UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended June 30, 1995
OR
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 1-7865
HMG/COURTLAND PROPERTIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 59-1914299
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 S. Bayshore Drive, Coconut Grove, Florida 33133
(Address of principal executive offices) (Zip Code)
305-854-6803
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Sections 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 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 Sections 12, 13, or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by 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.
1,166,835 Common shares were outstanding as of July 30, 1995.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
June 30, 1995 (Unaudited) and December 31, 1994 1
Condensed Consolidated Statements of Operations
Three and Six Months Ended June 30, 1995 and 1994
(Unaudited) 2
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994 (Unaudited) 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. Other Information
Item 6. Reports on Form 8-K 7
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Part I Financial Information
(UNAUDITED) Item I Financial Statements
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Investment Properties, net of accumulated
depreciation:
Commercial and industrial $2,979,067 $8,775,714
Hotel and club facility 8,515,001 8,297,760
Yacht Slips 1,722,352 1,767,421
Land held for development 2,608,776 2,608,776
Real estate development in progress 10,379,901 8,927,198
----------- -----------
Total investment properties, net 26,205,097 30,376,869
Investments in and receivables from
unconsolidated entitites 2,752,705 2,755,171
Notes and Advances Due From Related Parties 1,071,567 865,355
Cash and Cash Equivalents 3,531,497 5,382,501
Marketable Securities 67,130 93,999
Income Tax Receivable 334,912
Other Assets 1,922,898 1,875,081
----------- -----------
TOTAL ASSETS $35,550,894 $41,683,888
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses $1,566,010 $2,393,488
Mortgages and Notes payables 9,104,255 13,512,250
Other Liabilities 2,341,799 1,723,519
----------- -----------
TOTAL LIABILITIES 13,012,064 17,629,257
----------- -----------
Minority interests 3,761,592 4,817,360
----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock, no par value; 2,000,000 shares
authorized; none issued
Common Stock, $1 par value; 1,500,000 shares
authorized; 1,245,635 shares issued and
outstanding in 1995 and 1994 1,245,635 1,245,635
Additional Paid-in Capital 26,283,222 26,283,222
Undistributed gains from sales of real estate, net
of losses 30,169,134 29,381,281
Undistributed losses from operations (37,924,291) (36,676,405)
----------- -----------
19,773,700 20,233,733
Less: Treasury Stock, at cost (78,800 shares)
in 1995 and 1994 (996,462) (996,462)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 18,777,238 19,237,271
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $35,550,894 $41,683,888
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
1
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED) Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Rentals and related revenue $402,993 $784,238 $1,222,377 $1,700,574
Hotel, club and marina revenues 1,007,898 639,357 2,139,439 1,487,406
Gain from sale of securities 51,086
Interest from invested cash, dividends and other 376,618 110,845 528,585 178,600
--------- --------- --------- ---------
Total revenues 1,787,509 1,534,440 3,941,487 3,366,580
--------- --------- --------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 317,675 468,218 741,426 880,643
Hotel, club and marina expenses:
Payroll and related expenses 588,911 676,027 1,204,301 1,270,159
Cost of food and beverage 156,610 116,655 343,493 246,582
Administrative and general expenses 479,753 454,863 915,715 991,787
Depreciation and amortization 314,803 209,326 773,901 451,229
--------- --------- --------- ---------
Total operating expenses 1,857,752 1,952,089 3,978,836 3,840,400
Interest 239,190 228,408 488,186 443,897
Advisor's fee 218,751 218,751 437,502 437,502
General and administrative 132,278 528,552 248,334 761,557
Directors' fees and expenses 15,350 21,641 31,195 33,641
Minority partners' interests in operating
