Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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 or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
480 W. Dussel Drive, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 893-5050
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Shares
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.___
The aggregate market value of the registrant's voting stock which may be
voted by persons other than affiliates of the registrant was $64,059,586 on
February 28, 1997, computed by reference to the last sales price for such stock
on that date as reported on the Nasdaq National Market
The registrant had 8,316,992 Common shares outstanding, no par value, at
February 28, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1996 Annual Report of The Andersons, Inc. and Proxy
Statement for the Annual Meeting of Shareholders to be held on May 22, 1997,
are incorporated by reference into Parts II (Items 5, 6, 7 and 8), III (Items
10, 11 and 12) and IV of this Annual Report on Form 10-K. The Proxy Statement
will be filed with the Commission on or about April 15, 1997.
PART I
Item 1. Business
(a) General Development of Business
The Andersons, Inc. is a diversified agribusiness and retailing company
operating in three segments. The Agriculture Group engages in grain
merchandising, operates grain elevator facilities located in Ohio, Michigan,
Indiana and Illinois, distributes wholesale agricultural fertilizer and
operates retail farm centers. The Retail Group operates six retail stores in
Ohio. The Processing and Manufacturing Group (formerly called the Business
Development Group) includes, primarily, the processing of lawn and industrial
products and the repair and leasing of railcars.
Prior to January 2, 1996 the Company was structured as two entities; The
Andersons Management Corp. (the "Corporation") and The Andersons (the
"Partnership"). The Corporation was the sole general partner of the
Partnership and provided all management services to the Partnership. The
Partnership was the successor to other Ohio limited partnerships which operated
as "The Andersons" continuously since 1947. On January 2, 1996, the
Partnership merged with and into the Corporation and the Corporation survived,
changing its name to The Andersons, Inc. See Note 1 to the consolidated
financial statements for further discussion about the merger. All information
herein gives effect to the merger.
(b) Financial Information About Industry Segments
See Note 13 to the consolidated financial statements for information
regarding business segments.
(c) Narrative Description of Business
Agriculture Group
The Agriculture Group consists of grain operations, wholesale fertilizer
operations, and retail farm centers.
The Company's grain operations involve merchandising grain and operating
terminal grain elevator facilities. This includes purchasing, handling,
processing and conditioning grain, storing grain purchased by the Company as
well as grain owned by others, and selling grain. The principal grains sold by
the Company are yellow corn, yellow soybeans and soft red and white wheat. The
Company's total grain storage capacity was approximately 69 million bushels at
December 31, 1996.
Virtually all grain merchandised by the Company is grown in the Midwestern
portion of the United States (the Eastern Corn Belt) and is acquired from
country elevators, dealers and producers. The Company makes grain purchases at
prices referenced to Chicago Board of Trade quotations. The Company competes
for the purchase of grain with grain processors and feeders, as well as with
other grain merchandisers.
During 1996, approximately 72% of the grain sold by the Company was
purchased domestically by grain processors and feeders, and approximately 28%
was exported. Most of the exported grain was purchased by exporters for
shipment to foreign markets. Some grain is shipped directly to foreign
countries, mainly Canada. Almost all grain shipments are by rail or boat.
Rail shipments are made primarily to grain processors and feeders, with some
rail shipments made to exporters on the Gulf or east coast. All boat shipments
are from the Toledo, Ohio port elevator. Grain sales are effected on a
negotiated basis by the Company's merchandising staff.
The Company's grain business may be adversely affected by the grain supply
in its principal growing area including crop quality and quantity, government
regulations and policies, conditions in the shipping and rail industries and
commodity price levels. See "Government Regulation". The grain business is
seasonal coinciding with the harvest of the principal grains purchased and sold
by the Company.
Fixed price purchases and sales of cash grain and grain held in inventory
expose the Company to risks related to adverse changes in price. The Company
attempts to manage these risks by hedging fixed price purchase and sales
transactions and inventory through the use of futures and option contracts with
the Chicago Board of Trade ("CBOT"). The CBOT is a regulated commodity futures
exchange that maintains futures markets for the grains merchandised by the
Company. Futures prices are determined by supply and demand.
