UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2000
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: 0-1460
ANDERSEN GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 06-0659863
(State or other jurisdiction
of incorporation or organization) (I.R.S. Employer Identification No.)
515 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 826-8942
(Registrant's telephone number, including area code)
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 ____
As of October 2, 2000, there were 2,054,751 shares of the
Registrant's $.01 par value common stock outstanding.
Title Outstanding
Common Stock, $0.01 par value per share Authorized 6,000,000 shares;
Issued 2,059,863
ANDERSEN GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
Page No.
Part I - Financial Information
Item 1 - Financial Statements:
Consolidated Balance Sheets August 31, 2000 and February 29, 2000 3
Consolidated Statements of Operations for the Three and
Six Months Ended August 31, 2000 and 1999 4
Consolidated Statements of Cash Flows for the Six Months
Ended August 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 10
Part II - Other Information
Item 1 - Legal Proceedings 11
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
<TABLE>
<CAPTION>
Part I. Financial Information
Item 1. Financial Statements
ANDERSEN GROUP, INC.
Consolidated Balance Sheets
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
August 31, 2000 February 29, 2000
--------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $ 766 $ 1,854
Marketable securities 1,139 926
Accounts and other receivables, less
allowances of $108 and $111, respectively 6,605 4,657
Inventories 7,215 8,019
Prepaid expenses and other assets 277 468
------ ------
Total current assets 16,002 15,924
Property, plant and equipment, net 9,627 10,148
Prepaid pension expense 4,947 4,917
Investment in Moscow Broadband Communication Ltd. 3,768 4,084
Other assets 2,209 2,045
----- -----
$36,553 $37,118
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 521 $ 521
Notes payable to officer, net of unamortized discount 1,142 -
Short-term borrowings 2,900 3,054
Accounts payable 751 1,015
Other current liabilities 1,533 1,674
Deferred income taxes 545 456
----- -----
Total current liabilities 7,392 6,720
Long-term debt, less current maturities 3,141 3,190
Notes payable to officer, net of unamortized discount - 933
Subordinated note payable, net of unamortized discount 7,373 7,358
Other liabilities 2,023 1,973
Deferred income taxes 1,558 1,682
----- -----
Total liabilities 21,487 21,856
------ ------
Commitments and contingencies
Stockholders' equity:
Cumulative convertible preferred stock 3,799 4,033
Common stock 21 20
Treasury stock (97) (276)
Additional paid-in capital 6,338 6,141
Retained earnings 5,005 5,344
----- ------
Total stockholders' equity 15,066 15,262
------ ------
$36,553 $37,118
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANDERSEN GROUP, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Three months ended Six months ended
August 31, 2000 August 31, 1999 August 31, 2000 August 31, 1999
--------------- --------------- --------------- ---------------
Revenues:
Net sales $ 9,894 $7,051 $19,360 $14,349
Investment and other income 424 258 563 1,161
------ ----- ------ ------
10,318 7,309 $19,923 15,510
------ ----- ------- ------
Costs and expenses:
Cost of sales 7,478 4,944 14,440 9,897
Selling, general and administrative 1,695 1,602 3,204 3,298
Research and development 608 561 1,232 1,133
Interest expense 448 383 1,037 771
----- ----- ------ -----
10,229 7,490 19,913 15,099
------ ----- ------ ------
Income (loss) from operations before
equity in losses of unconsolidated
subsidiary and income taxes 89 (181) 10 411
Equity in losses of Moscow
Broadband Communication Ltd. (201) - (316) -
---- ----- ---- -----
Net (loss) income before income taxes (112) (181) (306) 411
Income tax (benefit) expense (52) (54) (120) 182
----- ------ ---- -----
Net (loss) income (60) (127) (186) 229
Preferred dividends (77) (96) (153) (192)
----- ------ ----- ----
Loss income applicable to common
Shares ($ 137) ($ 223) ($ 339) $ 37
====== ====== ====== ====
(Loss) earnings per common share:
Basic ($0.07) ($0.12) ($0.17) $0.02
====== ====== ====== =====
Diluted ($0.07) ($0.12) ($0.17) $0.02
====== ====== ====== =====
See accompanying notes to consolidated financial statements.
