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, 1997
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 16,490,756 shares of Common Stock, $.0001 par value, issued and
outstanding at May 8, 1997. Of that total, 92,400 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, 1997 (Unaudited)
and December 31, 1996.
Consolidated Statement of Operations - Three months ended
March 31, 1997 and 1996 (Unaudited).
Consolidated Statement of Shareholders' Equity - December
31, 1992 through March 31, 1997.
Consolidated Statement of Cash Flows - Three months ended
March 31, 1997 and 1996 (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
March 31, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 210,927 $ 250,209
Notes receivable - current:
Affiliate 2,673 38,478
Other 35,911 20,544
Investment in marketable
trading securities - at market 435,105 443,067
Accounts receivable - other 1,841 4,334
Accrued interest receivable - 143
Net investment in direct
financing leases - current 3,523 3,453
Prepaid income taxes 621 3,749
TOTAL CURRENT ASSETS 690,601 763,977
INVESTMENT IN UNCONSOLIDATED
SUBSIDIARY 248,214 250,008
NOTES RECEIVABLE - NON-CURRENT
Affiliate 14,420 34,347
Other 41,009 6,733
NET INVESTMENT IN DIRECT FINANCING
LEASES - non-current 7,946 8,854
$1,002,190 $1,063,919
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 1,750 $ 40,109
Deferred income taxes - current 8,338 8,338
TOTAL CURRENT LIABILITIES 10,088 48,447
DEFERRED INCOME TAXES - NON-CURRENT 3,226 3,226
13,314 51,673
SHAREHOLDERS' EQUITY:
Common stock $.0001 par value;
authorized 50,000,000 shares;
issued 16,490,756 shares at
March 31, 1997 and December 31,
1996; outstanding 16,398,356
shares at March 31, 1997 and
December 31, 1996 1,649 1,649
Additional paid-in capital 1,137,363 1,137,363
Retained earnings (deficiency) (140,104) (116,734)
998,908 1,022,278
Less treasury stock - 92,400 shares
at March 31, 1997 and
December 31, 1996 (10,032) (10,032)
988,876 1,012,246
$1,002,190 $1,063,919
</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
March 31,
1997 1996
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES:
Interest and dividend income $ 7,913 $ 8,154
Realized and unrealized
gain (loss) on invest-
ment in marketable
trading securities 632 31,888
Direct finance lease income 241 165
8,786 40,207
OPERATING EXPENSES:
General and
administrative expenses 12,181 12,549
INCOME (LOSS) FROM OPERATIONS (3,395) 27,658
OTHER INCOME (EXPENSES):
Equity in earnings (loss)
of unconsolidated subsidiary (12,897) 23,139
INCOME (LOSS) BEFORE INCOME TAXES (16,292) 50,797
PROVISION FOR INCOME TAXES 7,078 10,000
NET INCOME (LOSS) $ (23,370) $ 40,797
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 16,398,356 13,940,891
NET INCOME PER COMMON SHARE $ - $ -
</TABLE>
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FROM DECEMBER 31, 1993 THROUGH MARCH 31, 1997
<TABLE>
<CAPTION>
Common Stock
$.0001 Par Value
Authorized Addt'l Retained
50,000,000 Shares Paid-In Earnings Treasury
Shares Amount Capital (Deficit) Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1993 14,633,750 1,499 970,557 (17,361) (19,643) 935,052
Purchase of Treasury
Shares (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)
Sale 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
10% Stock Dividend 1,499,156 150 166,806 (166,956) - -
Purchase of Treasury Stock (249,100) - - - (33,070) (33,070)
Sale of Treasury Stock 1,212,450 - - - 105,773 105,773
Net income for the period - - - 59,443 - 59,443
Balance - December 31, 1996 16,398,356 1,649 1,137,363 (116,734) (10,032) 1,012,246
Net loss for the period - - - (23,370) - (23,370)
Balance - March 31, 1997(a) 16,398,356 $ 1,649 $1,137,363 $(140,104) $ (10,032) $ 988,876
</TABLE>
(a) Reflected on the accompanying
balance sheet as:
Issued: 16,490,756
Treasury Shares: 92,400
16,398,356
See accompanying notes to financial statements.