The Company's hedging program is designed to reduce the risk of changing
commodity prices. In that regard, hedging transactions also limit potential
gains from further changes in market prices. The grain division's
profitability is primarily derived from margins on grain sold, and revenues
generated from other merchandising activities with its customer, not from
hedging transactions. The Company has a policy which specifies the key
controls over its hedging program. This policy includes a description of the
hedging programs, mandatory review of positions by key management outside of
the trading function on a biweekly basis, daily position limits, modeling of
positions for changes in market conditions, and other internal controls.
Purchases of grain can be made the day the grain is delivered to a
terminal or via a forward contract made prior to actual delivery. Sales of
grain are generally made by contract for delivery in a future period. When the
Company purchases grain at a fixed price, the purchase is hedged with the sale
of a futures contract on the CBOT. Similarly, when the Company sells grain at
a fixed price, the sale is hedged with the purchase of a futures contract on
the CBOT. At the close of business each day, the open inventory ownership
positions as well as open futures and option positions, are marked-to-market.
Gains/losses in the value of the Company's owned inventory positions due to
changing prices are netted with and generally offset by losses/gains in the
value of the Company's futures positions.
When a futures contract is entered, an initial margin deposit must be sent
to the CBOT. The amount of the margin deposit is set by the CBOT and varies by
commodity. If the market price of a futures contract moves in a direction
which is adverse to the Company's position, an additional margin deposit,
called a maintenance margin, is required by the CBOT. Subsequent price changes
could require additional maintenance margins or could result in the return of
maintenance margins by the CBOT. Significant changes in market prices, such as
occur when weather conditions are unfavorable for extended periods, can have an
effect on liquidity and require the Company to maintain appropriate short-term
lines of credit. The Company has, at times, utilized CBOT option contracts to
limit its exposure to potential required margin deposits in the event of a
rapidly rising market.
The Grain division relies on forward purchase contracts with producers,
dealers and country elevators to ensure an adequate supply of grain to its
facilities throughout the year. Bushels contracted for future delivery at
February 28, 1997 approximated 23 million, 96% of which was to be delivered in
the 1996 and 1997 crop years. The Company relies heavily on its hedging
program as the method for minimizing price risk in its grain inventories and
contracts. The Company monitors current market conditions and may expand or
reduce the purchasing program in response to changes in those conditions. In
addition, the Company reviews its purchase contracts and the parties to those
contracts on a regular basis for defaults and non-delivery. Provision is made
under the Grain Trade Rules of the National Grain and Feed Association ("NGFA")
for resolution of contract defaults (non-delivery of grain) and for arbitration
of contract disputes. The Company's standard purchase and sales contracts
include arbitration clauses, and the Company is currently arbitrating several
cases before the NGFA. In addition, the Company is involved in litigation with
several producers. See "Legal Proceedings".
The Company competes in the sale of grain with other grain merchants,
other private elevator operators and farmer cooperatives which operate elevator
facilities. Competition is based primarily on price, service and reliability.
Some of the Company's competitors are also its customers and many of its
competitors have substantially greater financial resources than the Company.
The Company's wholesale fertilizer operations involve purchasing, storing,
formulating, and selling dry and liquid fertilizers; providing fertilizer
warehousing and services to manufacturers and customers; and wholesale
distribution of seeds and various farm supplies. The major fertilizer
ingredients sold by the Company are nitrogen, phosphate and potassium, all of
which are readily available from various sources.
The Company's wholesale fertilizer market area primarily includes
Illinois, Indiana, Michigan and Ohio and customers for the Company's fertilizer
products are principally retail dealers. Sales of agricultural fertilizer
products are heaviest in the spring and fall.
The Company's aggregate storage capacity for dry fertilizer was 14 million
cubic feet at December 31, 1996. The Company reserves 6 million cubic feet of
this space for various fertilizer manufacturers and customers. The Company's
aggregate storage capacity for liquid fertilizer at December 31, 1996 was 29
million gallons and 5 million gallons of this space is reserved for
manufacturers and customers. The agreements for reserved space provide the
Company storage and handling fees and, generally, are for an initial term of
one year and are renewable at the end of each term.
