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, 1997
[ ] 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 000-20557
THE ANDERSONS, INC.
(Exact name of registrant as specified in its charter)
OHIO 34-1562374
(State of incorporation (I.R.S. Employer
Identification No.) or organization)
480 W. Dussel Drive, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
(419) 893-5050
(Telephone Number)
(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 __
The registrant had 7,939,492 Common shares outstanding, no par value, at
November 1, 1997.
THE ANDERSONS, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - September 30, 1997
and December 31, 1996 3
Condensed Consolidated Statements of Operations -
Three months and nine months ended September 30, 1997
and 1996 6
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1997 and 1996 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(IN THOUSANDS)
September 30 December 31
1997 1996
Current assets:
Cash and cash equivalents $ 3,946 $ 27,524
Accounts and notes receivable:
Trade receivables - net 58,577 73,694
Margin deposits 327 327
-------------------------
58,904 74,021
Inventories:
Grain 61,586 70,762
Agricultural fertilizer and supplies 27,726 21,897
Merchandise 33,117 29,527
Lawn and corn cob products 11,869 17,633
Other 10,067 10,478
-------------------------
144,365 150,297
Deferred income taxes 1,547 1,864
Prepaid expenses 2,441 3,929
-------------------------
Total current assets 211,203 257,635
Other assets:
Notes receivable (net) and other assets 6,587 5,951
Investments in and advances to affiliates 1,111 1,340
------------------------
7,698 7,291
Property, plant and equipment:
Land 11,292 11,261
Land improvements and leasehold improvements 25,196 24,431
Buildings and storage facilities 84,361 80,669
Machinery and equipment 102,957 99,871
Construction in progress 1,503 1,795
-------------------------
225,309 218,027
Less allowances for depreciation and
amortization 140,948 136,362
-------------------------
84,361 81,665
-------------------------
$ 303,262 $ 346,591
=========================
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - (continued)
(UNAUDITED)(IN THOUSANDS)
September 30 December 31
1997 1996
Current liabilities:
Notes payable $ 49,700 $ -
Accounts payable for grain 35,072 96,932
Other accounts payable 59,388 75,713
Accrued expenses 8,740 16,981
Current maturities of long-term debt 7,384 6,360
----------------------------
Total current liabilities 160,284 195,986
Pension and postretirement benefits 2,878 2,804
Long-term debt:
Note payable, 7.8%, payable $398 thousand
quarterly, due 2004 13,702 14,250
Note payable under revolving credit line,
variable rate (6.2% at September 30, 1997) 20,000 16,300
Notes payable, variable rate (6.7% at
September 30, 1997), payable $336
quarterly beginning October 1997, due 2004 9,418 9,418
Other notes payable 968 1,036
Industrial development revenue bonds:
6.5%, sinking fund $900 thousand to $1
million payable annually, due 1999 2,900 2,900
Variable rate (5.7% at September 30, 1997),
payable $882 thousand annually through 2004 5,470 6,351
Variable rate (4.6% at September 30, 1997),
due 2025 3,100 3,100
Debenture bonds, 6.5% to 10%, due 1997
through 2007 18,064 21,030
Other bonds, 4% to 10% 485 543
--------------------------
74,107 74,928
Less current maturities of long-term debt 7,384 6,360
--------------------------
66,723 68,568
Deferred income taxes 5,243 5,371
Minority interest 614 613
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - (continued)
(UNAUDITED)(IN THOUSANDS)
September 30 December 31
1997 1996
Shareholders' equity:
Common stock (25,000 shares authorized,
stated value $.01 per share, 8,430
shares issued) 84 84
Additional paid-in capital 66,659 66,659
Retained earnings 5,007 7,106
Treasury stock (471 and 70 shares at 9/30/97 and
12/31/96, respectively; at cost) (4,230) (600)
-------------------------
67,520 73,249
-------------------------
$303,262 $346,591
=========================
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Nine Months
Ended September 30 Ended September 30
1997 1996 1997 1996
Grain sales and revenues $ 80,133 $ 135,328 $ 272,662 $ 490,386
