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 March 31, 1996
[ ] 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 81-0268110
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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 March 31, 1996
No Par Value Common Stock 1,875,000 Shares
Transitional Small Business Disclosure Format (Check One): Yes ; No X
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DIVERSIFIED REALTY, INC.
INDEX
MARCH 31, 1996
Page Number
PART I
Condensed Financial Statements:
Balance Sheet -
March 31, 1996 2
Statements of Income -
Three Months Ended March 31, 1996 and 1995 3
Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 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
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DIVERSIFIED REALTY, INC.
BALANCE SHEET
AS OF MARCH 31, 1996
ASSETS
Current Assets
Cash $ 632,061
Marketable Securities, at market 6
Receivables - Net 1,736
Due From Parent Company 305,625
Total Current Assets 939,428
Noncurrent Receivables 12,868
Property, Plant and Equipment, Net 290,368
TOTAL ASSETS $ 1,242,664
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 14,421
Total Current Liabilities 14,421
Stockholders' Equity
Common Stock - No Par Value, 5,000,000 shares
authorized, 1,875,000 shares issued and
outstanding 1,416,908
Accumulated Deficit (188,665)
Total Stockholders' Equity 1,228,243
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,242,664
See Notes to Financial Statements
2
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DIVERSIFIED REALTY, INC.
STATEMENTS OF INCOME
For The Three Months Ended
March 31,
1996 1995
Operating Revenues $ 26,303 $ 25,851
Operating Expenses
Depreciation 4,234 5,234
Other Expenses 13,165 13,014
Total Expenses 17,288 18,248
9,015 7,603
Provision for Income Taxes (3,700) (1,700)
Net Income $ 5,315 $ 5,903
Earnings (Loss) Per Weighted Average
Share Outstanding: (1,875,000 Shares) $ -- $ --
Dividends Per Share $ -- $ --
See Notes to Financial Statements
3
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DIVERSIFIED REALTY, INC.
STATEMENTS OF CASH FLOWS
For The Three Months Ended
March 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Provided (Used) By Operating
Activities $ 17,686 $ 16,737
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Received on Principal of
Notes Receivable 415 379
Net Cash Provided (Used) By
Investing Activities 415 379
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash Received From (Advanced To)
Parent Company (600) 4,417
Net Cash Provided (Used) By Financing
Activities (600) 4,417
NET INCREASE IN CASH 17,501 21,533
CASH - BEGINNING OF PERIOD 614,560 558,236
CASH - END OF PERIOD $ 632,061 $ 579,769
See Notes to Financial Statements
4
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DIVERSIFIED REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
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 March 31, 1996 and
the results of the Company's operations and cash flows for the three months
ended March 31, 1996 and 1995.
The results of operations for the three months ended March 31, 1996 and 1995
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 STATEMENTS OF INCOME
MARCH 31, 1996
A summary of the period to period changes in items included in the statements
of income is shown below.
COMPARISON OF
Three Months
Ended
March 31,
1996 and 1995
Increases
(Decreases)
Revenues $ 452 1.7%
Operating Expenses $ (960) (5.3%)
Net Income $ (588) (10.0%)
Revenues increased $453, 1.7%, in the first quarter of 1996 as compared with
the first quarter of 1995 with interest revenues increasing $96, 1.4% and
rent revenues increasing $359, 1.9%. the increase in rent revenues in the
first quarter of 1996 as compared with the first quarter of 1995 was due
primarily to an increase in the rental rates charged by the Company.
The provision for depreciation decreased $1,111, 21.2%, in the first quarter
of 1996 as compared to the first quarter of 1995 due to some of the Company's
assets being fully depreciated in 1995.
The provision for income taxes increased $2,000, 217.6%, in the first quarter
of 1996 as compared with the first quarter of 1995 due to an increase in pre-
tax income, an increase in federal rates and an increase in the Company's
effective state income tax rate.
6
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DIVERSIFIED REALTY, INC.
PART II
OTHER INFORMATION
MARCH 31, 1996
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
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
7
<PAGE>
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: April 29, 1996 s/K. King
K. King
Assistant
Secretary-Treasurer
Date: April 29, 1996 s/Jerry K. Mohland
Jerry K. Mohland,
Accountant
8
<PAGE>
</TEXT)
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 632,061
<SECURITIES> 6
<RECEIVABLES> 1,736
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 939,428
<PP&E> 290,368
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,242,664
<CURRENT-LIABILITIES> 14,241
<BONDS> 0
<COMMON> 1,416,908
0
0
<OTHER-SE> (188,665)
<TOTAL-LIABILITY-AND-EQUITY> 1,228,243
<SALES> 0
<TOTAL-REVENUES> 26,303
<CGS> 0
<TOTAL-COSTS> 17,288
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,015
<INCOME-TAX> 3,700
<INCOME-CONTINUING> 5,315
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,315
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
