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 September 30, 1998
[ ] 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 000-20557
THE ANDERSONS, INC.
(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)
(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 __
The registrant had 8,162,798 Common shares outstanding, no par value, at
November 1, 1998.
THE ANDERSONS, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - September 30, 1998
and December 31, 1997 3
Condensed Consolidated Statements of Operations -
Three months and nine months ended September 30, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(IN THOUSANDS)
September 30 December 31
1998 1997
Current assets
Cash and cash equivalents $ 4,257 $ 8,278
Accounts and notes receivable:
Trade accounts - net 59,906 68,643
Margin deposits 3,752 771
63,658 69,414
Inventories:
Grain 73,803 113,838
Agricultural fertilizer and supplies 28,784 18,908
Merchandise 32,862 27,674
Lawn and corn cob products 13,189 20,142
Other 16,535 10,905
165,173 191,467
Deferred income taxes 3,270 1,408
Prepaid expenses 2,902 4,521
Total current assets 239,260 275,088
Other assets:
Notes receivable (net) and other assets 6,332 6,333
Investments in and advances to affiliates 1,100 1,026
7,432 7,359
Property, plant and equipment:
Land 11,952 11,763
Land improvements and leasehold improvements 25,487 24,594
Buildings and storage facilities 87,715 85,377
Machinery and equipment 111,012 104,590
Construction in progress 2,852 2,109
239,018 228,433
Less allowances for depreciation and amortization 151,083 142,636
87,935 85,797
$334,627 $368,244
Note: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date.
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - (continued)
(UNAUDITED)(IN THOUSANDS)
September 30 December 31
1998 1997
Current liabilities
Notes payable $ 55,000 $ 15,572
Accounts payable for grain 32,778 121,233
Other accounts payable 72,489 63,309
Accrued expenses 13,246 12,973
Current maturities of long-term debt 6,882 8,406
Total current liabilities 180,395 221,493
Pension and postretirement benefits 2,663 2,799
Long-term debt
Note payable, 7.84%, payable $398 thousand
quarterly, due 2004 12,110 13,304
Note payable under revolving credit line,
variable rate (6.3% at September 30, 1998) 20,000 20,000
Notes payable, variable rate (6.4% at September 30,
1998), payable $336 thousand quarterly, due 2002 8,073 9,082
Other notes payable 1,027 1,120
Industrial development revenue bonds:
6.5%, sinking fund $1 million payable annually,
due 1999 2,000 2,000
Variable rate (5.5% at September 30, 1998),
payable $882 thousand annually through 2004 4,588 5,470
Variable rate (4.15% at September 30, 1998),
due 2025 3,100 3,100
Debenture bonds, 6.5% to 8.7%, due 1998
through 2008 21,278 19,556
Other bonds, 4% to 10% 437 483
72,613 74,115
Less current maturities of long-term debt 6,882 8,406
65,731 65,709
Deferred income taxes 6,983 5,393
Minority interest 671 649
Shareholders' equity:
Common stock (25,000 shares authorized, 8,430
issued, stated value $.01 per share, 8,164 and
7,939 outstanding at 9/30/98 and 12/31/97,
respectively) 84 84
Additional paid-in capital 67,188 66,660
Retained earnings 13,477 9,875
Unearned compensation (150) --
Treasury stock (266 and 491 shares at 9/30/98
and 12/31/97, respectively; at cost) (2,415) (4,418)
78,184 72,201
$334,627 $368,244
Note: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date.