Fertilizer, retail and other sales 79,778 91,261 322,507 336,742
Other income 2,018 1,062 3,715 2,465
-------------------------------------------
161,929 227,651 598,884 829,593
Cost of grain sales 72,083 127,996 255,948 463,527
Cost of fertilizer, retail and
other sales 59,049 68,546 241,939 253,245
-------------------------------------------
131,132 196,542 497,887 716,772
-------------------------------------------
GROSS PROFIT 30,797 31,109 100,997 112,821
Operating, administrative and
general expenses 31,337 31,526 96,842 98,372
Interest expense 1,905 2,592 6,318 11,754
-------------------------------------------
33,242 34,118 103,160 110,126
-------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (2,445) (3,009) (2,163) 2,695
Income tax expense (credit) (Note B) (916) (1,203) (811) 1,851
-------------------------------------------
NET INCOME (LOSS) $ (1,529) $ (1,806) $ (1,352) $ 844
===========================================
Per common share:
Earnings (loss) (Note B) $ (0.19) $ (0.21) $ (0.16) $ 0.10
===========================================
Dividends paid $ (0.03) $ -- $ (0.09) $ --
===========================================
Weighted average common shares
outstanding 8,124 8,430 8,232 8,430
===========================================
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(IN THOUSANDS)
Nine Months Ended
September 30
1997 1996
Operating activities
Net income (loss) $ (1,352) $ 844
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 7,485 7,311
Provision for losses on accounts and notes
receivable 1,067 3,369
Deferred income tax 190 (1,410)
Other (617) (400)
Changes in operating assets and liabilities:
Trade receivables 14,049 15,544
Inventories 5,932 138,988
Prepaid expenses and other assets 653 1,609
Accounts payable for grain (61,859) (64,294)
Other accounts payable and accrued expenses (24,491) (27,578)
------------------------
Net cash provided by (used in) operating activities (58,943) 73,983
Investing activities
Purchases of property, plant and equipment (10,084) (7,587)
Proceeds from sale of property, plant and equipment 948 514
------------------------
Net cash used in investing activities (9,136) (7,073)
Financing activities
Net increase (decrease) in short-term borrowings 49,700 (61,612)
Proceeds from issuance of long-term debt 149,182 80,222
Payments of long-term debt (150,004) (86,275)
Purchase of common stock for the treasury (4,053) -
Proceeds from sale of treasury stock to employees
participating in Employee Share Purchase Plan 423 -
Dividends paid (747) -
Payments to dissenting partners and for fractional
shares in merger transaction - (64)
------------------------
Net cash provided by (used in) financing activities 44,501 (67,729)
Decrease in cash and cash equivalents (23,578) (819)
Cash and cash equivalents at beginning of period 27,524 5,052
------------------------
Cash and cash equivalents at end of period $ 3,946 $ 4,233
========================
Noncash financing activity
Exchange of employee bonds for common shares $ (275)
Exchange of fixed assets for investment in LLC $ 513
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
NOTES TO CONDENSED CONSOLIDATED 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 Consolidated financial statements
should be read in conjunction with the audited, consolidated financial
statements and notes thereto included in The Andersons, Inc. annual
report on Form 10-K for the year ended December 31, 1996.
Note B - Prior to 1996, the majority of the Company's operations were conducted
as a partnership and the income from those operations was included in the
individual tax returns of its partners. Since January 2, 1996, the date
that The Andersons (the "Partnership") merged into its corporate general
partner, income from operations is taxed at the corporate level. In
conjunction with the merger, the Company recorded the deferred tax assets
and liabilities of the partnership that had not previously been
recognized. The net excess of deferred tax liabilities over deferred tax
assets ($812 thousand) was recorded in the first quarter of 1996 and
included as a component of income tax expense.
