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THE ST. LAWRENCE SEAWAY CORPORATION
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[LOGO]
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1995 ANNUAL REPORT
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<PAGE>
CHAIRMAN'S LETTER
Dear Stockholder:
Two years ago when our group acquired a significant ownership position in St.
Lawrence Seaway, we committed to continue the search for new businesses for the
Company. Though I wish I could report that our search was successful, the
opportunities were few and the Board of Directors determined not to compromise
our goal of quality for the sake of expediency.
Throughout the year, we continued our efforts to obtain regulatory approval for
a proposed offering of subordinated debentures of the Company to increase funds
available for any acquisition. In part based upon uncertainty in the
distribution and sale of such debentures, Management determined to terminate
such efforts and our requests for regulatory approval were withdrawn without
prejudice to any future offerings. We will, however, continue to explore
alternative ways of maximizing the use of Company assets and shareholder value.
In the coming months, we will look to a broad range of business and investment
opportunities. As a public company with no debt, approximately one million
dollars in cash, the balance of our assets is unmortgaged real estate, and a
management team with ten years experience in finance and investing, we are in a
strong position to maximize opportunities.
You will see from the enclosed financial statements that the Company's
operations in fiscal 1995 were in line with its past performance. Consistent
with past practice, the Company's assets have been kept in liquid interest
bearing instruments, pending use in other businesses.
On a personal note, on behalf of all the other directors of the Company, I want
to thank Jack Brown again this year for his help and diligence, as both a
director and counsel, in ensuring the smooth management of day-to-day operations
of the Company. More sadly, I note the recent passing of Albert Friedman, who
served as a Director of this Company from 1986 to 1993, and extend condolences
to his family and friends.
Finally, I want to thank all of you for your patience and confidence as we
continue the effort to locate the right investment and choose the right
direction for the Company.
Very truly yours,
/s/ Joel M. Greenblatt
Joel M. Greenblatt
Chairman of the Board
1
<PAGE>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ACT OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 1995
OR
_ 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 0-2040
THE ST. LAWRENCE SEAWAY CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1038443
(State or other jurisdiction (I.R.S. Employer Identification
of corporation or organization) Number)
320 N. Meridian St., Suite 818 46204
Indianapolis, Indiana (Zip Code)
(Address of principal executive offices)
(317) 639-5292
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(g) of the Act:
Name of Exchange on
Title of each class Which Registered
------------------- ----------------
Common Stock, par value $1.00 per share None
Securities registered pursuant to Section 12(b) of the Act: None
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [x] No [ ]
The aggregate market value of Common Stock held by non-affiliates of the
registrant as of May 25, 1995 was approximately $549,703.
The number of shares of Common Stock of the registrant outstanding as of June
20, 1995 was 393,735.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be used in connection with the registrant's
1995 Annual Meeting of Shareholders are incorporated by reference into Part III
of this report.
================================================================================
2
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THE ST. LAWRENCE SEAWAY CORPORATION
Part I
ITEM 1 - BUSINESS
General
The St. Lawrence Seaway Corporation (the "Company" or "St. Lawrence") is an
Indiana corporation organized on March 31, 1959, which, since such date has
principally engaged in farming, timber harvesting and other traditional
agricultural activities. During the last five years, the Company's only other
operating activity has been the sale of certain farming acreage, and investment
of its remaining liquid assets, primarily in interest bearing cash equivalent
securities.
The Company is engaged in a search for other business opportunities which may
or may not be related to its present agricultural, cash management and other
investment activities.
(A) Agricultural Activities - At March 31, 1995, St. Lawrence was the owner
of one parcel of agricultural real estate in Northern Indiana comprising
approximately 195 acres. This real estate, known as Schleman Farm, is primarily
devoted to farming activities under the cash lease method of operation. The cash
lease method of operation involves the leasing of the property to farmers who
are directly responsible for the operation of the Farm and who pay St. Lawrence
a rental fee covering a ten-month period for the use of the property for farming
and related activities. St. Lawrence generally receives these rental payments at
one time or in semi-annual installments. Real estate taxes and other minor
expenses, such as insurance, are the responsibility of St. Lawrence in some
instances.
