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[THE ANDERSONS LOGO]
PROSPECTUS
$8,000,000 8.0% TEN YEAR DEBENTURES
$12,000,000 7.4% FIVE YEAR DEBENTURES
($1,000 MINIMUM INVESTMENT)
The Andersons, Inc.
480 West Dussel Drive
Maumee, Ohio 43537
(419)891-5050
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TERMS OF DEBENTURES
- - Debentures will be issued the first of the month following our receipt
of payment. Interest begins to accrue on that day.
- - Interest will be paid to you annually on the anniversary of the date
issued.
- - We may redeem debentures at any time by paying you principal plus
accrued interest.
- - No sinking fund will be provided; these debentures are not secured.
TERMS OF SALE
- - There is no established trading market for the debentures.
- - We will sell debentures continuously until they are all sold or the
offering is terminated.
- - There are no underwriters or commissions to be paid. We are selling
directly to you.
- - We will receive all proceeds from the sale of debentures. We expect the
expenses of this offering to approximate $33,000.
You should carefully consider the Risk Factors identified that we have
listed beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is April 3, 2000
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. The SEC maintains an internet site at http://www.sec.gov
that contains reports, proxy and information statements, and other information,
regarding issuers that file documents with the SEC electronically.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the debentures.
- - Annual Report on Form 10-K for the year ended December 31, 1999;
This prospectus is part of a registration statement we filed with the
SEC.
Any person, including any beneficial owner, may request a copy of these
filings, at no cost, by contacting us as follows:
Investor Relations
Gary Smith
Vice President, Finance & Treasurer
The Andersons, Inc.
480 West Dussel Drive
Maumee, Ohio 43537
(419)891-6417
email:[email protected]
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these debentures in any state where the offer is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other
than the date on the front of this document. We undertake no obligation to
update any of the information in this Prospectus, except as provided by law.
TABLE OF CONTENTS
Page
Summary 3
Risk Factors 4
Use of Proceeds 4
Capitalization 5
Description of Debentures 5
Plan of Distribution 7
Legal Opinions 7
Experts 7
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SUMMARY
This page summarizes important points about us and about the debentures
that we are selling. It is important that you read the more detailed information
about the debentures that we are offering included later in the document and the
information about us that we are incorporating by reference.
THE ANDERSONS, INC.
We are engaged in several businesses including agriculture, processing,
manufacturing and retail. Our Agriculture Group operates grain elevators,
merchandises grain and distributes agricultural fertilizer. Our Processing Group
produces lawn fertilizer and corncob products. Our Manufacturing Group buys,
sells, leases and repairs railcars and our Retail Group operates six large home
centers and a distribution center. We also operate several other, smaller
businesses. We have been in existence since 1947 and have sold debentures under
similar terms to this offering for many years. Our principal administrative
offices are located at 480 West Dussel Drive, Maumee, Ohio 43537. Our telephone
number is (419) 893-5050.
OUR OFFER
SECURITIES $8,000,000 principal amount 8.0 % Ten-Year Debentures.
$12,000,000 principal amount 7.4 % Five-Year Debentures.
Offered directly by the Company.
$1,000 minimum principal investment.
REDEMPTION Redeemable at maturity or at the option of the Company.
USE OF PROCEEDS Payment of current maturities of long-term debt with the
remainder added to working capital and general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES
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<CAPTION>
Year ended December 31
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1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 1.91 1.97 1.50 1.67 1.58
</TABLE>
<TABLE>
<CAPTION>
SUMMARY FINANCIAL INFORMATION
(In thousands, except for per share amounts)
Year ended December 31
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1999 1998 1997
<S> <C> <C> <C>
Sales and merchandising revenues $978,936 $1,098,722 $993,746
Income before income taxes 11,959 13,006 6,255
Net income 8,379 9,752 4,074
Per share data:
Basic 1.05 1.21 0.50
Diluted 1.03 1.20 0.50
Dividends paid 0.20 0.16 0.12
As of December 31
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1999 1998 1997
Working capital $67,939 $65,898 $53,595
Total assets 376,776 360,823 368,244
Long-term debt 74,127 71,565 65,709
Shareholders' equity 84,805 82,734 72,201
</TABLE>
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RISK FACTORS
Following are factors that we believe you should consider before making
an investment decision.
