-----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, KyeE89vtFc6iTBTiWe3qCBVofsekVg5jbGMGLIxhYfICl3OKGQAmfwHcmZP2AoQj 5WJrYKzZt6/GzC3PqKukMQ== 0000950170-98-001077.txt : 19980521 0000950170-98-001077.hdr.sgml : 19980521 ACCESSION NUMBER: 0000950170-98-001077 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980520 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: 98629135 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 March 31, 1998. ( ) 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 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 March 31, 1998, 2,820,100 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 March 31, 1998 and December 31, 1997 A S S E T S
1998 1997 ---------------------- ---------------------- Current Assets: Cash $ 213,810 $ 324,556 Short-term investments 82,227 528,575 Accounts receivable 2,353,008 3,205,385 Due from related parties 596,100 520,000 Other receivables 35,250 - Other current assets 142,343 118,038 ------------- -------------- Total Current Assets 3,422,738 4,696,554 ------------- -------------- Furniture and Equipment, net 663,796 672,875 ------------- -------------- Other Assets: Undeveloped real estate, held for investment 1,147,389 789,447 Note receivable from related party 493,158 606,031 Note receivable - other 1,339,766 1,339,766 Investment in unconsolidated subsidiaries 1,656,911 1,629,998 Other assets 1,100,566 1,072,343 ------------- -------------- 5,737,790 5,437,585 ------------- -------------- $ 9,824,324 $ 10,807,014 ============= ==============
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Balance Sheets (Continued) March 31, 1998 and December 31, 1997 LIABILITIES AND SHAREHOLDERS' EQUITY
1998 1997 ---------------------- ---------------------- Current Liabilities: Obligations with banks $ 574,329 $ 576,756 Current portion of long-term debt 29,583 30,320 Accounts payable 170,237 767,155 Due to related parties 41,279 24,264 Income taxes payable 193,579 197,022 Accrued expenses and withholdings 29,492 77,531 Current portion of staff severance indemnities 28,522 21,530 Dividends payable - 150,000 ------------- -------------- Total Current Liabilities 1,067,021 1,844,578 ------------- -------------- Long-Term Liabilities: Long-term debt, excluding current portion 108,257 118,754 Staff severance indemnities, excluding current portion 87,317 87,317 ------------- -------------- 195,574 206,071 ------------- -------------- Shareholders' Equity: Preferred stock, $.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at March 31, 1998 and December 31, 1997, respectively - - Common stock, $.0001 par value, 20,000,000 shares authorized, 2,820,100 shares issued and outstanding 282 282 Additional paid-in capital 5,724,320 5,724,320 Retained earnings 2,921,745 3,135,713 Cumulative translation adjustment (84,618) (103,950) ------------- -------------- Total Shareholders' Equity 8,561,729 8,756,365 ------------- -------------- $ 9,824,324 $ 10,807,014 ============= ==============
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Income Three Months Ended March 31, 1998 and 1997
1998 1997 ---------------------- ---------------------- Revenues from Operations: Revenues $ 386,460 $ 909,261 Cost of operations 240,340 221,248 -------------- ------------- Gross Profit 146,120 688,013 Selling and Administrative Expenses 367,868 232,440 -------------- ------------- (221,748) 455,573 -------------- ------------- Other Income, Net 309,953 28,381 -------------- ------------- Income Before Income Taxes 88,205 483,954 Income Taxes 20,173 50,254 -------------- ------------- Net Income $ 68,032 $ 433,700 ============== ============= Net Income per Common Share $ .02 $ .15 ============== ============= Weighted Average Shares Outstanding 2,820,100 2,820,100 ============== =============
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows Three Months Ended March 31, 1998 and 1997
1998 1997 ---------------------- ---------------------- Cash Flows from Operating Activities: Net income $ 68,032 $ 433,700 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 15,329 - Translation adjustment 19,332 - Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 852,377 (803,910) Other receivables (35,250) (78,475) Other current assets (24,305) - Note receivable 112,873 - Other assets (28,223) (35,811) Increase (decrease) in: Accounts payable (596,918) (247,588) Provision for severance indemnity 6,992 10,645 Accrued expenses and withholdings (48,039) (708) Income taxes payable (3,443) 56,410 -------------- ------------- Net Cash Provided by (Used in) Operating Activities 338,757 (665,737) -------------- ------------- Cash Flows from Investing Activities: Purchase of fixed assets (6,250) (51,174) Investment in unconsolidated subsidiaries (384,855) (12,520) Proceeds from short-term investments 446,348 870,998 -------------- ------------- Net Cash Provided by Investing Activities 55,243 807,304 -------------- -------------
