-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ICFIPmJsPzi+t0EEv7NWP+h65MOv6B03Mj/Ujt/hNXFOYoSmLdv36hv2rfmkFKH+ EaclmGLVp+HO9HAQvQ7fnA== 0000950170-97-001410.txt : 19971117 0000950170-97-001410.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950170-97-001410 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDEAN DEVELOPMENT CORP CENTRAL INDEX KEY: 0000943184 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 650548697 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28806 FILM NUMBER: 97718647 BUSINESS ADDRESS: STREET 1: 200 E LAS OLAS SUITE 1900 CITY: FT LAUDERDALE STATE: FL ZIP: 33301 BUSINESS PHONE: 4074826336 MAIL ADDRESS: STREET 1: 200 E LAS OLAS BLVD CITY: FT LAUDERDALE STATE: FL ZIP: 33301 10QSB 1 FORM 10-QSB SECURITY AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997. ( ) 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: 33-90696 ANDEAN DEVELOPMENT CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 65-0648697 - -------------------------------------------------------------------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 1900 Glades Road, Suite 351, Boca Raton, Florida 33431 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (561) 416-8930 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of September 30, 1997, 2,820,000 shares of $.0001 par value common stock were outstanding. ANDEAN DEVELOPMENT CORPORATION INDEX Part I. Financial Information Item 1. Financial Statements (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information
ANDEAN DEVELOPMENT CORPORATION Consolidated Balance Sheets September 30, 1997 and December 31, 1996 A S S E T S 1997 1996 --------------- --------- Current Assets: Cash $ 114,889 $ 168,156 Invested cash 1,373,915 3,598,760 Accounts receivable, net 3,115,569 2,912,723 Note receivable - current portion 109,936 - Due from related parties 270,675 17,072 Employee advances 26,060 - Deferred income taxes 4,589 4,589 Other current assets 631,364 140,010 --------------- ------------- Total Current Assets 5,646,997 6,841,310 --------------- ------------- Furniture and equipment, net 225,753 165,557 --------------- ------------- Other Assets: Undeveloped real estate, held for investment 789,447 789,447 Note receivable - long term portion 1,229,827 - Note receivable from related party 606,031 606,031 Deferred income taxes 5,501 5,501 Investment in affiliated companies 956,377 425,250 Other assets 342,093 6,901 --------------- ------------- 3,929,276 1,833,130 --------------- ------------- $ 9,802,026 $ 8,839,997 =============== =============
The accompanying notes are an integral part of these consolidated financial statements.
ANDEAN DEVELOPMENT CORPORATION Consolidated Balance Sheets (Continued) September 30, 1997 and December 31, 1996 LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 --------------- --------- Current Liabilities: Obligations with banks $ 5,686 $ - Current portion of long-term debt 31,393 39,578 Accounts payable 170,906 262,671 Due to related parties 119,851 7,562 Income taxes payable 225,566 143,451 Accrued expenses and withholdings 34,190 26,978 Current portion of staff severance indemnities 21,469 17,977 --------------- ------------- Total Current Liabilities 609,061 498,217 --------------- ------------- Long-Term Liabilities: Long-term debt, excluding current portion 130,806 145,344 Staff severance indemnities, long-term portion 62,844 36,674 --------------- ------------- 193,650 182,018 --------------- ------------- Shareholders' Equity: Common stock, $.0001 par value, 20,000,000 shares authorized, 2,820,100 shares issued and outstanding at September 30, 1997 and December 31, 1996, respectively 282 282 Additional paid-in capital 5,566,066 5,724,320 Retained earnings 3,480,409 2,479,810 Cumulative translation adjustment (47,442) (44,650) ------------- ------------- 8,999,315 8,159,762 --------------- ------------- $ 9,802,026 $ 8,839,997 =============== =============
The accompanying notes are an integral part of these consolidated financial statements.
ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Income Nine Months Ended September 30, 1997 and 1996 1997 1996 --------------- --------- Revenues from Operations: Revenues $ 3,568,286 $ 2,187,541 Cost of operations (1,689,404) (635,337) --------------- ------------- Gross Profit 1,878,882 1,552,204 Selling and Administrative Expenses 674,008 333,209 --------------- ------------- Income from Operations 1,204,874 1,218,995 --------------- ------------- Other Income (Expense), net (25,686) (169,586) -------------- -------------- Income Before Income Taxes 1,179,188 1,049,409 Income Taxes 178,589 147,361 --------------- ------------- Net Income $ 1,000,599 $ 902,048 =============== ============= Net Income Per Common Share $ .36 $ .60 =============== ============= Weighted Average Shares Outstanding 2,752,411 1,500,100 =============== =============
The accompanying notes are an integral part of these consolidated financial statements.
ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows Nine Months Ended September 30, 1997 and 1996 1997 1996 --------------- --------- Cash Flows from Operating Activities: Net income $ 1,000,599 $ 902,048 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 14,322 6,944 Profit on sale of fixed assets (6,031) - Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (202,846) (538,843) Note receivable (1,339,763) - Other current assets (491,354) 80,537 Employee advances (26,060) - Other assets (335,192) (200) Increase (decrease) in: Accounts payable (91,765) (37,728) Provision for severance indemnity 29,663 10,331 Accrued expenses and withholdings 7,212 (22,956) Income taxes payable 82,115 145,914 --------------- ------------- Net Cash Provided by (Used in) Operating Activities: (1,359,100) 546,047 --------------- ------------- Cash Flows from Investing Activities: Purchase of fixed assets (73,283) (75,772) Investment in subsidiaries (531,127) - Payments for purchase of property under construction or land for sale - 22,402 Proceeds from sale of fixed assets 4,797 - Proceeds from sale of subsidiary (ITL) - 193,359 Purchase of bridge loan warrants (87,000) - Invested cash 2,224,845 260 --------------- ------------- Net Cash (Used in) Investing Activities 1,538,232 140,249 --------------- -------------
The accompanying notes are an integral part of these consolidated financial statements.
ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows (Continued) Nine Months Ended September 30, 1997 and 1996 1997 1996 --------------- --------- Cash Flows from Financing Activities: Cost of public offering (71,255) (355,377) (Advances to) repayments from related parties (141,315) (71,808) Proceeds from (payments on) notes payable to banks 5,686 116,942 Principal borrowings (payments) on long-term debt (22,723) (152,713) Dividends paid - (300,000) Proceeds from bridge loan - 65,000 --------------- ------------- Net Cash Provided by (Used in) Financing Activities (229,607) (697,956) ------------- ------------- Effect of Exchange Rate Changes (2,792) - Net Increase (Decrease) in Cash (53,267) (11,660) Cash at Beginning of Period 168,156 52,574 --------------- ------------- Cash at End of Period $ 114,889 $ 40,914 =============== ============= Supplemental Disclosure: The Company paid $13,963 and $141,933 for interest and $97,023 and $29,507 for income taxes in 1997 and 1996, respectively.
The accompanying notes are an integral part of these consolidated financial statements. ANDEAN DEVELOPMENT CORPORATION ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS GENERAL On November 12, 1996, the Company completed the sale of 1,200,000 shares of its stock to the public in an offering that raised approximately $6,150,000 for the Company. At September 30, 1996, management capitalized approximately $355,000 of costs associated with the public offering which was charged off to paid-in capital at December 31, 1996. The Company granted the bridge loan lenders 21,000 warrants to purchase common stock of $1.70. As a result, cost associated with these warrants in the amount of $75,600 are being charged against operations during the period of the loan (May 1996 through January 1997). As of December 31, 1996, the Company has charged 65,000 to operations. During this period, the Company initiated two new operations intended to provide continuous cash flow. It has taken a 25% equity participation, including management responsibilities in a wine bottling and processing plant in Chile. The wine processing and bottling plant will commence operations in March 1998 and will produce up to two million bottles of wine during 1998, increasing to four million annually over the next five years. The Company is presently studying the possibility of purchasing a 500 acre vineyard, which in the future will provide grapes for the wine processing and bottling plant. Additionally, during this period, the Company purchased 35 acres of beach front property ("El Peral" project) close to Santiago which has a summertime population of approximately 500,000. The Company intends to sell lots and develop this property including the construction of mid-income vacation homes over a four year period. The Company has sold approximately 55% of the 35 acres, and in doing so has recouped its investment on this purchase. The Company is also presently reviewing a potential investment and/or acquisition of an electrical manufacturer located in Spain and various water utility projects in Chile and Peru. RESULTS OF OPERATIONS The Company's core operations have traditionally been focused on three areas (i) engineering services and the sale of equipment and parts for projects throughout Chile; (ii) project management and the sale, as agent, of major equipment for three to five large turn-key projects during any given year and (iii) the preparation of business for third parties. While the period between the payment by the Company for the goods and services and the receipt of revenues in connection with the goods and services described in (i) above is typically proximate in time, this is not necessarily so with regard to payments and receipt for those goods and services described in (ii) and (iii) above. Often the interval between payments by the Company for equipment and ANDEAN DEVELOPMENT CORPORATION services is spread over a longer period of time. Thus, the fluctuation in the results of operations for each quarter may vary greatly, depending on the timing of payments for major equipment (both by and to the Company). SEPTEMBER 30, 1997 COMPARED TO SEPTEMBER 30, 1996 Gross revenues for the quarter ended September 30, 1997 increased $1,380,745 over the period ended September 30, 1996 from $2,187,541 to $3,568,286 an