SEASONALITY; WEATHER CONDITIONS
Many of our operations are dependent on weather conditions. The success
of our Agriculture Group is highly dependent on the weather in the eastern corn
belt (Ohio, Michigan, Indiana and Illinois), primarily during the spring
planting season through the summer (wheat) and fall (corn and soybean) harvests.
The Processing Group manufactures and distributes lawn fertilizer for home and
professional use and its sales are highly seasonal with the majority occurring
in the first and second quarter. Poor weather conditions during the spring
adversely affect consumer purchases of do-it-yourself lawn care products. The
Retail Group's business is also highly seasonal with a majority of sales
generated in the second and fourth quarters.
SUPPLY AND DEMAND OF COMMODITIES
Our Agriculture Group buys, sells and holds inventories of various
commodities, some of which are readily traded on commodity futures exchanges.
Our Processing Group uses some of these same commodities as base raw materials
in its lawn fertilizer. Changes in the supply and demand of these commodities
can affect the value of inventories that we hold as well as the price of raw
materials for our Processing Group. We hedge the majority of our grain inventory
positions including purchase and sale contracts, however, we are unable to hedge
100% of the price risk of each transaction due to timing, availability of hedge
contracts and third party credit risk.
ABSENCE OF PUBLIC MARKET FOR DEBENTURES; EFFECT OF INTEREST RATE CHANGES
We don't intend to list these Debentures on any national securities
exchange or on the Nasdaq national market. We don't expect any trading market to
develop. Because of this, we can't provide assurance that any market will
develop for the Debentures. If you want to sell your Debentures, we can't assure
you that a willing buyer will be found or at what price you might be able to
sell. In addition, because the interest rates on the Debentures are fixed, an
increase in general interest rates would negatively impact the value of the
Debentures and consequently any market that may develop.
SUBORDINATED OBLIGATIONS; ADDITIONAL LEVERAGE NOT RESTRICTED
Our obligations under the Indenture are subordinate and junior in right
of payment to all of our senior indebtedness. The Debentures are of equal rank
with other debenture bonds of the Company due through 2010 at interest rates
ranging from 6.3% to 8.7%. We are able to incur additional indebtedness or issue
other securities that would be senior to the Debentures under the Indenture.
CALL FEATURE OF THE DEBENTURES
You may redeem the Debentures on their maturity date for the principal
amount plus accrued interest. We hold the option to call the Debentures at any
time, paying principal plus interest at the date that they are called. Although
we don't plan to call these debentures before their maturity, we can't guarantee
that this will not happen. You, as a holder of Debentures, don't have the option
to require us to purchase your Debentures.
ABSENCE OF DEBENTURE RATING
The Debentures have not been rated by an independent rating
organization. We don't plan to seek an independent rating at this time.
USE OF PROCEEDS
The offering is not underwritten and we don't know how many of the
Debentures will sell or when they will be sold. The proceeds we receive from the
sale of the Debentures (after deducting our expenses) will be used first for the
payment of current maturities of long-term debt as scheduled. Following are our
current maturities as of December 31, 1999 (in thousands):
Debenture bonds due 2000, interest rate 8% $ 293
Notes payable, due quarterly with balance due in
2004, interest rate 7.8% 1,592
Note payable, variable rate (7.3% at December 31,
1999) payable quarterly with balance due in 2002 1,345
Industrial development revenue bond due 2004 with
annual payments, variable interest rate (5.7% at
December 31, 1999) 882
Other 47
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$4,159
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There is no time limit to this offering, and we plan to continue the
sale of the Debentures indefinitely or until they are completely sold. We are
not requiring a minimum sale of Debentures under this offering, and if the
amount sold does not cover our current maturities, we will fund those payments
either through cash provided by operations or with borrowings on our short-term
lines of credit.
Our secondary use for proceeds will be to add to working capital.
