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 June 30, 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 August 12, 1996.
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1996 (Unaudited) and
December 31, 1995.
Consolidated Statement of Operations - Three months and six
months ended June 30, 1996 and 1995 (Unaudited).
Consolidated Statement of Shareholders' Equity - December 31,
1992 through June 30, 1996.
Consolidated Statement of Cash Flows - Six months ended June
30, 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
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 420,893 $ 197,182
Notes receivable - current:
Affiliate 6,345 14,298
Other 92,514 98,695
Investment in marketable
trading securities - at market 391,149 320,920
Accounts receivable - other 9,351 26,297
Accrued interest receivable - 1,037
Net investment in direct
financing leases - current 3,607 3,976
Deferred income taxes - current 4,966 4,966
TOTAL CURRENT ASSETS 928,825 667,371
INVESTMENT IN UNCONSOLIDATED
SUBSIDIARY 265,791 214,316
NOTES RECEIVABLE - NON-CURRENT
Affiliate - 179
Other 14,381 25,561
NET INVESTMENT IN DIRECT FINANCING
LEASES - non-current 10,326 4,610
DEFERRED INCOME TAXES - non current 8,873 8,873
$1,228,196 $ 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>
June 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 3,928 $ 34,818
Income taxes payable 84,892 5,992
TOTAL CURRENT LIABILITIES 88,820 40,810
SHAREHOLDERS' EQUITY:
Common stock $.0001 par value;
authorized 50,000,000 shares;
issued 14,991,600 shares,
outstanding 14,862,650 shares
at June 30, 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) 180,215 (9,221)
1,152,271 962,835
Less treasury stock - 128,950 shares
at June 30, 1996; and
1,055,750 shares at December 31,
1995, at cost (12,895) (82,735)
1,139,376 880,100
$1,228,196 $ 920,910
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 9,577 $ 7,849 $ 17,731 $ 14,649
Realized and unrealized
gain (loss) on invest-
ment in marketable
trading securities 235,628 49,429 267,516 86,422
Consulting fees - 6,000 - 15,000
Direct finance lease income 289 247 454 520
245,494 63,525 285,701 116,591
OPERATING EXPENSES:
General and
administrative expenses 50,257 9,733 62,806 19,804
INCOME FROM OPERATIONS 195,237 53,792 222,895 96,787
OTHER INCOME (EXPENSES):
Equity in earnings (loss)
of unconsolidated subsidiary 24,402 (5,691) 47,541 22,884
Other Income - - - 100
INCOME BEFORE INCOME TAXES 219,639 48,101 270,436 119,771
PROVISION FOR INCOME TAXES 69,000 24,100 81,000 30,000
NET INCOME $ 150,639 $ 24,001 $ 189,436 $ 89,771
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 14,552,458 14,043,980 14,248,033 14,268,498
NET INCOME PER COMMON SHARE $ .01 $ - $ .01 $ .01
</TABLE>
See accompanying notes to consolidated financial statements.
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VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FROM DECEMBER 31, 1992 THROUGH JUNE 30, 1996
<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 1,126,800 - - - 89,840 89,840
Net income for the period - - - 189,436 - 189,436
Balance - June 30, 1996(a) 14,862,650 $ 1,499 $ 970,557 $ 180,215 $ (12,895) $1,139,376
</TABLE>
a) Reflected on the accompanying
balance sheet as:
Issued: 14,991,600
Treasury Shares: 128,950
14,862,650
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>
Six Months Ended
June 30,
1996 1995*
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 189,436 $ 89,771
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
(Gain) loss on sale of
marketable securities (258,755) (71,744)
Equity in (earnings) or loss
of unconsolidated subsidiary (47,541) (22,884)
Allowance for market decline
of securities (8,761) (14,678)
Changes in operating assets and liabilities:
(Decrease) in accounts
payable and accrued expenses (34,818) (57,173)
Decrease in accrued interest receivable 1,037 302
(Increase) decrease in
accounts receivable 24,456 -
Increase in income taxes payable 78,900 30,000
Proceeds from sale of marketable
trading securities 534,961 38,159
Purchase of marketable trading
securities (267,289) (106,684)
Net cash provided by (used in)
operating activities 211,626 (114,931)
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections of loans
to affiliates 8,132 23,092
Advance paid on notes receivable
- other (5,000) (50,000)
Principal collections of notes
receivable - other 22,361 33,434
Principal collections of direct
financing leases 1,753 2,240
Purchase of equipment for lease (7,100) -
Investment in unconsolidated
subsidiaries (12,814) (13,023)
Proceeds from sale of investment in
unconsolidated subsidiaries 4,753 289,412
Net cash provided by
(used in) investing activities 12,085 285,155
</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>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 223,711 $ 170,224
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 197,182 27,996
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 420,893 $ 198,220
</TABLE>
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-7(b)-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - FAIR PRESENTATION
The consolidated balance sheet as of June 30, 1996, the consolidated statement
of operations for the three months and six months ended June 30, 1996 and
1995, the consolidated statement of shareholders' equity as of June 30, 1996,
and the consolidated statement of cash flows for the six months ended June 30,
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 June 30, 1996 and for all
period presented have been made.
