FORM 10-Q - QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES ACT OF 1934
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended November 30, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT For the transition period from to
Commission file number 1-9312
AMERICAN LIST CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 11-2050322
------------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 Old Country Road, Mineola, New York 11501
- -------------------------------------------------------------------------------
(address of principal executive offices)
(516) 248-6100
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check whether the Registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Indicate by check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) or the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 4,541,703 shares of Common
Stock, $.01 par value, as of January 4, 1995.
<PAGE>
AMERICAN LIST CORPORATION
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
Consolidated Balance Sheets at November 30, 1995 and February 28,
1995
Consolidated Statements of Earnings for the three and nine months
ended November 30, 1995 and 1994
Consolidated Statement of Stockholders' Equity for the nine
months ended November 30, 1995
Consolidated Statements of Cash Flows for the nine months ended
November 30, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
AMERICAN LIST CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
November 30, February 28,
1995 1995
-------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents $ 3,227,013 $ 3,196,634
Marketable securities 8,143,211 7,351,410
Trade accounts receivable, net 4,310,980 4,393,107
Unamortized costs of lists 872,639 933,669
Prepaid income taxes 395,152
Prepaid expenses and other 70,761 37,042
------------ ------------
Total current assets 17,019,756 15,911,862
Property and equipment, at cost (less accumulated
depreciation of $812,232 and $690,427) 443,037 189,878
Deferred license cost, net of accumulated amortization 2,873,787 3,125,873
Unamortized costs of lists 475,877 654,402
Other assets 391,834 230,414
------------ ------------
$ 21,204,291 $ 20,112,429
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 437,665 $ 414,569
Accounts payable 259,460 97,653
Income taxes payable 170,337
Accrued pension and profit-sharing contribution 151,000 192,049
Accrued salaries 439,272 363,441
Accrued expenses 150,948 179,125
------------ ------------
Total current liabilities 1,438,345 1,417,174
Long-term debt 1,901,244 2,324,890
stockholders' equity:
Common stock, par value $.01 Per share;
authorized - 10,000,000 shares; issued and outstanding
4,541,703 and 4,560,013 shares, respectively 45,417 45,600
Additional paid-in-capital 6,466,642 6,913,311
Unrealized gain (loss) on marketable securities 7,107 (11,833)
Retained earnings 11,353,170 9,423,287
------------ ------------
17,872,336 16,370,365
Less treasury stock at cost - 300 shares (7,634)
------------ ------------
17,864,702 16,370,365
------------ ------------
$ 21,204,291 $ 20,112,429
------------ ------------
------------ ------------
</TABLE>
<PAGE>
AMERICAN LIST CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
THREE MONTHS ENDED NINE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
-------------------- --------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 4,773,790 $ 3,528,805 $ 13,221,531 $ 10,601,178
------------ ------------ ------------ ------------
Costs and expenses:
Cost of operations 653,168 508,360 2,025,687 1,635,193
Selling, general and
Administrative expense 1,196,433 886,033 3,252,192 2,694,247
------------ ------------ ------------ ------------
1,849,601 1,394,393 5,277,879 4,329,440
------------ ------------ ------------ ------------
Operating income 2,924,189 2,134,412 7,943,652 6,271,738
Investment income 122,619 92,253 361,478 256,692
Interest expense (43,166) (50,458) (141,477) (78,109)
------------ ------------ ------------ ------------
Earnings before provision for
Income taxes 3,003,642 2,176,207 8,163,653 6,450,321
------------ ------------ ------------ ------------
Provision for income taxes 1,093,000 837,000 3,045,000 2,491,000
------------ ------------ ------------ ------------
Net earnings $ 1,910,642 $ 1,339,207 $ 5,118,653 $ 3,959,321
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net earnings per common share $ 0.42 $ 0.29 $ 1.13 $ 0.87