Note C - In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement No. 128, Earnings per Share, which is required to be
adopted on December 31, 1997. At that time, the Company will be required
to change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating
primary earnings per share, the dilutive effect of stock options will be
excluded. This standard will have no impact on the Company's
presentation of earnings per share.
In addition, the FASB has issued Statement No. 131 (Disclosures about
Segments of an Enterprise and Related Information). The new rules change
the manner in which operating segments are defined and reported
externally to be consistent with the basis on which they are reported and
evaluated internally. The impact that this statement will have on the
Company has not been fully determined. The new rules are effective for
periods beginning after December 15, 1997.
Note D - Significant Accounting Policy - Commodity and Interest Rate Contracts.
For the purpose of hedging its market price risk exposure on grain owned
and related forward grain purchase and sale contracts, the Company holds
commodity contracts in the form of futures and options contracts for
corn, soybeans and wheat. The Company accounts for all commodity
contracts and the underlying grain inventories and forward grain
contracts using a daily mark to the market method. Company policy limits
the Company's unhedged grain position.
Grain inventories in the Company's balance sheet are comprised of the
current market value of these commodity contracts and the current market
value of grain inventory and forward grain contracts. Gains and losses
in the value of commodity contracts (whether due to changes in
commodity prices or due to sale, maturity, or extinguishment of the
commodity contract) and grain inventories and related forward grain
contracts are included in Grain Sales and Merchandising Revenues in the
statement of operations.
The Company also periodically enters into interest rate contracts to
manage interest rate risk. Income or expense associated with these
interest rate contracts is recognized on the accrual basis over the life
of the agreement as a component of interest expense, except in
the case of interest rate caps where the cost of the contract is included
in expense at the time of purchase. The fair market value of interest
rate contracts is not recognized in the balance sheet.
Item 2. Management's Discussion and Analysis of Financial Condition and
Operations
Results of Operations
Comparison of the three months ended September 30, 1997 with the three months
ended September 30, 1996:
Sales and revenues for the three months ended September 30, totaled $162
million, a decrease of $66 million or 28.9% from the 1996 third quarter sales
and revenues of $228 million. The Agriculture Group had a total decrease in
sales and revenues of $63 million, with a $55 million decrease in grain sales
and revenue. This decrease is due to a 14% decrease in bushels shipped and a
34% decrease in the average price of a bushel sold. The grain business began
1997 with less grain available for sale than in prior years because of a poor
1996 fall harvest in certain of the primary growing areas served by the
Company. A good 1997 wheat crop in the Company's primary growing area and
expectations for much improved corn and soybean crops in those same areas (as
compared to the prior two harvests) should provide the Company significant
bushels to handle in the fourth quarter of 1997. Wholesale fertilizer also had
decreased sales and revenues of $6.1 million, or 23%, due primarily to a 22%
decrease in volume. The retail farm centers experienced sales and revenue
decreases of $1.8 million or 35.5%.
The Retail Group experienced a 5.5% decrease in sales. All stores have
been impacted by competition in their respective markets. The original store,
located in Maumee, Ohio is undergoing a major renovation which may also have
impacted sales.
The Processing & Manufacturing Group had a $1.3 million or 7% decrease
in sales. The processing business (lawn fertilizer and industrial products) had
the largest sales decrease of $4.8 million or 39%. Of this decrease, $2.3
million represented combined 1996 sales and revenues of the Sorbents business
that was sold in the fourth quarter of 1996 and four lawn fertilizer
retail businesses that are no longer being operated by the Company. The
remainder of the decrease resulted from lower volume in both businesses. The
manufacturing division had a $3.1 million or 100% sales increase.
