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, 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 October 31, 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 -
September 30, 1995 and December 31, 1994. . . . . . . . .3
Condensed Statements of Income -
Three months ended September 30, 1995 and 1994. . . . . 4
Nine months ended September 30, 1995 and 1994 . . . . . 5
Condensed Statements of Cash Flows -
Nine months ended September 30, 1995 and 1994 . . . . . 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 5. Other Information. . . . . . . . . . . . . . . . . 9
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
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 305,605 $ 736,599
Short-term investments, at cost 560,144 490,532
Receivable from The Andersons - Note B 6,131,012 4,700,699
Prepaid expenses and other
accounts receivable 24,546 2,703,173
TOTAL CURRENT ASSETS 7,021,307 8,631,003
OTHER ASSETS
Receivable from The Andersons - Note B 3,820,032 3,059,742
Investment in The Andersons - Note B 986,244 969,376
Other assets 435,786 323,843
5,242,062 4,352,961
$12,263,369 $12,983,964
CURRENT LIABILITIES
Accounts payable $ 2,229,799 $ 869,704
Accrued expenses 4,270,002 7,192,479
TOTAL CURRENT LIABILITIES 6,499,801 8,062,183
ACCRUED POSTRETIREMENT BENEFITS 3,820,032 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 526,222 471,441
1,988,347 1,932,860
Unrealized gain on available for sale
securities 29,535 -
Less common shares in treasury at cost -
(247 and 236 Class A shares at September
30, 1995 and December 31, 1994,
respectively) (74,346) (70,821)
1,943,536 1,862,039
$12,263,369 $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 September 30
1995 1994
REVENUES:
Management fees - Note B $17,782,256 $17,032,669
Equity in net loss of
The Andersons (53,071) (32,086)
Interest earned and other income 58,774 35,779
17,787,959 17,036,362
COSTS AND EXPENSES:
Salaries, wages and benefits 17,547,300 16,904,541
Rent expense 192,871 189,899
General expenses 102,169 82,343
17,842,340 17,176,783
LOSS BEFORE INCOME TAXES (54,381) (140,421)
Federal income taxes (Credit) (28,800) (53,100)
NET LOSS (25,581) $ (87,321)
Net loss per Class A Common Share $ (5.55) $ (18.93)
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 INCOME
(UNAUDITED)
Nine months
Ended September 30
1995 1994
REVENUES:
Management fees - Note B $54,466,541 $50,673,699
Equity in net income of
The Andersons 16,868 139,480
Interest earned and other income 137,244 126,749
54,620,653 50,939,928
COSTS AND EXPENSES:
Salaries, wages and benefits 53,787,301 50,042,626
Rent expense 577,623 564,966
General expenses 190,648 152,635
54,555,572 50,760,227
INCOME BEFORE INCOME TAXES 65,081 179,701
Federal income taxes 10,300 55,000
NET INCOME $ 54,781 $ 124,701
Net income per Class A Common Share $ 11.89 $ 27.04
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)
Nine Months
Ended September 30
1995 1994
OPERATING ACTIVITIES
Net income $ 54,781 $ 124,701
Adjustments to reconcile net
income to net cash
used in operating activities:
Amortization - 2,433
Equity in earnings of The
Andersons in excess of cash
received (16,868) (139,480)
Changes in operating assets and
liabilities:
Receivable from The Andersons (2,203,154) (2,137,188)
Prepaid expenses and other
assets 2,620,401 2,543,916
Accounts payable and accrued
expenses (802,092) (400,326)
NET CASH USED IN OPERATING ACTIVITIES (346,932) (5,944)
INVESTING ACTIVITIES
Purchase of investments (81,243) (250,000)
FINANCING ACTIVITIES
Purchase of Common Shares for Treasury (3,525) (18,387)
Sale of Common Shares 706 19,333
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (2,819) 946
DECREASE IN CASH AND CASH EQUIVALENTS (430,994) (254,998)
Cash and cash equivalents at
beginning of year 736,599 795,379
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 305,605 $ 540,381
Noncash investing activity
Unrealized gain on available for sale
securities $ 29,535
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
$164,115 and $160,143 from the Partnership for the three-month
periods ended September 30, 1995 and 1994 respectively, and $495,602
and $473,408 for the nine-month periods ended September 30, 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 "Registrant") had cash and cash equivalent
and short-term investments of approximately $865,700 at September 30, 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 Registrant is the sole general partner (the
"Partnership"). This receivable represents the costs incurred by the
Registrant in providing management and labor services to the Partnership but
not yet paid by the Registrant and therefore not yet collected from the
Partnership. The Registrant has no short-term or long-term debt. Class A
Common Shares redeemed for cash in 1995 totaled $3,525 and new Class B shares
issued totaled $706. Management believes, given the relationship between the
Registrant and the Partnership whereby the Registrant 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 $865,700, that the Corporation's liquidity is adequate to
meet both short and long-term needs.
Results of Operations
Comparison of the Corporation's three months ended September 30, 1995 and three
months ended September 30, 1994:
In the third quarter of 1995, the Registrant incurred a net loss of $25,581 or
$5.55 per Class A Common Share, compared to a net loss of $87,321 or $18.93 per
share in 1994. Equity in the net loss of the Partnership and the portion of
the management fee based on the Partnership's return on equity decreased by
$16,566 due to a decrease in performance of the Partnership in the third
quarter of 1995. Net rental expense on the Registrant's office building
decreased by approximately $2,800. The income tax credit decreased by $24,300
due to the decrease in the quarter loss.
Comparison of the Corporation's nine months ended September 30, 1995 and nine
months ended September 30, 1994:
Net income in the first nine months of 1995 was $54,781 or $11.89 per Class A
Common Share, compared to net income of $124,701 or $27.04 per share in 1994.
Equity in net income of the Partnership and the portion of the management fee
based on the Partnership's return on equity decreased by $271,500 due to a
decrease in performance of the Partnership for the first nine months of 1995.
Net rental expense increased slightly. Income tax expense decreased by $44,700
due to the decrease in income.
PART II. OTHER INFORMATION
Item 5. Other Information
On October 26, 1995, subsequent to the period covered by this Report, the
Registrant's Registration Statement on Form S-4 (File No. 33-58963) with
respect to a proposed merger of the Partnership with and into the Registrant
and certain other related matters, was declared effective by the Securities and
Exchange Commission. The primary purpose of the merger is to simplify the
organizational structure of the Partnership and the Registrant and allow
current Shareholders and Limited Partners t he potential for additional
liquidity. The Registrant currently anticipates that, if the merger is approved
by its shareholders and the limited partners of the Partnership by a vote to be
held on November 16, 1995, it will be effective as of January 2, 1996.
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, 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: November 13, 1995 By /s/Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: November 13, 1995 By /s/Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 305,605
<SECURITIES> 560,144
<RECEIVABLES> 6,131,012
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<OTHER-SE> 481,411
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<TOTAL-REVENUES> 54,620,653
<CGS> 53,787,301
<TOTAL-COSTS> 53,787,301
<OTHER-EXPENSES> 768,271
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 65,081
<INCOME-TAX> 10,300
<INCOME-CONTINUING> 54,781
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<EXTRAORDINARY> 0
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