New York, New York 10017
(212) 759-3695
(1) Member of Executive Committee and Nominating Committee
(2) Member of Audit Committee
14
EXHIBIT 21
SUBSIDIARIES OF THACKERAY CORPORATION
NAME OF CORPORATION STATE OF INCORPORATION
- ------------------- ----------------------
Wholly-Owned by Thackeray Corporation
- -------------------------------------
Brennand-Paige Industries, Inc. Delaware
14155 Corp. New York
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form 10-K and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,615,000
<SECURITIES> 0
<RECEIVABLES> 198,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,884,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 619,000
<OTHER-SE> 9,729,000
<TOTAL-LIABILITY-AND-EQUITY> 10,884,000
<SALES> 2,263,000
<TOTAL-REVENUES> 2,333,000
<CGS> 1,303,000
<TOTAL-COSTS> 1,409,000
<OTHER-EXPENSES> 435,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 664,000
<INCOME-TAX> 70,000
<INCOME-CONTINUING> 594,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 594,000
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