Gross profit for the three months ended September 30, 1997 totaled $30.8
million, a decrease of $0.3 million or 1% from the 1996 third quarter gross
profit of $31.1 million. The Agriculture Group contributed a gross profit
increase of 2%, with the grain division up 9.8%, wholesale fertilizer up 1% and
retail farm centers down 39%. Gross profit on sales in the Retail Group
was down $0.9 million or 7.6%. The Processing and Manufacturing Group also
experienced a decrease of $0.6 million or 8.6%. The processing division posted
a $1.2 million or 28% decrease, the manufacturing division gross profit was up
$0.3 million or 28% and the ventures division gross profit was up $0.3 million
or 18%. However, when excluding the 1996 gross profit related to the
businesses no longer operated (as described previously), the Processing and
Manufacturing Group showed an increase of less than $0.1 million or 1%.
Operating, administrative and general expenses for the third quarter of
1997 totaled $31.3 million, a decrease of $0.2 million or 0.6% from the third
quarter of 1996. The decrease relates primarily to 1996 expenses of the
businesses not in operation in 1997.
Interest expense for the third quarter of 1997 was $1.9 million, a $0.7
million decrease from the third quarter of 1996. This interest expense
decrease was due to a $36 million or 52% decrease in average short-term
borrowings from the third quarter of 1996. Short-term borrowings are used to
fund working capital needs. A $20 million or 30% reduction in average grain
inventory for the same period, resulting from lower bushel volume and
market prices, was the primary cause of the reduction in borrowings.
The loss before income tax credit of $2.4 million, is $0.6 million or 19%
better than the loss in the third quarter of 1996. The effective income tax
rate for the third quarter of 1997 is 37.5% as compared to the 1996 third
quarter effective rate of 40%. The net loss of $1.5 million represents
improved results from the $1.8 million net loss in the 1996 third quarter.
Loss per share of $0.19 compares favorably to the $0.21 loss per share
in the third quarter of 1996.
Comparison of the nine months ended September 30, 1997 with the nine months
ended September 30, 1996:
Sales and revenues for the nine months ended September 30, 1997 totaled
$599 million, a decrease of $231 million or 27.8% from the 1996 first nine
months sales and revenue of $830 million. The Agriculture Group had a total
decrease of $226 million, with most of it due to decreased grain sales and
revenue. The significant decrease in grain sales and revenues is due to a 25%
decrease in bushels shipped and a 25% decrease in the average price of a bushel
sold. Merchandising revenues were lower than the first nine months of 1996 by
$3.5 million or 30%. The grain business began 1997 with less grain available
for sale than in prior years because of a poor 1996 fall harvest in certain of
the primary growing areas served by the Company. A good 1997 wheat crop in the
Company's primary growing area and expectations for much improved corn and
soybean crops in those same areas (as compared to the prior two harvests)
should provide the Company significant bushels to handle in the fourth quarter
of 1997. Wholesale fertilizer had a sales and revenues decrease of $8.8
million, or 8.8%, which was due primarily to a 8% decrease in volume, while the
retail farm center business experienced a sales increase of $1.2 million or 5%.
The Retail Group experienced a 2% decrease in sales from the first nine
months of 1996. All stores have been impacted by competition in their
respective markets. The original store, located in Maumee, Ohio is undergoing
a major renovation which may also have impacted sales.
The Processing & Manufacturing Group had a $3.8 million or 4% decrease in
sales. The processing business (lawn fertilizer and industrial products) had
the largest sales decrease of $11.3 million or 18%. Of this decrease, $7.4
million represents 1996 sales and revenues of businesses that the Company is no
longer operating. The remainder of the decrease results primarily from
lower volume. The manufacturing division had a $7.2 million or 60% increase in
sales for the first nine months of the year due to several railcar sales in the
period.
Gross profit for the nine months ended September 30, 1997 totaled $101
million, a decrease of $11.8 million or 10% from the 1996 first nine months
gross profit of $112.8 million. The Agriculture Group's gross profit decreased
$10.7 million, with the grain division showing a decrease of $10.1 million,
wholesale fertilizer division a decrease of $1.4 million and retail farm
centers an increase of $0.8 million. Gross profit on sales in the Retail Group
was down $1.4 million or 4%. The Processing and Manufacturing Group had a $0.9
million decrease in gross profit with the processing division posting a $3
million or 14% decrease, the manufacturing division gross profit up $1.3
million or 34% and the ventures division up $0.8 million or 17%.
