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 June 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 July 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 -
June 30, 1994 and December 31, 1993 . . . . . . . 3
Condensed Statements of Income -
Three months ended June 30, 1994 and 1993 . . . . 4
Condensed Statements of Income -
Six months ended June 30, 1994 and 1993 . . . . . 5
Condensed Statements of Cash Flows -
Six months ended June 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)
June 30 December 31
1994 1993
CURRENT ASSETS
Cash and cash equivalents $ 536,142 $ 795,379
Short-term investments, at cost 755,313 505,313
Receivable from The Andersons-Note B 6,233,392 4,173,287
Prepaid expenses and other
accounts receivable 977,355 2,726,694
TOTAL CURRENT ASSETS 8,502,202 8,200,673
OTHER ASSETS
Receivable from The Andersons-Note B 2,642,021 2,413,041
Investment in The Andersons - Note B 933,405 761,839
Deposits and other assets 17,732 56,650
3,593,158 3,231,530
$12,095,360 $11,432,203
CURRENT LIABILITIES
Accounts payable $ 1,931,360 $ 1,149,232
Accrued expenses 5,702,287 6,263,206
TOTAL CURRENT LIABILITIES 7,633,647 7,412,438
ACCRUED POSTRETIREMENT BENEFITS 2,642,021 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 431,111 219,090
1,892,524 1,680,176
Less common shares in treasury at
cost - (243 and 242 Class A shares
and 0 and 147 Class B shares at
June 30, 1994 and December 31,
1993, respectively) (72,832) (73,452)
1,819,692 1,606,724
$12,095,360 $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 June 30
1994 1993
REVENUES:
Management fees - Note B $17,849,512 $15,317,575
Equity in net income of
The Andersons 142,628 79,947
Interest earned and other income 50,104 35,525
18,042,244 15,433,047
COSTS AND EXPENSES:
Salaries, wages and benefits 17,517,754 15,111,389
Rent expense 189,899 182,802
General expenses 36,256 51,241
17,743,909 15,345,432
INCOME BEFORE INCOME TAXES 298,335 87,615
Federal income taxes 90,900 14,100
NET INCOME $ 207,435 $ 73,515
Net income per Class A Common Share $ 44.98 $ 15.88
Weighted average number of Class A Shares
outstanding 4,612 4,630
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Six Months
Ended June 30
1994 1993
REVENUES:
Management fees - Note B $33,641,030 $29,829,958
Equity in net income of
The Andersons 171,566 73,185
Interest earned and other income 90,970 53,245
33,903,566 29,956,388
COSTS AND EXPENSES:
Salaries, wages and benefits 33,151,985 29,476,981
Rent expense 375,067 365,604
General expenses 70,293 85,678
33,597,345 29,928,263
INCOME BEFORE INCOME TAXES 306,221 28,125
Federal income taxes 94,200 4,200
NET INCOME $ 212,021 $ 23,925
Net income per Class A Common Share $ 45.97 $ 5.17
Weighted average number of Class A Shares
outstanding 4,612 4,630
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months
Ended June 30
1994 1993
OPERATING ACTIVITIES
Net income $ 212,021 $ 23,925
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Amortization 1,770 264
Equity in earnings of The
Andersons in excess of cash
received - Note B (171,566) (73,185)
Changes in operating assets and
liabilities:
Receivable from The Andersons (2,289,085) (918,421)
Prepaid expenses and other
assets 1,786,487 1,725,533
Accounts payable and accrued
expenses 450,189 (722,786)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (10,184) 35,330
INVESTING ACTIVITIES
Purchase of short-term investments (250,000) -
FINANCING ACTIVITIES
Purchase of Common Shares for Treasury (18,387) (14,060)
Sale of Common Shares 19,334 7,316
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 947 (6,744)
INCREASE (DECREASE)IN CASH AND CASH
EQUIVALENTS (259,237) 28,586
Cash and cash equivalents at
beginning of year 795,379 223,567
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 536,142 $ 252,153
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 $161,244 and $146,791 from the Partnership for the
three-month periods ended June 30, 1994 and 1993, respectively,
and $313,265 and $293,582 for the six-month periods ended June 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 June 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 $19,334 from an offering of
its Class A and Class B Common Shares and redeemed shares totaling $18,387.
The Corporation is no longer offering shares and does not anticipate doing so
in the near future. 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 June 30, 1994 and 1993:
Net income in the second quarter of 1994 was $207,435 or $44.98 per Class A
Common Share, compared to a net income of $73,515, or $15.88 per share in
1993. Equity in net income of the Partnership and the portion of the
management fee based on the Partnership's return on equity increased by
$173,800 due to the improved performance of the Partnership in the second
quarter of 1994. Net rental income increased by $26,766 due to increased
occupancy. Income tax expense increased by $76,800 due to the increase in
income.
Six Months ended June 30, 1994 and 1993:
Net income in the first six months of 1994 was $212,021 or $45.97 per Class
A Common Share, compared to a net income of $23,925, or $5.17 per share in
1993. Equity in net income of the Partnership and the portion of the
management fee based on the Partnership's return on equity increased by
$228,666 due to the improved performance of the Partnership. Net rental
income increased by $44,706 due to increased occupancy. Income tax expense
increased by $90,000 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 June 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: August 12, 1994 By /s/Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: August 12, 1994 By /s/Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