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Nine Months
Ended September 30 Ended September 30
1998 1997 1998 1997
Grain sales and revenues $ 123,602 $ 80,133 $ 374,474 $ 272,662
Fertilizer, retail and other sales 105,614 79,778 358,762 322,507
Other income 1,576 2,018 3,584 3,715
230,792 161,929 736,820 598,884
Cost of grain sales 113,975 72,083 349,285 255,948
Cost of fertilizer, retail and
other sales 79,900 59,049 267,996 241,939
193,875 131,132 617,281 497,887
Gross Profit 36,917 30,797 119,539 100,997
Operating, administrative and
general expenses 34,819 30,993 103,675 95,775
Provision for bad debts 1,406 344 2,488 1,067
Interest expense 2,153 1,905 6,497 6,318
38,378 33,242 112,660 103,160
Income (loss) before income taxes (1,461) (2,445) 6,879 (2,163)
Provision for income taxes (Note B) (489) (916) 2,305 (811)
Net income (loss) $ (972) $ (1,529) $ 4,574 $ (1,352)
Per common share:
Basic and diluted $ (0.12) $ (0.19) $ 0.57 $ (0.16)
Dividends paid $ 0.04 $ 0.03 $ 0.12 $ 0.09
Weighted average common shares
outstanding 8,145 8,124 8,033 8,232
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(IN THOUSANDS)
Nine Months Ended September 30
1998 1997
Operating activities
Net income (loss) $ 4,574 $ (1,352)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 7,884 7,485
Provision for losses on accounts and
notes receivable 2,488 1,067
Deferred income tax (698) 190
Changes in operating assets and liabilities:
Trade receivables 5,459 14,049
Inventories 28,006 5,932
Prepaid expenses and other assets 3,977 653
Accounts payable for grain (88,455) (61,859)
Other accounts payable and accrued expenses 7,332 (25,108)
Net cash used in operating activities (29,433) (58,943)
Investing activities
Purchases of property, plant and equipment (7,816) (10,084)
Proceeds from sale of property, plant and equipment 251 948
Net cash used in investing activities (7,565) (9,136)
Financing activities
Net increase in short-term borrowings 35,360 49,700
Proceeds from issuance of long-term debt 82,722 149,182
Payments of long-term debt (84,223) (150,004)
Purchase of common stock for the treasury (345) (4,053)
Proceeds from sale of 49 thousand shares of
treasury stock under registered plans 437 423
Dividends paid (974) (747)
Net cash provided by financing activities 32,977 44,501
Decrease in cash and cash equivalents (4,021) (23,548)
Cash and cash equivalents at beginning of period 8,278 27,524
Cash and cash equivalents at end of period $ 4,257 $ 3,946
Noncash investing activity:
Business acquisition:
Assets other than property, plant and equipment $ 7,055
Property, plant and equipment 1,847
Liabilities assumed (6,652)
Common stock issued (2,250)
Net cash expended $ --
See notes to condensed consolidated financial statements.
THE ANDERSONS, INC.
NOTES TO CONDENSED CONSOLIDATED 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 consolidated financial statements
should be read in conjunction with the audited consolidated financial
statements and notes thereto included in The Andersons, Inc. Annual
Report on Form 10-K for the year ended December 31, 1997.
Note B - In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement No. 131, Disclosures about Segments of an Enterprise and
Related Information, which is required for years beginning after
December 15, 1997. The new rules change the manner in which operating
segments are defined and reported externally to be consistent with the
basis on which they are reported and evaluated internally. This
statement will not have a significant impact on the Company.
In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which defines
derivatives, requires that derivatives be carried at fair value, and
provides for hedge accounting when certain conditions are met. This
statement is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. Although the Company has not fully
assessed the implications of this new statement, the Company does not
believe adoption of this statement will have a material impact on its
financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Comparison of the three months ended September 30, 1998 with the three months
ended September 30, 1997:
Sales and revenues for the three months ended September 30, 1998 totaled
$230.8 million, an increase of $68.9 million or 43% from the 1997 third quarter
sales and revenues of $161.9 million.
The Agriculture Group had an increase in sales of $40.0 million and an
increase in merchandising revenues of $1.6 million for a net increase in
revenues of $41.6 million or 40%. Grain bushels sold increased 97% while
fertilizer tons sold decreased 11%. The increase in merchandising revenues
reflects $1.3 million in additional revenues earned for storing customer
grain and fertilizer. The large harvest has provided the Company more bushels
to sell and store in the fourth quarter and 1999. The unusually dry grain,
however, reduces the Company's ability to generate drying and mixing income.
The excess supply and other factors pushed grain prices to a low level which
resulted in softened sales in the fertilizer business. The Company has added
facilities in all of its Agriculture businesses since the third quarter of
1997. These additions include leases for two grain elevators (increasing grain
storage capacity from 69 million bushels to 80 million bushels), an additional
fertilizer distribution facility and four retail farm centers.
The Processing & Manufacturing Group had increased sales and revenues of
$27.4 million or 155%. The processing business had increased sales of $4.2
million or 56% resulting from an 85% increase in lawn fertilizer tons sold
coupled with a 5% decrease in the average selling price per ton. Volume is up
in all segments of the lawn fertilizer market. Railcar sales increased $22.3
million while revenues from the railcar leasing business increased $0.9 million
or 31%. Sales of railcars are sporadic throughout the year.