The Company operates nine retail farm centers located throughout Michigan,
Indiana and Ohio. These centers, often strategically located at or near the
Company's grain or wholesale fertilizer facilities, offer agricultural
fertilizer, custom application of fertilizer, and chemicals, seeds and supplies
to the farmer.
In its wholesale fertilizer and retail farm center businesses, the Company
competes with regional cooperatives; fertilizer manufacturers; multi-state
retail/wholesale chain store organizations; and other independent wholesalers
of agricultural products. Many of these competitors have considerably larger
resources than the Company. Competition in the agricultural products business
of the Company is based principally on price, location and service.
Retail Group
The Company's Retail Group consists of six stores operated under the trade
name "The Andersons", which are located in the Columbus, Lima and Toledo, Ohio
markets and serve urban, rural and suburban customers. The retail concept is
that of a destination store for the do-it-yourself homeowner and includes a
full line of home center products plus a wide array of other items not
available at the more traditional home center stores. In addition to hardware,
home remodeling and lawn & garden products, The Andersons stores offer
housewares, automotive, sporting goods, pet products, workwear and food
(bakery, deli, produce, wine and specialty groceries). Each store carries more
than 70,000 different items, has 100,000 square feet or more of in-store
display space plus 40,000 square feet of outdoor garden center space, and has a
center aisle that features do-it-yourself clinics, special promotions and
varying merchandise displays.
The retail merchandising business is highly competitive. The Company
competes with a variety of retail merchandisers, including numerous mass
merchandisers, home centers, department and hardware stores. The principal
competitive factors are quality of product, price, service and breadth of
selection. The Company's retail business is affected by seasonal factors with
significant sales occurring during the Christmas season and in the spring.
Processing and Manufacturing Group
The Processing and Manufacturing Group consists of three business units:
the processing division, the manufacturing division and the ventures division.
The processing division consists of lawn products, which manufactures and
markets fertilizer and related products to retailers and professional lawn care
companies and industrial products, which processes corn cobs into various
products for the chemical carrier, pet and industrial markets. The retail
granular lawn products are sold to mass merchandisers, small independent
retailers and other lawn fertilizer manufacturers. During the off-season, ice
melt products are distributed to many of the same retailers. The professional
granular lawn products are sold both direct and through distributors to lawn
service applicators and to golf courses. The principal raw materials for the
lawn care products are nitrogen, potash and phosphate, which are purchased
primarily from the Company's wholesale fertilizer division. The lawn products
industry is highly seasonal, with the majority of the sales occurring from
early spring to early summer. Competition is based principally on
merchandising ability, service and quality.
The Company is one of the largest producers of processed corncob products
in the United States. These products serve the chemical carrier, animal
litter, industrial and sorbent markets and are distributed throughout the
United States and Canada and into Europe and Asia. The principal sources for
the corncobs are the Company's grain operations and seed corn producers.
The Company's manufacturing division includes a full service railcar
repair shop, which specializes in repair, renovation and painting of railcars.
The division also is involved in the purchase and sale of railcars, leasing and
subleasing of railcars, and also provides fleet management services. It also
does custom fabrication work. Competition for railcar marketing and fleet
maintenance services are based primarily on service and access to third party
financing. Repair and fabrication shop competition is based primarily on
price, quality and location.
The Company's ventures division includes the production of pet foods,
which are marketed through a joint venture, the operation of eight auto service
centers, also a joint venture, and a lawn and garden power equipment sales and
service shop.
Research and Development
The Company's research and development program is mainly concerned with
the development of improved products and processes, primarily for the
processing division of the Processing and Manufacturing Group. The Company
expended approximately $320,000, $370,000, and $490,000 on research and
development during 1996, 1995 and 1994, respectively.
Employees
At December 31, 1996, the Company had 1,160 full-time and 1,864 part-time
or seasonal employees. The Company believes its relations with its employees
are good.
Government Regulation
Grain sold by the Company must conform to official grade standards imposed
under a federal system of grain grading and inspection administered by the
United States Department of Agriculture ("USDA").