St. Lawrence has engaged the services of a farm management company, Halderman
Farm Management Service, Inc., of Wabash, Indiana ("Halderman"). Under the
current contract, Halderman manages, and is responsible for the negotiation of
all leases, tenant contracts, and general operations and programs of the
Schleman Farm. Halderman is compensated on a quarterly per-acre fee basis. It
has managed the current and former farm properties of the Company for more than
ten years.
(B) Cash Management and Other Investments - During the fiscal year ended
March 31, 1995, the Company continuedits practice of maintaining its other
assets in relatively liquid interest/dividend bearing money market investments.
The Company is engaged in a search for other business opportunities and,
accordingly, such funds may be used for an acquisition or for a partial payment
of an acquisition or for the commencement of a new business.
Financing Arrangements
The Company's real estate is unencumbered. Furthermore, the Company currently
has no debt for borrowed funds or similar obligations or contingencies. The
Company may incur debt of an undetermined amount to effect an acquisition or
commence a new business. St. Lawrence does not have a formal arrangement with
any bank or financial institution with respect to the availability of financing
in the future.
Recent Developments
On March 21, 1994, the Company filed with the Securities and Exchange
Commission a Registration Statement on Form S-1 under the Securities Act of
1933, as amended, in connection with a proposed offering and sale of $10 million
or more of principal amount of unsecured, senior debentures due 2004 of the
Company. Based upon uncertainty in the Company's ability to offer or achieve
broad distribution and sale of such debentures, the proposed offering and the
Registration Statement have been terminated by the Company.
Licenses and Trademarks, etc.
The business of St. Lawrence is not currently dependent upon any patent,
trademark, franchise or license.
Governmental Regulation
St. Lawrence believes it is in compliance with all federal,
state and local regulations including all applicable environmental matters.
Seasonality
Although farm operations are generally conducted during the summer months,
St. Lawrence receives the majority of its rental and other payments based upon a
definitive schedule and therefore seasonal or weather factors generally do not
have an effect on the revenues of the Company.
Employees
The Company has only one full time salaried employee at this time. During
fiscal years ended March 31, 1992 and 1993 and part of fiscal year ended March
31, 1994, Bernard Zimmerman & Co., Inc., a financial and management consulting
firm of which Bernard Zimmerman, a former Chairman of the Board of the Company
is the Senior Vice-President, received a monthly fee of $2,000 for financial
consulting services pursuant to a consulting agreement which expired on
September 30, 1993 and was not renewed.
Mr. Jack C. Brown, Secretary of St. Lawrence receives a monthly fee of $500
for administrative services that he renders to the Company. Such fee is paid
pursuant to a month to month arrangement.
3
<PAGE>
ITEM 2 - PROPERTIES
At March 31, 1995, the Company owned one parcel of agricultural real estate
in Porter County, Indiana comprising approximately 195 acres. Only a portion of
the property, known as Schleman Farm, is suitable for farming purposes. The
balance is wooded and from time-to-time is suitable to some extent for timber
harvesting operations. In the past, St. Lawrence has harvested excess timber
from its various properties. Such timber harvesting has occurred at intermittent
times and there can be no assurances that there will be timber activities at
Schleman Farm in the future.
ITEM 3 - LEGAL PROCEEDINGS
St. Lawrence is not a party to nor is any of its property the subject of any
material legal proceedings.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Part II
ITEM 5 - MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market information
There is no current, active trading market for shares of the Company's common
stock and such common stock is not currently listed for trading on any exchange.
The average bid price for the Company's common stock for fiscal calendar quarter
ended March 31, 1995, as reported by the National Quotation Bureau, Inc. from
the pink sheets and the OTC Bulletin Board was $1.625.
Dividends
It is the present policy of the Board of Directors of St. Lawrence to retain
earnings, if any, to finance the future expansion of the Company. No cash
dividends are expected to be paid in the future.
Number of Stockholders
As of June 20, 1995, there were approximately 1,405 holders of record of the
Company's Common Stock.
The following table sets forth selected financial information with respect to
the Company for the five fiscal years ended March 31, 1995. The information set
forth in the following table should be read in connection with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and in
conjunction with the Company's audited Financial Statements and Notes thereto
appearing elsewhere in this Report.
