SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File No.
December 31, 1996 0-2040
THE ST. LAWRENCE SEAWAY CORPORATION
-----------------------------------
(Exact Name of Registrant as Specified in its Charter)
INDIANA 35-1038443
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(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 December 31, 1996
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Common Stock, $1.00 par value 393,735
THE ST. LAWRENCE SEAWAY CORPORATION
FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION PAGE
- ------------------------------ ----
Balance Sheets - December 31, 1996 (UNAUDITED) and March 31, 1996 ............ 3
Statements of Income - Three months ended December 31, 1996 and 1995
(UNAUDITED) ............................................................... 4
Statements of Income - Nine months ended December 31, 1996 and 1995
(UNAUDITED) ............................................................... 5
Statements of Cash Flows - Nine months ended December 31, 1996 and
1995 (UNAUDITED) .......................................................... 6
Notes to Financial Statements - December 31, 1996 ............................ 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations ................................................... 8-9
PART II. OTHER INFORMATION ................................................ 10
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Signatures ................................................................. 11
Page 2
THE ST. LAWRENCE SEAWAY CORPORATION
BALANCE SHEETS
DECEMBER 31, 1996 (UNAUDITED) AND MARCH 31, 1996
DECEMBER 31, MARCH 31,
1996 1996
==========================
ASSETS
Current assets:
Cash and cash equivalents $1,167,137 1,232,478
Interest and other receivables 0 11,104
Prepaid items 809 549
Deferred income taxes 6,260 2,014
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Total Current Assets 1,174,206 1,246,145
Land 118,913 118,913
Property and equipment 4,639 5,816
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Total Assets $1,297,758 1,370,874
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payroll taxes withheld and accrued $ 1,101 454
Accounts payable & other 24,180 53,432
Deferred Income 0 8,208
Federal & state taxes payable 619 0
---------- ----------
Total Current Liabilities 25,900 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 596,871 633,793
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Total Shareholders' Equity 1,271,858 1,308,780
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Total Liabilities and Shareholders' Equity $1,297,758 1,370,874
==========================
Page 3
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
DECEMBER 31, 1996 AND 1995
(UNAUDITED)
DECEMBER 31, DECEMBER 31,
1996 1995
==============================
Revenues:
Farm rentals 2,736 2,736
Interest and dividends 14,599 16,651
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Total revenues 17,335 19,387
Operating costs and expenses:
Farm related operating costs 395 392
Depreciation 392 392
General and administrative 44,441 30,142
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Total operating expenses 45,228 30,926
Income (Loss) before tax provision (27,893) (11,539)
Provision for income taxes/
(tax benefit) 2,553 1,549
----------- -----------
Net income (loss) (25,340) (9,990)
==============================
Per share data:
Weighted average number
of common shares outstanding 393,735 393,735
----------- -----------
Primary earnings per share:
Income (Loss) per share ($0.06) ($0.03)
==============================
Page 4
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED
DECEMBER 31, 1996 AND 1995
(UNAUDITED)
DECEMBER 31, DECEMBER 31,
1996 1995
==============================
Revenues:
Farm rentals 8,208 8,208
Interest and dividends 41,086 50,360
----------- -----------
Total revenues 49,294 58,568
Operating costs and expenses:
Farm related operating costs 1,660 1,243
Depreciation 1,176 1,046
General and administrative 86,914 81,510
----------- -----------
Total operating expenses 89,750 83,799
Income (Loss) before tax provision (40,456) (25,231)
Provision for income taxes/
(tax benefit) 3,534 3,252
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Net income (loss) (36,922) (21,979)
==============================
Per share data:
Weighted average number
of common shares outstanding 393,735 393,735
----------- -----------
Primary earnings per share:
Income (Loss) per share ($0.09) ($0.06)
==============================
Page 5
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
DECEMBER 31, 1996 AND 1995
(UNAUDITED)
DECEMBER 31, DECEMBER 31,
1996 1995
==============================
Cash flows from operating activities:
Net income (loss) (36,922) (21,979)
Adjustments to reconcile net income to
net cash from operating activities
Depreciation 1,176 1,046
(Increase) Decrease in current assets:
Interest and other receivables 11,104 19,283
Prepaid items (260) 5,054
Deferred income tax (4,246) (3,879)
(Decrease) Increase in current liabilities:
Payroll tax & other (7,560) (8,076)
Accounts payable (29,252) (7,370)
Income taxes payable 619 627
----------- -----------
Net cash from operating activities (65,341) (15,294)
Cash flows from investing activities:
Purchase of Subsidiary Stock 0 (1,000,000)
Purchase of equipment 0 (1,960)
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Net cash from investing activities 0 (1,001,960)
Cash flows from financing activities: ----------- -----------
Net cash from financing activities 0 0
Net increase in cash and cash equivalents (65,341) (1,017,254)
Cash and cash equivalents, beginning 1,232,478 1,260,870
----------- -----------
Cash and cash equivalents, ending $ 1,167,137 243,616
==============================
Supplemental disclosures of cash flow information:
Cash paid for income taxes 0 0
Cash paid for interest expense 0 0
Page 6
THE ST. LAWRENCE SEAWAY CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 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 nine month period ending December 31, 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 December 31, 1996 as compared to
three months ended December 31, 1995.
