UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
[ ] 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 33-16936
THE ANDERSONS MANAGEMENT CORP.
(Exact name of registrant as specified in its charter)
OHIO 34-1562374
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
480 W. Dussel Drive, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
(419) 893-5050
(Telephone Number)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report.)
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 31, 1994, there were 4612 non-voting Class A Common Shares no
par value and 5008 voting Class B Common Shares no par value of the
Registrant, issued and outstanding. Ownership of Class A Shares is restricted
to limited partners of The Andersons, a limited partnership of which the
Registrant is the sole general partner. Ownership of Class B Shares is
restricted to holders of Class A Shares. Because of its form of organization,
that includes transfer restrictions, there is no market for any partnership
interests in The Andersons. In these circumstances, there is no market for
the Class A or Class B Shares.
THE ANDERSONS MANAGEMENT CORP.
INDEX
Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Balance Sheets -
September 30, 1994 and December 31, 1993. . . . . . . . . . . 3
Condensed Statements of Income -
Three months ended September 30, 1994 and 1993. . . . . . . . 4
Condensed Statements of Income -
Nine months ended September 30, 1994 and 1993 . . . . . . . . 5
Condensed Statements of Cash Flows -
Nine months ended September 30, 1994 and 1993 . . . . . . . . 6
Notes to Condensed Financial Statements . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 9
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE ANDERSONS MANAGEMENT CORP.
CONDENSED BALANCE SHEETS
(UNAUDITED)
September 30 December 31
1994 1993
CURRENT ASSETS
Cash and cash equivalents $ 540,381 $ 795,379
Short-term investments, at cost 755,313 505,313
Receivable from The Andersons - Note B 6,025,387 4,173,287
Prepaid expenses and other
accounts receivable 112,128 2,726,694
TOTAL CURRENT ASSETS 7,433,209 8,200,673
OTHER ASSETS
Receivable from The Andersons - Note B 2,698,129 2,413,041
Investment in The Andersons - Note B 901,319 761,839
Deposits and other assets 124,867 56,650
3,724,315 3,231,530
$11,157,524 $11,432,203
CURRENT LIABILITIES
Accounts payable $ 1,029,531 $ 1,149,232
Accrued expenses 5,697,493 6,263,206
TOTAL CURRENT LIABILITIES 6,727,024 7,412,438
ACCRUED POSTRETIREMENT BENEFITS 2,698,129 2,413,041
SHAREHOLDERS' EQUITY
Common Shares, without par value:
Class A non-voting:
Authorized - 25,000 shares
Issued - 4,855 shares at
stated value 1,456,405 1,456,405
Class B voting:
Authorized - 25,000 shares
Issued - 5,008 and 4,681 shares,
respectively, at stated value 5,008 4,681
Retained earnings 343,790 219,090
1,805,203 1,680,176
Less common shares in treasury at
cost - (243 and 242 Class A shares
and 0 and 147 Class B shares at
September 30, 1994 and December 31,
1993, respectively) (72,832) (73,452)
1,732,371 1,606,724
$11,157,524 $11,432,203
NOTE: The balance sheet at December 31, 1993 has been derived from the
audited financial statements at that date.
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months
Ended September 30
1994 1993
REVENUES:
Management fees - Note B $17,032,669 $14,948,740
Equity in net loss of
The Andersons (32,086) (8,791)
Interest earned and other income 35,779 27,516
17,036,362 14,967,465
COSTS AND EXPENSES:
Salaries, wages and benefits 16,904,541 14,809,092
Rent expense 189,899 182,802
General expenses 82,343 28,140
17,176,783 15,020,034
LOSS BEFORE INCOME TAXES 140,421 52,569
Federal income taxes (credit) (53,100) (7,900)
NET LOSS $ 87,321 $ 44,669
Net loss per Class A Common Share $ 18.93 $ 9.65
Weighted average number of Class A Shares
outstanding 4,612 4,627
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Nine Months
Ended September 30
1994 1993
REVENUES:
Management fees - Note B $50,673,699 $44,778,698
Equity in net income of
The Andersons 139,480 64,394
Interest earned and other income 126,749 80,761
50,939,928 44,923,853
COSTS AND EXPENSES:
Salaries, wages and benefits 50,042,626 44,286,073
Rent expense 564,966 548,406
General expenses 152,635 113,818
50,760,227 44,948,297
INCOME (LOSS) BEFORE INCOME TAXES 179,701 (24,444)
Federal income taxes (credit) 55,000 (3,700)
NET INCOME (LOSS) $ 124,701 $ (20,744)
Net income (loss) per Class A Common Share $ 27.04 $ (4.48)
Weighted average number of Class A Shares
outstanding 4,612 4,628
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months
Ended September 30
1994 1993
OPERATING ACTIVITIES
Net income (loss) $ 124,701 $ (20,744)
Adjustments to reconcile net
income (loss) to net cash (used in)
provided by operating activities:
Amortization 2,433 264
Equity in earnings of The
Andersons in excess of cash
received - Note B (139,480) (64,394)
Changes in operating assets and
liabilities:
Receivable from The Andersons (2,137,188) (1,987,141)
Prepaid expenses and other assets 2,543,916 2,296,003
Accounts payable and accrued
expenses (400,326) (177,740)
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (5,944) 46,248
NET CASH USED IN INVESTING ACTIVITIES --
Purchase of short-term investments (250,000) -
FINANCING ACTIVITIES
Purchase of Common Shares for Treasury (18,387) (18,392)
Sale of Common Shares 19,333 10,918
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 946 (7,474)
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (254,998) 38,774
Cash and cash equivalents at
beginning of year 795,379 223,567
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 540,381 $ 262,341
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note A - In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of
the results of operations for the periods indicated have been
made.