The Retail Group experienced a slight overall increase in sales from the
third quarter of 1997. Sales for the third quarter of 1998 were $39.1 million
as compared to $38.9 million for the third quarter of 1997.
Gross profit for the three months ended September 30, 1998 totaled $36.9
million, an increase of $6.1 million or 20% from the 1997 third quarter gross
profit of $30.8 million.
The Agriculture Group had a $1.9 million or 16% increase in gross profit with
$1.6 million related to merchandising activities. Gross profits on grain sales
increased 10%, merchandising revenues increased 31%, and gross profit on
fertilizer sales decreased 7% due to the volume decrease.
Overall, the Processing and Manufacturing Group experienced an increase of
$4.6 million or 70%, with $3.5 million from the manufacturing division. This
increase is attributable to the sales of railcars in the third quarter and
volume increases in the lawn fertilizer business.
Gross profit on sales in the Retail Group increased 1% or $0.1 million on
higher margins and slightly increased sales. The margin improvement was due to
a shift in the product mix sold during the 1998 third quarter when compared to
the third quarter of 1997. The addition of home soft goods and similar
products in the 1998 reset of the stores has resulted in improvements to the
overall store margins.
Operating, administrative and general expenses for the third quarter of 1998
totaled $34.8 million, an increase of $3.8 million or 12% from the third
quarter of 1997. Full time employees increased over 4% in the same period and
labor and benefits expense for the three month period increased 9%. The
staffing increases occurred in the Agriculture and Processing and Manufacturing
groups. In addition, there were increases in depreciation and amortization and
in repair and maintenance expense, in part due to the new facilities. Total
additional operating expenses relating to the new facilities were $1.4 million.
The provision for bad debts for the third quarter totaled $1.4 million, an
increase of $1.1 million or 309% from the third quarter of 1997. Increased
credit risk on specific grain and rail customers prompted this increase in the
provision for bad debts.
Interest expense for the third quarter of 1998 was $2.2 million, a $0.2
million increase from the third quarter of 1997. The quarterly average
borrowings were 23% higher in 1998 than in the third quarter of 1997, however,
the Company's average borrowing rate has decreased.
The pretax loss of $1.5 million represents an improvement of $1 million or
40% from the third quarter of 1997. The net loss of $1 million represents an
improvement of $.6 million from the 1997 third quarter results. The quarterly
effective tax rate decreased from 37% in 1997 to 33% in 1998. The actual tax
rate for the year ended December 31, 1997 was 35%. Basic and dilutive loss per
share of $0.12 is a $0.07 improvement from the third quarter of 1997 loss per
share of $0.19.
Comparison of the nine months ended September 30, 1998 with the nine months
ended September 30, 1997:
Sales and revenues for the nine months ended September 30, 1998 totaled
$736.8 million, an increase of $137.9 million or 23% from the 1997 sales and
revenues of $598.9 million.
The Agriculture Group had an increase in sales of $99.9 million and an
increase in merchandising revenues of $6.3 million for a net increase in
revenues of $106.2 million or 27%. Grain bushels sold increased 73% while
fertilizer tons sold increased 3%. The increase in merchandising revenues
reflects $4.5 million in additional revenues earned for storing customer
grain and fertilizer. The large harvest has provided the Company more bushels
to sell and store in the fourth quarter and 1999. The unusually dry grain,
however, reduces the Company's ability to generate drying and mixing income.
As mentioned previously, the Company has added facilities in all of its
Agriculture businesses since the third quarter of 1997.
The Processing & Manufacturing Group had increased sales and revenues of
$32.5 million or 39%. The processing business had increased sales of $10.1
million or 19% resulting from a 45% increase in lawn fertilizer tons sold
coupled with a 15% decrease in the average selling price per ton. Volume is up
in all segments of the lawn fertilizer market. Railcar sales increased $18.8
million while revenues from the railcar leasing business increased $3.8 million
or 45%.
The Retail Group experienced a slight overall decrease in sales when compared
to the first nine months of 1997. Sales for the nine months to date in 1998
were $120.9 million as compared to $121.8 million for the nine months ended
September 30, 1998.
Gross profit for the nine months ended September 30, 1998 totaled $119.5
million, an increase of $18.5 million or 18% from the 1997 nine-month gross
profit of $101 million.
The Agriculture Group had a $11 million or 33% increase in gross profit with
$6.3 million related to merchandising activities. Gross profits on grain sales
increased 35%, while gross profit on fertilizer sales increased 12%.
