FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996
2-96366-A
(Commission File Number)
VANDERBILT SQUARE CORP.
(Exact name of Registrant as specified in its charter)
Florida 59-2483405
(State of other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
3040 East Commercial Blvd., Ft. Lauderdale, FL 33308
(Address of Principal Executive Offices)
(954) 776-0902
(Registrant's Telephone Number, including area code)
Not Applicable
(Former name, former address and former fiscal years,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No
There were 14,991,600 shares of Common Stock, $.0001 par value,
issued and outstanding at May 10, 1996. Of that total, 944,250
shares are held by the Company in its treasury.
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1996
(Unaudited) and December 31, 1995.
Consolidated Statement of Operations - Three months
ended March 31, 1996 and 1995 (Unaudited).
Consolidated Statement of Shareholders' Equity -
December 31, 1992 through March 31, 1996.
Consolidated Statement of Cash Flows - Three months
ended March 31, 1996 and 1995 (Unaudited).
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
SIGNATURES
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
Item I. Financial Statements
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 178,235 $ 197,182
Notes receivable - current:
Affiliate 9,886 14,298
Other 102,983 98,695
Investment in marketable
trading securities - at market 321,239 320,920
Accounts receivable - other 47,007 26,297
Accrued interest receivable - 1,037
Net investment in direct
financing leases - current 3,535 3,976
Deferred income taxes - current 4,966 4,966
TOTAL CURRENT ASSETS 667,851 667,371
INVESTMENT IN UNCONSOLIDATED
SUBSIDIARY 232,654 214,316
NOTES RECEIVABLE - NON-CURRENT
Affiliate - 179
Other 20,398 25,561
NET INVESTMENT IN DIRECT FINANCING
LEASES - non-current 11,186 4,610
DEFERRED INCOME TAXES - non current 8,873 8,873
$ 940,962 $ 920,910
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ - $ 34,818
Income taxes payable 13,892 5,992
TOTAL CURRENT LIABILITIES 13,892 40,810
SHAREHOLDERS' EQUITY:
Common stock $.0001 par value;
authorized 50,000,000 shares;
issued 14,991,600 shares,
outstanding 14,047,350 shares
at March 31, 1996 and
13,935,850 shares at
December 31, 1995 1,499 1,499
Additional paid-in capital 970,557 970,557
Retained earnings (deficiency) 31,576 (9,221)
1,003,632 962,835
Less treasury stock - 944,250 shares
at March 31, 1996; and
1,055,750 shares at December 31,
1995, at cost 76,562 82,735
927,070 880,100
$ 940,962 $ 920,910
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
REVENUES:
Interest and dividend income $ 8,154 $ 6,800
Realized and unrealized
gain on investment in
marketable trading securities 31,888 36,993
Consulting fees - 9,000
Direct finance lease income 165 273
40,207 53,066
OPERATING EXPENSES:
General and
administrative expenses 12,549 10,071
INCOME FROM OPERATIONS 27,658 42,995
OTHER INCOME (EXPENSES):
Equity in earnings of
unconsolidated subsidiary 23,139 28,575
Other Income - 100
INCOME BEFORE INCOME TAXES 50,797 71,670
PROVISION FOR INCOME TAXES 10,000 1,100
NET INCOME $ 40,797 $ 70,570
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 13,940,891 14,354,428
NET INCOME PER COMMON SHARE $ - $ -
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FROM DECEMBER 31, 1992 THROUGH MARCH 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stock
$.0001 Par Value Additional Retained
Authorized 50,000,000 Shares Paid-In Earnings Treasury
Shares Amount Capital (Deficit) Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1992 12,105,750 $ 1,499 $ 640,411 $ (271,844) $ (27,616) $ 342,450
Purchase of Treasury Stock (172,000) - - - (11,880) (11,880)
Issuance of stock in
settlement of debt 2,700,000 - 330,146 - 19,853 349,999
Net Income for the period - - - 254,483 - 254,483
Balance - December 31, 1993 14,633,750 1,499 970,557 (17,361) (19,643) 935,052
Purchase of Treasury Stock (204,000) - - - (16,596) (16,596)
Net income for the period - - - 6,642 - 6,642
Balance - December 31, 1994 14,429,750 1,499 970,557 (10,719) (36,239) 925,098
Purchase of Treasury Stock (826,900) - - - (71,477) (71,477)
Sales of Treasury Stock 333,000 - - - 24,981 24,981
Net Income for the period - - - 1,498 - 1,498
Balance - December 31, 1995 13,935,850 1,499 970,557 (9,221) (82,735) 880,100
Purchase of treasury stock (200,000) - - - (20,000) (20,000)
Sale of treasury stock 311,500 - - - 26,173 26,173
Net income for the period - - - 40,797 - 40,797
Balance - March 31, 1996(a) 14,047,350 $ 1,499 $ 970,557 $ 31,576 $ (76,562) $ 927,070
a) Reflected on the accompanying
balance sheet as:
Issued: 14,991,600
Treasury Shares: (944,250)
14,047,350
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 40,797 $ 70,570
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
