<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended MARCH 31, 1997 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 0-20123
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WINTHROP RESOURCES CORPORATION
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-1415469
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1015 OPUS CENTER, 9900 BREN ROAD EAST
MINNETONKA, MINNESOTA 55343
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (612) 936-0226
------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
------------------------------------------------------
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
----- -----
As of April 21, 1997 8,600,300 shares of Common Stock of the Registrant,
$0.01 par value, were outstanding.
1
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WINTHROP RESOURCES CORPORATION
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (Unaudited)
Balance Sheets as of March 31, 1997
and December 31, 1996. . . . . . . . . . . . . . . . . . . 3
Statements of Earnings for the three
months ended March 31, 1997 and 1996 . . . . . . . . . . . 4
Statement of Common Shareholders' Equity for the
three months ended March 31, 1997. . . . . . . . . . . . . 5
Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 . . . . . . . . . . . 6
Condensed Notes to Financial Statements. . . . . . . . . . 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . . . . 10
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . 13
Item 2. CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . . 13
Item 3. DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . 13
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . 13
Item 5. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . 13
Item 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WINTHROP RESOURCES CORPORATION
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 9,528,700 $ 11,867,939
Receivables:
Trade accounts. . . . . . . . . . . . . . . . . . . . . . . . . 3,581,919 2,021,630
Other receivables . . . . . . . . . . . . . . . . . . . . . . . 505,977 185,886
------------ ------------
Total receivables . . . . . . . . . . . . . . . . . . . . . . 4,087,896 2,207,516
Investment in leasing operations:
Direct financing and sales-type leases. . . . . . . . . . . . . 324,780,329 295,841,766
Operating leases, less accumulated depreciation . . . . . . . . 1,850,137 2,610,643
Equipment installed on leases not yet commenced . . . . . . . . 20,924,823 28,937,630
------------ ------------
Total investment in leasing operations. . . . . . . . . . . . 347,555,289 327,390,039
Furniture and equipment, less accumulated depreciation
and amortization of $819,991 and $748,927 . . . . . . . . . . . 1,080,092 1,042,190
Goodwill and other intangible assets, less accumulated
amortization of $789,980 and $620,668 . . . . . . . . . . . . . 6,332,050 6,421,362
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394,973 1,180,516
------------ ------------
$369,979,000 $350,109,562
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable. . . . . . . . . . . . . . . . . . . . . . $ 14,457,686 $ 16,638,091
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . 7,555,594 7,738,759
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . 2,349,832 1,247,856
Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . 3,397,567 3,766,466
Rents received in advance . . . . . . . . . . . . . . . . . . . . 3,843,183 4,784,247
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 21,492,253 20,400,053
Senior notes due 2003 . . . . . . . . . . . . . . . . . . . . . . 28,750,000 28,750,000
Discounted lease rentals. . . . . . . . . . . . . . . . . . . . . 203,286,580 185,603,611
------------ ------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 285,132,695 268,929,083
Preferred stock, $.01 par value. Authorized 2,000,000 shares;
no shares issued and outstanding. . . . . . . . . . . . . . . . --- ---
Common shareholders' equity:
Common stock, $.01 par value. Authorized 15,000,000 shares;
issued and outstanding 8,600,300 and 8,600,300 shares . . . . 86,003 86,003
Additional paid-in capital. . . . . . . . . . . . . . . . . . . 23,190,695 23,190,695
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 61,569,607 57,903,781
------------ ------------
Total common shareholders' equity . . . . . . . . . . . . . . 84,846,305 81,180,479
------------ ------------
$369,979,000 $350,109,562
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
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WINTHROP RESOURCES CORPORATION
STATEMENTS OF EARNINGS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------
1997 1996
------------ ------------
Revenues:
Leasing . . . . . . . . . . . . . . . . . . . $ 17,302,684 $ 15,499,783
Sales . . . . . . . . . . . . . . . . . . . . 648,580 477,525
Other . . . . . . . . . . . . . . . . . . . . 290,199 71,937
------------ ------------
Total revenues. . . . . . . . . . . . . . . 18,241,463 16,049,245
------------ ------------
Costs and expenses:
Leasing . . . . . . . . . . . . . . . . . . . 4,374,487 4,654,327
Sales . . . . . . . . . . . . . . . . . . . . 434,668 259,337
Selling, general and administrative . . . . . 2,418,865 2,115,184
Interest expense. . . . . . . . . . . . . . . 4,017,790 3,577,661
Other . . . . . . . . . . . . . . . . . . . . 169,312 129,838
------------ ------------
Total costs and expenses. . . . . . . . . . 11,415,122 10,736,347
------------ ------------
Earnings before income tax expense. . . . . . . 6,826,341 5,312,898
Provision for income tax expense. . . . . . . . 2,730,500 2,178,300
------------ ------------
Net earnings. . . . . . . . . . . . . . . . . . $ 4,095,841 $ 3,134,598
------------ ------------
------------ ------------
Net earnings per common and
common equivalent share. . . . . . . . . . . . $ 0.46 $ 0.40
------------ ------------
------------ ------------
Weighted average number of common
and common equivalent shares outstanding . . . 8,901,187 7,871,525
------------ ------------
------------ ------------
See accompanying notes to consolidated financial statements.
