-----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, V+ucoyz9NBIt2KYTmPevxjOHfIpVLGzlF3M2Vx+Z26skDfSG0mNNbBv52W8E7eWk Q+M0kwJV16RDwzJcRliAZQ== 0001021408-01-505618.txt : 20010821 0001021408-01-505618.hdr.sgml : 20010821 ACCESSION NUMBER: 0001021408-01-505618 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010820 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: 1934 Act SEC FILE NUMBER: 000-28806 FILM NUMBER: 1718679 BUSINESS ADDRESS: STREET 1: 801 BRICKELL SQUARE STREET 2: SUITE 900 CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3053720056 MAIL ADDRESS: STREET 1: 600 BRICKELL AVE STREET 2: SUITE 301 B CITY: MIAMI STATE: FL ZIP: 33131 10QSB 1 d10qsb.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to ___________ Commission file number 33-90696 ----------------------- ANDEAN DEVELOPMENT CORPORATION (Name of small business issuer as specified in its charter) Florida 65-0648697 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1 Brickell Square, 801 Brickell Avenue, Suite 900, Miami, Florida 33131 (Address of principal executive offices) (305) 371-0056 (Issuer's telephone number) ---------------- Check whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 __ - State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of June 30, 2001, 2,820,100 shares of $.0001 par value common stock were outstanding. Transitional Small Business Disclosure Format (check one) Yes ____ No X ---- 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 June 30, 2001 and December 31, 2000 ASSETS
June 30, 2001 December 31, (Unaudited) 2000 ----------------- ---------------- Current Assets: Cash $ 66,082 $ 213,589 Accounts receivable 98,500 2,511,838 Notes receivable 391,360 148,000 Inventory - 51,408 Other current assets 164,508 180,439 ----------------- ---------------- Total Current Assets 720,450 3,105,274 ----------------- ---------------- Property, Plant and Equipment, net 496,414 503,651 ----------------- ---------------- Other Assets: Goodwill - 205,157 Notes receivable from related party and others 1,646,526 1,739,558 Investment in unconsolidated subsidiaries 2,543 243,168 Deposits and other 235,119 156,767 ----------------- ---------------- 1,884,188 2,344,650 ----------------- ---------------- $ 3,101,052 $ 5,953,575 ================= ================
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Continued) June 30, 2001 and December 31, 2000 LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, 2001 December 31, (Unaudited) 2000 ----------------- ---------------- Current Liabilities: Obligations with banks $ 40,969 $ 989,571 Accounts payable and accrued expenses 48,936 1,607,484 Due to related parties 21,102 - Income taxes payable 42,804 - ----------------- ---------------- Total Current Liabilities 153,811 2,597,055 ----------------- ---------------- Long-Term Liabilities: Staff severance indemnities, excluding current portion 70,745 72,364 Dividend payable - 423,018 ----------------- ---------------- 70,745 495,382 ----------------- ---------------- Minority interest 191,597 572,182 ----------------- ---------------- Shareholders' Equity: Preferred stock, $.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding - - Common stock, $.0001 par value, 20,000,000 shares authorized, 2,820,100 shares issued and outstanding 282 282 Additional paid-in capital 5,660,187 5,724,320 Accumulated deficit (2,581,833) (3,124,172) Accumulated other comprehensive (loss) (393,737) (311,474) ----------------- ---------------- Total Shareholders' Equity 2,684,899 2,288,956 ----------------- ---------------- $ 3,101,052 $ 5,953,575 ================= ================
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Income Three Months Ended June 30, 2001 and 2000
2001 2000 ----------------- ----------------- Revenues from Operations: Revenues $ 263,601 $ 2,629,698 Cost of operations (35,192) (1,997,477) ----------------- ----------------- Gross Profit 228,409 632,221 Selling and Administrative Expenses (64,052) (279,167) ----------------- ----------------- 164,357 353,054 ----------------- ----------------- Other Expenses, net (59,277) (464,648) ----------------- ----------------- Income (Loss) Before Income Taxes and Minority Interest 105,080 (111,594) Income Taxes (15,499) (3,509) ----------------- ----------------- Income (Loss) Before Minority Interest 89,581 (115,103) Minority Interest 1,525 60,338 ----------------- ----------------- Net Income (Loss) 91,106 (54,765) Other Comprehensive Income (Loss): Foreign currency translation adjustment 13,647 (67,229) ----------------- ----------------- Comprehensive Income (Loss) $ 104,753 $ (121,994) ================= ================= Net Income (Loss) per Common Share $ 0.03 $ (0.02) ================= ================= 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 Income Six Months Ended June 30, 2001 and 2000
2001 2000 -------------------- -------------------- Revenues from Operations: Revenues $ 513,601 $ 5,018,801 Cost of operations (73,397) (3,929,738) ----------------- ---------------- Gross Profit 440,204 1,089,063 Selling and Administrative Expenses (251,771) (519,042) ----------------- ---------------- Other Expenses, net (50,619) (543,887) ----------------- ---------------- Income Before Income Taxes and Minority Interest 137,814 26,134 Income Taxes (30,872) (3,509) ----------------- ---------------- Income Before Minority Interest 106,942 22,625 Minority Interest 12,379 (16,657) ----------------- ---------------- Net Income 119,321 5,968 Other Comprehensive (Loss) Income: Foreign currency translation adjustment (82,263) 20,809 ----------------- ---------------- Comprehensive Income $ 37,058 $ 26,777 ================= ================ Net Income per Common Share $ 0.0423 $ 0.0021 ================= ================ 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 Shareholders' Equity Six Months Ended June 30, 2001
