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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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.
June 30, 1998 0-2040
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THE ST. LAWRENCE SEAWAY CORPORATION
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (317) 639-5292
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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
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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 JUNE 30, 1998
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Common Stock, $1.00 par value 393,735
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<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
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FORM 10-Q INDEX
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
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<S> <C>
Balance Sheets -June 30, 1998 (UNAUDITED) and March 31, 1998 .................................. 3
Statements of Income - Three months ended June 30, 1998 and 1997
(UNAUDITED) ................................................................................ 4
Statements of Cash Flows - Three months ended June 30, 1998 and
1997 (UNAUDITED) ........................................................................... 5
Notes to Financial Statements - June 30, 1998 ................................................. 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations ...................................................................... 8
PART II. OTHER INFORMATION ................................................................... 9
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Signatures ................................................................................... 10
Exhibit (27) ................................................................................. 11
</TABLE>
Page 2
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
BALANCE SHEETS
JUNE 30, 1998 (UNAUDITED) AND MARCH 31, 1998
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1998 1998
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,080,108 1,105,940
Interest and other receivables 1,619 1,644
Prepaid items 2,379 662
Deferred income taxes 2,014 2,014
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Total Current Assets 1,086,120 1,110,260
Land 118,913 118,913
Property and equipment 2,287 2,679
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Total Assets $1,207,320 1,231,852
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payroll taxes withheld and accrued $ 772 772
Accounts payable & other 15,239 27,734
Deferred Income 5,472 8,208
Federal & state taxes payable 159 0
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Total Current Liabilities 21,642 36,714
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 377,252 377,252
Retained earnings 414,691 424,151
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Total Shareholders' Equity 1,185,678 1,195,138
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Total Liabilities and Shareholders' Equity $1,207,320 1,231,852
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</TABLE>
Page 3
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1998 1997
========= =========
<S> <C> <C>
Revenues:
Farm rentals 2,736 2,736
Interest and dividends 13,538 14,222
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Total revenues 16,274 16,958
Operating costs and expenses:
Farm related operating costs 439 476
Depreciation 392 392
General and administrative 26,357 22,087
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Total operating expenses 27,188 22,955
Income (Loss) before tax provision (10,914) (5,997)
Provision for income taxes/
(tax benefit) (1,454) (757)
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Net income (loss) (9,460) (5,240)
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Per share data:
Weighted average number
of common shares outstanding 393,735 393,735
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Primary earnings per share:
Income (Loss) per share ($0.02) ($0.01)
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</TABLE>
Page 4
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1998 1997
============ ===========
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (9,460) (5,240)
Adjustments to reconcile net income to
net cash from operating activities
Depreciation 392 392
(Increase) Decrease in current assets:
Interest Receivables 25 0
Other Receivables 0 0
Prepaid items (1,717) (401)
Deferred income tax 0 (925)
(Decrease) Increase in current liabilities:
Payroll tax & other 0 (872)
Accounts payable (12,495) (7,013)
Deferred income (2,736) (2,736)
Income taxes payable 159 1,040
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Net cash from operating activities (25,832) (15,755)
Cash flows from investing activities:
Net cash from investing activities 0 0
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Cash flows from financing activities:
Net cash from financing activities 0 0
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Net decrease in cash and cash equivalents (25,832) (15,755)
Cash and cash equivalents, beginning 1,105,940 1,165,962
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Cash and cash equivalents, ending 1,080,108 1,150,207
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Supplemental disclosures of cash flow information:
Cash paid for income taxes 0 0
Cash paid for interest expense 0 0
</TABLE>
Page 5
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1998
(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 June 30, 1998, are not
necessarily indicative of the results that may be expected for the fiscal year
ending March 31, 1999. 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, 1998.
NOTE B--RECLASSIFICATION
The 1997 financial statements have been reclassified, where necessary, to
conform to the presentation of the 1998 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.
Page 6
<PAGE>
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 June 30, 1998 as compared to three
months ended June 30, 1997.