However, when excluding the 1996 gross profit related to businesses that the
Company is no longer operating, the Processing and Manufacturing Group showed
an increase of $1.3 million or 5%.
Operating, administrative and general expenses for the first nine months
of 1997 totaled $96.8 million, a decrease of $1.5 million or 2% from the first
nine months of 1996. The decrease relates primarily to 1996 expenses of the
businesses not in operation in 1997.
Interest expense for the first nine months of 1997 was $6.3 million, a
$5.4 million decrease from the first nine months of 1996. This interest
expense decrease was due to an $86 million or 66% decrease in average short-
term borrowings from the first nine months of 1996. Short-term borrowings are
used to fund working capital needs. A $75 million or 55% decrease in average
grain inventory for the same period resulting from lower bushel volume and
market prices caused the reduction in borrowings.
The loss before income tax credit was $2.2 million a $4.9 million decrease
from the first nine months income of 1996. The effective income tax rate for
the first nine months of 1997 is 37.5% as compared to the 1996 first nine
months effective rate of 68.7%. The effective income tax rate of 37.5% for the
first nine months of 1997 is reflective of the Company's estimated income
tax rate for the year. The 1996 rate includes $0.8 million to establish
deferred taxes on the assets of the former partnership at the January 2, 1996
merger and after removing that amount, the 1996 effective rate was 38.6%. Net
loss of $1.4 million represents a $2.2 million decrease from the 1996 first
nine months net income. The loss per share of $0.16 is a $0.26 decrease from
the first nine months of 1996 earnings per share of $0.10.
Liquidity and Capital Resources
The Company's primary use of cash includes funding working capital
requirements, making payments on debt and other obligations, investing in
capital additions, acquisitions and improvements, providing a return to its
owners through dividends and funding repurchases of its common shares. The
Company believes that cash from operations and available financing sources will
be sufficient to meet anticipated cash requirements.
In the first nine months of 1997, the Company's operations used $59 million.
Working capital decreased $10.7 million in this same time period. The Company
had $4 million in cash and cash equivalents at September 30, 1997 and has
short-term lines of credit of $250 million available to finance working
capital, primarily inventories and accounts receivable. At September 30,
1997 $49.7 million was borrowed on the available lines. The nature of the
Company's commodity businesses requires it to maintain these credit lines to
finance cash requirements that can fluctuate greatly due to seasonal inventory
levels and market volatility. Typically the Company's highest borrowings occur
in the spring due to high inventory levels in the wholesale fertilizer and
retail businesses, credit sales in the wholesale fertilizer and lawn fertilizer
businesses and a customary reduction in the liability for grain due to the cash
needs of grain producers and market strategies.
A quarterly cash dividend of $0.03 per common share was paid in each of
the first three quarters of 1997. A cash dividend of $0.03 per common share
was declared for shareholders of record on October 1, 1997 and was paid on
October 21, 1997. No cash dividends were paid in 1996, but the final payment
of $64 thousand to former partners electing not to participate in the
merger and for fractional shares, was paid in the first quarter of 1996. The
Company made income tax payments of $4 million in the first nine months of 1997
and expects to make no additional payments in 1997. Also in the first half of
1997, the Company has purchased 450 thousand shares of its common stock for the
treasury and reissued 49 thousand shares to its employees as part of the
Employee Share Purchase Plan.
The Company has spent $10.1 million to date on capital additions and
improvements. Total capital expenditures for 1997 are expected to approximate
$16 million. They include $4 million for renovations to retail stores and $4.5
million for plant upgrades, expansion and the purchase of the assets of Blondes
Farm Supply, Inc., located in Litchfield and North Adams, Michigan. Blondes
Farm Supply, Inc. is a retail farm center business that the Company's
agriculture group has leased for several years . In addition, the Company
plans approximately $1 million for plant improvements and expansion in the
processing and manufacturing group. Funding for these expenditures is expected
to come from cash generated from operations or additional long-term debt.
