SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File No.
September 30, 1996 0-2040
- ------------------ -------------------
THE ST. LAWRENCE SEAWAY CORPORATION
-----------------------------------
(Exact Name of Registrant as Specified in its Charter)
INDIANA 35-1038443
------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
818 Chamber of Commerce Building
320 N. Meridian Street
Indianapolis, Indiana 46204
- --------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (317) 639-5292
------------------------
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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at September 30, 1996
----- ---------------------------------
Common Stock, $1.00 par value 393,735
THE ST. LAWRENCE SEAWAY CORPORATION
FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION PAGE
- ------- --------------------- ----
Balance Sheets - September 30 ,1996 (UNAUDITED) and March 31, 1996 ........ 3
Statements of Income - Three months ended September 30, 1996 and 1995
(UNAUDITED)............................................................. 4
Statements of Income - Six months ended September 30, 1996 and 1995
(UNAUDITED)............................................................. 5
Statements of Cash Flows - Six months ended September 30, 1996 and
1995 (UNAUDITED)........................................................ 6
Notes to Financial Statements - September 30 ,1996......................... 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 8-9
PART II. OTHER INFORMATION................................................10-11
Signatures................................................................. 12
Page 2
THE ST. LAWRENCE SEAWAY CORPORATION
BALANCE SHEETS
SEPTEMBER 30, 1996 (UNAUDITED) AND MARCH 31, 1996
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1996 1996
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,211,668 1,232,478
Interest and other receivables 1,594 11,104
Prepaid items 1,034 549
Deferred income taxes 3,499 2,014
------------- ------------
Total Current Assets 1,217,795 1,246,145
Land 118,913 118,913
Property and equipment 5,032 5,816
------------- ------------
Total Assets $ 1,341,740 1,370,874
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payroll taxes withheld and accrued $ 656 454
Accounts payable & other 40,738 53,432
Deferred Income 2,736 8,208
Federal & state taxes payable 411 0
------------- -------------
Total Current Liabilities 44,541 62,094
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 622,212 633,793
------------- -------------
Total Shareholders' Equity 1,297,199 1,308,780
------------- -------------
Total Liabilities and Shareholders' Equity $ 1,341,740 1,370,874
============= =============
</TABLE>
Page 3
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
---- ----
<S> <C> <C>
Revenues:
Farm rentals 2,736 2,736
Interest and dividends 14,863 16,522
----------- ------------
Total revenues 17,599 19,258
Operating costs and expenses:
Farm related operating costs 897 483
Depreciation 392 359
General and administrative 19,594 30,161
------------ -------------
Total operating expenses 20,883 31,003
Income (Loss) before tax provision (3,284) (11,745)
Provision for income taxes/
(tax benefit) (392) (1,173)
------------ -------------
Net income (loss) (2,892) (10,572)
============ =============
Per share data:
Weighted average number
of common shares outstanding 393,735 393,735
------------ -------------
Primary earnings per share:
Income (Loss) per share ($0.01) ($0.03)
============ =============
</TABLE>
Page 4
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
---- ----
<S> <C> <C>
Revenues:
Farm rentals 5,472 5,472
Interest and dividends 26,487 33,709
--------
Total revenues 31,959 39,181
Operating costs and expenses:
Farm related operating costs 1,265 852
Depreciation 784 653
General and administrative 42,472 51,369
-------- --------
Total operating expenses 44,521 52,874
Income (Loss) before tax provision (12,562) (13,693)
Provision for income taxes/
(tax benefit) (981) (1,703)
-------- --------
Net income (loss) (11,581) (11,990)
======== ========
Per share data:
Weighted average number
of common shares outstanding 393,735 393,735
-------- --------
Primary earnings per share:
Income (Loss) per share ($0.03) ($0.03)
======== ========
</TABLE>
Page 5
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (11,581) (11,990)
Adjustments to reconcile net income to
net cash from operating activities
Depreciation 784 653
(Increase) Decrease in current assets:
Interest receivable 0 1,195
Other receivables 9,510 16,650
Prepaid items (485) (384)
Deferred income tax (1,485) (2,116)
(Decrease) Increase in current liabilities:
Payroll tax & other 202 (268)
Accounts payable (18,166) (8,080)
Income taxes payable 411 413
----------- -----------
Net cash from operating activities (20,810) (3,927)
Cash flows from investing activities:
Purchase of equipment 0 (1,960)
----------- -----------
Net cash from investing activities 0 (1,960)
Cash flows from financing activities:
Net cash from financing activities 0 0
Net decrease in cash and cash equivalents (20,810) (5,887)
Cash and cash equivalents, beginning 1,232,478 1,260,870
----------- -----------
Cash and cash equivalents, ending $1,211,668 1,254,983
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid for income taxes 122 0
Cash paid for interest expense 0 0
</TABLE>
Page 6
THE ST. LAWRENCE SEAWAY CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
for generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ending September 30, 1996, are not
necessarily indicative of the results that may be expected for the fiscal year
ending March 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the fiscal year ended March 31, 1996.
NOTE B--RECLASSIFICATION
The 1995 financial statements have been reclassified, where necessary, to
conform to the presentation of the 1996 financial statements.