Interest and dividend income decreased to $13,538 in the three-months ended June
30, 1998, from $14,222 in the previous year. This decrease is a result of
slightly lower rates of interest earned on available cash investments.
Farm rental revenue remained unchanged in the three months ended June 30, 1998
from those in the three months ended June 30, 1997.
General and administrative expenses increased to $26,357 in the three months
ended June 30, 1998 from $22,087 in the three-months ended June 30, 1997. This
increase was principally due to an increase in office rent and in professional
fees associated with the Company's response in the fiscal quarter ended June 30,
1998, to certain shareholder and SEC informational inquiries regarding the
Company's Form 10-K Annual Report for the Fiscal Year ended March 31, 1997.
As a result of the above items, the Company had a loss of $10,914 before taxes
in the three months ended June 30, 1998, as compared to a loss of $5,997 before
taxes in the three months ended June 30, 1997.
Federal and state income tax benefits of $1,454 were applicable in the three
months ended June 30, 1998 as compared to federal and state income tax benefits
of $757 in the three months ended June 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had net working capital of $1,064,478 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 7
<PAGE>
YEAR 2000
The Company has initiated a review of its management and information systems to
discover whether such systems are Year 2000 compliant. Although the Company has
not completed its review, the Company does not anticipate that significant
compliance efforts will be required as it does not rely heavily on computers in
its operations. Indeed, the Company's sole computer is used strictly for word
processing and spreadsheet preparation. As part of its ongoing Year 2000
preparations, the Company intends to send in September, 1998, written requests
for information from its farm management company, independent accountant and its
transfer agent in regard to each such service provider's Year 2000 readiness.
Similar requests will be sent to other service providers, if any, whose
relationship with the Company is determined to be material.
OUTLOOK
This Form 10-Q contains statements which are not historical facts, but are
forward-looking statements which are subject to risks, uncertainties and
unforseen factors that could affect the Company's ability to accomplish its
strategic objectives with respect to acquisitions and developing new business
opportunities, as well as its operations and actual results. All forward-looking
statements contained herein, including without limitation, those relating to
Year 2000 readiness, reflect Management's analysis only as of the date of the
filing of this Report. Except as may be required by law, the Company undertakes
no obligation to publicly revise these forward-looking statements to reflect
events or circumstances that arise after the date hereof. In addition to the
disclosures contained herein, readers should carefully review risks and
uncertainties contained in other documents which the Company files from time to
time with the Securities and Exchange Commission.
Page 8
<PAGE>
THE ST. LAWRENCE SEAWAY CORPORATION
PART II. OTHER INFORMATION
Item 1.
Legal Proceeding - Not Applicable
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Item 2.
Changes in Securities - Not Applicable
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Item 3.
Defaults upon Senior Securities - Not Applicable
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Item 4.
Submission of Matters to a Vote of Security Holders - Not Applicable
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Item 5.
Other Information - Not Applicable
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Item 6.
Exhibits and Reports on Form 8-K -
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Item 6(a) Exhibits -
(27) Financial Data Schedule
Item 6(b) Reports on Form 8-K -
No Reports on Form 8-K were filed by the Company in the quarter
ended June 30, 1998.
Page 9
<PAGE>
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: 8/13/98 /s/ Daniel L. Nir
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Daniel L. Nir
President and Treasurer
(Chief Financial Officer)
Date: 8/13/98 /s/ Jack C. Brown
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Jack C. Brown
Secretary
Page 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED JUNE 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,080,108
<SECURITIES> 0
<RECEIVABLES> 1,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,086,120
<PP&E> 2,287
<DEPRECIATION> 392
<TOTAL-ASSETS> 1,207,320
<CURRENT-LIABILITIES> 21,642
<BONDS> 0
0
0
<COMMON> 393,735
<OTHER-SE> 791,943
<TOTAL-LIABILITY-AND-EQUITY> 1,207,320
<SALES> 0
<TOTAL-REVENUES> 16,274
<CGS> 0
<TOTAL-COSTS> 27,188
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,914)
<INCOME-TAX> (1,454)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,460)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