<TABLE>
<CAPTION>
ITEM 6 - SELECTED FINANCIAL DATA Years Ended March 31,
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1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
Revenues:
Farm Rentals.............................................. $ 9,804 $ 21,913 $ 34,725 $ 34,665 $ 32,442
Interest & Dividends...................................... 55,311 34,855 33,085 50,913 73,399
Gain on Sale of Farm Properties, net...................... 0 80,779 80,183 0 7,669
Other..................................................... 0 48 0 216 0
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Total .................................................... 65,115 137,595 147,993 85,794 113,510
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Operating Costs & Expenses:
Farm Related.............................................. 1,634 2,155 4,327 4,719 4,867
General and Administrative................................ 154,053 111,306 105,365 103,649 99,964
Other..................................................... 588 0 0 1,558 4,675
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Total..................................................... 156,275 113,461 109,692 109,926 109,506
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Income (Loss) Before Income Taxes......................... (91,160) 24,134 38,301 (24,132) 4,004
Income Tax Expense (Benefit).............................. (5,429) 8,048 10,289 (2,751) 2,153
------------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)......................................... $ (85,731) $ 16,086 $ 28,012 $ (21,381) $ 1,851
====================================================================================================================================
Income (Loss) per Common Share............................ $(0.22) $0.04 $0.07 $(0.05) $0.00
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Number of
Common Shares Outstanding............................... 393,735 395,005 406,740 409,036 409,036
====================================================================================================================================
Balance Sheet Data:
Total Assets.............................................. 1,414,825 1,507,513 1,499,482 1,492,007 1,531,524
Total Liabilities......................................... 23,859 30,817 35,835 35,856 53,992
Shareholders' Equity...................................... 1,390,966 1,476,696 1,463,647 1,456,151 1,477,532
====================================================================================================================================
</TABLE>
4
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Results of Operations
Year Ended March 31, 1995, as compared to Year Ended March 31, 1994.
Interest and dividend income increased to $55,311 in the year ended March 31,
1995, from $34,855 in the previous year. The increase is a result of higher
interest rates received in cash invested in the year ended March 31, 1995.
Farm rental revenue decreased in the year ended March 31, 1995 because fiscal
year 1995 was the first year that there were no carry-over rentals from the sale
of previously owned farm properties and because the new lease for the Schleman
Farm contains a $5/acre rent concession given in consideration of the
uncertainty of crop yields due to abnormally inclement weather.
A net increase of approximately $54,700 in general and administrative
expenses occurred in the year ended March 31, 1995 principally due to deferred
legal and other expenses currently recognized in the Company's Statement of
Income as of March 31, 1995. The Company's other actual expenses were comparable
in the year ended March 31, 1995 with prior years.
As a result of the above items, the Company had a loss of $91,160 before
taxes in the year ended March 31, 1995, as compared to a profit of $24,134
before taxes in the year ended March 31, 1994.
The income tax benefit in the current year was $5,429 as a result of the loss
realized in the year ended March 31, 1995. An income tax of $8,048 was paid in
the year ended March 31, 1994 as a result of profit realized in that year.
Year Ended March 31, 1994, as compared to Year Ended March 31, 1993.
Interest and dividend income increased to $34,855 in the year ended March 31,
1994, from $33,085 in the previous year. The increase is a result of slightly
higher interest rates received on cash invested in the year ended March 31,
1994.
Farm rental revenue and farm related costs and expenses decreased in the year
ended March 31, 1994, due to the sale on August 2, 1993, of the Company's
Airport Farm property of approximately 205 acres. The Company continued to
receive farm rental revenues from the Airport Farm through December 31, 1993.
A net increase of approximately $6,000 in general and administrative expenses
occurred in the year ended March 31, 1994, due to increased professional fees
(including legal and accounting costs), salaries and annual meeting expenses of
an aggregate of approximately $20,000 which were offset by decreases in certain
other expenses.
In the year ended March 31, 1994, the Company realized, after all costs and
expenses, a gain on the sale of farm property of $80,779 before applicable
income taxes. A sale by the Company of comparable farm property occurred in the
year ended March 31, 1993, which provided a gain of $80,301 before applicable
income taxes.
As a result of the above items, the Company achieved a profit of $24,134
before taxes in the year ended March 31, 1994, as compared to a profit of
$38,301 before taxes in the year ended March 31, 1993.