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Average shares outstanding 4,540,592 4,557,810 4,542,742 4,557,810
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
<PAGE>
AMERICAN LIST CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
UNREALIZED
GAIN (LOSS)
ADDITIONAL ON
PAID-IN MARKETABLE RETAINED TREASURY
SHARES AMOUNT CAPITAL SECURITIES EARNINGS STOCK TOTAL
--------- -------- ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at march 1, 1995 4,560,013 $ 45,600 $ 6,913,311 $ (11,833) $9,423,287 $16,370,365
issuance of common stock
in connection with
exercise of stock options 6,290 63 62,323 62,386
purchase of common stock
for treasury $ (516,872) (516,872)
Retirement of treasury
stock (24,600) (246) (508,992) 509,238
Cash dividends declared
and paid on common
stock - $.70 Per share (3,188,770) (3,188,770)
Unrealized gain on
marketable securities 18,940 18,940
Net earnings 5,118,653 5,118,653
--------- -------- ------------ ------------ ------------ ----------- -----------
Balance at november 30, 1995 4,541,703 $ 45,417 $ 6,466,642 $ 7,107 $ 11,353,170 $ (7,634) $17,864,702
--------- -------- ------------ ------------ ------------ ----------- -----------
--------- -------- ------------ ------------ ------------ ----------- -----------
</TABLE>
<PAGE>
AMERICAN LIST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
NINE MONTHS ENDED
NOVEMBER 30,
-------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities
Net earnings for the period $ 5,118,653 $ 3,959,321
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 121,805 65,115
Provision for losses on accounts receivable 10,000
Amortization of bond premiums 164,931 195,178
Amortization of deferred license cost 252,086 131,124
Amortization of goodwill 13,068
(Increase) in operating assets (191,554) (227,167)
(Decrease) in operating liabilities (112,506) (925,377)
----------- -----------
Net cash provided by operating activities 5,376,483 3,198,194
----------- -----------
Cash flows from investing activities
Capital expenditures (105,672) (60,691)
Purchase of marketable securities (927,642) (1,837,217)
Acquisition of subsidiary, net of cash acquired (69,534)
Deferred license cost (600,000)
----------- -----------
Net cash used in investing activities (1,102,848) (2,497,908)
----------- -----------
Cash flows from financing activities
Issuance of common stock 62,386 16,625
Cash dividends paid (3,188,770) (2,651,361)
Acquisition of common stock for treasury (516,872)
Payment of long-term debt (600,000)
----------- ------------
Net cash used in financing activities (4,243,256) (2,634,736)
----------- -----------
Net increase (decrease) in cash and cash equivalents 30,379 (1,934,450)
Cash and cash equivalents at beginning of period 3,196,634 4,700,262
----------- -----------
Cash and cash equivalents at end of period $ 3,227,013 $ 2,765,812
----------- -----------
</TABLE>
<PAGE>
AMERICAN LIST CORPORATION
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements reflect all
adjustments which, in the opinion of management, are of a normal
recurring accrual nature and necessary for a fair statement of the
results for the interim periods presented. These financial
statements have been prepared in accordance with the instructions
to Form 10-Q and, therefore, do not include all the information or
note disclosures necessary for a complete presentation. They
should be read in conjunction with the Company's audited financial
statements and accompanying notes which appear in the Company's
Form 10-KSB for the year ended February 28, 1995. The results of
operations for the first nine months of the year are not
necessarily indicative of the results of operations for the full
year.
Note B - STOCKHOLDERS' EQUITY
In May 1992, the Company adopted the 1992 Stock Option Plan which
provides for the issuance of options to purchase up to 82,500
shares, as adjusted, of common stock. The plan provides for the
issuance of both incentive stock options and non-qualified options
to purchase shares at exercise prices determined by the Board of
Directors. On July 17, 1995, the Company's stockholders approved
the increase in the number of shares available for issuance under
the plan to 300,000. During the nine months ended November 30,
1995, the Company granted incentive stock options to purchase
56,000 shares of its common stock at prices ranging from $21.00 to
$29.38 per share representing the unadjusted quoted market price
at the date of such grant.