The production levels, markets and prices of the grains which the Company
merchandises are materially affected by United States government programs,
including acreage control and price support programs of the USDA. Also, under
federal law, the President may prohibit the export of any product, the scarcity
of which is deemed detrimental to the domestic economy, or under circumstances
relating to national security. Because a portion of the Company's grain sales
are to exporters, the imposition of such restrictions could have an adverse
effect upon the Company's operations.
The Company, like other companies engaged in similar businesses, is
subject to a multitude of federal, state and local environmental protection
laws and regulations including, but not limited to, laws and regulations
relating to air quality, water quality, pesticides and hazardous materials.
The provisions of these various regulations could require modifications of
certain of the Company's existing plant and processing facilities and could
restrict future facilities expansion or significantly increase their cost of
operation. Of the Company's capital expenditures, approximately $720,000,
$740,000 and $617,000 in 1996, 1995 and 1994, respectively, were made in order
to comply with these regulations.
Item 2. Properties
The Company's principal agriculture, retail and other properties are
described below. Except as otherwise indicated, all properties are owned by
the Company.
Agriculture Facilities
Location Wholesale Fertilizer
Grain Liquid
Storage Dry Storage Storage
(bushels) (cubic feet) (gallons)
Maumee, OH 17,270,000 6,333,000 2,620,000
Toledo, OH River 7,010,000 2,000,000 3,000,000
Metamora, OH 6,860,000 --- ---
Lyons, OH (3) 380,000 47,000 160,000
Toledo, OH 1,210,000 --- ---
Champaign, IL 13,500,000 833,000 ---
Delphi, IN 6,700,000 1,000,000 ---
Clymers, IN (1)(4) 4,450,000 --- 2,694,000
Clymers, IN (3) --- 37,000 480,000
Dunkirk, IN 5,980,000 900,000
Poneto, IN 620,000 --- 5,540,000
North Manchester, IN (3) --- 23,000 90,000
Logansport, IN --- 33,000 3,011,000
Walton, IN (3) --- 433,000 7,000,000
Albion, MI (3) 2,590,000 23,000 40,000
White Pigeon, MI 2,070,000 --- ---
Webberville, MI --- 2,017,000 3,200,000
Litchfield, MI (2)(3) --- 40,000 252,000
North Adams, MI(2)(3) --- 20,000 230,000
Union City, MI (3) --- 20,000 49,500
Munson, MI (3) --- 33,000 150,000
68,640,000 13,792,000 28,516,500
(1) Facility leased - lease expires in 1998, provides an option to purchase.
(2) Facility leased.
(3) Facility is or includes a retail farm center.
(4) Facility also stores soybean oil with a capacity of 61,000,000 pounds.
The grain facilities are mostly concrete and steel tanks, with some flat
storage. The Company also owns grain inspection buildings and dryers, a corn
sheller plant, maintenance buildings and truck scales and dumps.
Wholesale fertilizer and retail farm center properties consist mainly of
fertilizer warehouse and distribution facilities for dry and liquid
fertilizers. The Maumee, Ohio and Walton, Indiana locations have fertilizer
mixing, bagging and bag storage facilities. The Company also owns a seed
processing facility in Delta, Ohio. Aggregate storage capacity in the nine
retail farm centers located in Michigan, Indiana and Ohio for liquid fertilizer
and dry fertilizer is 1.5 million gallons and 243,000 cubic feet, respectively.
Retail Store Properties
Name Location Square Feet
Maumee Store Maumee, OH 131,000
Toledo Store Toledo, OH 130,000
Woodville Store (1) Northwood, OH 100,000
Lima Store (1) Lima, OH 117,000
Brice Store Columbus, OH 128,000
Sawmill Store Columbus, OH 134,000
Warehouse (1) Maumee, OH 245,000
(1) Leased
The leases for the two stores and the warehouse facility are long-term
leases with several renewal options and provide for minimum aggregate annual
lease payments approximating $1 million. The two store leases provide for
contingent lease payments based on achieved sales volume. Neither store
achieved a sales level triggering contingent lease payments in 1996, 1995 or
1994.
Other Properties
The Company owns lawn fertilizer production facilities and automated pet
food production and storage facilities in Maumee, Ohio. It also owns corncob
processing and storage facilities in Maumee, Ohio and Delphi, Indiana. The
Company leases a lawn fertilizer production facility and a warehouse facility.