Capital expenditures can be curtailed if cash generated from operations is less
than expected.
Certain of the Company's long-term debt is secured by first mortgages on
various facilities. In addition, some of the long-term borrowings include
provisions that impose minimum levels of working capital and equity,
limitations on additional debt and require the Company to be substantially
hedged in its grain transactions. The Company's liquidity is enhanced by the
fact that grain inventories are readily marketable. In the opinion of
management, the Company's liquidity is adequate to meet short-term and long-
term needs.
Forward Looking Statements
The preceding Management's Discussion and Analysis contain various
"forward-looking statements" that reflect the Company's current views with
respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties, including but not
limited to those identified below, which could cause actual results to
differ materially from historical results or those anticipated. The words
"believe," "expect," "anticipate" and similar expressions identify forward-
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
The following factors could cause actual results to differ materially from
historical results or those anticipated; weather, supply and demand of
commodities including grains, fertilizer and other basic raw materials,
market prices for grains and the potential for increased margin requirements,
regulatory agency review of grain contracts and related contract default
litigation, competition, economic conditions and competition in its retail
stores' markets, interest rates and income taxes.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company, like others in the agriculture industry, utilizes
different types of contracts with producers (including contracts commonly
referred to as "Hedged To-Arrive" or "HTA" contracts) to purchase grain. Some
grain producers have defaulted or threatened default on certain of these
contracts, arguing that their contracts are unenforceable. The Company
believes that this is due, in large part, to unprecedented high grain prices
experienced in 1996 and in come cases, crop shortages due to poor weather in
some of the primary growing areas served by the Company. The Company is
currently engaged in litigation and/or arbitration with several defaulting
producers, including one purported class action filed on May 16, 1996 in the
United States District Court for the Northern District of Illinois, Eastern
Division, Case no. 96C2936, Harter, et. al., v. Iowa Grain Company and The
Andersons Investment Services Corp., d.b.a. The Andersons, Inc., wherein
enforceability of the delivery obligation under certain grain contracts has
been raised as an issue. The Harter lawsuit seeks declaratory and injunctive
relief and compensatory, exemplary and punitive damages of an unspecified
amount. The Court, in Harter, ordered arbitration by the National Grain and
Feed Association and dismissed Iowa Grain Company as a defendant. The Company
currently has several arbitration cases before the National Grain and Feed
Association. The Company also has received several favorable rulings in the
arbitration proceedings, including a recent favorable ruling in the Harter
arbitration. The Company believes its grain contracts are enforceable
obligations and intends to enforce them. Although no assurance can be given
that the current litigation and arbitration will not result in liability or
loss, the Company continues to believe that it has valid claims and defenses in
the lawsuits and proceedings in which it is involved.
Pursuant to subpoenas duces tecum served by the Commodities Futures
Trading Commission (the "CFTC"), the Company has produced certain records,
including names and phone numbers of certain customers, and the depositions of
certain employees and former employees have been taken in the matter of
"Certain Transactions and Practices Among Grain Elevators, et. al., Involving
Futures Contracts."
In light of the Company's current and prior use of Hedged To-Arrive
contracts, related industry-wide litigation, and current conditions of the
industry as a whole, there can be no assurance that other litigation will not
be brought, that a class will not be certified or that other CFTC proceedings
will not be instituted. There currently is no reasonable basis to predict
the amount of future liability or loss, if any, that may arise from such
litigation or CFTC proceedings.
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, 1997.
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, INC.
(Registrant)
Date: November 12, 1997 By /s/Richard P. Anderson
Richard P. Anderson
Chairman of the Board and Chief
Executive Officer
Date: November 12, 1997 By /s/Richard R. George
Richard R. George
Vice President and Controller (Principal
Accounting Officer)
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