Interest and dividend income decreased to $14,599 in the three-months ended
December 31, 1996, from $16,651 in the previous year. This decrease is a result
of lower rates of interest earned on available cash investments.
Farm rental revenue remained unchanged in the three months ended December 31,
1996 from those in the three months ended December 31, 1995.
General and administrative expenses increased to $44,441 in the three months
ended December 31, 1996 from $30,142 in the three-months ended December 31,
1995. This increase 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 $27,893 before taxes
in the three months ended December 31, 1996, as compared to a loss of $11,539
before taxes in the three months ended December 31, 1995.
Federal and state income tax benefits of $2,553 were applicable in the three
months ended December 31, 1996 as compared to federal and state income tax
benefits of $1,549 in the three months ended December 31, 1995.
Results of Operations - Nine months ended December 31, 1996, compared to nine
months ended December 31, 1995.
Interest and dividend income decreased to $41,086 in the nine months ended
December 31, 1996, from $50,360 in the same period ended December 31, 1995. 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 revenues remained unchanged in the nine months ended December 31,
1996 from those in the nine months ended December 31, 1995.
General and administrative expenses increased to $86,914 in the nine months
ended December 31, 1996 from $81,510 in the nine months ended December 31, 1995.
This increase is primarily the result of a change in the annual meeting date
(which caused expenses of such meeting to be recognized in a later quarter).
Page 8
As a result of the above items the Company incurred a loss before provision for
income taxes of $40,456 in the nine months ended December 31, 1996 as compared
to a loss before provision for income taxes of $25,231 in the comparable period
a year ago.
Federal and state income tax benefits of $3,534 were applicable in the nine
months ended December 31, 1996 as compared to federal and state income benefits
of $3,252 that were applicable in the nine months ended December 31, 1995.
Liquidity and Capital Resources
At December 31, 1996, the Company had net working capital of $1,148,306 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 - Not Applicable
Item 5.
Other Information - Not Applicable
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 10
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,
thereunto duly authorized.
THE ST. LAWRENCE SEAWAY
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CORPORATION
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Registrant
Date: 2/14/97 /s/ Daniel L. Nir
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Daniel L. Nir
President and Treasurer
(Chief Financial Officer)
Date: 2/14/97 /s/ Jack C. Brown
-------------------------
Jack C. Brown
Secretary
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,167,137
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,174,206
<PP&E> 4,639
<DEPRECIATION> 1,176
<TOTAL-ASSETS> 1,297,758
<CURRENT-LIABILITIES> 25,900
<BONDS> 0
0
0
<COMMON> 393,735
<OTHER-SE> 878,123
<TOTAL-LIABILITY-AND-EQUITY> 1,297,758
<SALES> 0
<TOTAL-REVENUES> 49,294
<CGS> 0
<TOTAL-COSTS> 89,750
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (40,456)
<INCOME-TAX> 3,534
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,922)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
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