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, 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 July 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 -
June 30, 1995 and December 31, 1994 . . . . . . . . . . .3
Condensed Statements of Income -
Three months ended June 30, 1995 and 1994 . . . . . . . 4
Six months ended June 30, 1995 and 1994 . . . . . . . . 5
Condensed Statements of Cash Flows -
Six months ended June 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)
June 30 December 31
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 289,609 $ 736,599
Short-term investments, at cost 553,881 490,532
Receivable from The Andersons - Note B 5,354,549 4,700,699
Prepaid expenses and other
accounts receivable 810,003 2,703,173
TOTAL CURRENT ASSETS 7,008,042 8,631,003
OTHER ASSETS
Receivable from The Andersons - Note B 3,521,765 3,059,742
Investment in The Andersons - Note B 1,039,315 969,376
Other assets 323,331 323,843
4,884,411 4,352,961
$11,892,453 $12,983,964
CURRENT LIABILITIES
Accounts payable $ 1,975,131 $ 869,704
Accrued expenses 4,448,782 7,192,479
TOTAL CURRENT LIABILITIES 6,423,913 8,062,183
ACCRUED POSTRETIREMENT BENEFITS 3,521,765 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 551,802 471,441
2,013,927 1,932,860
Unrealized gain on available for sale
securities 7,194 -
Less common shares in treasury at cost -
(247 and 236 Class A shares at June 30,
1995 and December 31, 1994, respectively) (74,346) (70,821)
1,946,775 1,862,039
$11,892,453 $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 June 30
1995 1994
REVENUES:
Management fees - Note B $18,271,144 $17,849,512
Equity in net income of
The Andersons 41,069 142,628
Interest earned and other income 35,002 50,104
18,347,215 18,042,244
COSTS AND EXPENSES:
Salaries, wages and benefits 18,054,801 17,517,754
Rent expense 192,871 189,899
General expenses 33,655 36,256
18,281,327 17,743,909
INCOME BEFORE INCOME TAXES 65,888 298,335
Federal income taxes 30,700 90,900
NET INCOME $ 35,188 $ 207,435
Net income per Class A Common Share $ 7.64 $ 44.98
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)
Six months
Ended June 30
1995 1994
REVENUES:
Management fees - Note B $36,684,283 $33,641,030
Equity in net income of
The Andersons 69,939 171,566
Interest earned and other income 78,470 90,970
36,832,692 33,903,566
COSTS AND EXPENSES:
Salaries, wages and benefits 36,240,003 33,151,985
Rent expense 384,752 375,067
General expenses 88,476 70,293
36,713,231 33,597,345
INCOME BEFORE INCOME TAXES 119,461 306,221
Federal income taxes 39,100 94,200
NET INCOME $ 80,361 $ 212,021
Net income per Class A Common Share $ 17.44 $ 45.97
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)
Six Months
Ended June 30
1995 1994
OPERATING ACTIVITIES
Net income $ 80,361 $ 212,021
Adjustments to reconcile net
income to net cash
used in operating activities:
Amortization - 1,770
Equity in earnings of The
Andersons in excess of cash
received (69,939) (171,566)
Changes in operating assets and
liabilities:
Receivable from The Andersons (1,129,619) (2,289,085)
Prepaid expenses and other
assets 1,924,894 1,786,487
Accounts payable and accrued
expenses (1,176,247) 450,189
NET CASH USED IN OPERATING ACTIVITIES (370,550) (10,184)
INVESTING ACTIVITIES
Purchase of investments (73,621) (250,000)
FINANCING ACTIVITIES
Purchase of Common Shares for Treasury (3,525) (18,387)
Sale of Common Shares 706 19,334
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (2,819) 947
DECREASE IN CASH AND CASH EQUIVALENTS (446,990) (259,237)
Cash and cash equivalents at
beginning of year 736,599 795,379
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 289,609 $ 536,142
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
$164,114 and $161,244 from the Partnership for the three-month
periods ended June 30, 1995 and 1994 respectively, and $331,486 and
$313,265 for the six-month periods ended June 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
equivalents and short-term investments of approximately $843,500 at June 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 the first six months of 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 $843,500, 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 June 30, 1995 and three
months ended June 30, 1994:
Net income in the second quarter of 1995 was $35,188 or $7.64 per Class A
Common Share, compared to net income of $207,435 or $44.98 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 $251,045 due to a
decrease in performance of the Partnership in the second quarter of 1995. Net
rental income decreased by $6,107 due to increased rent expense and some
temporarily vacant space. Income tax expense decreased by $60,200 due to the
decrease in income.
Comparison of the Corporation's six months ended June 30, 1995 and six months
ended June 30, 1994:
Net income in the first six months of 1995 was $80,361 or $17.44 per Class A
Common Share, compared to net income of $212,021 or $45.97 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 $254,942 due to a
decrease in performance of the Partnership in 1995. Net rental income
decreased by $4,572 due to increased rent expense and some temporarily vacant
space. Income tax expense decreased by $55,100 due to the decrease in income.
PART II. OTHER INFORMATION
Item 5. Other Information
On August 9, 1995, subsequent to the period covered by this Report, the
Registrant filed a Second Amendment to its 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 Registrant and
certain other related matters. 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 the potential for
additional liquidity. The Registrant currently anticipates that, if the merger
is approved by its shareholders and the limited partners of the Partnership,
it will be effective as of January 1, 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 June 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: August 10, 1995 By /s/Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: August 10, 1995 By /s/Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 289,609
<SECURITIES> 533,881
<RECEIVABLES> 5,354,549
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,008,042
<PP&E> 0
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<TOTAL-ASSETS> 11,892,453
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<BONDS> 0
<COMMON> 1,462,125
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0
<OTHER-SE> 485,650
<TOTAL-LIABILITY-AND-EQUITY> 11,892,453
<SALES> 36,684,283
<TOTAL-REVENUES> 36,832,692
<CGS> 36,240,003
<TOTAL-COSTS> 36,240,003
<OTHER-EXPENSES> 473,228
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 119,461
<INCOME-TAX> 39,100
<INCOME-CONTINUING> 80,361
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,361
<EPS-PRIMARY> 17.44
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