Increases in working capital will allow us to reduce our short-term borrowings.
We have sold $195,000 of the five-year and $395,000 of the ten-year
debentures since this offering was registered on June 4, 1999.
CAPITALIZATION
Following are the details (in thousands) of our consolidated
capitalization as of December 31, 1999. We haven't included the effect of the
receipt of any proceeds from this offering of Debentures, since the amount of
proceeds and when the proceeds will be received is uncertain.
Long-term debt:
Notes payable $ 38,782
Debenture bonds 24,719
Industrial development revenue bonds 10,575
Other 51
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Total long-term debt 74,127
Deferred income 4,026
Pension & postretirement benefits 3,255
Minority interest 1,235
Shareholders' equity:
Common shares 84
Additional paid-in capital 67,227
Treasury shares (7,158)
Other (302)
Retained earnings 24,954
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Total shareholders' equity 84,805
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Total capitalization $167,448
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See Notes 6, 7, and 10 to our Consolidated Financial Statements for
additional information as to the lines of credit, long-term debt and leases and
related commitments.
DESCRIPTION OF DEBENTURES
The Debentures we are offering are to be issued under an Indenture
between us and Fifth Third Bank, as Trustee (the "Trustee"). The original
Indenture agreement was dated as of October 1, 1985, and has been supplemented
by a Seventeenth Supplemental Indenture, dated as of August 14, 1997. The
Seventeenth Supplemental Indenture was created to authorize a new series of
debentures that were registered and issued from 1997 to the present. We
confirmed our liability for the interest and principal payment of these
debentures as well as compliance with the original indenture. Except for the
rate of interest and years to maturity, the terms and conditions of the
Debentures, including all debentures previously issued under the Indenture, are
identical. Following are summaries of certain provisions of the Indenture that
are not complete definitions. Please refer to the Seventeenth Supplemental
Indenture a copy of which was filed as an exhibit to our 1999 Annual Report on
Form 10-K or the original Indenture as previously filed. If particular Sections
or defined terms of the Indenture are referred to in this Prospectus, we intend
that such Sections or defined terms shall be incorporated by reference from the
original Indenture documents.
GENERAL
The Indenture does not limit the principal amount of the Debentures,
either in the aggregate or as to any series. The Debentures will be unsecured
direct obligations of the Company and any successor entities.
We may not merge or consolidate or sell substantially all of our assets
as an entirety unless the successor entity expressly assumes the payment of
principal and interest on all outstanding Debentures
Although we have no present plans, understandings or arrangements, we
may issue unsecured debt in the future. This new unsecured debt may have terms
that would be senior to the Debentures. If we become subject to any insolvency
or bankruptcy proceedings, or any other receivership, liquidation,
reorganization or similar proceedings, the holders of any such senior debt as
well as holders of any of our secured debt would be entitled to receive payment
in full before the holders of the Debentures are entitled to receive any payment
of principal or interest on the Debentures. The Indenture contains no
restriction against our issuance of additional indebtedness, including unsecured
debt senior to the Debentures, or secured debt. The Debentures are of equal rank
with other debenture bonds of the Company due through 2009 at interest rates
ranging from 6.5% to 8.7%. See Note 7 of the Notes to our Consolidated Financial
Statements for more information about our secured borrowings.
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The Indenture contains no minimum working capital, current ratio or
other such requirements, or any protective provisions in the event of a highly
leveraged transaction. No such transactions are contemplated.
We will issue Debentures on the first of the following month after we
receive payment for the Debentures. The Debentures we are offering will be due
in either five years or ten years from their Original Issue Date. This maturity
date is subject to our right to redeem the Debentures at any time by paying the
holder the principal amount plus accrued interest to the date of redemption
(Section 1101). The Debentures will bear interest at the annual rate shown on
the front cover of this Prospectus. The interest payment will be made annually
to the holder of record at the close of business on the fifteenth day of the
month preceding the Interest Payment Date and will first occur one year from the
Original Issue Date. (Section 301.) Principal and interest will be payable, and
the Debentures will be transferable, at the office of the Trustee, Fifth Third
Bank, Corporate Trust Services, Mail Drop 1090D2, 38 Fountain Square Plaza,
Cincinnati, Ohio, 45263. We may, however, make any payment of interest or
principal by check mailed to the address of the holder of record as it appears
on the Debenture Register. (Sections 301 and 307.)