On April 17, 1995, the Company purchased 24,600 shares of its
common stock on the open market for an aggregate purchase price of
$509,238. These shares were retired in November 1995.
On November 16, 1995, the Company purchased 300 shares of its
common stock in the open market for an aggregate purchase price of
$7,634. These shares were retired in January 1996.
<PAGE>
AMERICAN LIST CORPORATION
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
November 30, 1995
Note C - ACQUISITION
On June 22, 1995, the Company acquired substantially all of the
operating assets and liabilities of GeoDemX Corporation
("GeoDemX"), a developer and marketer of geodemographic software;
an emerging category of software defined by the combination of
computerized maps with electronic demographic for nominal
consideration. The purchase agreement provides for, among other
things, additional consideration to be paid based on a percentage
of GeoDemX's annual pretax earnings through February 28, 1999.
Such additional consideration shall be paid by the Company through
the issuance of common shares of the Company's common stock.
However, the sellers may elect to receive up to 50% of such
additional consideration in cash. The excess cost of the net
assets acquired, approximating $125,000, has been included in
other assets and will be amortized on a straight-line basis over a
five year period. Historical pro-forma information is not
presented as the pro-forma results would not be materially
different from those of the Company.
<PAGE>
AMERICAN LIST CORPORATION
November 30, 1995
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION
The Company continues to be in a favorable financial position and
does not require outside financing to support its operations.
Working capital as of November 30, 1995 and February 28, 1995
amounted to approximately $15.6 million and $14.5 million,
respectively. The Company has no material commitments for capital
expenditures. Management is, however, continually seeking
possibilities for additional expansion into compatible business
areas. On June 22, 1995, the Company acquired substantially all of
the operating assets and liabilities of GeoDemX Corporation (see
Note C to the consolidated unaudited financial statements). The
Company believes that cash and cash equivalents and marketable
securities as of November 30, 1995 in the approximate amount of
$11.4 million can provide adequate liquidity for the Company's
continuing operations and for such possible further expansion. Net
cash flows from operating activities amounted to approximately $5.4
million and $3.2 million for the nine months ended November 30,
1995 and 1994, respectively. Operating cash flows increased due to
increased net earnings and a reduction in income tax payments
during the current period. Further increases in cash equivalents
and marketable securities are dependent upon future operating
profits and the level of dividends declared by the Board of
Directors. On October 9, 1995, the Company declared a quarterly
dividend of 25 cents ($.25) per share, payable November 10, 1995 to
stockholders of record on October 20, 1995. On April 17, 1995, the
Company purchased 24,600 of its common stock on the open market for
an aggregate purchase price of $509,238. On November 16, 1995, the
Company purchased 300 shares of its common stock on the open market
for an aggregate purchase price of $7,634. Presently, the Company
does not anticipate any further purchases of its common stock,
however, depending on market conditions, the Company, may, from
time to time, purchase additional shares of its common stock.
RESULTS OF OPERATIONS
Revenues from operations increased during the three and nine months
ended November 30, 1995 by approximately $1,245,000 (35%) and
$2,620,000 (25%), respectively, from the comparable 1994 periods.
This increase in revenue is primarily attributable to an expansion
of the Company's customer base, price increases which took effect
in September 1994 and April 1995 and revenues generated by the
newly acquired subsidiary, GeoDemX.
Costs of operations increased for the three and nine months ended
November 30, 1995 by approximately $145,000 (28%) and $390,000
(24%), respectively, from the comparable 1994 periods primarily due
to the amortization of deferred license costs and costs associated
with the newly acquired subsidiary, GeoDemX. As a percentage of
sales, costs of operations remained constant for the three and nine
months ended November 30, 1995 as compared to same periods for 1994
as a result of the increase in student list sales offsetting the
amortization of deferred license costs and lower margins on GeoDemX
sales.