(Gain) loss on sale of
marketable securities (36,198) (23,993)
Equity in (earnings) or loss
of unconsolidated subsidiary (23,139) (28,575)
Allowance for market decline
of securities 4,310 (13,000)
Changes in operating assets and liabilities:
(Decrease) in accounts
payable and accrued expenses (34,818) (30,759)
Decrease in accrued interest receivable 1,037 302
(Increase) decrease in
accounts receivable 24,605 (2,503)
Increase in income taxes payable 7,900 1,100
Proceeds from sale of marketable
securities 43,104 5,351
Purchase of marketable trading
securities (79,259) -
Net cash provided by (used in)
operating activities (51,661) (21,507)
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections of loans
to affiliates 4,591 7,399
Advance paid on notes receivable
- other (5,000) -
Principal collections of notes
receivable - other 5,875 14,807
Principal collections of direct
financing leases 965 1,296
Purchase of equipment for lease (7,100) -
Investment in unconsolidated
subsidiaries - (9,141)
Proceeds from sale of investment in
unconsolidated subsidiaries 1,988 71,833
Net cash provided by
(used in) investing activities 1,319 86,194
</TABLE>
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (20,000) (10,000)
Proceeds from sale of treasury stock 51,395 -
Net cash provided by (used in)
financing activities 31,395 (10,000)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ (18,947) $ 54,687
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 197,182 27,996
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 178,235 $ 82,683
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
NOTE 1 - FAIR PRESENTATION
The consolidated balance sheet as of March 31, 1996, the
consolidated statement of operations for the three months
ended March 31, 1996 and 1995, the consolidated statement
of shareholders' equity as of March 31, 1996, and the
consolidated statement of cash flows for the three months
ended March 31, 1996 and 1995, have been prepared by the
Company without audit. In the opinion of management, all
adjustments necessary to present fairly the financial
position and results of operations at March 31, 1996 and
for all period presented have been made.
The operations for the three months ended March 31, 1996
are not necessarily indicative of the results of
operations to be expected for the Company's fiscal year.
The condensed financial statements as of December 31,
1995, 1994 and 1993 have been derived from audited
financial statements.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with
the consolidated financial statements and notes thereto as
of December 31, 1995 and for the year then ended.
NOTE 2 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts
of Vanderbilt Square Corp. and its wholly-owned
subsidiary, Hi-Tech Leasing, Inc.. All significant
intercompany accounts and transaction have been eliminated
in consolidation.
NOTE 3 - DIRECT FINANCING LEASES
The net investment in direct financing leases consists of
the gross amount of the lease, net of deferred interest
and allowance for doubtful accounts.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
NOTE 4 - EARNINGS (LOSS) PER SHARE
Per share information was computed using the weighted
average number of common shares outstanding during the
reporting periods. Per share information computed to be
less than one cent is not shown on the accompanying
financial statements.
NOTE 5 - INVESTMENT IN MARKETABLE TRADING SECURITIES
Marketable trading securities are stated at market value
at the balance sheet date. Market values of investments
in marketable trading securities amounted to $321,239 at
March 31, 1996, and $320,920 at December 31, 1995. The
cost of these investments is $358,655 and $366,314
respectively. Unrealized gains and losses resulting from
fluctuations in the market price of the related securities
are currently reflected in the consolidated statement of
operations under the caption "Realized and unrealized gain
(loss) in marketable trading securities".
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<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be reviewed in
conjunction with the accompanying financial statements, including
the notes thereto.
Financial Condition
At March 31, 1996, the Company had current assets of $667,851,
compared to $667,371 at December 31, 1995; total assets of $940,962
as compared to $920,910 at December 31, 1995; current liabilities
of $13,892 as compared to $40,810 at December 31, 1995, and a
current net worth of $927,070 as compared to $880,100 at December
31, 1995. (See "Financial Statements"). The increase in total
assets is principally due to the increase in net income generated
by operations.
The increase in net worth is due to the income earned by the
Company during the three months ended March 31, 1996, net of
treasury stock purchases.