4
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WINTHROP RESOURCES CORPORATION
STATEMENT OF COMMON SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
----------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
---------- ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1996. . . . . . . . . 8,600,300 $ 86,003 $ 23,190,695 $ 57,903,781 $ 81,180,479
Dividends declared. . . . . . . . . --- --- --- (430,015) (430,015)
Net earnings for the period . . . . --- --- --- 4,095,841 4,095,841
---------- ---------- ------------ ------------ --------------
BALANCE,
MARCH 31, 1997 . . . . . . . . . . 8,600,300 $ 86,003 $ 23,190,695 $ 61,569,607 $ 84,846,305
---------- ---------- ------------ ------------ -------------
---------- ---------- ------------ ------------ -------------
</TABLE>
See accompanying notes to consolidated financial statements.
5
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WINTHROP RESOURCES CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,095,841 $ 3,134,598
Adjustments to reconcile net earnings to net cash used
in operating activities:
Leasing costs and interest expense on discounted lease rentals . . 9,017,126 8,294,455
Leasing revenues, primarily amortization of interest
income on sales-type and direct finance leases. . . . . . . . . . 1,956,367 (1,723,425)
Deferred initial direct costs. . . . . . . . . . . . . . . . . . . (610,022) (10,528)
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . 1,092,200 871,320
Amortization of goodwill and other intangible assets . . . . . . . 169,312 129,838
Depreciation on furniture and equipment. . . . . . . . . . . . . . 71,065 53,154
Changes in operating assets and liabilities:
Trade accounts and other receivables . . . . . . . . . . . . . . . (1,880,380) (593,033)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . (214,457) (92,903)
Accounts payable and accrued liabilities . . . . . . . . . . . . . (2,449,573) 400,057
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . 1,101,976 254,671
Customer deposits and rents received in advance. . . . . . . . . . (1,309,963) (992,825)
-------------- --------------
Net cash provided by operating activities. . . . . . . . . . . . 11,039,492 9,725,379
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment for leasing. . . . . . . . . . . . . . . . . (51,089,444) (33,960,483)
Purchase of furniture and equipment. . . . . . . . . . . . . . . . (108,967) (148,850)
Intangible assets acquired . . . . . . . . . . . . . . . . . . . . (80,000) ---
Acquisition, net of cash acquired. . . . . . . . . . . . . . . . . --- (6,842,031)
-------------- --------------
Net cash used in investing activities. . . . . . . . . . . . . . (51,278,411) (40,951,364)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from discounted lease rentals . . . . . . . . . . . . . . 38,718,049 25,064,660
Early retirement of discounted lease rentals . . . . . . . . . . . (474,357) (492,582)
Borrowings under lines of credit . . . . . . . . . . . . . . . . . 17,830,000 800,000
Repayment of borrowings under lines of credit. . . . . . . . . . . (17,830,000) (800,000)
Proceeds from exercise of stock options. . . . . . . . . . . . . . --- 53,750
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . --- (725,928)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . (344,012) (236,487)
-------------- --------------
Net cash provided by financing activities. . . . . . . . . . . . 37,899,680 23,663,413
-------------- --------------
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . (2,339,239) (7,562,572)
Cash and cash equivalents, beginning of period. . . . . . . . . . . . 11,867,939 10,234,159
-------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD. . . . . . . . . . . . . . . $ 9,528,700 $ 2,671,587
-------------- --------------
-------------- --------------
CASH PAID DURING THE PERIOD FOR:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 776,572 $ 22,819
-------------- --------------
-------------- --------------
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 536,324 $ 1,052,308
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to consolidated financial statements.