In its railcar leasing business, the Company owns or leases approximately 2,000
railcars (primarily covered hopper cars) with lease terms ranging from one to
ten years and future minimum lease payments aggregating $18 million with future
minimum sublease income of an equal amount. The Company also owns a railcar
repair facility, a steel fabrication facility, a service and sales facility for
outdoor power equipment. Additionally, the Company is part of a joint venture
which owns or leases eight auto service centers. The Company also owns or
leases a number of switch engines, cranes and other equipment.
The Company's administrative office building is leased under a net lease
expiring in 2005. The Company owns approximately 704 acres of land on which
various of the above properties and facilities are located; approximately 439
acres of farmland and land held for future use; approximately 11 acres of
improved land in an office/industrial park held for sale; and certain other
real estate.
Real properties, machinery and equipment of the Company were subject to
aggregate encumbrances of approximately $36 million at December 31,1996.
Additions to property for the years ended December 31, 1996, 1995 and 1994
amounted to $10 million, $16 million, and $26 million, respectively. See Note
9 to the Company's consolidated financial statements for information as to the
Company's leases.
The Company believes that its properties, including its machinery,
equipment and vehicles, are adequate for its business, well maintained and
utilized, suitable for their intended uses and adequately insured.
Item 3. Legal Proceedings
The Company, like others in the agriculture industry, utilizes different
types of contracts with producers (including contracts commonly referred to as
"Hedged To-Arrive" or "HTA" contracts) to purchase grain. Some grain producers
have defaulted or threatened default on certain of these contracts, arguing
that their contracts are unenforceable. The Company believes that this is due,
in large part, to unprecedented high grain prices experienced in 1996. The
Company currently is engaged in litigation and/or arbitration with several
defaulting producers, including one purported class action filed on May 16,
1996 in the United States District Court for the Northern District of Illinois,
Eastern Division, Case no. 96C2936, Harter, et. al., v. Iowa Grain Company and
The Andersons Investment Services Corp., d.b.a. The Andersons, Inc., wherein
enforceability of the delivery obligation under certain grain contracts has
been raised as an issue. The Harter lawsuit seeks declaratory and injunctive
relief and compensatory, exemplary and punitive damages of an unspecified
amount. The Court, in Harter, ordered arbitration by the National Grain and
Feed Association and dismissed Iowa Grain Company as a defendant. The Company
believes its grain contracts are enforceable obligations and intends to enforce
them. Although no assurance can be given that the current litigation and
arbitration will not result in liability or loss, the Company continues to
believe that it has valid claims and defenses in the lawsuits and proceedings
in which it is involved.
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."
In light of the Company's current and prior use of Hedged To-Arrive
contracts, related industry-wide litigation, and current conditions of the
industry as a whole, there can be no assurance that other litigation will not
be brought, that a class will not be certified or 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 litigation
or CFTC proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 4A. Executive Officers of the Registrant
Pursuant to General Instruction G(3) of Form 10-K, the following
information with respect to the executive officers of the registrant is
included herein in lieu of being included in the Registrant's Proxy Statement
for its Annual Meeting of Shareholders to be held May 22, 1997.