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows (Continued) Three Months Ended March 31, 1998 and 1997
1998 1997 ---------------------- ---------------------- Cash Flows from Financing Activities: Payment of public offering cost $ - $ (71,256) Borrowings from (advances to) related parties (59,085) 24,231 Proceeds from (payments on) notes payable to bank (2,427) - Principal payments on long-term debt (11,234) (7,863) Dividends paid (432,000) - -------------- ------------ Net Cash Used in Financing Activities (504,746) (54,888) -------------- ------------- Net Increase (Decrease) in Cash (110,746) 86,679 Cash at Beginning of Period 324,556 168,156 -------------- ------------- Cash at End of Period $ 213,810 $ 254,835 ============== ============= Supplemental Disclosure of Cash Flow Information: Cash paid during the quarter for interest $ 9,316 $ 4,409
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION GENERAL - The following discussion regarding the Company and its business and operations contains "forward-looking statements" within the meaning of Private Securities Litigation Reform Act 1995. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may", "expect", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. The reader is cautioned that all forward-looking statements are necessarily speculative and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward looking statements. The Company does not have a policy of updating or revising forward-looking statements and thus it should not be assumed that silence by management of the Company over time means that actual events are bearing out as estimated in such forward looking statements. OVERVIEW - During the first quarter of 1998, Management's efforts were mainly focused on the acquisition and reorganization of small to medium size companies that would provide the Company with a more stable cash flow and would constitute a solid investment. Management believes that these investments will be profitable and will generate cash flow in future years, (e.g., vineyard and wine processing installation). In addition, these acquisitions will provide the Company with highly qualified employees and assets that would bring new ideas and state of the art technology. The first quarter in 1998 has been affected by two setbacks that had a negative effect on the results expected by management for 1998. The first was the inability of its American subsidiary, Andean Engineering & Finance Corporation ("AEFC") to produce any revenues or profit from inception, mainly due to the dedication of its executives to long-term matters; a majority of those efforts were successfully dedicated to the reorganization of Construcciones Electromecanicas Consonni, S.A., ("Consonni"). The second setback was the effect of the Asiatic Crisis on the investment activity during the last quarter of 1997 and first quarter of 1998. Most of the projects being handled by the Company as well as some new contracts anticipated to be executed during the first quarter of 1998, were postponed until the second quarter and/or third quarter of 1998. The impact of these two problems is clearly a factor when analyzing the results of the year. Management is taking corrective measures to mitigate or eliminate these problems for the remainder of 1998. Notwithstanding, management believes that increased expenses were necessary to develop the Company and prepare it for its new phase of activities. 1 ANDEAN DEVELOPMENT CORPORATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED) The Company believes that the market has already absorbed the effects of the Asiatic Crisis during this period and the delayed activities will come to fruition in the second and third quarters of 1998. Moreover, the activities of INGESIS, NYSA, the two wine related companies, and Consonni should have a positive effect on total revenues and net income, as well as the stability of the Company. In general, management anticipates a solid recovery starting the second quarter of 1998. PLAN OF OPERATIONS - The Company will increase its efforts in the Core Business area, using its facilities in Spain and by acting as a consultant to various manufacturers who are