6
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WINTHROP RESOURCES CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The financial statements included in this Form 10-Q have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed, or
omitted, pursuant to such rules and regulations, although management believes
the disclosures are adequate to make the information presented not
misleading. These statements should be read in conjunction with the financial
statements and related notes included in the Company's Annual Report on Form
10-K for the year ended December 31, 1996.
The financial statements presented herein as of March 31, 1997 and 1996
and for the three months then ended reflect, in the opinion of management,
all material adjustments consisting only of normal recurring adjustments
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods. Certain 1996 balances
have been reclassified to conform to the 1997 method of presentation.
(2) INVESTMENT IN LEASING OPERATIONS
The components of the net investment in direct financing and sales-type
leases as of March 31, 1997 were as follows:
Direct financing and sales-type leases:
Minimum lease payments receivable. . . . . . . . . . . . . $ 343,372,721
Estimated residual values. . . . . . . . . . . . . . . . . 27,890,946
Initial direct costs . . . . . . . . . . . . . . . . . . . 6,872,551
Less unearned revenue on lease payments receivable . . . . (47,149,008)
Less unearned revenue on residuals . . . . . . . . . . . . (4,809,323)
Less reserve for credit losses . . . . . . . . . . . . . . (1,397,558)
--------------
Net investment in direct financing and sales-type leases 324,780,329
--------------
Operating leases:
Operating lease assets . . . . . . . . . . . . . . . . . . 5,900,528
Less accumulated depreciation and amortization . . . . . . (4,050,391)
--------------
Net investment in operating leases . . . . . . . . . . . 1,850,137
--------------
Equipment installed on leases not yet commenced . . . . . . 20,924,823
--------------
Total investment in leasing operations . . . . . . . . . . . $ 347,555,289
--------------
--------------
7
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WINTHROP RESOURCES CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(3) DISCOUNTED LEASE RENTALS
Discounted lease rentals as of March 31, 1997 consisted of the following:
Nonrecourse borrowings . . . . . . . . . . . . . . . . . . . $ 203,018,686
Recourse borrowings . . . . . . . . . . . . . . . . . . . . 267,894
-------------
Total discounted lease rentals . . . . . . . . . . . . . . . $ 203,286,580
-------------
-------------
(4) NOTES PAYABLE TO BANKS
At March 31, 1997 the Company had lines of credit totaling $23,000,000
available from two banks. The interest rates are charged at one bank's prime
rate, or, at the Company's option, at a rate determined by a specified
alternative-rate calculation, and at 25 basis points over the other bank's
prime rate. These agreements expire in July 1997 and June 1997,
respectively. All borrowings under these agreements are secured by specific
leases and the underlying equipment. At March 31, 1997 no amounts were
outstanding under these lines of credit.
(5) INCOME TAXES
The Company accounts for income taxes under FASB No. 109. Income tax
expense for the three months ended March 31, 1997 consisted of current and
deferred tax expense of $1,638,300 and $1,092,200, respectively.
(6) EARNINGS PER SHARE
Earnings per share are computed on the weighted average number of common
shares outstanding of 8,901,187 and 7,871,525 for the three months ended
March 31, 1997 and 1996, respectively. For the 1996 period common equivalent
shares were excluded from the weighted average number of common shares as the
dilutive effect was less than 3%.