gains of consolidated entities 36,515 4,930 120,940 22,301
Gains from unconsolidated entities (75,578) (30,291) (115,620) (540,752)
--------- --------- --------- ---------
Total expenses 2,424,258 2,897,080 5,189,373 4,998,546
--------- --------- --------- ---------
Loss before gain on sales of real estate (636,749) (1,362,640) (1,247,886) (1,631,966)
Gain (loss) on sales of real estate, net (28,543) 172,987 787,853 1,362,489
--------- --------- --------- ---------
NET LOSS ($665,292) ($1,189,653) ($460,033) ($269,477)
========= =========== ========= =========
Earnings (Loss) Per Common Share
(Based on 1,166,835 weighted average shares
outstanding): ($0.57) ($1.02) ($0.39) ($0.23)
====== ====== ====== ======
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($460,033) ($269,477)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 773,901 451,229
Gain from unconsolidated entities (115,620) (540,752)
Net gain from sales of real estate (787,853) (1,362,640)
Net gain from sales of securities (51,086) (37,275)
Changes in assets and liabilities:
(Increase) decrease in other receivables (57,648) 153,310
Minority partners' interest in operating gains 120,940 22,301
(Decrease) increase in accounts payable
and accrued expenses (209,198) 32,725
Decrease in income taxes payable (450,000)
Decrease in income tax receivable 334,912
(Increase) decrease in other assets (206,821) 224,741
Increase in due from affiliates (206,212) (78,985)
---------- ----------
Total adjustments (404,685) (1,585,346)
---------- ----------
Net cash used in operating activities (864,718) (1,854,823)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (2,108,976) (5,129,938)
Net proceeds from disposals of properties 6,741,293 11,428,366
Net distributions from unconsolidated entitites 118,086 761,332
Net proceeds from sales and redemptions of
securities 77,955 527,821
Purchases of investments in securities (65,172)
---------- ----------
Net cash provided by investing activities 4,828,358 7,522,409
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to mortgages and notes payables 700,000 1,500,000
Repayment of mortgages and notes payables (5,107,995) (6,635,544)
Net (distributions to) contributions from
minority partners (1,406,649) 530,670
---------- ----------
Net cash used in financing activities (5,814,644) (4,604,874)
---------- ----------
Net (decrease) increase in cash and cash
equivalents (1,851,004) 1,062,712
Cash and cash equivalents at beginning of
the period 5,382,501 4,005,430
---------- ----------
Cash and cash equivalents at end of the
period $3,531,497 $5,068,142
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest
(net of amounts capitalized) $488,000 $444,000
======== ========
Cash paid during the period for income taxes $450,000
========
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements include all adjustments (consisting only of
normal recurring accruals) which are necessary for a fair presentation of the
results for the periods presented. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the Company's Annual Report for the year ended December 31,
1994. The results of operations for the six months ended June 30, 1995 are not
necessarily indicative of the results to be expected for the full year.
2. GAIN (LOSS) ON SALES OF REAL ESTATE
In January 1995, the Company sold its restaurant property ("On the Border
Cafe" located in Houston, Texas) for approximately $1.3 million. The Company
recognized a gain on the sale of approximately $369,000.
In January 1995, HMG-Fieber Associates sold its property located in
Buzzards Bay, Massachusetts for approximately $152,000, and recognized a gain on
the sale of approximately $68,000. The Company's portion of the gain was
approximately $44,000.
In March 1995, HMG-Fieber Associates sold its property located in
Norristown, Pennsylvania for approximately $812,000, and recognized a gain on
the sale of approximately $620,000. The Company's portion of the gain was
approximately $403,000.
In April 1995, Four Sugar Grove Associates (a partnership owned 97% by the
Company) sold its office building located in Houston, Texas. The selling price
was $4.5 million and a loss on the sale (after giving effect for the $1.3
million valuation allowance reported in 1994) was approximately $18,000.