Accumulated Other Total Common Additional Accumulated Comprehensive Shareholders' Stock Paid-In Capital Deficit Income (Loss) Equity -------------- ------------------ --------------- -------------------- ----------------- Balance at December 31, 2000 $ 282 $ 5,724,320 $ (3,124,172) $ (311,474) $ 2,288,956 Net income (Unaudited) - - 119,321 - 119,321 Return of capital (Unaudited) - (64,133) - - (64,133) Rescinded dividends (Unaudited) - - 423,018 - 423,018 Foreign currency translation adjustment (Unaudited) - - - (82,263) (82,263) ----------- --------------- --------------- ---------------- --------------- Balance at June 30, 2001 (Unaudited) $ 282 $ 5,660,187 $ (2,581,833) $ (393,737) $ 2,684,899 =========== =============== =============== ================ ===============
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows Six Months Ended June 30, 2001 and 2000
2001 2000 ----------------- ---------------- Cash Flows from Operating Activities: Net income $ 119,321 $ 5,968 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 40,673 66,637 Translation adjustment (82,263) 20,809 Minority interest (380,585) (100,024) Gain on sale of real estate held for investment - Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 2,413,338 (108,437) Inventory 51,408 (742,381) Other receivables (611,128) Other current assets 15,931 637,000 Notes receivable 185,140 (54,142) Deferred charges - (114,925) Other assets 126,805 - Increase (decrease) in: Accounts payable 1,941,648 Provision for severance indemnity - Accrued expenses and withholdings (1,527,760) (101,878) Income taxes payable 12,016 (2,713) Deferred revenue - (511,489) Staff severance (1,619) (3,333) ----------------- ---------------- Net Cash Provided by Operating Activities 972,405 321,612 ----------------- ---------------- Cash Flows from Investing Activities: Purchase of fixed assets (18,806) (94,003) Investment in unconsolidated subsidiaries 225,995 389,892 Proceeds from short-term investments - 122,235 Real estate held for investment - (275,638) ----------------- ---------------- Net Cash Provided by Investing Activities 207,189 142,486 ----------------- ----------------
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Consolidated Statements of Cash Flows (Continued) Six Months Ended June 30, 2001 and 2000
2001 2000 ----------------- -------------- Cash Flows from Financing Activities: (Advances to) borrowings from related parties (314,366) $ 639,679 (Payments on) proceeds from notes payable to bank (948,602) 334,213 Principal payments on long-term debt - (681,412) Payments on due to public entities - (653,627) Reduction of capital (64,133) - ----------------- --------------- Net Cash (Used in) Financing Activities (1,327,101) (361,147) ----------------- --------------- Net (Decrease) Increase in Cash (147,507) 102,951 Cash at Beginning of Period 213,589 125,163 ----------------- --------------- Cash at End of Period $ 66,082 $ 228,114 ================= =============== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 5,697 $ 102,012 Cash paid during the period for taxes 30,872 3,509 Supplemental Disclosure of Non-Cash Financing Activities: Rescinded Dividends (423,018) -
The accompanying notes are an integral part of these financial statements. ANDEAN DEVELOPMENT CORPORATION Notes to Consolidated Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The quarterly financial information included --------------------- herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. For further information, refer to the financial statements and notes thereto included in the Company's form 10-KSB as of and for the year ended December 31, 2000. Functional Currency - The financial statements have been translated in ------------------- accordance with the provisions set forth in Statement of Financial Accounting Standards No. 52, from Chilean pesos (the functional currency) into US dollars (the reporting currency). Earnings Per Common Share - Earnings per common share are based on the ------------------------- weighted average number of shares outstanding of 2,820,100 for the periods ended June 30, 2001 and 2000, respectively, after giving effect to common stock equivalents which consist of warrants issued with the initial public offering that would have a dilutive effect on earnings per share. Warrants issued with exercise prices greater than the existing market value of the company stock are deemed anti-dilutive and are not components of earnings per share. 3 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is an analysis of the results of operations of Andean Development Corporation and subsidiaries (collectively, the "Company") and the Company's liquidity and capital resources. The Company cautions readers that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Report or that are otherwise made by or on behalf of the Company. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements which involve risks and uncertainties. Without limiting the generality of the foregoing, words such as "may," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These risks include: risks of increases in the costs of the Company's merchandise and the continued availability of suitable merchandise; the Company's relationship with its suppliers, licensors and contributors; changes in preferences of customers; competitive and general economic factors in the markets where the Company sells and collects goods; the impact of and changes in government regulations such as restrictions or prohibitions relating to the contribution of charitable goods; and other factors discussed herein or from time to time in the Company's other filings with the Securities and Exchange Commission including the Company's Consolidated Financial Statements and Notes to Consolidated Financial Statements included in its 2000 Annual Report on Form 10-KSB. GENERAL Andean Development Corporation ("ADC" or the "Company") was incorporated in Florida on October 19, 1994 and is presently a holding company for Errazuriz y Asociados Ingenieros S.A. ("AE&A"), and E&A Ingesis S.A. ("INA"), both Chilean corporations located in Santiago, Chile. AE&A provides engineering and project management services for water and energy related private and public works and provides technical assistance for both turnkey and non-turnkey major works, mainly related to the development and construction of energy, water and sewage treatment projects in Chile. INA acts as the agent in the sale of major electrical and mechanical equipment. INA is also developing a communication network and related software for (i) rural area remote education, and (ii) post graduate professional education "at home" for Union leaders and key employees in Chile, which, if successful, could be adopted and developed in other countries in South America. The Company, supported by the government of Chile and by certain Chilean institutions, is developing at the Company's cost: . Software to be used to educate the school populations of indigenous rural communities located in isolated areas in the mountains of Chile or close to its coast line, and . Software to teach leadership, and other related matters, to union leaders in Chile, highly qualified employees of the government of Chile, and to certain private industries such as Corporacion del Cobre de Chile, Chilean Copper Corporation ("Codelco"). The Company has recently entered into an agreement with Codelco, through one of the 4 Company's sponsoring institutions, Fundacion Tucapel Jimenez Alfaro, by which the Company will provide educational services to union leaders at Codelco's Andina Division. Codelco is the industry leader in the Chilean mining industry and the Company anticipates, but cannot guarantee, that once the Codelco project proves successful, other Chilean companies will execute similar agreements. Currently, the Company is well positioned in its core business segment to take advantage of an economic upturn in the large projects sector, since the Company is well established in its marketplace and has maintained customers who are established in their specialties. The Company is also the majority owner (83%) of a non-operating subsidiary, Consonni USA, Inc., the assets of which consist of cash and notes receivables. 5 FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED JUNE 30, 2001 TO THREE MONTHS ENDED JUNE 30, 2000 Gross Revenues and Costs of Operations Gross Revenues decreased $2,366,097 from $2,629,698 for the three months ended June 30, 2000 to $263,601 for the three months ended June 30, 2001. The decrease in gross revenues is a result of the sale of certain subsidiaries during 2000 including the loss in revenues from Consonni as a consequence of the sale of the Company's interest in Consonni. Cost of Operations decreased $1,962,285 from $1,997,477 for the three months ended June 30, 2000 to $35,192 for the three months ended June 30, 2001. This decrease comes primarily from a decrease in operational costs following the sale of certain subsidiaries during 2000 including the decrease in revenues resulting from the sale of the Company's interest in Consonni. Selling and Administrative Expenses, Incomes from Operations and Other Income Expenses Selling and Administrative Expenses decreased $215,115from $279,167 for the three months ended June 30, 2000 to $64,052 for the three months ended June 30, 2001. This decrease comes primarily from a decrease in operational costs following the sale of certain subsidiaries during 2000. Other Expenses decreased $405,371 from $464,648 for the three months ended June 30, 2000 to $59,277 for the three months ended June 30, 2001. This comes primarily from a decrease in depreciation of Consonni's equipment and in the reductions of some costs due to the sale of the Company's interest in Consonni. Net Income and Income Tax Net Income increased from a loss of ($54,765) for the three months ended June 30, 2000 to an income of $91,106 for the three months ended June 30, 2001. Income Tax increased from $3,509 for the three months ended June 30, 2000 to $15,499 for the three months ended June 30, 2001. 