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 March 31, 1995
[ ] 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 April 30, 1995, there were 4,608 non-voting Class A Common Shares, no
par value and 5,720 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 transfer
restrictions contained in the partnership agreement, there is no market for
any partnership interests in The Andersons. Consequently, 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 -
March 31, 1995 and December 31, 1994. . . . . . . . 3
Condensed Statements of Income -
Three months ended March 31, 1995 and 1994. . . . . 4
Condensed Statements of Cash Flows -
Three months ended March 31, 1995 and 1994. . . . . 5
Notes to Condensed Financial Statements . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 7
PART II. OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . 8
Item 6. Exhibits and Reports on Form 8-K. . . . . . . 8
Signatures. . . . . . . . . . . . . . . . . . . . . . . 8
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE ANDERSONS MANAGEMENT CORP.
CONDENSED BALANCE SHEETS
(UNAUDITED)
March 31 December 31
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 570,053 $ 736,599
Short-term investments, at cost 490,532 490,532
Receivable from The Andersons - Note B 5,199,966 4,700,699
Prepaid expenses and other
accounts receivable 1,527,926 2,703,173
TOTAL CURRENT ASSETS 7,788,477 8,631,003
OTHER ASSETS
Receivable from The Andersons - Note B 3,274,554 3,059,742
Investment in The Andersons - Note B 998,462 969,376
Deposits and other assets 343,667 323,843
4,616,683 4,352,961
$12,405,160 $12,983,964
CURRENT LIABILITIES
Accounts payable $ 3,244,857 $ 869,704
Accrued expenses 3,981,355 7,192,479
TOTAL CURRENT LIABILITIES 7,226,212 8,062,183
ACCRUED POSTRETIREMENT BENEFITS 3,274,554 3,059,742
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 - 5,720 and 5,014 shares,
respectively, at stated value 5,720 5,014
Retained earnings 516,615 471,441
1,978,740 1,932,860
Less common shares in treasury at
cost - (247 and 236 Class A shares
at March 31, 1995 and December 31,
1994, respectively) (74,346) (70,821)
1,904,394 1,862,039
$12,405,160 $12,983,964
NOTE: The balance sheet at December 31, 1994 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 March 31
1995 1994
REVENUES:
Management fees - Note B $18,413,139 $15,791,518
Equity in net income of
The Andersons 29,086 28,938
Interest earned and other income 43,252 40,866
18,485,477 15,861,322
COSTS AND EXPENSES:
Salaries, wages and benefits 18,185,202 15,634,231
Rent expense 191,881 185,168
General expenses 54,820 34,037
18,431,903 15,853,436
INCOME BEFORE INCOME TAXES 53,574 7,886
Federal income taxes 8,400 3,300
NET INCOME $ 45,174 $ 4,586
Net income per Class A Common Share $ 9.80 $ .99
Weighted average number of Class A Shares
outstanding 4,608 4,612
See notes to condensed financial statements.
THE ANDERSONS MANAGEMENT CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months
Ended March 31
1995 1994
OPERATING ACTIVITIES
Net income $ 45,174 $ 4,586
Adjustments to reconcile net
income to net cash
used in operating activities:
Amortization 1,106
Equity in earnings of The
Andersons in excess of cash
received - Note B (29,086) (28,938)
Changes in operating assets and
liabilities:
Receivable from The Andersons (714,079) 571,305
Prepaid expenses and other
assets 1,155,423 840,860
Accounts payable and accrued
expenses (621,159) (1,411,302)
NET CASH USED IN OPERATING ACTIVITIES (163,727) (22,383)
FINANCING ACTIVITIES
Purchase of investments - (250,000)
Purchase of Common Shares for Treasury (17,025) (18,391)
Sale of Common Shares 14,206 19,301
NET CASH USED IN FINANCING ACTIVITIES (2,819) (249,090)
DECREASE IN CASH AND CASH EQUIVALENTS (166,546) (271,473)
Cash and cash equivalents at
beginning of year 736,599 795,379
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 570,053 $ 523,906
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, 1994.
Note B - The Registrant is the sole general partner of The Andersons, an
Ohio limited partnership (the "Partnership"). The Registrant
provides all management and labor services required by the
Partnership in its operations. In exchange for providing management
services, the Registrant 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
Registrant's employees who are engaged in furnishing services to the
Partnership, b) reimbursable expenses incurred by the Registrant 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
Registrant's general overhead and to provide an element of profit to
the Registrant.
The Registrant leases an office building which is primarily occupied
by the Partnership. Management fees include rental income of
$167,372 and $152,021 from the Partnership for the three-month
periods ended March 31, 1995 and 1994 respectively. Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Andersons Management Corp. (the "Corporation") had cash and cash
equivalents and short-term investments of approximately $1.1 million at March
31, 1995 and $1.2 million December 31, 1994. The largest component of the
Corporation's working capital was a receivable from The Andersons, an Ohio
limited partnership of which the Corporation is the sole general partner (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. Class A
Common Shares redeemed for cash in the first three months of 1995 totaled
$3,525, Class A shares gifted to other shareholders totaled $13,500 and new
Class B shares issued totaled $706. Management believes, given the
relationship between the Corporation and the Partnership whereby the
Corporation is reimbursed by the Partnership for its costs in providing
management and labor services to the Partnership and given the Corporation's
cash and cash equivalents and short-term investment of $1.1 million, that the
Corporation's liquidity is adequate to meet both short-term and long-term
needs.
Results of Operations
Comparison of the Corporation's Three months ended March 31, 1995 and three
months ended March 31, 1994:
Net income in the first quarter of 1995 was $45,174 or $9.80 per Class A
Common Share, compared to net income of $4,586 or $0.99 per share in 1994 due
to an increase in expenses reimbursed by the Partnership. Equity in net
income of the Partnership and the portion of the management fee based on the
Partnership's return on equity remained constant. The increase in management
fee revenue and salaries, wages and benefits expense reflects an increase of
131 salary and full-time positions. Net rental income increased by $1,535
due to increased occupancy. Income tax expense increased due to the increase
in income.
PART II. OTHER INFORMATION
Item 5. Other Information
On May 1, 1995, subsequent to the period covered by this Report, the
Corporation filed a Registration Statement on Form S-4 (File No. 33-58963)
with the Securities and Exchange Commission with respect to a proposed merger
of the Partnership with and into the Corporation and certain other related
matters. The primary purpose of the proposed merger and certain of the
related matters is to permit a public offering of common shares of the
Corporation at a date to be determined by the Corporation. The Corporation
currently anticipates that, if the merger is approved by the shareholders of
the Corporation and the limited partners of the Partnership, the public
offering will occur in the fall of 1995.
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 March 31, 1995
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: May 12, 1995 By /s/Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: May 12, 1995 By /s/Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 570,053
<SECURITIES> 490,532
<RECEIVABLES> 5,199,966
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,788,477
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,405,160
<CURRENT-LIABILITIES> 7,226,212
<BONDS> 0
<COMMON> 1,462,125
0
0
<OTHER-SE> 442,269
<TOTAL-LIABILITY-AND-EQUITY> 12,405,160
<SALES> 18,413,139
<TOTAL-REVENUES> 18,485,477
<CGS> 18,185,202
<TOTAL-COSTS> 18,185,202
<OTHER-EXPENSES> 246,701
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53,574
<INCOME-TAX> 8,400
<INCOME-CONTINUING> 45,174
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,174
<EPS-PRIMARY> 9.80
<EPS-DILUTED> 0
</TABLE>