bidding projects in Peru, Argentine and Brazil, where the Chilean utilities have made significant investments. The Company will also consolidate its investments and effectively increase the production of the newly acquired subsidiaries, improving the quality of its services to customers, its coverage of new markets and its internal administration. Management will seek approval of the shareholders to increase its participation in Consonni and ECESA of Spain up to 77%. Management plans to dedicate more time to its Core Business and have acquired experts to develop new businesses. Mr. Errazuriz, CEO and Chairman, effective May 15, 1998, resigned to dedicate all of his time to the development of new ideas, sales and promotion in the Core Business area. He will remain as Chairman of the Board. Mr. De La Barra, who joined the Company in September 1997 from the Inter-American Development Bank, has been appointed to the position of President and CEO. RESULTS OF OPERATIONS - March 31, 1998 compared to March 31, 1997. Gross revenues decreased from $909,261 in 1997 to $386,460 in 1998, a decrease of 57%. This decrease is due to the Asiatic Crisis previously mentioned that has delayed most projects being handled by the Company as well as postponement of new contract negotiations. Management expects to increase its gross revenues in the second and third quarters of 1998 with the completion of the contracts delayed in the first quarter. Cost of operations increased from $221,248 at March 31, 1997 to $240,340 at March 31, 1998 or 9% due to the diversification of the Company's operations in new markets and thus as a result, additional personnel have been hired to meet these needs. 2 ANDEAN DEVELOPMENT CORPORATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED) Selling and administrative expenses increased from $232,440 at March 31, 1997 to $367,868 at March 31, 1998 an increase of $135,428 or 58% which is reflective of the above mentioned increase in personnel and management's continued effort to increase the Company's Core business. Management anticipates some of these investments to have profitability at the end of 1998. Gross profits decreased from $688,013 at March 31, 1997 to $146,120 at March 31, 1998, a decrease of $541,893 or 79%. This is primarily due to net income decreased from $433,700 at March 31, 1997 to $68,032 at March 31, 1998, a decrease of $365,668 or 84%. This is due to the aforementioned. Income taxes have decreased from $50,254 to $20,173 or $30,081. Although income before income taxes decreased significantly, the Company must pay income taxes in Chile that are not offset with U.S. affiliates for consolidated financial statement purposes. LIQUIDITY AND CAPITAL RESOURCES - During the period ended in March 31, 1998, as compared to December 31, 1997, there were significant changes in the liquidity, type of assets and structure of debt. Other assets have increased from $5,437,585 for the period ended on December 31, 1997 to $5,737,790 for the period ended March 31, 1998. This increase corresponds to investments in new business opportunities described above. Current liabilities decreased from $1,844,578 as of December 31, 1997 to $1,067,021 as of March 31, 1998, due to the payments of payables during the first quarter of 1998. Long-term liabilities of $195,574 as or March 31, 1998, is down from $206,071 as of December 31, 1997 due to payments made on liabilities in the first quarter of 1998. 3 ANDEAN DEVELOPMENT CORPORATION Part II. Other Information Item 1. Legal Proceeds 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 /bullet/ Resignation of Mr. Errazuriz as President and Chief Executive Officer, effective May 15, 1998. /bullet/ Appointment of Mr. Mauricio De la Barra as President and Chief Executive Officer, effective May 15, 1998. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 27 Financial Data Schedule (b) Reports on Form 8-K: None SIGNATURES In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, Andean Development Corporation has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANDEAN DEVELOPMENT CORPORATION DATE: May 20, 1998 By: /s/ Mauricio De La Barra ------------------------------- Mauricio De La Barra, Chief Executive Officer, Chief Financial Officer and Authorized Signatory EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 296,037 0 2,353,008 0 0 773,693 781,076 117,280 9,824,324 1,067,021 0 0 0 282 9,824,042 9,824,324 0 386,460 240,340 367,868 (319,269) 0 9,316 88,205 20,173 68,032 0 0 0 46,612 .02 .02
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