<PAGE>
ANDERSEN GROUP, INC.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Six months ended
August 31, 2000 August 31, 1999
--------------- ---------------
Cash flows from operating activities:
Net (loss) income ($ 186) $ 229
Adjustments to reconcile net (loss) income to net
cash provided by (used in) operating activities:
Equity in losses of Moscow Broadband Communication Ltd. 316 -
Depreciation, amortization and accretion 840 750
Deferred income taxes (35) 31
Pension income (30) (50)
Net gains from marketable securities and investments (236) (578)
Purchases of marketable securities - (113)
Proceeds from sales of marketable securities 23 1,867
Changes in operating assets and liabilities:
Accounts and other receivables (1,948) 10
Inventories 804 3,204
Prepaid expenses and other assets 230 (116)
Accounts payable (264) 170
Accrued liabilities and other long-term obligations (142) (324)
----- -----
Net cash (used in) provided by operating activities (628) 5,080
----- -----
Cash flows from investing activities:
Purchases of property and equipment, net (429) (761)
---- ----
Net cash used in investing activities (429) (761)
---- -----
Cash flows from financing activities:
Principal payments on long-term debt (49) (69)
Proceeds from issuance of secured note to officer 200 -
Repayment of short term debt, net (154) (2,106)
Stock options exercised 74 -
Net sales of treasury stock 51 18
Collection of receivable from officer - 50
Preferred dividends paid (153) (192)
---- ----
Net cash used in financing activities (31) (2,299)
---- ------
Net (decrease) increase in cash and cash equivalents ( 1,088) 2,020
Cash and cash equivalents - beginning of period 1,854 2,541
----- -----
Cash and cash equivalents - end of period $ 766 $4,561
===== ======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
ANDERSEN GROUP, INC.
Notes to Consolidated Financial Statements
(1) Accounting Policies
The accompanying interim financial statements and related notes should
be read in conjunction with the Consolidated Financial Statements of Andersen
Group, Inc. and related notes as contained in the Annual Report on Form 10-K for
the fiscal year ended February 29, 2000. The interim financial statements
include all adjustments (consisting only of normal recurring adjustments) and
accruals necessary in the judgment of management for a fair presentation of such
statements. In addition, certain reclassifications have been made to the prior
period financial information so that it conforms to the current period
presentation.
(2) Marketable Securities
Marketable securities consisted of the following (in thousands):
August 31, 2000 February 29, 2000
--------------- -----------------
F M Emerging Russia Fund $1,118 $825
Portfolio of Ukraine common stocks 241 239
Renaissance Russian Bond Fund 52 75
Valuation reserve - foreign investments (272) (213)
------ -----
$1,139 $926
====== ======
The valuation reserve relates to the Company's investments in the FM
Emerging Russia Fund and a portfolio of Ukrainian common stocks to provide for
liquidity and volatility concerns.
(3) Inventories
Inventories consisted of the following (in thousands):
August 31, 2000 February 29, 2000
--------------- -----------------
Raw material $ 1,877 $ 5,727
Work in process 6,477 8,153
Finished goods 5,755 6,029
Consignment leases (1,956) (6,952)
------ ------
12,153 12,957
LIFO Reserve (4,938) (4,938)
------ ------
$ 7,215 $ 8,019
======= =======
At August 31, 2000, certain of the precious metal inventory levels of
The J.M. Ney Company ("JM Ney"), which are valued on a LIFO basis, were lower
than the prior fiscal year-end levels. Due to the interim nature of these
financial statements, no adjustment of the LIFO reserve has been recognized in
the Consolidated Statements of Operations. Had such inventory levels been
determined to be permanent in nature, at August 31, 2000, there would have been
an increase in the LIFO reserve of approximately $91,000 and a corresponding
increase in cost of sales. The interim financial statements have not been
adjusted to reflect changes in precious metals prices since the prior fiscal
year end. Had such changes been made, the gross values of inventories would have
been increased by approximately $500,000, with a corresponding increase in the
LIFO reserve.
(4)
<PAGE>
Investment in Moscow Broadband Communication Ltd.
The Company records its investment in Moscow Broadband Communication Ltd.
("Moscow Broadband") using the equity method of accounting, which is at cost as
adjusted for its proportionate share of the equity in the earnings and losses of
Moscow Broadband. For the six months ended August 31, 2000 the Company recorded
a loss of $316,000 which represents its 25% interest in Moscow Broadband's six
month losses of $1,264,000, which in turn, include Moscow Broadband's 50% equity
interest in the losses of ComCor TV.