The income tax provision in the current year was $8,048 as a result of the
profit realized in the year ended March 31, 1994. An income tax of $10,289 was
paid in the year ended March 31, 1993, as a result of profit realized in that
year.
Year Ended March 31, 1993, as compared to Year Ended March 31, 1992.
Interest and dividend income decreased to $33,085 in the year ended March 31,
1993, from $50,913 in the previous year. This decrease is a direct result of the
lesser rates of interest received on cash invested in the year ended March 31,
1993, as compared to the year ended March 31, 1992.
Farm rental revenues and farm related costs and expenses were comparable in
the years ended March 31, 1993 and 1992.
General and administrative expenses were comparable in the years ended March
31, 1993 and 1992.
In the year ended March 31, 1993, the Company realized, after all costs and
expenses, a gain on the sale of farm property of $80,301 before applicable
income taxes. No such sales of farm properties occurred in the year ended March
31, 1992.
As a result of the above items the Company incurred a profit of $38,301
before taxes in the year ended March 31, 1993, as compared to a loss of $24,132
before tax benefits in the year ended March 31, 1992.
The income tax provision in the current year was $10,289 as a result of the
profit realized in the year ended March 31, 1993. An income tax benefit was
reported in the year ended March 31, 1992, due to a loss from operations.
Liquidity and Capital Resources
At March 31, 1995, the Company had net working capital of $1,266,761, the
major portion of which was in cash and money market funds. St. Lawrence has
sufficient capital resources to continue its current business.
5
<PAGE>
The Company may require the use of its assets for a purchase or partial
payment for an acquisition or in connection with another business opportunity.
In addition, St. Lawrence may incur debt of an undetermined amount to effect an
acquisition or in connection with another business opportunity. It may also
issue its securities in connection with an acquisition or other business
opportunity.
St. Lawrence does not have a formal arrangement with any bank or financial
institution with respect to the availability of financing in the future.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ANNEXED HERETO STARTING ON
PAGE 8.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
Part III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is hereby incorporated by reference
to a definitive proxy statement involving the election of directors which is
expected to be filed by the Company within 120 days after the close of its
fiscal year.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this Item 11 is hereby incorporated by reference
to a definitive proxy statement involving the election of directors which is
expected to be filed by the Company within 120 days after the close of its
fiscal year.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is hereby incorporated by reference
to a definitive proxy statement involving the election of directors which is
expected to be filed by the Company within 120 days after the close of its
fiscal year.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is hereby incorporated by reference
to a definitive proxy statement involving the election of directors which is
expected to be filed by the Company within 120 days after the close of its
fiscal year.
Part IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
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Page No.
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(a) Financial Statements:
Independent Auditor's Report....................... 12
Balance Sheets..................................... 8
Statements of Income .............................. 9
Statement of Shareholders' Equity.................. 9
Statements of Cash Flows........................... 10
Notes to Financial Statements...................... 11 to 12
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Schedules:
X - Supplementary Income Statement Information....... 12
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Schedules other than those listed above are omitted for the reason that they
are not required or not appropriate or the required information is shown in the
financial statements or notes thereto.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by St. Lawrence during the quarter ended
March 31, 1995.
(c) Exhibits
(3) (i) Articles of Incorporation of The St. Lawrence Seaway Corporation, as
amended. (Incorporated by reference to Exhibit (C) (3) (i) to the Annual
Report of The St. Lawrence Seaway Corporation for the fiscal year ended
March 31, 1991.)
(ii) By-Laws of The St. Lawrence Seaway Corporation (Incorporated by
reference to Exhibit (C) (3) (ii) to the Annual Report of The St.
Lawrence Seaway Corporation on Form 10-K for the fiscal year ended March
31, 1987.)
(10)(i) Stock Option Agreements, each dated September 21, 1987, between The St.
Lawrence Seaway Corporation and each of Jack C. Brown, Philip I. Berman,
and Albert Friedman. (Incorporated by reference to Exhibit (C) (10) (i)
to the Annual Report of The St. Lawrence Seaway Corporation on Form 10K
for the fiscal year ended March 31, 1988.)
(ii) Agreement, dated July 31, 1986 by and between The St. Lawrence Seaway
Corporation and Bernard Zimmerman & Company, Inc. (Incorporated by
reference to Exhibit 2 to the 10-Q of The St. Lawrence Seaway
Corporation for the 6 months ended June 30, 1986.)