The Debentures will be issued only in fully registered form without
coupons in denominations of $1,000 or any multiple of $1,000. (Section 302.) No
service charge will be made for any transfer or exchange of Debentures, but we
may require payment of an amount sufficient to cover any tax or other
governmental charge payable in connection with a transfer or exchange. (Section
305.)
We may issue Debentures in series from time to time with an aggregate
principal amount as is authorized by our Board of Directors. (Section 311.) The
Debentures do not provide for any sinking fund. At December 31, 1999, we had
outstanding Debentures with a principal amount of $24.7 million.
MODIFICATION AND WAIVER
We can't modify the Indenture without the approval of the holders of 66
2/3 % of the principal of all outstanding debentures that would be affected by
the modification. Specifically, the following modifications need support of 66
2/3% of holders:
- - A change to the stated maturity date of the principal of any Debenture;
- - A change to the stated payment date of interest;
- - A reduction of the principal amount of any Debenture;
- - A reduction of the interest paid on any Debenture;
- - A change to the place or currency of payment of principal or interest on
any Debenture;
- - A limitation on the right to institute suit for the enforcement of any
payment on or with respect to any Debenture;
- - A reduction of the above-stated percentage of holders of Debentures
necessary to modify or amend the Indenture; or
- - A modification of the foregoing requirements or reduction of the percentage
of outstanding Debentures necessary to waive any past default to less than
a majority.
Holders of a majority of the principal amount of the outstanding Debentures
may waive compliance by the Company with certain restrictions. (Sections 902 and
513)
EVENTS OF DEFAULT
The following are events of default:
- - failure to pay principal when due;
- - failure to pay any interest when due, continued for 30 days;
- - failure to perform any other indenture covenant of the Company, continued
for 60 days after written notice; and
- - certain events in bankruptcy, insolvency or reorganization.
If we don't make payments of principal or interest, the Trustee must
provide you with a notice of default. For any other event of default, the
Trustee is not required to send notice to you if it considers withholding the
notice to be in your best interest. (Section 501 and 602.)
If an event of default happens and is not cured, either the Trustee or
the holders of 25% or more of the principal amount of the Debentures may
accelerate the maturity of all outstanding Debentures.
Holders of a majority of the principal amount of the outstanding
Debentures may waive a default that would normally result in acceleration of the
Debentures, but only if all defaults have been remedied and all payments due
have been made. (Sections 502 and 513.)
You have the unconditional right to receive the payment of principal
and interest when due and to
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institute suit for the enforcement of such payment. (Section 508.)
THE TRUSTEE
Except for its duties in the case of default as described previously,
the Trustee is not required to exercise any of its rights or powers under the
Indenture at the request, order or direction of any holders, unless such holders
have offered to the Trustee reasonable indemnity. (Section 603.) Subject to such
provisions for indemnification, the holders of a majority in principal amount of
the outstanding Debentures may determine the time, method and place of
conducting proceedings for any remedy available to the Trustee, or of exercising
any trust or power conferred upon the Trustee. (Section 512.)
We are required to furnish to the Trustee an annual statement on our
performance or fulfillment of covenants, agreements or conditions in the
Indenture and the absence of events of default. (Section 1004.)
PLAN OF DISTRIBUTION
This offering of Debentures is not underwritten. We are selling the
Debentures directly to you without any intermediaries. There is no time limit to
this offering and we plan to continue the sale of the Debentures indefinitely or
until they are completely sold. We can't be sure of the amount of Debentures
that we may ultimately sell. We are selling the Debentures for our own account
and not paying commissions to anyone.