At August 31, 2000, the carrying value of the Company's investment in
Moscow Broadband was $3,768,000, and the Company's 25% equity in the net assets
of Moscow Broadband was $4,314,000. The $546,000 difference is due to a previous
write down of this investment and the purchase of shares of Moscow Broadband
during the prior fiscal year using credited accounts receivable for amounts
previously expensed.
(5) Income Taxes
Income tax expense represents an estimate of the effective income tax
rate for the current fiscal year.
(6) (Loss) Earnings Per Share
Earnings per share are computed based on the weighted average number of
common and common equivalent shares outstanding. Diluted earnings per share
assumes full conversion of all convertible securities into common stock at the
later of the beginning of the applicable period or date of issuance, unless
antidilutive. For the three and six-month periods ended August 31, 2000, the
effects of such conversions have been antidilutive.
(7) Business Segments and Export Sales
During the six months ended August 31, 2000, the Company operated in
two segments: Electronics, which comprises the operations of JM Ney; and
Corporate, which includes the Company's investments, real estate and corporate
administrative activities. Operating income consists of net sales, investment
and other income, less cost of sales and selling, general and administrative
expenses directly allocated to the industry segments. Corporate revenues consist
of investment and other income not attributable to JM Ney. Corporate
identifiable assets include marketable securities and short-term investments,
and assets not directly attributable to JM Ney.
Summarized financial information for business segments is as follows (in
thousands):
Six months ended: August 31, 2000 August 31, 1999
--------------- ---------------
Revenues:
Electronics $19,373 $14,463
Corporate 550 1,047
$19,923 $15,510
------- -------
Operating income (loss):
Electronics $ 1,325 $ 848
Corporate (278) 334
-------- --------
$ 1,047 $ 1,182
-------- --------
Interest expense:
Electronics $ 805 $ 542
Corporate 232 229
-------- --------
$ 1,037 $ 771
-------- --------
Depreciation, amortization and accretion:
Electronics $ 742 $ 674
Corporate 98 76
-------- ---------
$ 840 $ 750
----- ---------
Capital expenditures:
Electronics $ 429 $ 746
Corporate - 15
-------- ---------
$ 429 $ 761
-------- ---------
<PAGE>
As of: August 31, 2000 February 29, 2000
--------------- -----------------
Identifiable assets:
Electronics $27,347 $27,835
Corporate 9,206 9,283
------- -------
$36,553 $37,118
------- -------
Export sales for the six months ended August 31, 2000 and 1999 were $4,160,000
and $2,648,000, respectively. Such sales were made primarily to customers in
Canada, Europe and the Pacific Rim.
During the six month periods ended August 31, 2000, sales to a single customer
accounted for 14.1% and 17.1% of net sales, respectively. At August 31, 2000,
accounts receivable from this customer accounted for 13.0% of consolidated net
accounts and other receivables.
(8) Related Party Transactions
In April 2000, the Company borrowed $200,000 from its President in
exchange for a secured note bearing interest at the annual rate of 8.5% and a
warrant to purchase 5,393 shares of the Company's stock at $11.13 per share
through April 2003. This warrant has been valued at approximately $18,000, and
is presented as a discount to the note payable to officer which is being
amortized over the term of the note. Also, in April 2000, the Company received
$50,000 from its Chairman in exchange for an unsecured demand note bearing
interest at the annual rate of 10.0%. This loan and related interest was repaid
in May 2000.
(9) Supplemental Disclosure of Cash Flow Information
------------------------------------------------
During the six months ended August 31, 2000, the Company issued 24,499
shares of its common stock from the conversion of 12,603 shares of its
cumulative convertible preferred stock.
(10) Subsequent Event
In October 2000, JM Ney and its primary bank signed amendments to their
loan agreements which, among
other things, increased the credit limit on the revolving credit line from $6
million to $8 million and formally changed certain covenants. The amendments
also provide for specific sublimits for JM Ney's precious metals borrowings,
which can be adjusted from time to time at JM Ney's discretion.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
For the three months ended August 31, 2000, the Company incurred a net loss
applicable to common shares of $137,000, or $0.07 per share, basic and diluted.