(iii) St. Clair Farm Property Option and Sale Agreement, dated March 31, 1992.
(Incorporated by reference to the Exhibit (C) (10) (iii) to the Annual
Report of The St. Lawrence Seaway Corporation on Form 10K for the fiscal
year ended March 31, 1992.)
6
<PAGE>
(iv) Airport Farm Property Option and Sale Agreement, dated March 25, 1993.
(v) Amendment No. I to Stock Option Agreement between The St. Lawrence
Seaway Corporation and Jack C. Brown dated August 28, 1992.
(vi) Amendment No. 1 to Stock Option Agreement between The St. Lawrence
Seaway Corporation and Albert Friedman dated August 28, 1992.
(vii) Amendment No. I to the Warrant issued to Bernard Zimmerman & Co. Inc.
dated August 28, 1992.
(viii) Stock Option Agreement, dated August 28, 1992 between The St. Lawrence
Seaway Corporation and Wayne J. Zimmerman.
(ix) Stock Sale Agreement, dated June 24, 1993 between Bernard Zimmerman &
Co., Inc. and Industrial Development Partners. (Incorporated by
reference to Exhibit 7(a) to Current Report on Form 8-K dated September
30, 1993).
(x) Assignment and Assumption Agreement dated as of July 30, 1993.
(Incorporated by reference to Exhibit 7(b) to Current Report on Form 8-K
dated September 30, 1993.)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons (who included a majority of the
Board of Directors) on behalf of the registrant and in the capacities indicated
on June 26, 1995.
Signatures Title Date
/s/ Daniel L. Nir President, Treasurer June 26, 1995
----------------- and Director
Daniel L. Nir
(Principal Financial
Officer)
/s/ Joel M. Greenblatt Chairman of the Board, June 26, 1995
---------------------- and Director
Joel M. Greenblatt
(Principal Executive
Officer)
/s/ Jack C. Brown Secretary and Director June 26, 1995
-----------------
Jack C. Brown
/s/ Edward B. Grier III Director June 26, 1995
-----------------------
Edward B. Grier III
7
<PAGE>
<TABLE>
<CAPTION>
THE ST. LAWRENCE SEAWAY CORPORATION
BALANCE SHEETS Years Ended March 31,
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1995 1994
============================================================================================================
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................. $ 1,260,870 $1,310,040
Interest receivable.................................................... 2,633 1,366
Fee receivables........................................................ 16,650 0
Prepaid items and refunds.............................................. 8,453 5,180
Deferred income taxes.................................................. 2,014 2,014
------------------------------------------------------------------------------------------------------------
Total Current Assets................................................... 1,318,600 1,318,600
Land .................................................................... 118,913 118,913
Property and equipment.................................................... 5,292 0
Deferred items - Note 7................................................... 0 70,000
------------------------------------------------------------------------------------------------------------
Total Assets.............................................................. 1,507,513 $1,507,513
============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payroll taxes withheld and accrued..................................... $ 721 $ 696
Accounts payable & other............................................... 14,930 21,228
Deferred income........................................................ 8,208 8,892
------------------------------------------------------------------------------------------------------------
Total Current Liabilities................................................. 23,859 30,816
Shareholders' equity:
Common stock, par value $1, 4,000,000 authorized, 393,735
issued and outstanding at the respective dates...................... 393,735 393,735
Additional paid-in capital............................................. 281,252 281,252
Retained earnings...................................................... 715,979 801,710
------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity................................................ 1,390,966 1,476,697
------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity................................ $ 1,414,825 $1,507,513
============================================================================================================
</TABLE>
See notes to the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME Years Ended March 31,
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1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C>
Revenues:
Farm rentals................................................................... $ 9,804 $ 21,913 $ 34,725
Gain on sale of Farm property.................................................. 0 80,779 80,183
Interest and dividends......................................................... 55,311 34,855 33,085
Other.......................................................................... 0 48 0
------------------------------------------------------------------------------------------------------------------------------------
Total revenues.................................................................... 65,115 137,595 147,993
====================================================================================================================================
Operating costs and expenses:
Farm related operating costs................................................... 1,634 2,155 4,327
Depreciation and Amortization.................................................. 558 0 0
Consulting Fees - Note 4....................................................... 6,000 18,000 30,000
General and administrative..................................................... 148,053 93,306 75,365
------------------------------------------------------------------------------------------------------------------------------------
Total operating expenses.......................................................... 156,275 113,461 109,692
------------------------------------------------------------------------------------------------------------------------------------
Income (Loss), before tax provision............................................... (91,160) 24,134 38,301