LEGAL OPINIONS
Beverly J. McBride, our Vice President, General Counsel and Secretary
issued an opinion regarding certain legal matters and matters with respect to
Ohio law. She owns 39,399 of our common shares and has the option to purchase
13,180 additional common shares. She also holds 300 restricted shares that have
not yet vested.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule incorporated by reference in our Annual Report
on Form 10-K for the year ended December 31, 1999, as set forth in their report,
which is incorporated by reference in this prospectus. Our financial statements
and schedule are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
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You should rely only on the information contained in or incorporated by
reference in this prospectus. We have authorized no one to provide you with
different information.
We are not making an offer of these securities in any location where
the offer is not permitted.
You should not assume that the information in this prospectus,
including information incorporated by reference, is accurate as of any date
other than the date on the front of the prospectus.
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SUBSCRIPTION AGREEMENT
FOR 8.0% TEN-YEAR DEBENTURES AND 7.4% FIVE-YEAR DEBENTURES OF
THE ANDERSONS, INC.
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<S> <C>
(I)(We) hereby subscribe for:
______________________________ multiple(s) of 8.0% Ten-Year Debentures
______________________________ multiple(s) of 7.4% Five-Year Debentures
of The Andersons, Inc. at face value. Each multiple is $1,000. Herewith find $_________________ in full payment
thereof.
The Debentures should be registered and issued in the following mode of ownership: (ONLY ONE MODE OF
OWNERSHIP MAY BE SELECTED)
1. ______________________________ an individual.
(Name)
2. ______________________________ and _______________________________ as joint tenants with right of survivorship and
(Name) (Name) not as tenants in common.
3. ______________________________ and _______________________________ as tenants in common.
(Name) (Name)
4. ______________________________ as custodian for _____________________________ under the Uniform Gifts to Minors
(Name) (Name) Act, as applicable.
5. ______________________________ trustee for __________________________.
(Name) (Name)
Trust Name __________________________ Date of Trust______________________________
6. ______________________________ TOD __________________________ subject to STA TOD Rules.
(Name) (Name)
</TABLE>
I acknowledge receipt of a copy of the current Prospectus of The Andersons,
Inc. with respect to the offering of the above Debentures subscribed for hereby
which will be issued, and interest will begin to accrue, as of the first day of
the month following the month in which payment of the Debentures has been
received by The Andersons, Inc. Under the penalties of perjury, I certify that
the information listed below is true, correct and complete.
Dated ________________________ Signed ___________________________________
Signed ___________________________________
Please print name, address, social security number and telephone number of
registered owner(s).
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<S> <C>
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(Name) (Name)
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(Street) (Street)
- -------------------------------------------------- --------------------------------------------------------
(City, State, Zip Code) (City, State, Zip Code)
- -------------------------------------------------- --------------------------------------------------------
(Social Security Number or Federal I.D. Number) (Social Security Number or Federal I.D. Number)
- -------------------------------------------------- --------------------------------------------------------
(Area Code)(Telephone Number) (Area Code)(Telephone Number)
Make check payable to: The Andersons, Inc. YOU ARE REQUIRED TO COMPLETE THE W-9 FORM ON THE REVERSE SIDE
Mail to: The Andersons, Inc., Assistant Treasurer, OF THIS SUBSCRIPTION.
PO Box 119, Maumee, Ohio 43537
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W-9 FORM
IMPORTANT TAX INFORMATION
We ask that you complete this substitute form W-9, sign in the space provided,
and return it, with the subscription agreement to:
The Andersons, Inc.
PO Box 119
Maumee, Ohio 43537
A) Is your name and address correct on the preceding subscription form? _____
Yes _____ No (If No, please correct it on the subscription agreement.)
B) Taxpayer Identification Number (TIN). - Enter your TIN in the space provided
below:
Employer Identification Number ___ ___ - ___ ___ ___ ___ ___ ___ ___
-OR-
Social Security Number ___ ___ ___ - ___ ___ - ___ ___ ___ ___
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<S> <C> <C>
C) Please check the appropriate box: [] Individual / Sole Proprietor [] Corporation
[] Partnership [] Other ____________
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D) Certification: Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of
a failure to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup withholding.
Certification instructions: You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return.
Signature: ____________________________Title: ____________________Date: _______