The accompanying unaudited condensed financial statements should
be read in conjunction with the financial statements and notes
thereto included in the Corporation's annual report on Form 10-K
for the year ended December 31, 1993.
Note B - The Corporation is the sole general partner of The Andersons, a
limited partnership (the Partnership). As sole general partner,
the Corporation provides all management and labor services
required by the Partnership in its operations. In exchange for
providing management services the Corporation charges the
Partnership a management fee equal to: a) the salaries and cost
of all employee benefits and other normal employee costs, paid or
accrued on behalf of the Corporation's employees who are engaged
in furnishing services to the Partnership, b) reimbursable
expenses incurred by the Corporation in connection with its
services to the Partnership, or on the Partnership's behalf, and
c) an amount based on an achieved level of return on partners'
invested capital of the Partnership to cover the Corporation's
general overhead and to provide an element of profit to the
Corporation.
The Corporation leases an office building which is primarily
occupied by the Partnership. Management fees include rental
income of $160,142 and $146,791 from the Partnership for the
three-month periods ended September 30, 1994 and 1993,
respectively, and $473,407 and $440,373 for the nine-month periods
ended September 30, 1994 and 1993, respectively.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources:
The Corporation had cash and cash equivalents and short-term investments of
approximately $1.3 million at September 30, 1994 and December 31, 1993. The
largest component of the Corporation's working capital was a receivable from
The Andersons (the "Partnership"). This receivable represents the costs
incurred by the Corporation in providing management and labor services to
the Partnership but not yet paid by the Corporation and therefore not yet
collected from the Partnership. The Corporation has no short- term or
long-term debt. In 1994 the Corporation received $19,333 from an offering
of its Class A and Class B Common Shares and redeemed shares totaling
$18,387. The Corporation is not currently offering shares. Management
believes, given the relationship between the Corporation and the Partnership
whereby the Corporation is reimbursed by the Partnership for its cost in
providing management and labor services to the Partnership, and given the
Corporation's cash and cash equivalents and short-term investment of $1.3
million, that the Corporation's liquidity is adequate to meet both
short-term and long-term needs.
Results of Operations:
Three months ended September 30, 1994 and 1993:
In the third quarter of 1994 the Corporation incurred a loss of $87,321 or
$18.93 per Class A Common Share, compared to a loss of $44,669, or $9.65 per
share in 1993. Equity in the net loss of The Andersons and the portion of
the management fee based on the Partnership's return on equity resulted in a
decrease in income to the Corporation of $48,165. Net rental income
increased by $14,872 due to increased occupancy. General expenses increased
by $54,203. In the third quarter of 1994, $51,000 was paid for board member
retainer fees and committee chairperson fees. In the previous year these
fees were paid in the second quarter. The federal income tax credit was
$45,200 higher in the third quarter of 1994 compared to the credit in the
third quarter of last year, due to the increase in the Corporation's loss.
Nine Months ended September 30, 1994 and 1993:
Net income in the first nine months of 1994 was $124,701 or $27.04 per Class
A Common Share, compared to a net loss of $20,744, or $4.48 per share in
1993. Equity in net income of The Andersons and the portion of the
management fee based on the Partnership's return on equity increased by
$180,501 due to the improved performance of the Partnership. Net rental
income increased by $59,578 due to increased occupancy. General expenses
were up $38,817. Approximately $16,000 was as a result of an increase in
fees paid to outside board members and $6,000 was an increase in state and
local income taxes due to the increase in income. The remaining expense
increase is a result of increases in general corporate operating expenses.
Income tax expense increased by $58,700 due to the increase in income.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K. There were no reports on Form 8-K for
the three months ended September 30, 1994.
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.
THE ANDERSONS MANAGEMENT CORP.
(Registrant)
Date: November 14, 1994 By /s/ Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: November 14, 1994 By /s/ Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
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