Name Position Age Year Assumed
Christopher President, Processing and 42 1996
J. Anderson Manufacturing Group
Vice President, Business 1992
Development Group
General Manager, Ventures & New 1990
Business Development
Daniel T. President, Retail Group 41 1996
Anderson Director of Marketing and 1996
Merchandising, Retail Group
General Merchandise Manager, 1991
Retail Group
Michael J. President and Chief Operating 45 1996
Anderson Officer
Vice President and General 1994
Manager, Retail Group
Vice President and General 1990
Manager, Grain Group
Richard M. Vice President and General 40 1996
Anderson Manager, Processing Division
Vice President and General 1990
Manager, Industrial Products
Group
General Manager, Industrial 1990
Products & Technical Development
Richard P. Chairman of the Board and Chief 67 1996
Anderson Executive Officer
President and Chief Executive 1987
Officer
Joseph L. President, Agriculture Group 46 1996
Braker Vice President and General 1994
Manager, Agriculture Group
Vice President and General 1990
Manager, Agricultural Products
Group
Joseph C. Vice President, Human Resource 48 1996
Christen Development
Director of Human Resource 1988
Development
Dale W. Vice President - Corporate 52 1992
Fallat Services
Senior Vice President, Corporate 1990
Services
Phillip C. Vice President, Corporate 55 1996
Fox Planning
Director of Company Planning 1988
Charles E. Vice President, Personnel 55 1996
Gallagher Director of Personnel 1988
Richard R. Vice President and Controller 47 1996
George Corporate Controller 1988
Beverly J. Vice President, General Counsel 55 1996
McBride and Secretary
General Counsel and Corporate 1987
Secretary
Gary L. Vice President, Finance and 51 1996
Smith Treasurer
Corporate Treasurer 1988
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
The information under the caption Market for Common Stock on page 10 and
Shareholders on the inside back cover of The Andersons, Inc. 1996 Annual Report
to Shareholders is incorporated herein by reference. The Company's first
quarterly dividend of three cents per common share was declared on December 20,
1996 for shareholders of record on January 2, 1997.
Item 6. Selected Financial Data
The information under the caption Selected Financial Data on page 9 of The
Andersons, Inc. 1996 Annual Report to Shareholders is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information under the caption Management's Discussion and Analysis
appearing on pages 8 and 9 of The Andersons, Inc. 1996 Annual Report to
Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The information under the caption Selected Quarterly Financial Data on
page 10 of The Andersons, Inc. 1996 Annual Report to Shareholders, as well as
the following consolidated financial statements of The Andersons, Inc. set
forth on pages 11 through 28 of The Andersons, Inc. 1996 Annual Report to
Shareholders are incorporated herein by reference:
Consolidated Statements of Income for the years ended December 31,
1996, 1995 and 1994
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994
Consolidated Statements of Changes in Owners' Equity for the years
ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Following is the Report of Independent Auditors on the Consolidated
Financial Statements and schedule:
Report of Independent Auditors
Board of Directors
The Andersons, Inc.
We have audited the accompanying consolidated balance sheets of The Andersons,
Inc. and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, cash flows and changes in owners' equity for
each of the three years in the period ended December 31, 1996. Our audits also
included the financial statement schedule listed in the index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Andersons, Inc. and subsidiaries at December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
/s/ERNST & YOUNG LLP
Toledo, Ohio
January 31, 1997
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
For information with respect to the executive officers of the registrant,
see "Executive Officers of the Registrant" in Item 4A included in Part I of
this report. For information with respect to the Directors of the registrant,
see "Election of Directors" in the Proxy Statement for the Annual Meeting of
the Shareholders to be held on May 22, 1997 (the "Proxy Statement"), which is
incorporated herein by reference; for information concerning 1934 Securities
and Exchange Act Section 16(a) Compliance, see such section in the Proxy
Statement, incorporated herein by reference.
Item 11. Executive Compensation
The information set forth under the captions "Executive Compensation" in
the Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the captions "Executive Compensation" in
the Proxy Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Financial Statement Schedules and Reports on Form 8-K
(a) (1) The consolidated financial statements of the Company, as set forth
under Item 8 of this report on Form 10-K, are incorporated herein by reference
from The Andersons, Inc. 1996 Annual Report to Shareholders.
(2) The following consolidated financial statement schedule is included
in Item 14(d):
Page
II. Consolidated Valuation and Qualifying Accounts - years
ended December 31, 1996, 1995 and 1994 14
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
(3) Exhibits:
2.1 Agreement and Plan of Merger, dated April 28, 1995 and amended as
of September 26, 1995, by and between The Andersons Management Corp.
and The Andersons. (Incorporated by reference to Exhibit 2.1 to
Registration Statement No. 33-58963).
3.1 Articles of Incorporation. (Incorporated by reference to Exhibit 3(d)
to Registration Statement No. 33-16936).
3.4 Code of Regulations of The Andersons, Inc. (Incorporated by reference
to Exhibit 3.4 to Registration Statement No. 33-58963).
4.3 Specimen Common Share Certificate. (Incorporated by reference to
Exhibit 4.1 to Registration Statement No. 33-58963).