Provision or income taxes/(tax benefit)........................................ (5,429) 8,048 10,289
------------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)................................................................. (85,731) $ 16,086 $ 28,012
====================================================================================================================================
Per share data:
Weighted average number of common shares outstanding........................... 393,735 395,005 406,740
------------------------------------------------------------------------------------------------------------------------------------
Primary earnings per share:
Income (Loss) per share:....................................................... $ (0.22) $ 0.04 $ 0.07
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENT OF SHAREHOLDERS' EQUITY
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Common stock
------------------------ Additional
Number of Par Paid-in Retained
Shares Value $1 Capital Earnings
====================================================================================================================================
<S> <C> <C> <C> <C>
Balance at March 31, 1992........................................... 409,036 $ 409,036 $ 296,541 $ 750,574
Other............................................................ 7,038
Stock Purchase................................................... (13,777) (13,777) (13,777)
Net Income for 1993.............................................. 28,012
------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1993........................................... 395,259 $ 395,259 $ 282,764 $ 785,624
====================================================================================================================================
Stock Purchase................................................... (1,524) (1,524) (1,512)
Net Income for 1994.............................................. 16,086
------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1994........................................... 393,735 $ 393,735 $ 281,252 $ 801,710
Net Loss for 1995................................................ (85,731)
------------------------------------------------------------------------------------------------------------------------------------
393,735 $ 393,735 $ 281,252 $ 715,979
====================================================================================================================================
</TABLE>
See notes to the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF CASH FLOWS Years Ended March 31,
------------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss)................................................................. $ (85,731) $ 16,086 $ 28,012
Adjustments to reconcile net income to
Net cash from operating activities:
Amortization of deferred items.............................................. 558 0 0
(Gain) Loss on sale of farm properties...................................... 0 (80,779) (80,183)
(Increase) in deferred items................................................ 70,000 (70,000) 0
(Increase) Decrease in current assets:
Interest receivable............................................................ (1,267) (366) 205
Farm related receivables....................................................... (16,650) 0 0
Prepaid items.................................................................. (3,273) (4,921) 1,105
Deferred income tax............................................................ 0 2,266 3,645
(Decrease) Increase in current liabilities:
Payroll tax & other............................................................ 25 167 623
Accounts payable............................................................... (6,982) (4,212) (1,618)
Income taxes payable........................................................... 0 (974) 974
------------------------------------------------------------------------------------------------------------------------------------
Net cash from operating activities.......................................... (43,290) (142,733) (47,237)
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Proceeds from sale of farm properties.......................................... 0 291,940 231,503
Purchase of equipment.......................................................... (5,880) 0 0
------------------------------------------------------------------------------------------------------------------------------------
Net cash from investing activities............................................. (5,880) 291,940 231,503
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from tax refunds...................................................... 0 0 7,038
Stock purchase................................................................. 0 (3,036) (27,554)
------------------------------------------------------------------------------------------------------------------------------------
Net cash from financing activities.......................................... 0 (3,036) (20,516)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents......................................... (49,170) 146,171 163,750
Cash and cash equivalents, beginning.............................................. 1,310,040 1,163,869 1,000,119
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, ending................................................. $ 1,260,870 $1,310,040 $1,163,869
====================================================================================================================================
Supplemental disclosures of cash flow information:
Cash paid for income taxes..................................................... $ 500 $ 11,463 $ 9,188
Cash paid for interest expense................................................. 0 0 0
</TABLE>
See notes to the financial statements.
10
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies observed in
the preparation of the financial statements for the St. Lawrence Seaway
Corporation (the "Company").
Basis of Presentation:
The Company utilizes the accrual method of accounting in accordance with
generally accepted accounting principles for financial statement purposes. Under
this method, revenue is recognized when earned and expenses are recognized when
incurred.