6 FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF SIX MONTHS ENDED JUNE 30, 2001 TO SIX MONTHS ENDED JUNE 30, 2000 Gross Revenues and Costs of Operations Gross Revenues decreased $4,505,200 from $5,018,801 for the six months ended June 30, 2000 to $513,601 for the six months ended June 30, 2001. The decrease in gross revenues is a result of the sale of certain subsidiaries during 2000 including the loss in revenues from Consonni as a consequence of the sale of the Company's interest in Consonni. Cost of Operations decreased $3,856,341from $3,929,738 for the six months ended June 30, 2000 to $73,397 for the six months ended June 30, 2001. This decrease comes primarily from a decrease in operational costs following the sale of certain subsidiaries during 2000 including the decrease in revenues resulting from the sale of the Company's interest in Consonni. Selling and Administrative Expenses, Incomes from Operations and Other Income Expenses Selling and Administrative Expenses decreased $267,271 from $519,042 for the six months ended June 30, 2000 to $251,771 for the six months ended June 30, 2001. This decrease comes primarily from a decrease in operational costs following the sale of certain subsidiaries during 2000. Other Expenses decreased $493,268 from $543,887 for the six months ended June 30, 2000 to $50,619 for the six months ended June 30, 2001. This comes primarily from a decrease in depreciation of Consonni's equipment and in the reductions of some costs due to the sale of the Company's interest in Consonni. Net Income and Income Tax Net Income increased from $5,968 for the six months ended June 30, 2000 to $119,321 for the six months ended June 30, 2001. Income Tax increased from $3,509 for the six months ended June 30, 2000 to $30,872 for the six months ended June 30, 2001. Liquidity and Capital Resources The Company has financed its operations and other working capital requirements principally from operating cash flow. 7 Current Assets Cash and Short-Term Investments decreased $147,507from $213,589 as of December 31, 2000 to $66,082 for the six month period ended June 30, 2001. This decrease comes primarily from a decrease in cash following the sale of certain subsidiaries during 2000, including most of the Company's interest in Consonni. As of December 31, 2000 and for the six month period ended June 30, 2001, the Company has no short-term investments. Accounts Receivable decreased $2,413,338 from $2,511,838 at December 31, 2000 to $98,500 for the six month period ended June 30, 2001. This decrease comes primarily from a decrease in accounts receivable following the sale of certain subsidiaries during 2000 including the sale of most of the Company's interest in Consonni. Inventory, Notes Receivable and Other Current Assets increased $176,021from $379,847 as of December 31, 2000 to $555,868 for the six month period ended June 30, 2001. Total Current Assets decreased $2,384,824 from $3,105,274 at December 31, 2000 to $720,450 for the six month period ended June 30, 2001. This decrease was primarily due to the sale of certain subsidiaries during 2000. Property, Plant and Equipment decreased $7,237 from $503,651 at December 31, 2000 to $496,414 at the six month period ended June 30, 2001. Other Assets decreased $460,462 from $2,344,650 at December 31, 2000 to $1,884,188 for the six month period ended June 30, 2001. This decrease is primarily the result of a write off of goodwill and the sale of certain subsidiaries during 2000. Liabilities Current Liabilities decreased from $2,597,055 at December 31, 2000, to $153,811 for the six month period ended June 30, 2001. This decrease comes primarily from a decrease in liabilities following the sale of certain subsidiaries during fiscal 2000 including the sale of the Company's interest in Consonni. Long-Term Liabilities decreased from $495,382 at December 31, 2000 to $70,745 at the six month period ended June 30, 2001, due to the Company decision to rescind a declared dividend. The Company anticipates that its cash requirements will increase as it continues to expend substantial resources to build a communication network and related software for rural area remote education and post graduate professional education and establish its sales and marketing network operations, customer support and administrative organizations. The Company currently anticipates that its available cash resources and cash generated from operations will be sufficient to meet its presently anticipated working capital and capital expenditure requirements for the next twelve months. As of June 30, 2001, there were no commitments for long-term capital expenditures. If the Company is unable to maintain profitability, or seeks further expansion, additional funding will become necessary. No assurances can be given that either equity or debt financing will be available. 8 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 Security Holders The Company's Annual Meeting of Shareholders was held on June 30, 2001. The results of the voting with respect to matters presented at the Annual Meeting were as follows: (a) Election of Directors
Common Stock Voted ------------------ For Against Withheld --- ------- -------- Pedro P. Errazuriz 1,484,700 0 0 Pedro Pablo Errazuriz Dominguez 1,484,700 0 0 Jose Luis Yrarrazaval 1,484,700 0 0 Alberto Coddou 1,484,700 0 0 Sergio Jimenez 1,484,700 0 0
(b) Ratification of the appointment of Spear, Safer, Harmon & Co., as the Company's Certified Public Accountants for the year ending December 31, 2001.
Common Stock Voted ------------------ For Against Withheld --- ------- -------- 1,484,700 0 0
Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) The following Exhibits are filed as part of the Quarterly Report on Form 10-QSB None. (b) Reports on Form 8-K: None. 9 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANDEAN DEVELOPMENT CORPORATION By: /s/ Pedro Pablo Errazuriz ----------------------------------------- Date: August 14, 2001 Pedro Pablo Errazuriz President and Chief Executive Officer ___________________________ 10 -----END PRIVACY-ENHANCED MESSAGE-----