Overall, the Processing and Manufacturing Group experienced an increase in
gross profit of $7.3 million or 25%, with $4.7 million from the manufacturing
division. This increase is attributable to the sales of railcars in the third
quarter and volume increases in the lawn fertilizer business.
Gross profit on sales in the Retail Group increased 1% or $0.3 million on
higher margins. The margin improvement was due to a shift in the product mix
sold. The addition of home soft goods and similar products in the early 1998
reset of the stores has resulted in improvements to the overall store margins.
Operating, administrative and general expenses for the first nine months of
1998 totaled $103.7 million, an increase of $7.9 million or 8% from the first
nine months of 1997. Full time employees increased over 4% in the same period
and labor and benefits expense for the nine month period increased $3.2 million
or 6%. The staffing increases occurred in the Agriculture and Processing and
Manufacturing groups. In addition, there were increases in depreciation and
amortization and in repair and maintenance expense, in part due to the new
facilities. Total additional operating, administrative and general expenses
relating to the new facilities were $1.8 million.
The provision for bad debts for the first nine months of 1998 totaled $2.5
million, an increase of $1.4 million or 133% from the first nine months of
1997. Increased credit risk on specific grain and rail customers prompted this
increase in the provision for bad debts.
Interest expense for the first nine months of 1998 was $6.5 million, a $0.2
million increase from the first nine months of 1997. Year to date average
short-term borrowings for 1998 were 13% higher than the same period in 1997.
There was a slight decrease in the average interest rate.
The pretax income of $6.9 million represents an improvement of $9 million
from the first nine months of 1997. The net income of $4.6 million represents
an improvement of $5.9 million from the 1997 year to date results. The year to
date effective tax rate decreased from 37% in 1997 to 34% in 1998. The actual
tax rate for the year ended December 31, 1997 was 35%. Basic and dilutive
income per share of $0.57 is a $0.73 improvement from the first nine months of
1997 loss per share of $0.16.
Liquidity and Capital Resources
In the first nine months of 1998, the Company's operations used cash of $29.4
million. For the same period in 1997, the Company's operations used cash of
$59 million. Working capital has grown from $53.6 million at December 31, 1997
to $58.9 million at September 30, 1998. The Company had $4 million in cash and
cash equivalents at September 30, 1998 and has short-term lines of credit of
$225 million available to finance working capital, primarily inventories and
accounts receivable. At September 30, 1998, $55 million was borrowed on these
available lines. Typically, the Company's highest borrowings occur in the
spring due to seasonal inventory requirements in the wholesale fertilizer and
retail businesses, credit sales in the wholesale and lawn fertilizer businesses
and a customary reduction in the liability for grain due to the cash needs of
grain producers and market strategies.
A quarterly cash dividend of $0.04 per common share was paid in each of the
first three quarters of 1998. A cash dividend of $0.04 per common share was
declared for shareholders of record on October 1, 1998 and was paid on October
21, 1998. Cash dividends of $0.03 per common share were paid quarterly in
1997. The Company made income tax payments of $3.5 million in the first nine
months of 1998 and expects to make additional payments totaling approximately
$1.1 million in 1998. Also in the first nine months of 1998, the Company
issued 67,469 shares (including 16,018 restricted shares) to employees, former
employees and directors under registered stock plans and repurchased 36,000
shares. It also issued 192,834 shares for all of the outstanding shares of
Crop & Soil, Inc., a corporation operating three retail farm centers in
Northwest Ohio.
Capital expenditures for the first nine months of 1998 total $7.8 million.
Total cash capital expenditures for 1998 are expected to approximate $17
million and include additional production capacity in the processing division,
plant upgrades and improvements in the agriculture group and the acquisition of
additional railcars. Funding for these expenditures is expected to come from
cash generated from operations. Capital expenditures can be curtailed if cash
generated from operations is less than expected.
Certain of the Company's long-term debt is secured by first mortgages on
various facilities. Some of the long-term borrowings include provisions that
impose minimum levels of working capital and equity, limitations on additional
debt and require the Company to be substantially hedged in its grain
transactions. The Company's liquidity is enhanced by the fact that grain
inventories are readily marketable. In the opinion of management, the
Company's liquidity is adequate to meet short-term and long-term needs.
Impact of Year 2000
The Year 2000 Issue is the result of computer programs that were written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs or hardware that have date sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could cause a system failure or miscalculations causing disruptions of
operations.
