0000821026-95-000008.txt : 19950811 0000821026-95-000008.hdr.sgml : 19950811 ACCESSION NUMBER: 0000821026-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950810 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDERSONS MANAGEMENT CORP CENTRAL INDEX KEY: 0000821026 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 34156374 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-16936-01 FILM NUMBER: 95560336 BUSINESS ADDRESS: STREET 1: 1200 DUSSEL DRIVE CITY: MAUMEE STATE: OH ZIP: 43537 BUSINESS PHONE: 4198935050 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 [ ] 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 33-16936 THE ANDERSONS MANAGEMENT CORP. (Exact name of registrant as specified in its charter) OHIO 34-1562374 (State of incorporation (I.R.S. Employer or organization) Identification No.) 480 W. Dussel Drive, Maumee, Ohio 43537 (Address of principal executive offices) (Zip Code) (419) 893-5050 (Telephone Number) Not applicable (Former name, former address and former fiscal year, if changed since last report.) 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 July 31, 1995, there were 4,608 non-voting Class A Common Shares, no par value and 5,720 voting Class B Common Shares, no par value of the Registrant, issued and outstanding. Ownership of Class A Shares is restricted to limited partners of The Andersons, a limited partnership of which the Registrant is the sole general partner. Ownership of Class B Shares is restricted to holders of Class A Shares. Because of transfer restrictions contained in the partnership agreement, there is no market for any partnership interests in The Andersons. Consequently, there is no market for the Class A or Class B Shares. THE ANDERSONS MANAGEMENT CORP. INDEX Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets - June 30, 1995 and December 31, 1994 . . . . . . . . . . .3 Condensed Statements of Income - Three months ended June 30, 1995 and 1994 . . . . . . . 4 Six months ended June 30, 1995 and 1994 . . . . . . . . 5 Condensed Statements of Cash Flows - Six months ended June 30, 1995 and 1994 . . . . . . . . 6 Notes to Condensed Financial Statements . . . . . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . 8 PART II. OTHER INFORMATION Item 5. Other Information. . . . . . . . . . . . . . . . . 9 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . .9 Signatures. . . . . . . . . . . . . . . . . . . . . . . . . 9 PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE ANDERSONS MANAGEMENT CORP. CONDENSED BALANCE SHEETS (UNAUDITED) June 30 December 31 1995 1994 CURRENT ASSETS Cash and cash equivalents $ 289,609 $ 736,599 Short-term investments, at cost 553,881 490,532 Receivable from The Andersons - Note B 5,354,549 4,700,699 Prepaid expenses and other accounts receivable 810,003 2,703,173 TOTAL CURRENT ASSETS 7,008,042 8,631,003 OTHER ASSETS Receivable from The Andersons - Note B 3,521,765 3,059,742 Investment in The Andersons - Note B 1,039,315 969,376 Other assets 323,331 323,843 4,884,411 4,352,961 $11,892,453 $12,983,964 CURRENT LIABILITIES Accounts payable $ 1,975,131 $ 869,704 Accrued expenses 4,448,782 7,192,479 TOTAL CURRENT LIABILITIES 6,423,913 8,062,183 ACCRUED POSTRETIREMENT BENEFITS 3,521,765 3,059,742 SHAREHOLDERS' EQUITY Common Shares, without par value: Class A non-voting: Authorized - 25,000 shares Issued - 4,855 shares at stated value 1,456,405 1,456,405 Class B voting: Authorized - 25,000 shares Issued - 5,720 and 5,014 shares, respectively, at stated value 5,720 5,014 Retained earnings 551,802 471,441 2,013,927 1,932,860 Unrealized gain on available for sale securities 7,194 - Less common shares in treasury at cost - (247 and 236 Class A shares at June 30, 1995 and December 31, 1994, respectively) (74,346) (70,821) 1,946,775 1,862,039 $11,892,453 $12,983,964 NOTE: The balance sheet at December 31, 1994 has been derived from the audited financial statements at that date. See notes to condensed financial statements. THE ANDERSONS MANAGEMENT CORP. CONDENSED STATEMENTS OF INCOME (UNAUDITED) Three months Ended June 30 1995 1994 REVENUES: Management fees - Note B $18,271,144 $17,849,512 Equity in net income of The Andersons 41,069 142,628 Interest earned and other income 35,002 50,104 18,347,215 18,042,244 COSTS AND EXPENSES: Salaries, wages and benefits 18,054,801 17,517,754 Rent expense 192,871 189,899 General expenses 33,655 36,256 18,281,327 17,743,909 INCOME BEFORE INCOME TAXES 65,888 298,335 Federal income taxes 30,700 90,900 NET INCOME $ 35,188 $ 207,435 Net income per Class A Common Share $ 7.64 $ 44.98 Weighted average number of Class A Shares outstanding 4,608 4,612 See notes to condensed financial statements. THE ANDERSONS MANAGEMENT CORP. CONDENSED STATEMENTS OF INCOME (UNAUDITED) Six months Ended June 30 1995 1994 REVENUES: Management fees - Note B $36,684,283 $33,641,030 Equity in net income of The Andersons 69,939 171,566 Interest earned and other income 78,470 90,970 36,832,692 33,903,566 COSTS AND EXPENSES: Salaries, wages and benefits 36,240,003 33,151,985 Rent expense 384,752 375,067 General expenses 88,476 70,293 36,713,231 33,597,345 INCOME BEFORE INCOME TAXES 119,461 306,221 Federal income taxes 39,100 94,200 NET INCOME $ 80,361 $ 212,021 Net income per Class A Common Share $ 17.44 $ 45.97 Weighted average number of Class A Shares outstanding 4,608 4,612 See notes to condensed financial statements. THE ANDERSONS MANAGEMENT CORP. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30 1995 1994 OPERATING ACTIVITIES Net income $ 80,361 $ 212,021 Adjustments to reconcile net income to net cash used in operating activities: Amortization - 1,770 Equity in earnings of The Andersons in excess of cash received (69,939) (171,566) Changes in operating assets and liabilities: Receivable from The Andersons (1,129,619) (2,289,085) Prepaid expenses and other assets 1,924,894 1,786,487 Accounts payable and accrued expenses (1,176,247) 450,189 NET CASH USED IN OPERATING ACTIVITIES (370,550) (10,184) INVESTING ACTIVITIES Purchase of investments (73,621) (250,000) FINANCING ACTIVITIES Purchase of Common Shares for Treasury (3,525) (18,387) Sale of Common Shares 706 19,334 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2,819) 947 DECREASE IN CASH AND CASH EQUIVALENTS (446,990) (259,237) Cash and cash equivalents at beginning of year 736,599 795,379 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 289,609 $ 536,142 See notes to condensed financial statements. THE ANDERSONS MANAGEMENT CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS Note A - In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations for the periods indicated have been made. The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Corporation's annual report on Form 10-K for the year ended December 31, 1994. Note B - The Registrant is the sole general partner of The Andersons, an Ohio limited partnership (the "Partnership"). The Registrant provides all management and labor services required by the Partnership in its operations. In exchange for providing management services, the Registrant charges the Partnership a management fee equal to: a) the salaries and cost of all employee benefits and other normal employee costs, paid or accrued on behalf of the Registrant's employees who are engaged in furnishing services to the Partnership, b) reimbursable expenses incurred by the Registrant in connection with its services to the Partnership, or on the Partnership's behalf, and c) an amount based on an achieved level of return on partners' invested capital of the Partnership to cover the Registrant's general overhead and to provide an element of profit to the Registrant. The Registrant leases an office building which is primarily occupied by the Partnership. Management fees include rental income of $164,114 and $161,244 from the Partnership for the three-month periods ended June 30, 1995 and 1994 respectively, and $331,486 and $313,265 for the six-month periods ended June 30, 1995 and 1994, respectively. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The Andersons Management Corp. (the "Registrant") had cash and cash equivalents and short-term investments of approximately $843,500 at June 30, 1995 and $1.2 million December 31, 1994. The largest component of the Corporation's working capital was a receivable from The Andersons, an Ohio limited partnership of which the Registrant is the sole general partner (the "Partnership"). This receivable represents the costs incurred by the Registrant in providing management and labor services to the Partnership but not yet paid by the Registrant and therefore not yet collected from the Partnership. The Registrant has no short-term or long-term debt. Class A Common Shares redeemed for cash in the first six months of 1995 totaled $3,525 and new Class B shares issued totaled $706. Management believes, given the relationship between the Registrant and the Partnership whereby the Registrant is reimbursed by the Partnership for its costs in providing management and labor services to the Partnership and given the Corporation's cash and cash equivalents and short-term investment of $843,500, that the Corporation's liquidity is adequate to meet both short and long-term needs. Results of Operations Comparison of the Corporation's three months ended June 30, 1995 and three months ended June 30, 1994: Net income in the second quarter of 1995 was $35,188 or $7.64 per Class A Common Share, compared to net income of $207,435 or $44.98 per share in 1994. Equity in net income of the Partnership and the portion of the management fee based on the Partnership's return on equity decreased by $251,045 due to a decrease in performance of the Partnership in the second quarter of 1995. Net rental income decreased by $6,107 due to increased rent expense and some temporarily vacant space. Income tax expense decreased by $60,200 due to the decrease in income. Comparison of the Corporation's six months ended June 30, 1995 and six months ended June 30, 1994: Net income in the first six months of 1995 was $80,361 or $17.44 per Class A Common Share, compared to net income of $212,021 or $45.97 per share in 1994. Equity in net income of the Partnership and the portion of the management fee based on the Partnership's return on equity decreased by $254,942 due to a decrease in performance of the Partnership in 1995. Net rental income decreased by $4,572 due to increased rent expense and some temporarily vacant space. Income tax expense decreased by $55,100 due to the decrease in income. PART II. OTHER INFORMATION Item 5. Other Information On August 9, 1995, subsequent to the period covered by this Report, the Registrant filed a Second Amendment to its Registration Statement on Form S-4 (File No. 33-58963) with the Securities and Exchange Commission with respect to a proposed merger of the Partnership with and into the Registrant and certain other related matters. The primary purpose of the merger is to simplify the organizational structure of the Partnership and the Registrant and allow current Shareholders and Limited Partners the potential for additional liquidity. The Registrant currently anticipates that, if the merger is approved by its shareholders and the limited partners of the Partnership, it will be effective as of January 1, 1996. Item 6. Exhibits and Reports on Form 8-K (b) Reports on Form 8-K. There were no reports on Form 8-K for the three months ended June 30, 1995 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. THE ANDERSONS MANAGEMENT CORP. (Registrant) Date: August 10, 1995 By /s/Richard P. Anderson Richard P. Anderson President and Chief Executive Officer Date: August 10, 1995 By /s/Richard R. George Richard R. George Corporate Controller (Principal Accounting Officer) EX-27 2
5 6-MOS DEC-31-1995 JUN-30-1995 289,609 533,881 5,354,549 0 0 7,008,042 0 0 11,892,453 6,423,913 0 1,462,125 0 0 485,650 11,892,453 36,684,283 36,832,692 36,240,003 36,240,003 473,228 0 0 119,461 39,100 80,361 0 0 0 80,361 17.44 0