<PAGE>
AMERICAN LIST CORPORATION
November 30, 1995
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS (Continued)
Selling, general and administrative costs increased during the
three and nine months ended November 30, 1995 by approximately
$310,000 (35%) and $558,000 (21%) from the comparable 1994 periods
primarily due to expenses associated with the GeoDemX subsidiary
and to additional personnel recently hired by the Company.
Investment income increased approximately $105,000 (41%) during the
nine months ended November 30, 1995 from the comparable 1994 period
primarily due to an increase in interest rates and a greater amount
of funds available for investment.
Interest expense for the nine months ended November 30, 1995
increased by approximately $63,000 (81%) from the comparable 1994
period due to the debt associated with the Company's license
agreement entered into in July 1994.
The effective tax rate for the three and nine months ended November
30, 1995 decreased to 36.4% from 38.5% and 37.3% from 38.6%
respectively, from the comparable 1994 periods primarily due to
increased non-taxable municipal bond interest income.
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6(a). Exhibits, Lists and Reports on Form 8-K.
3.1 Articles of Incorporation as amended to August 31, 1983(1)
3.1.a Certificate of Amendment to Articles of Incorporation filed
September 19, 1983(2)
3.1.b Certificate of Amendment to Articles of Incorporation filed
September 9, 1987(3)
3.2 By laws as amended to date (1)
10.1 Profit-sharing Plan (1)
10.2 Pension Plan (1)
10.3 Lease Agreement (4)
10.4 Stock Option Plan (5)
10.5 Employment Agreement between the Registrant and Jan Stumacher (6)
10.6 Employment Agreement, as amended, between the Registrant and
Martin Lerner (7)
10.7 Agreement of Sale and Purchase of Assets between the Registrant
and GeoDemX Corporation (8)
22 Subsidiaries of the Registrant (9)
(1) Incorporated by reference to the Annual Report on Form 10-K
for the year ended February 28, 1981.
<PAGE>
(2) Incorporated by reference to the Annual Report on Form 10-K for
the year ended February 29, 1984.
(3) Incorporated by reference to the Annual Report on Form 10-K for
the year ended February 29, 1988.
(4) Incorporated by reference to the Annual Report on Form 10-K for
the year ended February 29, 1992.
(5) Incorporated by reference to the Annual Report on Form 10-K for
the year ended February 28, 1993.
(6) Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended February 28, 1994.
(7) Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended February 28, 1995.
(8) Incorporated by reference to the Quarterly
Report on Form 10-Q for the three months ended
May 31, 1995.
(9) Incorporated by reference to the Quarterly
Report on Form 10-Q for the three months ended
August 31, 1995.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the three months ended
November 30, 1995.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN LIST CORPORATION
Date: January 12, 1996 By: /S/MARTIN LERNER
-----------------------------------
Martin Lerner, President
Principal Financial Officer
and Chief Executive
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 3,227,013
<SECURITIES> 8,143,211
<RECEIVABLES> 4,370,980
<ALLOWANCES> 60,000
<INVENTORY> 0
<CURRENT-ASSETS> 17,019,756
<PP&E> 1,255,269
<DEPRECIATION> 812,232
<TOTAL-ASSETS> 21,204,291
<CURRENT-LIABILITIES> 1,438,345
<BONDS> 0
<COMMON> 45,417
0
0
<OTHER-SE> 17,819,285
<TOTAL-LIABILITY-AND-EQUITY> 21,204,291
<SALES> 13,221,531
<TOTAL-REVENUES> 13,221,531
<CGS> 2,025,687
<TOTAL-COSTS> 5,277,879
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 141,477
<INCOME-PRETAX> 8,163,653
<INCOME-TAX> 3,045,000
<INCOME-CONTINUING> 5,118,653
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,118,653
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 1.13
</TABLE>