NOTE C--EARNINGS PER SHARE
Primary earnings per share are computed 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.
NOTE D-- SUBSIDIARY INVESTMENT
On December 31, 1995, the Company organized a wholly-owned subsidiary (the
"Subsidiary") under the name of The St. Lawrence Seaway Fund as a Massachusetts
business trust for the purpose of investing in securities. The Company purchased
100,000 shares of beneficial interest in the trust at $10 per share on January
3, 1996. The Company intended to register the Subsidiary with the Securities and
Exchange Commission as a closed-end investment company. Subsequently, the
Company determined that because of tax considerations, such steps would not be
practical or in the best interest of the Company's shareholders and,
accordingly, as of May 31, 1996, dissolved the Subsidiary.
Page 7
THE ST. LAWRENCE SEAWAY CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations -- Three months ended September 30, 1996 as compared to
three months ended September 30, 1995.
Interest and dividend income decreased to $14,863 in the three-months ended
September 30, 1996, from $16,522 in the previous year. The decrease is a result
of slightly lower interest rates received while a portion of the Company's cash
was invested in and by the Subsidiary.
Farm rental revenue remained unchanged in the three months ended September 30,
1996.
General and administrative expenses decreased significantly to $19,594 in the
three months ended September 30, 1996 from $30,161 on the three-months ended
September 30, 1995. This decrease reflects the change in the date of payment of
the expenses of the Annual Report to and Annual Meeting of Stockholders which
was held in a later quarter in 1996.
As a result of the above items, the Company had a loss of $3,284 before taxes in
the three months ended September 30, 1996, as compared to a loss of $11,745
before taxes in the three month ended September 30, 1995.
Federal and state income tax benefits of $392 were applicable in the three
months ended September 30, 1996 as compared to federal and state income tax
benefits of $1,173 in the three months ended September 30, 1995.
Results of Operations - Six months ended September 30, 1996, compared to six
months ended September 30, 1995.
Interest and dividend income decreased to $26,487 in the six months ended
September 30, 1996, from $33,708 in the same period ended September 30, 1995.
This decrease is a result of lower rates of interest earned on available cash
investments.
Farm rental revenues remained unchanged in the six months ended September 30,
1996.
General and administrative expenses decreased to $42,472 in the six months ended
September 30, 1996 from $51,369 in the six months ended September 30, 1995. This
decrease is primarily the result of a change in the annual meeting date (which
caused
Page 8
expenses of such meeting to be recognized in an earlier quarter) and decreased
professional fees.
As a result of the above items the Company incurred a loss before provision for
income taxes of $12,562 in the six months ended September 30, 1996 as compared
to a loss before provision for income taxes of $13,693 in the comparable period
a year ago.
Federal and state income tax benefits of $981 were applicable in the six months
ended September 30, 1996 as compared to federal and state income benefits of
$1,703 that were applicable in the six months ended September 30, 1995.
Liquidity and Capital Resources
At September 30, 1996, the Company had net working capital of $1,173,254 the
major portion of which was in cash and money market funds. St. Lawrence has
sufficient capital resources to continue its current business.
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.
Page 9
THE ST. LAWRENCE SEAWAY CORPORATION
PART II. OTHER INFORMATION
Item 1.
Legal Proceeding - Not Applicable
Item 2.
Changes in Securities - Not Applicable
Item 3.
Defaults upon Senior Securities - Not Applicable
Item 4.
Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Meeting of Stockholders on October
29, 1996.
(b) Not applicable.
(c) At the stockholders meeting, the Company's nominees for director
were elected by the following votes:
Votes to Withhold
Nominee Votes in Favor Authority
------- -------------- ---------
Joel M. Greenblatt 211,843 2,694
Daniel L. Nir 211,843 2,694
Jack C. Brown 211,461 3,076
Edward B. Grier III 211,643 2,894
Item 5.
Other Information - Not Applicable
Page 10
Item 6.
Exhibits and Reports on form 8-K -
Item 6(a) Exhibits -
(27) Financial Data Schedule
Item 6(b) Reports on Form 8-K -
No reports on Form 8-K were required to be filed for the quarter for
which this report is filed
Page 11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereinto duly authorized.
THE ST. LAWRENCE SEAWAY
CORPORATION
Registrant
/s/ Daniel L. Nir
Date: 11/14/96 -------------------------
Daniel L. Nir
President and Treasurer
(Chief Financial Officer)
/s/ Jack C. Brown
Date: 11/14/96 -------------------------
Jack C. Brown
Secretary
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,211,668
<SECURITIES> 0
<RECEIVABLES> 1,594
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,217,795
<PP&E> 5,032
<DEPRECIATION> 392
<TOTAL-ASSETS> 1,341,740
<CURRENT-LIABILITIES> 44,541
<BONDS> 0
0
0
<COMMON> 393,735
<OTHER-SE> 903,464
<TOTAL-LIABILITY-AND-EQUITY> 1,341,740
<SALES> 0
<TOTAL-REVENUES> 31,959
<CGS> 0
<TOTAL-COSTS> 44,521
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,562)
<INCOME-TAX> (981)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,581)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