(7) PROPOSED MERGER
On February 28, 1997 the Company and TCF Financial Corporation ("TCF")
announced the signing of a definitive agreement to merge a wholly-owned
subsidiary of TCF with and into the Company in a tax-free stock-for-stock
exchange, with the Company surviving and becoming
8
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WINTHROP RESOURCES CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
a wholly-owned subsidiary of TCF National Bank Minnesota (the "Merger"). In
connection with the Merger, each outstanding share of the Company's Common
Stock will be converted into 0.7766 shares of TCF common stock. TCF has also
agreed to assume the Company's Stock Incentive Plan on an as converted basis.
The merger is subject to approval by both companies' shareholders, required
regulatory filings and approvals and treatment of the transaction as a
pooling of interests for accounting purposes. TCF has the right to terminate
the transaction if the average closing price of TCF common stock is more than
$51.70 per share. Winthrop has the right to terminate the transaction if the
average closing price of TCF common stock is less than $42.30 per share. The
period for the average closing stock price of TCF common stock is the 30
trading days ending three business days prior to the later of the last
shareholders' meeting to vote on the merger or the date of the last
regulatory approval. In connection with the Merger, certain shareholders of
Winthrop have entered into Stockholder Agreements with TCF pursuant to which
such shareholders have agreed, subject to certain exceptions, to vote all of
their shares in favor of the Merger. On April 25, 1997 both companies filed
with the Securities and Exchange Commission a Registration Statement on Form
S-4 in connection with the registration of TCF common stock to be issued in
the Merger and the solicitation of proxies by each of the Company and TCF for
a special meeting of stockholders to be held by each company.
(8) SUBSEQUENT EVENT
On January 19, 1996 the Company acquired substantially all of the assets
of Capital Business Leasing, Inc. ("Capital"). Under the terms of the asset
purchase agreement the Company was scheduled to make a final payment on
December 31, 1996 of up to $2,000,000 plus accrued interest thereon at a rate
of six percent (6%) per annum. The Company filed a lawsuit on November 14,
1996 seeking to void this payment after certain new facts became apparent.
On April 10, 1997 the Company and Capital reached a settlement whereby
the Company's obligation was reduced to $1,450,000 and the Company made this
final payment.
9
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WINTHROP RESOURCES CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
Net earnings for the three months ended March 31, 1997 were $4,096,000,
or $0.46 per share, as compared to $3,135,000, or $0.40 per share, for the
corresponding period in 1996. At March 31, 1997 the Company's net investment
in leasing operations was $347,555,000, an increase of 6.2% over $327,390,000
at December 31, 1996.
Total revenues of $18,241,000 for the three months ended March 31, 1997
were up 13.7% over $16,049,000 for the same three-month period in 1996.
Leasing revenues accounted for 94.9% and 96.6% of total revenues for the
three-month periods ended March 31, 1997 and 1996, respectively. The
quarter-to-quarter fluctuations in total revenues, leasing revenues and the
allocation between types of leasing revenues result primarily from the manner
and timing in which leasing revenues are recognized over the term of each
particular lease. The allocation of revenues is a function of the lease
classification as determined in accordance with generally accepted accounting
principles.
Total leasing costs as a percentage of leasing revenue were 25.3% and
30.0% for the three-month periods ended March 31, 1997 and 1996,
respectively. The decrease in leasing costs as a percentage of leasing
revenues primarily reflects the influence of the relative size and lease
classification of transactions for the respective periods.
Revenues from outright sales of equipment as a percentage of the total
revenues were 3.6% and 3.0% for the three-month periods ended March 31, 1997
and 1996, respectively. Cost of the equipment sold as a percent of outright
sales revenue was 67.0% and 54.3% for the respective 1997 and 1996 periods.
The period-to-period variations in outright sales revenues and equipment cost
as a percent of these revenues were the result of fluctuations in the value
and timing of the return to the Company of equipment placed on lease in
earlier periods.