The Company plan to resolve the Year 2000 Issue involves four phases:
assessment, remediation, testing and implementation. The Company has completed
its assessment of all systems that could be significantly affected by the year
2000 and has developed remediation plans that include both modifications and
replacements. These remediation plans have been prioritized based on the
perceived risk of failure or error. The Company interfaces with third parties
in some of its businesses and functional areas. These third party interfaces
have been considered in the assessment and remediation plans and have been
assigned a high priority for completion.
In addition, the Company has queried its significant suppliers and
subcontractors that do not share information systems with the Company (its
"external agents") and received responses from 70% of them. To date, the
Company is not aware of any external agent with a Year 2000 Issue that would
materially impact the Company's results of operations, liquidity or capital
resources. However, the Company has no means of ensuring that external agents
will be Year 2000 ready. The inability of external agents to complete their
Year 2000 resolution processes in a timely fashion could materially impact the
Company. The effect of non-compliance by external agents is not determinable.
Costs incurred to date have totaled approximately $.7 million for the
purchase of new software and $.6 million representing existing internal
resources that were expensed as incurred. The remaining cost of remediation
for the Company is estimated at $1.9 million, which includes $1.7 million for
the purchase of software and hardware and $.2 million representing existing
internal resources that will be expensed as incurred.
Year 2000 modification plans and software installations are under way and are
expected to be substantially complete by the first quarter of 1999 for all high
risk systems except the wholesale fertilizer system that will be installed by
the end of the second quarter and the retail cash register systems that will be
installed by the third quarter. Testing of remediated systems has begun as
well and will be completed for the remaining systems upon completion of
modifications.
There have been no substantial changes to the plans as previously reported.
The Company believes that with the planned modifications and conversions, the
Year 2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not completed
before the year 2000, there could be an impact on the operations of the
Company. The Company is now in the process of developing contingency plans for
its major systems applications and other high-risk systems. This process will
both determine the need for a contingency plan based on the current status of
remediation and testing as well as determine manual workarounds or other
actions for these critical applications.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes and similar uncertainties.
Forward Looking Statements
The preceding Management's Discussion and Analysis contain various "forward-
looking statements" which reflect the Company's current views with respect to
future events and financial performance. These forward-looking statements are
subject to certain risks and uncertainties, including but not limited to those
identified below, which could cause actual results to differ materially from
historical results or those anticipated. The words "believe," "expect,"
"anticipate" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. 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. The following
factors could cause actual results to differ materially from historical results
or those anticipated; weather, supply and demand of commodities including
grains, fertilizer and other basic raw materials, market prices for grains and
the potential for increased margin requirements, regulatory agency review of
grain contracts, competition, economic conditions, risks associated with
acquisitions, interest rates and income taxes.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Pursuant to subpoenas duces tecum served by the Commodities Futures Trading
Commission (the "CFTC"), the Company has produced certain records, including
names and phone numbers of certain customers, and the depositions of certain
employees and former employees have been taken in the matter of "Certain
Transactions and Practices Among Grain Elevators, et. al., Involving Futures
Contracts." There can be no assurance that other CFTC proceedings will not
be instituted. There currently is no reasonable basis to predict the amount of
future liability or loss, if any, that may arise from such CFTC proceedings.
Item 2. Changes in Securities and Use of Proceeds
On July 1, 1998, the Company issued 192,834 shares of its common stock to the
six former owners of Crop and Soil, Inc. in exchange for all of the outstanding
shares of Crop and Soil, Inc. The purchase agreement provides for a purchase
price of $2.25 million to be paid in two installments of the Company's common
shares. The July 1, 1998 installment was valued at $1.75 million. The second
installment, if any, will be made as of April 1, 2000, and will be in shares of
the Company's common stock with a value up to $.5 million. This installment
will be reduced if the shares transferred in the July 1, 1998 installment
provide a compounded total return (market value plus dividends) in excess of
10% to their holders for the period April 1, 1998 to April 1,
2000.
The shares were issued without registration in reliance on the exemption
provided by the Securities Act of 1933, as amended (the "Act"), pursuant to
Section 4(2) of the Act.
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 September 30, 1998.
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, INC.
(Registrant)
Date: November 12, 1998 By /s/Richard P. Anderson
Richard P. Anderson
Chairman of the Board and Chief Executive
Officer
Date: November 12, 1998 By /s/Richard R. George
Richard R. George
Vice President and Controller (Principal
Accounting Officer)