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Three Months Ended
March 31,
1997 1996*
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (23,370) $ 40,797
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
(Gain) loss on sale of
marketable securities (30,352) (36,198)
Equity in (earnings) or loss
of unconsolidated subsidiary 12,897 (23,139)
Allowance for market decline
of securities 29,720 4,310
Changes in operating assets and liabilities:
(Decrease) in accounts
payable and accrued expenses (38,359) (34,818)
Decrease in accrued interest receivable 143 1,037
(Increase) decrease in
accounts receivable 2,493 24,605
Increase in income taxes payable 3,128 7,900
Proceeds from sale of marketable
trading securities 61,918 94,499
Purchase of marketable trading
securities (53,324) (99,259)
Net cash provided by (used in)
operating activities (35,106) (20,266)
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan advance to affiliates - -
Principal collections of loans
to affiliates 3,085 4,591
Advance paid on notes receivable
- other (2,000) (5,000)
Principal collections of notes
receivable - other 5,004 5,875
Principal collections of direct
financing leases 838 965
Purchase of equipment for lease - (7,100)
Investment in unconsolidated
subsidiaries (11,103) -
Proceeds from sale of investment in
unconsolidated subsidiaries - 1,988
Net cash provided by
(used in) investing activities (4,176) 1,319
</TABLE>
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<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Three Months Ended
March 31,
1997 1996*
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ (39,282) $ (18,947)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 250,209 197,182
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 210,927 $ 178,235
</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
March 31, 1997
(Unaudited)
NOTE 1 - FAIR PRESENTATION
The consolidated balance sheet as of March 31, 1997, the consolidated
statement of operations for the three months ended March 31, 1997 and 1996,
the consolidated statement of shareholders' equity as of March 31, 1997, and
the consolidated statement of cash flows for the three months ended March 31,
1997 and 1996, 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, 1997 and for all
period presented have been made.
The operations for the three months ended March 31, 1997 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, 1996, 1995 and 1994 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, 1996 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, 1997
(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 $435,105 at March 31, 1997, and $443,067 at December 31, 1996. The cost of
these investments is $442,342 and $420,584 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 - SUBSEQUENT EVENT
The Board of Directors of the Company appointed Glen Shaffren to the Board of
Directors and elected Mr. Shaffren as Vice President of the Company, effective
on November 1, 1996. On January 29, 1997, the Company accepted the
resignation of Mr. Shaffren as an officer and director of the Company.
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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, 1997, the Company had current assets of $690,601, compared to
$763,977 at December 31, 1996; total assets of $1,002,190 as compared to
$1,063,919 at December 31, 1996; current liabilities of $10,088 as compared to
$48,447 at December 31, 1996, and a current net worth of $988,876 as compared
to $1,063,919 at December 31, 1996. (See "Financial Statements"). The
decrease in total assets and net worth are principally due to the net loss
incurred for the period.
Liquidity
During the three months ended March 31, 1997, the Company had a decrease in
cash and cash equivalents to $39,282. The Company's decrease in cash was
principally attributed to the net loss. The Company believes it has
sufficient cash and cash equivalents to meet its current liquidity
requirements. In the event the Company requires additional cash, the Company
can readily liquidate marketable securities.
The Company has limited liabilities and no present commitments that are
reasonably likely to result in its liquidity increasing or decreasing in any
material way. The Company, therefore, believes that it has sufficient funds
to meet any current liquidity needs. 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 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.
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.
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<PAGE>
Results of Operations
The Company's revenues for the three months ended March 31, 1997, and March
31, 1996, were principally derived from interest income and activity related
to marketable securities transactions.
The Company's revenues for the three months ended March 31, 1997, was $8,786
as compared to $40,207 for the comparable period last year. The principal
reason for the decrease in revenues for the three months ended March 31, 1997
was the decrease in gain on investment in marketable trading securities.
Operating expenses decreased to $12,181 for the three months ended March 31,
1997, as compared to $12,549 for the comparable period last year. Loss before
provision for income taxes for the three months ended March 31, 1997, was
($16,292) as compared to income of $50,797 for the same period last year. The
decrease in income of $67,089 is principally due to a decrease in gain on
investment in marketable securities of $31,256 and a decrease in equity of an
unconsolidated subsidiary of $36,036.
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
The Board of Directors of the Company appointed Glen Shaffren to the
Board of Directors and elected Mr. Shaffren as Vice President of the
Company, effective on November 1, 1996. On January 29, 1997, the
Company accepted the resignation of Mr. Shaffren as an officer and
director of the Company.
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.
/s/Norman H. Becker
Date: May 8, 1997 By: Norman H. Becker, President
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<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-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 210,927
<SECURITIES> 435,105
<RECEIVABLES> 43,948
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 690,601
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,002,190
<CURRENT-LIABILITIES> 10,088
<BONDS> 0
0
0
<COMMON> 1,649
<OTHER-SE> 987,227
<TOTAL-LIABILITY-AND-EQUITY> 1,002,190
<SALES> 0
<TOTAL-REVENUES> 8,786
<CGS> 0
<TOTAL-COSTS> 12,181
<OTHER-EXPENSES> 12,897
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,292)
<INCOME-TAX> 7,078
<INCOME-CONTINUING> (23,370)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,370)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