During the prior fiscal year's second quarter, the Company reported a net loss
applicable to common shares of $223,000, or $0.12 per share, basic and diluted.
Year-to-date through August 31, 2000, the Company has incurred a net loss
applicable to common shares of $339,000, or $0.17 per share, basic and diluted.
This compares to the prior fiscal year's first six months, for which net income
of $37,000, or $0.02 per share basic and diluted, was reported.
REVENUES
Revenues for the quarter ended August 31, 2000 totaled $10,318,000, as compared
to $7,309,000 of revenues for the comparable quarter in the prior fiscal year.
This increase is comprised of an 40.3% increase in sales from The J.M. Ney
Company (JM Ney), net of lower appreciation in the Company's trading portfolio.
Through six months, a 34.9% increase in sales from JM Ney and year-to-date net
appreciation in the Company's trading portfolio have increased total revenues
from $15,510,000 in the prior fiscal year to $19,923,000 in the current year.
New sales programs, and increases in shipments to other customers helped
contribute to JM Ney's sales increase, particularly in the three month period
ended August 31, 2000. In addition, continued increases in the price of
palladium helped boost sales during the three and six months periods ended
August 31, 2000. Average published prices per troy ounce for this precious metal
were approximately $669.20 and $636.25, for the three and six months ended
August 31, 2000, respectively, as compared with $336.50 and $341.00, for the
comparable periods in the prior fiscal year. During the three and six month
periods ended August 31, 2000, the products JM Ney sold contained approximately
5,774 and 11,578 troy ounces of palladium, respectively.
Investment and other income was $424,000 and $563,000, respectively, during the
three and six months ended August 31, 2000. Significant components of investment
and other income for the six-month period and the comparable period of the prior
fiscal year are as follows (in thousands):
Six months ended
August 31, 2000 August 31, 1999
--------------- ---------------
Net gains from domestic investment portfolio $ - $ 114
Net gains from Russian and Eastern European
portfolio 236 464
Interest and dividends 18 149
Rental income 221 232
Ultrasonics royalties 37 42
Other, net 51 160
---- -----
$ 563 $1,161
----- ------
COST OF SALES
Cost of sales for the three months ended August 31, 2000 represented 75.6% of
net sales, as compared to cost of sales during the comparable period in the
prior fiscal year, which were 70.1% of net sales. Cost of sales for the six
months ended August 31, 2000 totaled 74.6% of net sales, as compared to 69.02%
of net sales for the comparable six-month period in the prior fiscal year. These
decreases in net margins are due to primarily the pass-through effect of
increasing palladium prices.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the three months ended August
31, 2000 totaled $1,695,000, a 5.8% increase from the prior fiscal year's second
quarter levels. Such current year expenses represented 17.1% of net sales as
compared to prior year expenses which totaled 22.7% of net sales. Through the
first six months of the fiscal year, these expenses total $3,204,000, which is
2.9% lower than the comparable period in the prior fiscal year. As a percentage
of sales, these expenses for the six months ended August 31, 2000 equal 16.5% of
net sales, as compared to 23.0% for the prior fiscal year's first six months.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses for the three months ended August 31, 2000
totaled $608,000, which is an 8.4% increase from the prior fiscal year's second
quarter expense level. For the six months ended August 31, 2000, these expenses
totaled $1,232,000, or 8.7% higher than the expense level in the comparable
period in the prior fiscal year. These increased costs reflect growth in JM
Ney's engineering staff to further expand its technical capabilities.
INTEREST EXPENSE
Interest expense during the three and six month periods ended August 31, 2000
were 17.0% and 34.5% higher, respectively, than the interest costs incurred
during the comparable periods in the prior fiscal year. This increase is
primarily due to increased costs for palladium leases, as a result of higher
market prices and lease rates for these metals financing and hedging
arrangements.
INCOME TAX EXPENSE
Income taxes have been accrued based upon estimated effective tax rates.
LIQUIDITY AND CAPITAL RESOURCES
At August 31, 2000, the Company's consolidated cash and marketable securities
totaled $1,905,000, which is an $875,000 decrease from February 29, 2000 levels,
primarily due to the application of cash to pay for operating expenses and
inventories at the balance sheet date.