Liquidity
In the three months ended March 31, 1996, the Company had a
decrease in cash and cash equivalent of ($18,947), as compared to
an increase of $54,687 for the three months ended March 31, 1995.
The Company's decrease in cash was primarily due to the increased
investment in marketable trading securities. In the event the
Company requires additional cash, the Company can readily liquidate
marketable securities.
The Company's operating expenses have continued to be kept at what
the Company believes to be a minimal level. The Company has no
present commitments that are reasonably likely to result in its
liquidity increasing or decreasing in any material way. In
addition, the Registrant knows of no trend, additional demand,
event or uncertainties that will result in, or that are reasonably
likely to result in, the Company's liquidity increasing or
decreasing in any material way.
Capital Resources
The Company has no material commitments for capital expenditures.
The Company knows of no material trends, favorable or unfavorable,
in the Registrant's capital resources.
The Company has no outstanding credit lines or credit commitments
in place and has no current need for financial credit. In the
event of any future need, the Company believes that it will be able
to borrow at prevailing terms through loans collateralized, if
necessary, by its assets.
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<PAGE>
Results of Operations
The Company's revenues for the three months ended March 31, 1996,
and March 31, 1995, were principally derived from consulting fees,
interest income and activity related to marketable securities
transactions.
The Company's revenues for the three months ended March 31, 1996,
was $40,207 as compared to $53,066 for the same period last year.
The principal reason for the decrease was a reduction in income
from investments in marketable trading securities and consulting
fees.
Operating expenses increased to $12,549 for the three months ended
March 31, 1996, as compared to $10,071 for the comparable period
last year. The principal reason for the increase in operating
expenses was an increase general office expenses. Income before
provision for income taxes for the three months ended March 31,
1996, was $50,797 as compared to $71,670 for the same period last
year. The decrease in net income of $20,873 is principally due to
a reduction in revenues of $12,859 and equity in earnings of
unconsolidated subsidiary of $5,436.
Registrant knows of no trends or uncertainties that have had, or
that the Company reasonably expects will have a materially
favorable or unfavorable impact on net sales or revenues or income
from continuing operations. Moreover, Registrant knows of no other
events that will cause a material change in the relationship
between its costs and revenues.
Impact of Inflation
The Company is engaged in entering into equipment leases with
customers in which the Company retains title and ultimate ownership
of the leased equipment. The customer, or lessee, is entitled to
possession and use of the equipment for the purposes for which the
equipment is intended so long as all other performance obligations
incumbent upon the customer and under the lease agreement are
performed and satisfied.
The Company establishes its payment schedule and the lease term
under each and every lease on a case-by-case basis in keeping with
its view of commercial risk, inflationary prospects, customer's
financial data and prevailing terms in the equipment leasing
industry. The lease payment schedules vary from twelve (12) months
to sixty (60) months, terms which are customary in the equipment
leasing industry.
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<PAGE>
In the event that inflation increases during the lease term beyond
the expectations that the Company incorporated into its lease rate
decision regarding the terms of a given lease, the Company's
anticipated real profit from the lease will be correspondingly
diminished when actually realized; except that in the lease term,
the residual fair market value of the lease equipment will have
increased consistent with the same increased inflation actually
experienced and the Company will benefit from the inflation factor
accordingly.
With respect to inflation in general, while there can be no
certainty, the Company anticipates that it will be able to increase
its lease rates correspondingly without significant adverse
results.
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<PAGE>
PART II
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. EXHIBITS AND REPORTS ON FORM 8-K
Not applicable.
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<PAGE>
SIGNATURES
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.
VANDERBILT SQUARE CORP.
Date: May 10, 1996 By: /s/ Norman H. Becker
Norman H. Becker, President
Date: May 10, 1996 By: /s/ Ronald A. Martini
Ronald A. Martini
Vice President
Date: May 10, 1996 By: /s/ Diane Aquino
Diane Aquino, Secretary
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheets, Statement of Operations, Statement of Shareholders' Equity, Statement of
Cash Flows and Notes thereto incorporated in Part I., Item 1. of this Form 10-Q
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 178,235
<SECURITIES> 321,239
<RECEIVABLES> 163,411
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 667,851
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 940,962
<CURRENT-LIABILITIES> 13,892
<BONDS> 0
1,499
0
<COMMON> 0
<OTHER-SE> 1,002,133
<TOTAL-LIABILITY-AND-EQUITY> 940,962
<SALES> 0
<TOTAL-REVENUES> 40,207
<CGS> 0
<TOTAL-COSTS> 12,549
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 50,797
<INCOME-TAX> 10,000
<INCOME-CONTINUING> 40,797
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,797
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