The operations for the six months ended June 30, 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
June 30, 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 $391,149 at June 30, 1996, and $320,920 at December 31, 1995. The cost of
these investments is $415,493 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".
NOTE 6 - POST BALANCE SHEET EVENT
On August 6, 1996, the Board of Directors of the Company declared a 10% stock
dividend of the outstanding Common Stock of the Company. The stock dividend
is payable September 24, 1996 to all stockholders of record at the close of
business on August 23, 1996.
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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 June 30, 1996, the Company had current assets of $928,825, compared to
$667,371 at December 31, 1995; total assets of $1,228,196 as compared to
$920,910 at December 31, 1995; current liabilities of $88,820 as compared to
$40,810 at December 31, 1995, and a current net worth of $1,139,376 as
compared to $880,100 at December 31, 1995. (See "Financial Statements"). The
increase in total assets and net worth are principally due to the increase in
net income generated by operations.
Liquidity
In the six months ended June 30, 1996, the Company had an increase in cash and
cash equivalent of $223,711, as compared to an increase of $170,224 for the
six months ended June 30, 1995. The Company's increase in cash was primarily
due to the proceeds from the sale of marketable 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.
Results of Operations
The Company's revenues for the six months ended June 30, 1996, and June 30,
1995, were principally derived from interest income and activity related to
marketable securities transactions.
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<PAGE>
The Company's revenues for the six months and three months ended June 30,
1996, was $285,701 and $245,494 as compared to $116,591 and $63,525 for the
comparable periods last year. The principal reason for the increase in
revenues for the six months and three months ended June 30, 1996 was the
increase in interest income and gain on investment in marketable trading
securities.
Operating expenses increased to $62,806 and $50,257 for the six months and
three months ended June 30, 1996, as compared to $19,804 and $9,733 for the
comparable periods last year. The principal reason for the increase in
operating expenses was an increase in general office expenses. Income before
provision for income taxes for the six months ended June 30, 1996, was
$270,436 as compared to $119,771 for the same period last year. The increase
in income of $150,665 is principally due to an increase in gain on investment
in marketable securities of $181,094 and an increase in equity of an
unconsolidated subsidiary of $24,657.
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.
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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
On August 6, 1996, the Board of Directors of the Company declared a 10% stock
dividend of the outstanding Common Stock of the Company. The stock dividend
is payable September 24, 1996 to all stockholders of record at the close of
business on August 23, 1996.
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: August 12, 1996 By: /s/ Norman H. Becker
Norman H. Becker, President
Date: August 12, 1996 By: /s/ Ronald A. Martini
Ronald A. Martini, Vice President
Date: August 12, 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
sheet, Statement of Operations, Statements 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> JUN-30-1996
<CASH> 420,893
<SECURITIES> 391,149
<RECEIVABLES> 111,817
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 928,825
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,228,196
<CURRENT-LIABILITIES> 88,820
<BONDS> 0
0
0
<COMMON> 1,499
<OTHER-SE> 1,137,877
<TOTAL-LIABILITY-AND-EQUITY> 1,228,196
<SALES> 0
<TOTAL-REVENUES> 285,701
<CGS> 0
<TOTAL-COSTS> 62,806
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 270,436
<INCOME-TAX> 81,000
<INCOME-CONTINUING> 189,436
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 189,436
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>