Selling, general and administrative expenses increased $304,000 (14.4%)
in the three months ended March 31, 1997 over the corresponding 1996 period,
primarily as a result of increased commissions and other employment expense,
partially offset by an increase in the capitalization of initial direct costs
associated with direct finance leases recorded during the 1997 period.
Commission expense varies from period to period depending upon relative
profits generated by individual sales representatives. The increase in other
compensation expense reflects a larger workforce in 1997 compared with the
corresponding 1996 period. At March 31, 1997 the Company had a total of 94
full-time employees compared to 83 full-time employees at March 31, 1996.
The increased capitalization of initial direct costs was primarily due to the
greater
10
<PAGE>
volume of direct financing leases recorded during the first quarter of 1997
as compared to the same period in 1996.
Interest expense increased $440,000 (12.3%) in the first quarter of 1997
over the first quarter of 1996. The increase in 1997 is primarily the result
of interest expense on the Company's 9.5% Senior Notes issued in June 1996
and higher average borrowings as compared to 1996, reduced by the increased
capitalization of interest expense associated with the interim financing of
equipment purchased for leases.
Income tax expense as a percentage of earnings before income tax was
approximately 40% and 41% for the three month periods ended March 31, 1997
and 1996, respectively. The actual income tax paid varies depending on many
factors, including the alternative minimum tax rate, various state tax laws,
timing differences due to accelerated tax depreciation rules and a variety of
other tax considerations.
As a result of the foregoing factors, net earnings increased by $961,000
(30.7%) for the three months ended March 31, 1997 as compared with the
corresponding 1996 period.
FINANCIAL CONDITION AND LIQUIDITY
The funds necessary to support the Company's leasing activities have been
provided primarily from operations, discounted lease financing and, to a
lesser extent and only on an interim basis, bank borrowings under lines of
credit. The extent to which the Company employs these lines is dependent
upon available funds and the volume of its lease and sales transactions. At
March 31, 1997 no amounts were outstanding under these credit lines.
Generally, upon commencement of a lease, the Company assigns the lease
payment stream to a financial institution and the proceeds are used to reduce
the lines of credit. The Company generally funds its equity investments in
leased equipment with internally generated funds.
At March 31, 1997, the Company had discounted lease rentals outstanding
of $203,287,000, of which 99.9% were nonrecourse loans. At December 31,
1996, the Company had discounted lease rentals outstanding of $185,604,000 of
which 99.8% were nonrecourse. The increase in discounted lease rentals for
the three months ended March 31, 1997 is due primarily to the proceeds from
the discounting of new leases during the quarter exceeding the amortization
of previously discounted lease rentals. The Company depends on discounted
lease financing to provide funds for its operations at rates that reflect
prevailing market interest rates and the credit standing of its customers.
Based on the Company's experience in the leasing industry, its strong
financial history and its long-standing relationships with certain financial
institutions, the Company believes that discounted lease financing will
continue to be available at competitive rates of interest.
11
<PAGE>
On April 10, 1997 the Company drew upon its existing cash reserves to
make a final payment of $1,450,000 pursuant to an asset purchase agreement
for the Company's purchase of substantially all the assets of Capital
Business Leasing, Inc., which transaction closed in January 1996.
There can be fluctuations in cash flow from period to period due to the
timing of payments by customers and timing of permanent financing. The
Company's current financial resources and estimated cash flow from operations
are expected to be adequate to fund the Company's operations and its present
expansion plans.
Inflation has not been a significant factor in the Company's operations.
NOTE ON FORWARD-LOOKING INFORMATION
Certain statements in this Form 10-Q and in the future filings by the
Company with the Securities and Exchange Commission and in the Company's
written and oral statements made by or with the approval of an authorized
executive officer constitute "forward-looking statements" within the meaning
of the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, and the Company intends that such forward-looking statements be subject
to the safe harbors created thereby. The words "believe," "expect" and
"anticipate" and similar expressions identify forward-looking statements.