Land:
Land was purchased originally in 1961 and is recorded at the original
historical cost.
Earnings Per Share:
Primary earnings per share and fully diluted earnings per share are computed,
when applicable, using the weighted average number of shares of common stock and
common stock equivalents outstanding under the modified treasury stock method.
Common stock equivalents include all common stock options and warrants
outstanding during each of the periods presented.
Income Taxes:
The provision for income taxes charged against earnings relates to all items
of revenue and expense recognized for financial accounting purposes during each
of the years presented. The actual current tax liability may be different than
the charge against earnings due to the effect of cash rents received in advance,
resulting in deferred income tax benefits. These deferred tax benefits or
liabilities are temporary in nature and will offset upon the non-renewal of all
land rental contracts.
Reclassification:
The 1994 and 1993 financial statements have been reclassified, where
necessary, to conform to the presentation of the 1995 financial statements.
Cash Flows:
For purposes of reporting cash flows, cash and cash equivalents include all
cash in banks and cash accumulation funds.
Depreciation:
Property and equipment consisting of small office equipment, is stated at
cost. Depreciation is computed using the straight-line method over a five-year
estimated useful life. Expenditures for maintenance and repairs that do not
extend useful lives are charged to income as incurred.
NOTE 2. SHAREHOLDERS' EQUITY
The Company has a common stock warrant outstanding for the purchase of
100,000 shares of common stock at $3.00 per share. The warrant was originally
issued in connection with the sale by the Company of 50,000 shares of common
stock during 1986 to Bernard Zimmerman & Co. Inc. The warrant and common stock
were subsequently sold and transferred to The Windward Group, L.L.C. (formerly
Industrial Development Partners), pursuant to an agreement dated September 30,
1993. The warrant expires on September 24, 1997.
The Company has a stock option plan originally adopted by the shareholders on
June 12, 1978, and revised and approved by the shareholders on June 13, 1983,
September 21, 1987, and August 28, 1992. The revised plan provides that 15,000
shares of the Company's stock be set aside at an exercise price of $3.00 per
share for Mr. Jack C. Brown, a Director of the Company. Mr. Brown's option is
currently exercisable with respect to all 15,000 shares and, if not exercised,
will expire on September 21, 1997.
The Company has 4,000,000 authorized $1 par value common shares. As of March
31, 1995 and 1994, there were 393,735 common shares issued and outstanding.
NOTE 3. STOCK REPURCHASE
On February 4, 1994, the Company purchased 1,524 of its common shares in the
open market at a price of $1.99 per common share. The shares, as acquired, were
immediately cancelled and returned to the status of authorized and unissued.
On February 8, 1993, the Company purchased 13,777 shares of its common stock
from a former director of the Company at a price of $2.00 per common share. The
shares, as acquired, were immediately cancelled and returned to the status of
authorized and unissued.
NOTE 4. RELATED PARTIES
During the fiscal years ending March 31, 1995, 1994 and 1993, the Company
paid to Jack C. Brown, Secretary and a Director, an annual administrative fee of
$6,000, which was paid monthly in the amount of $500. During fiscal years 1994
and 1993, the Company paid The Zimmerman Group, Inc., of which the former
President of the Company is Senior Vice President and a former director is the
President, a monthly fee of $2,000 for financial consulting services including
the evaluation of acquisition and merger opportunities. The consulting
arrangement with The Zimmerman Group expired on September 30, 1993 and was not
renewed.
NOTE 5. INCOME TAXES
Effective April 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. The cumulative effect
of the change in accounting principle is included in determining net income as
of March 31, 1993. The total effect of the adoption of SFAS No. 109 was
immaterial to the financial statements. Financial statements for prior years
have not been restated.
The Company has loss carryforwards totalling $50,700 that may be offset
against future taxable income. If not used, the carryforwards will expire in
2010.