Covenants contained in its borrowing agreements restrict JM Ney from paying
dividends or otherwise transferring funds to the Company outside the ordinary
course of business except as defined in certain circumstances as defined. At
August 31, 2000, JM Ney's working capital net of intercompany balances was
$7,189,000, or 83.5% of consolidated net current assets, and its net worth, net
of a $4 million subordinated note payable to the Company, totaled $6,607,000 or
43.9% of the Company's consolidated total net worth.
As noted in Note 10 to the consolidated financial statements, JM Ney has signed
amendments to its loan agreements with its primary bank. These amendments
increase the revolving credit limit to $8 million and provide for specific
dollar and ounce sublimits for precious metals borrowings. In addition,
amendments to financial covenants contained within the agreements are expected
to eliminate the need to request compliance waivers which had been noted in
prior quarters due to factors which include the effects of the volatility of
market prices and leasing rates for palladium during the fourth quarter of the
prior fiscal year and the first quarter of the current fiscal year.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements, which are subject to a number
of risks and uncertainties that may cause actual results to differ materially
from expectations. Those uncertainties include, but are not limited to the
following:
The Company has expanded its investment and business development activities in
Russia and Eastern Europe. Economic and political developments in these
countries could significantly impact both the return on and the return of
capital employed in these regions. In addition, the price and volatility of
precious metals, particularly palladium and gold, could impact the market for
many of JM Ney's products, as users substitute less expensive materials.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company and JM Ney are exposed to market risk from changes in equity
security prices, certain commodity prices, interest rates and from factors that
impact equity investments in Russia and the Ukraine, as discussed in the
Company's Annual Report on Form 10-K for the year ended February 29, 2000. The
following information is presented to update the status of the identified risks.
FOREIGN INVESTMENT RISK
The Company has an investment in Moscow Broadband with a carrying value of
$3,768,000. Moscow Broadband's primary asset is an investment in ComCor TV, a
Moscow, Russia based broadband cable operator licensed to provide video,
Internet and telephoning to up to 1.5 million homes and businesses in Moscow.
The Company also has a trading portfolio of Russian and Ukrainian investments
with market values totaling $1,359,000 and a net reported value of $1,087,000.
In addition, as a result of the receipt of an additional cash distribution in a
series of anticipated liquidating distributions, JM Ney's investment in a
Russian bond fund has been reduced to approximately $52,000. All such
investments bear the specific economic, currency and political risks of this
region.
COMMODITY RATE RISK
During the six months ended August 31, 2000, the price of palladium as measured
by the daily Second London fixings, fluctuated from a high of $852.00 per troy
ounce, to a low of $554.00 per troy ounce. This volatility impacts selling
prices and can affect profitability through changes in the demand for JM Ney's
products, from increased costs to replace sold metals and, along with
corresponding volatility in precious metal lease rates, through increased
interest expense on palladium consignment leases.
Although the market price for gold has not been as volatile during the six month
period, having ranged from approximately $270.00 an ounce to $294.00 per ounce,
volatility in the price of this metal can have similar effects, including
affecting JM Ney's LIFO management strategies.
As noted in Note 3 to the Consolidated Financial Statements as of August 31,
2000, certain of JM Ney's precious metals inventory levels were below the prior
fiscal year end levels. For purposes of reporting cost of sales on a LIFO basis
at that date, if such inventory levels are remaining at February 28, 2001 the
LIFO reserve would increase by approximately $91,000 and there would be a
corresponding increase to cost of sales. The restoration of all LIFO layer
levels at prices as of August 31, 2000 would result in a decrease in cost of
sales of approximately $39,000.
INTEREST RATE RISK
The interest cost of JM Ney's use of precious metal hedges in the form of
consignment borrowing in recent years has experienced significant fluctuations.
During the six months ended August 31, 2000, the interest costs of such
arrangements ranged from 7.5% per annum to 18.0% per annum.
Part II. Other Information
Item 1. Legal Proceedings
Morton International, Inc. v. A.E. Staley Mfg. Co. et al. and Velsicol
Chemical Corp. v. A.E. Staley Mfg. Co. et al
As originally reported in the Company's Form 10-K for the year ended February
28, 1997, in July 1996, two companion lawsuits were filed in the United States
District Court for the District of New Jersey, by various owners and operators
of the Ventron-Velsicol Superfund Site (Site). The lawsuits, which were
subsequently consolidated, were filed under the Comprehensive Environmental
Resource Compensation and Liability Act (CERCLA), the Resource Conservation and
Recovery Act, the New Jersey Spill Act and New Jersey common law, alleging that
the defendants (over 100 companies, including JM Ney) were generators of certain
wastes allegedly processed at the site. The lawsuits seek recovery of costs
incurred and a declaration of future liability for costs to be incurred by the
owners and operators in studying and remediating the Site.
