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<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-2864
DIVERSIFIED REALTY, INC.
(Exact name of small business issuer as specified in its charter)
Montana
(State or other jurisdiction of incorporation or organization)
81-0268110
(IRS Employer Identification No.)
128 Second Street South, Great Falls, Montana 59405
(Address of principal executive offices)
(406) 727-2600
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes 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:
Class Outstanding at September 30, 1995
No Par Value Common Stock 1,875,000 Shares
Transitional Small Business Disclosure Format (Check One): Yes No X
<PAGE>
DIVERSIFIED REALTY, INC.
INDEX
SEPTEMBER 30, 1995
Page Number
PART I
Condensed Financial Statements:
Balance Sheet
September 30, 1995 2
Statements of Income -
Three Months and Nine Months Ended
September 30, 1995 and 1994 3
Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 4
Notes to Financial Statements 5
Management's Discussion and Analysis
of the Statements of Income 6
PART II
Other Information 7
Signatures 8
-1-
<PAGE>
DIVERSIFIED REALTY, INC.
BALANCE SHEET
AS OF SEPTEMBER 30, 1995
ASSETS
Current Assets
Cash $ 607,282
Marketable Securities, at market 6
Receivables - Net 1,665
Due From Parent Company 299,744
Total Current Assets 908,697
Noncurrent Receivables 13,754
Property, Plant and Equipment, Net 299,725
TOTAL ASSETS $ 1,222,176
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 12,590
Income Taxes Payable 5,350
Total Current Liabilities 17,940
Stockholders' Equity
Common Stock - No Par Value, 5,000,000 shares
authorized, 1,875,000 shares issued and
outstanding 1,416,908
Accumulated Deficit (212,672)
Total Stockholders' Equity 1,204,236
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,222,176
See Notes to Financial Statements
-2-
<PAGE>
<TABLE>
DIVERSIFIED REALTY, INC.
<CAPTION>
STATEMENTS OF INCOME
For The Three For The Nine
Months Months
Ended Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Revenues $ 24,917 $ 28,092 $ 78,378 $ 72,822
Operating Expenses 16,117 20,380 53,548 68,324
Operating Income 8,800 7,712 24,380 4,498
Provision for Income Taxes (1,850) (700) (5,400) (700)
Net Income $ 6,950 $ 7,012 $ 19,430 $ 3,798
Earnings Per Weighted Average
Share Outstanding: (1,875,000
Shares) $ -- $ -- $ .01 $ --
Dividends Per Share $ -- $ -- $ -- $ --
</TABLE>
See Notes to Financial Statements
-3-
<PAGE>
DIVERSIFIED REALTY, INC.
STATEMENTS OF CASH FLOWS
For The Nine
Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Provided By Operating
Activities $ 46,106 $ 30,154
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Received on Principal of
Notes Receivable 1,140 47,503
Net Cash Provided By
Investing Activities 1,140 47,503
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash Received From (Advanced To)
Parent Company 1,800 (10,526)
Net Cash Provided (Used) By Financing
Activities 1,800 (10,526)
NET INCREASE IN CASH 49,046 67,131
CASH - BEGINNING OF PERIOD 558,236 484,348
CASH - END OF PERIOD $ 607,282 $ 551,479
See Notes to Financial Statements
-4-
<PAGE>
DIVERSIFIED REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
In the opinion of management, all adjustments necessary (consisting of
only normal recurring accruals) have been made to the unaudited financial
statements to present fairly the financial position as of September 30, 1995
and the results of the Company's operations for the three months and nine
months ended September 30, 1995 and 1994 and cash flows for the nine months
ended September 30, 1995 and 1994.
The results of operations for the three months and nine months ended
September 30, 1995 and 1994 are not necessarily indicative of the results to
be expected for the full year.
Parent -
M Corp, Great Falls, Montana owns approximately 84% of the outstanding
shares of the Company.
-5-
<PAGE>
DIVERSIFIED REALTY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE INCOME STATEMENT
SEPTEMBER 30, 1995
A summary of the period to period changes in items included in the
statements of income is shown below.
COMPARISON OF
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 AND 1994 1995 AND 1994
INCREASES (DECREASES)
Revenues $ (3,175) (11.3%) $ 5,556 7.6%
Expenses (4,263) (20.9%) (14,776) 21.6%
Net Income (32) (.5%) 15,632 NM
Revenues increased $5,556 (7.6%) in the first nine months of 1995 as
compared with the first nine months of 1994, with interest revenues increasing
$7,371 (50.4%) and rent revenues decreasing $1,846 (3.2%). The increase in
interest revenues was due primarily to an increase in interest-bearing
deposits and to an increase in interest rates earned by the Company.
Operating expenses decreased $14,776 (21.6%) in the first nine months
of 1995 as compared with the first nine months of 1994 due primarily to a
decrease in the provision for depreciation expense ($4,772, 23.3%) and to a
net decrease in other expenses.
-6-
<PAGE>
DIVERSIFIED REALTY, INC.
PART II
OTHER INFORMATION
SEPTEMBER 30, 1995
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
On July 11, 1995 a meeting of shareholders was held at which the
Company's entire Board of Directors was elected.Directors
elected to the Board were L. H. LaValley, Charles E. Reed and
S.M. McCann.The Company's shareholders also authorized the Board
of Directors to select an independent certified public
accounting firm to audit the Company's financial statements
for 1995. No other matters were acted upon at the shareholder's
meeting.
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
-7-
<PAGE>
DIVERSIFIED REALTY, INC.
SIGNATURES
In accordance with the requirements of the Exchange
Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
DIVERSIFIED REALTY, INC.
Registrant
Date: October 30, 1995 T. D. Lampkins
Secretary-Treasurer
Date: October 30, 1995 Jerry K. Mohland,
Accountant
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the unaudited financial statements contained in the Company's Form
10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 607,282
<SECURITIES> 6
<RECEIVABLES> 1,665
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 908,697
<PP&E> 299,725
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,222,176
<CURRENT-LIABILITIES> 17,940
<BONDS> 0
<COMMON> 1,416,908
0
0
<OTHER-SE> (212,672)
<TOTAL-LIABILITY-AND-EQUITY> 1,222,176
<SALES> 0
<TOTAL-REVENUES> 78,378
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 53,548
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 24,830
<INCOME-TAX> 5,400
<INCOME-CONTINUING> 19,430
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,430
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
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