These forward-looking statements reflect the Company's current views with
respect to future events and financial performance, but are subject to many
uncertainties and factors relating to the Company's operations and business
environment which may cause the actual results of the Company to be
materially different from any future results expressed or implied by such
forward-looking statements. Examples of such uncertainties include, but are
not limited to, changes in customer demand and requirements, mix of leases
written, new product announcements, interest rate fluctuations, changes in
federal income tax laws and regulations, competition, industry specific
factors and world wide economic and business conditions. The mix of leases
written in a quarter is a result of a combination of factors, including, but
not limited to, changes in customer demands and/or requirements, new product
announcements, price changes, changes in delivery dates, changes in
maintenance policies and the pricing policies of equipment manufacturers, and
price competition from other lessors. The Company undertakes no obligation
to publicly update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
12
<PAGE>
PART II. OTHER INFORMATION
WINTHROP RESOURCES CORPORATION
ITEM 1. LEGAL PROCEEDINGS
The Company was not the defendant in any material litigation as of
April 30, 1997. See Note 8 of the Company's financial statements
appearing elsewhere in this Quarterly Report on Form 10-Q for a description
of certain Company initiated legal proceedings.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable.
(b) 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
On February 28, 1997 the Company and TCF Financial Corporation ("TCF")
announced the signing of a definitive agreement to merge a wholly-owned
subsidiary of TCF with and into the Company in a tax-free stock-for-stock
exchange (See Note 7 of the Notes to the Company's financial statements
appearing elsewhere in this Quarterly Report on Form 10-Q for a discussion of
the proposed merger).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
On March 7, 1997 the Registrant filed a current report on Form 8-K, dated
February 28, 1997, reporting Item 5. Other Events, and Item 7. Financial
Statements and Exhibits.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WINTHROP RESOURCES CORPORATION
Date: April 30, 1997 By: /S/ John L. Morgan
---------------------------------------
John L. Morgan
President and Chief Executive
Officer (Principal Executive
Officer) and Director
/S/ Kirk A. Mackenzie
---------------------------------------
Kirk A. MacKenzie
Executive Vice President, Treasurer,
and Chief Financial Officer (Principal
Financial and Accounting Officer) and
Director
14
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
11 Statement Regarding Computation of
Per Share Earnings 16
27 Financial Data Schedule 17
15
<PAGE>
EXHIBIT 11
WINTHROP RESOURCES CORPORATION
COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1995
---------- ----------
PRIMARY EARNINGS PER SHARE:
Weighted average common shares outstanding. . . . 8,600,300 7,871,525
Effect of dilutive options. . . . . . . . . . . . 300,887 *
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . 8,901,187 7,871,525
---------- ----------
---------- ----------
Net earnings. . . . . . . . . . . . . . . . . . . $4,095,841 $3,134,598
---------- ----------
---------- ----------
Net earnings per common and
common equivalent share. . . . . . . . . . . . . $ 0.46 $ 0.40
---------- ----------
---------- ----------
FULLY DILUTED EARNINGS PER SHARE:
Weighted average common shares outstanding. . . . 8,600,300 7,871,525
Effect of dilutive options. . . . . . . . . . . . 300,887 *
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . 8,901,187 7,871,525
---------- ----------
---------- ----------
Net earnings. . . . . . . . . . . . . . . . . . . $4,095,841 $3,134,598
---------- ----------
---------- ----------
Net earnings per common and
common equivalent share. . . . . . . . . . . . . $ 0.46 $ 0.40
---------- ----------
---------- ----------
* Dilution is less than 3%; common equivalent shares are excluded.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 9,529
<SECURITIES> 0
<RECEIVABLES> 4,088
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,900
<DEPRECIATION> 820
<TOTAL-ASSETS> 369,979
<CURRENT-LIABILITIES> 0
<BONDS> 28,750
0
0
<COMMON> 86
<OTHER-SE> 84,760
<TOTAL-LIABILITY-AND-EQUITY> 369,979
<SALES> 649
<TOTAL-REVENUES> 18,241
<CGS> 435
<TOTAL-COSTS> 7,228
<OTHER-EXPENSES> 169
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,018
<INCOME-PRETAX> 6,826
<INCOME-TAX> 2,730
<INCOME-CONTINUING> 4,096
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,096
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.46
</TABLE>