Based on preliminary disclosure of information relating to the claims made by
plaintiffs and defendants, JM Ney, which produced and refined precious metals
used in dental amalgams, is one of the smaller parties to have had any
transactions with one of the plaintiff's predecessors in interest. However,
under both CERCLA and the New Jersey Spill Act, a party is jointly and severally
liable, unless there is a basis for divisibility. At this time, there is
insufficient information to determine the appropriate allocation of costs as
between or among the defendant group, if liability to the generator defendants
is ultimately proven. Moreover, because of the incomplete status of discovery,
the Company is unable to predict the probable outcome of the lawsuit, whether
favorable or unfavorable, and has no basis to ascertain a range of loss, should
any occur, with respect to an outcome that might be characterized as
unfavorable.
The Company continues to investigate whether any liability, which may accrue at
some future date, may be subject to reimbursement in whole or in part from
insurance proceeds. The Company intends to continue to vigorously defend the
lawsuit.
James S. Cathers and Sylvia Jean Cathers, his wife v. Kerr Corporation,
Whip-Mix Corporation, The JM Ney Company and Dentsply Corporation, Inc.
As originally reported in the Company's Form 10-Q for the quarter ended August
31, 1997, in August 1997, J.M. Ney was included as a defendant in an asbestos
related civil action for negligence and product liability filed in the Court of
Common Pleas of Allegheny County, Pennsylvania, in which the Plaintiffs claim
damages from being exposed to asbestos and asbestos products alleged to have
been manufactured and supplied by the defendants, including J.M. Ney's former
Dental Division. The Company intends to vigorously defend the lawsuit. The
Company has determined that it has insurance that potentially covers this claim
and has called upon the insurance carriers to provide reimbursement of defense
costs and liability, should any arise. As of this date, the Company has no basis
to conclude that the litigation may be material to the Company's financial
condition or business.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K:
Exhibit Description
Exhibit 11 Statement re: Computation of Per Share Earnings.
Exhibit 27 Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ended August 31, 2000.
<PAGE>
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.
ANDERSEN GROUP, INC.
By: /s/ Oliver R. Grace, Jr.
------------------------
Oliver R. Grace, Jr.
President and Chief Executive Officer
Date: October 12, 2000
By: /s/ Andrew M. O'Shea
Andrew M. O'Shea
Vice President and Chief Financial Officer
Date: October 12, 2000
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
ANDERSEN GROUP, INC.
Statement Re: Computation of Per Share Earnings
(In thousands, except per share data)
<S> <C> <C>
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
August 31, 2000 August 31, 1999 August 31, 2000 August 31, 1999
--------------- --------------- --------------- ---------------
Calculation of basic earnings per share:
Numerator for basic and diluted earnings per share:
Net (loss) income ($137) ($223) ($339) $ 37
===== ===== ===== ========
Denominator for basic earnings per share:
Weighted average number of shares
outstanding during the period 2,055 1,932 2,047 1,930
Effect of dilutive securities - (a) 20 - (a) 13
----- ----- ----- -----
Denominator for diluted earnings per share 2,055 1,952 2,047 1,943
===== ===== ===== -----
Basic earnings per share ($0.07) ($0.12) ($0.17) $0.02
====== ====== ====== =====
Diluted earnings per share ($0.07) ($0.12) ($0.17) $0.02
====== ====== ====== =====
<FN>
a) For each of the three and six month periods ended August 31, 2000, the
effect of outstanding stock options, or the assumed conversion of
subordinated convertible notes or cumulative preferred stock, were
anti-dilutive.
</FN>
</TABLE>
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.
ANDERSEN GROUP, INC.
By: ____________________
Oliver R.Grace
President and Chief Executive Officer
Date: October 12, 2000
By: ____________________
Andrew M.O'Shea
Chief Financial Officer
Date: October 12, 2000