Provision for federal and state taxes on income consisted of:
Years ended March 31,
--------------------------------------------------------------------------------
1995 1994 1993
================================================================================
Currently due:
Federal........................ (6,175) $1,132 5,043
State.......................... 746 4,650 5,374
--------------------------------------------------------------------------------
(5,429) $5,782 10,417
Deferred:......................... -- $1,724 (97)
Federal........................ -- 542 (31)
--------------------------------------------------------------------------------
State.......................... -- 2,266 (128)
--------------------------------------------------------------------------------
Provision for income taxes........ (5,429) $8,048 10,289
================================================================================
11
<PAGE>
NOTE 6. SEC REGISTRATION STATEMENT
On March 21, 1994, the Company filed with the Securities and Exchange
Commission a registration statement on Form S-1, under the Securities Act of
1933, as amended. The filing was in connection with a proposed offering and sale
of $10 million or more of Senior Debentures due 2004 of the Company. If issued,
the Senior Debentures would have included Warrants exercisable for the purchase
of additional debentures. On May 18, 1995, the registration statement was
abandoned and withdrawn by the Company and is no longer in effect.
NOTE 7. DEFERRED ITEMS
Certain legal and other expenses in the amount of $70,000 as of March 31,
1994 were incurred in connection with the filing of the above noted registration
statement. Upon the abandonment and withdrawal of the registration statement,
which occurred during the current period, total related costs of approximately
$53,000 were recognized as a current expense of the Company.
SCHEDULE X
THE ST. LAWRENCE SEAWAY CORPORATION SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years Ended March 31, 1995, 1994 and 1993
--------------------------------------------------------------------------------
COLUMN A COLUMN B
--------------------------------------------------------------------------------
ITEM CHARGED TO COSTS
AND EXPENSES
--------------------------------------------------------------------------------
Years Ended March 31,
--------------------------------------------------------------------------------
1995 1994 1993
================================================================================
Maintenance and repairs.......... $ 903 $1,078 $ 979
Depreciation and amortization of
intangible assets, preoperating
costs and similar deferral..... $ 558 $ 0 $ 0
Taxes, other than payroll
and income taxes............... $2,007 $ 714 $3,620
Royalties........................ NONE NONE NONE
Advertising Costs................ NONE NONE NONE
================================================================================
REPORT OF INDEPENDENT AUDITORS
SALLEE & COMPANY
--------------------------------------------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS MEMBER
AICPA
TAX DIVISION
DIVISION OF FIRMS:
SEC PRACTICE SECTION
INDIANA CPA SOCIETY
Board of Directors
The St. Lawrence Seaway Corporation
Indianapolis, Indiana
We have audited the accompanying balance sheets of The St. Lawrence Seaway
Corporation as of March 31, 1995 and 1994, and the related statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended March 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statments. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The St. Lawrence Seaway
Corporation as of March 31, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended March 31, 1995,
in conformity with generally accepted accounting principles.
/s/ SALLEE & COMPANY
May 16, 1995
Bedford, Indiana
1509 J STREET, P.O. BOX 1148, BEDFORD, INDIANA 47421,
812-275-4444 (FAX) 812-275-3300
12
<PAGE>
CORPORATE DIRECTORY
Board of Directors
Joel M. Greenblatt
Chairman of the Board
St. Lawrence Seaway Corporation
Managing Partner
Gotham Capital
Jericho, NY
Jack C. Brown
Secretary
St. Lawrence Seaway Corporation
Attorney at Law
Indianapolis, IN
Daniel L. Nir
President and Treasurer
St. Lawrence Seaway Corporation
Managing Partner
Gotham Capital
Jericho, NY
Edward B. Grier III
Partner
Gotham Capital
Jericho, NY
Officers
Joel M. Greenblatt
Chairman of the Board
Daniel L. Nir
President and Treasurer
Jack C. Brown
Secretary
Counsel
Lane Altman & Owens
Boston, Massachusetts
Auditors
Sallee & Company
Bedford, Indiana
Transfer Agent and Registrar
Continental Stock Transfer & Trust Co.
York City, New York
Executive Office
320 N. Meridian Street
Suite 818
Indianapolis, Indiana 46204
Telephone (317) 639-5292
Form 10-K Availability
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1995 as filed with the Securities and Exchange Commission is available
to stockholders upon written request, without charge, from the Secretary of the
Company.
Designed by Curran & Connors, Inc.
<PAGE>
------------------------------------------
----------------------------------------------------
THE ST. LAWRENCE SEAWAY CORPORATION
----------------------------------------------------
320 N. Meridian Street, Suite 818
Indianapolis, Indiana 46204
(317) 639-5292