4.4 The Fifteenth Supplemental Indenture dated as of January 2, 1995,
between The Andersons, Inc. and Fifth Third Bank of Northwestern
Ohio, N.A., successor Trustee to an Indenture between The Andersons
and Ohio Citizens Bank, dated as of October 1, 1985. (Incorporated by
reference to Exhibit 4.4 to registrant's 1995 Annual Report on Form
10-K).
10.1 Management Performance Program. * (Incorporated by reference to
Exhibit 10(a) to the Partnership's Form 10-K dated December 31, 1990,
File No. 2-55070).
10.2 The Andersons, Inc. Long-Term Performance Compensation Plan *
(Incorporated by reference to Appendix B to Registration Statement
No. 33-58963).
10.3 The Andersons, Inc. Employee Share Purchase Plan * (Incorporated by
reference to Appendix C to Registration Statement No. 33-58963).
13 The Andersons, Inc. 1996 Annual Report to Shareholders
22 Subsidiaries of The Andersons, Inc.
23.1 Consent of Independent Auditors
* Management contract or compensatory plan.
The Company agrees to furnish to the Securities and Exchange Commission a
copy of any long-term debt instrument or loan agreement that it may request.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter of the year.
(c) Exhibits:
The exhibits listed in Item 14(a)(3) of this report, and not
incorporated by reference, follow "Financial Statement Schedule"
referred to in (d) below.
(d) Financial Statement Schedule:
The financial statement schedule listed in 14(a)(2) follows
"Signatures".
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in Maumee, Ohio,
on the 28th day of March, 1997.
THE ANDERSONS, INC. (Registrant)
By /s/Richard P. Anderson
Richard P. Anderson
Chairman of the Board and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant on the 28th day of March, 1997.
Signature Title Date
/s/Richard P. Anderson Chairman and Chief Executive 3/28/97
Richard P. Anderson Officer (Principal Executive Officer)
/s/Richard R. George Vice President and Controller 3/28/97
Richard R. George (Principal Accounting Officer)
/s/Gary L. Smith Vice President, Finance 3/28/97
Gary L. Smith and Treasurer
(Principal Financial Officer)
________________________ Director
Donald E. Anderson
/s/Michael J. Anderson Director 3/28/97
Michael J. Anderson
/s/Richard M. Anderson Director 3/28/97
Richard M. Anderson
/s/Thomas H. Anderson Director 3/28/97
Thomas H. Anderson
/s/John F. Barrett Director 3/28/97
John F. Barrett
/s/Paul M. Kraus Director 3/28/97
Paul M. Kraus
_______________________ Director
Donald M. Mennel
_______________________ Director
David L. Nichols
_______________________ Director
Dr. Sidney A. Ribeau
_______________________ Director
Charles A. Sullivan
Except for those portions of The Andersons, Inc. 1996 Annual Report to
Shareholders specifically incorporated by reference in this report on Form
10-K, such annual report is furnished solely for the information of the
Securities and Exchange Commission and is not to be deemed "filed" as a part of
this filing.
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
THE ANDERSONS, INC.
Additions
Balance at Charged to Charged to Balance
Beginning Costs and Other Accounts Deductions at End
Description of Period Expenses -Describe -Describe of Period
Allowance for doubtful accounts receivable:
Year ended December 31, 1996 $3,514,000 $4,321,994 $ - $4,605,994 $3,230,000
Year ended December 31, 1995 2,292,000 2,220,830 - 998,830 3,514,000
Year ended December 31, 1994 1,178,000 2,682,904 - 1,568,904 2,292,000
Allowance for doubtful notes receivable:
Year ended December 31, 1996 $1,277,000 $ - $ - $ 542,000 $ 735,000
Year ended December 31, 1995 727,000 550,000 - - 1,277,000
Year ended December 31, 1994 - 727,000 - - 727,000
Uncollectible accounts written off, net of recoveries
EXHIBIT INDEX
THE ANDERSONS, INC.
Exhibit
Number
13 The Andersons, Inc. 1996 Annual Report to Shareholders
22 Subsidiaries of The Andersons, Inc.
23.1 Consent of Independent Auditors