increase of approximately 63%. This increase is due to the first successful operations in the selling and developing of the beach property referred to above and commissions earned from various projects. Costs of operations for the fiscal period ended September 30, 1997 increased $1,054,066 over the fiscal period ended September 30, 1996 from $635,337 to $1,689,403 or 166%. This increase is attributable to the cost of preparing the beach front property for sale ("El Peral" project) and, in general, to the policy of the Company entering into business that will have a lower profit margin in itself but will create a steady cash flow and obtain a more regular Cost of Operations vs. Gross Revenue Rate. Selling and administrative expenses for the fiscal period ended September 30, 1997 increased $340,799 from $333,209 at September 30, 1996 to $674,008 at September 30, 1997 or 102%. This increase is attributable to the sale of lots in the "El Peral" project and the publicity and preparation costs related to this project and other various projects related to the core business. Other income (expense-net) as of September 30, 1997 decreased from ($169,586) of expenses at September 30, 1996 to ($25,686) of expenses amounting to a difference of $143,900. This decrease is attributable to increased interest income as a result of the approximately $2,300,000 of invested cash. Net income increased from $902,048 at September 30, 1996 to $1,000,599 at September 30, 1997. This increase of $98,551 or 11% is attributable to increased commissions earned during the period. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1997 accounts receivable increased $202,846 from $2,912,723 as of year end December 1996 to $3,115,569 as of September 30, 1997 or 7%. The amount of the receivable outstanding and the number of days outstanding is attributable to the timing of recognition of revenues as compared to the date of payment. In particular, in the case of equipment sales, the Company recognizes revenues on the sale of the equipment or on a turnkey project, when the contract between the purchasing company and the manufacturer is signed by both parties or an "order to proceed" is issued by the buyer. While the schedule of payment is set by contract, the time of payment may be determined by practices of the exporting country involved in the transaction as well as unanticipated delays caused by obtaining permits and ANDEAN DEVELOPMENT CORPORATION export licenses and as a result it is not unusual for a transfer of funds to take 60-180 days. The Company normally receives its commission, which are fully earned at the time the award is made, 30 days after receipt of funds by the manufacturer it represents. Generally, payment terms conform to the contractual payment schedule between the buyer and the seller. The decrease in accounts receivable is attributable to increased receipts during the six month period and the terms of payments associated with these contracts. Accounts payable decreased $91,765 from $262,671 as of December 31, 1996 to $170,706 as of September 30, 1997 or 35%. This decrease is attributable to timing differences occurring in the normal course of business. Other current assets increased $491,354 from $140,010 as of December 31, 1996 to $631,364 as of September 30, 1997 or 350%. This increase is attributable to works in progress to increase our office space and to a loan to Consonni USA Inc. Total other assets increased $2,096,146 from $1,833,130 as of December 31, 1996 to $3,929,276 as of September 30, 1997 or 114%. This increase is attributable to the purchase of the beach front property and a note receivable related to the subsequent sale of 55% the property. ANDEAN DEVELOPMENT CORPORATION PART II: OTHER INFORMATION ITEM 1: Legal Proceedings None ITEM 2: Changes in Securities None ITEM 3: Defaults upon Senior Securities None ITEM 4: Submission of Matters to a vote of Securities Holders None ITEM 5: Other Information Subsequent Events During this period, the Company invested in a wine processing and bottling facility in Chile, which is scheduled to begin distributing up to two million bottles of wine commencing in March, 1998. The Company is currently reviewing other equity investments in South America and Europe. On October 1, 1997, the Company declared dividends of $.20 per share to stockholders of record on October 31, 1997, payable in two installments on December 31, 1997 and March 31, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form 10-QSB, and has duly caused this Form 10-QSB to be signed on its behalf by the undersigned, thereunto duly authorized on the 13th of November, 1997. ANDEAN DEVELOPMENT CORPORATION BY: /s/ PEDRO P. ERRAZURIZ ------------------------------ Pedro P. Errazuriz , President (Principal Executive Officer) BY: /s/ JOSE LUIS YRARRAZAVAL -------------------------- Jose Luis Yrarrazaval, Secretary/Treasurer (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-QSB has been signed by the following persons in the capacity and on the dates indicated. SIGNATURE TITLE DATE - --------- ----- ---- /s/PEDRO P. ERRAZURIZ President November 13, 1997 - --------------------- (Principal Executive Pedro P. Errazuriz Officer) /s/JOSE LUIS YRARRAZAVAL Treasurer November 13, 1997 - ------------------------ Director Jose Luis Yrarraaval (Principal Accounting Officer) EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 27 Financial Data Schedule EX-27 2
5 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1,488,804 0 3,115,569 0 0 1,042,624 296,702 (70,949) 9,802,026 609,061 0 0 0 282 8,999,033 9,802,026 0 3,568,286 1,689,404 674,008 11,723 0 13,963 1,179,188 178,589 1,000,599 0 0 0 1,000,599 .36 .36
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