3. KEY LARGO
As previously reported, in the Company's annual report for the year ended
December 31, 1994, HMG of Key Largo, Inc. (a wholly-owned subsidiary) had
pending a civil action in the Circuit Court of Dade County, Florida. In July
1995, the parties settled the litigation and on August 2, 1995 an order of
dismissal with prejudice was entered by the court. Pursuant to the terms of the
agreement, the partnership will be liquidated and upon liquidation in the third
quarter of 1995, the Company will recognize a gain of approximately $500,000.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the three and six months ended June 30, 1995, increased
$253,000 (16%) and $575,000 (17%), respectively, as compared with the same
periods in 1994. Total expenses for the three months ended June 30, 1995,
decreased $67,000 (3%) while for the six months ended June 30, 1995, total
expenses increased $138,000 (4%).
REVENUES
Rentals and related revenue for the three and six months ended June 30,
1995 decreased $381,000 (49%) and $478,000 (28%), respectively, from the same
periods in 1994. These decreases were primarily attributable to the sale of the
office building located in Houston, Texas in April, 1995.
Hotel, Club and Marina revenues consisted of hotel rooms revenue, food and
beverage revenue, club membership dues and revenues from marina operations.
For the three and six months ended June 30, 1995, Hotel, Club and Marina
revenues increased by approximately $368,000 (58%) and $652,000 (44%),
respectively, from the comparable periods in 1994. This was primarily
attributable to increased hotel occupancy and increased food and beverage
operations.
Interest from invested cash, dividends and other revenues for the three and
six months ended June 30, 1995 increased by $265,000 (240%) and $350,000 (196%),
as compared with the same periods in 1994. This was attributable primarily to
increased interest income on cash balances held by Key Largo Lodge, Ltd.
EXPENSES
For the three and six months ended June 30, 1995, operating expenses of
rental properties and other, as compared with the same periods in 1994,
decreased by $150,000 (32%) and $139,000 (16%), respectively. These decreases
were primarily the result of the sale of the office building in Houston, Texas
in April 1995.
Hotel, Club and Marina cost of food and beverage for the three and six
months ended June 30, 1995 increased by 40,000 (34%) and $97,000 (39%)
respectively, as compared with the comparable periods in 1994. These increases
were attributable to increased food and beverage revenue.
Depreciation and amortization for the three and six months ended June 30,
1995 increased by $105,000 (50%) and $323,000 (72%), respectively, from the
comparable periods in 1994. These increases were the result of an increase in
fixed assets relating to the renovation of the property completed in December
1994.
General and administrative expenses for the three and six months ended June
30, 1995 decreased by $396,000 (75%) and $513,000 (67%) respectively, from the
comparable periods in 1994. This was largely due to decreased legal fees.
Minority partners' interest in operating gains of consolidated investments
for the three and six months ended June 30, 1995, as compared with the same
periods in 1994 increased by $31,000 (641%) and $99,000 (442%), respectively.
This increase was primarily due to increased operating gains of HMG Fieber
Associated (a 65% owned partnership).
5
<PAGE>
Gains from unconsolidated entities for the three months ended June 30, 1995
increased $45,000 (150%) while for the six months ended June 30, 1995 gains
decreased $425,000 (79%), as compared with the same periods in 1994,
respectively. The increase in the three month period was primarily attributable
to gains from investments held by Courtland Investments, Inc. The decrease in
the six month period was the result of a non-recurring gain from a certain
investment held by Courtland Investments, Inc. which was sold in the first
quarter of 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's material commitments for capital expenditures include the
completion of the shopping center in Jacksonville, Florida, and required capital
contributions relating to The Grove Towne Center project in Houston, Texas. The
sources of funds for these projects are being provided from available cash and
ultimately with construction and permanent financing.
Maturities of debt obligations in 1995 are expected to be satisfied from
available cash, sales of properties and operating revenue.
MATERIAL COMPONENTS OF CASH FLOWS
For the six months ended June 30, 1995, net cash used in operating
activities was approximately $865,000. This is reflected primarily in a loss
before gain on sales of real estate of $1.2 million less depreciation and
amortization of $774,000 and a decrease in income tax receivable of $335,000,
plus net gain from sales of securities of $51,000, an increase in other assets
and due from affiliates of $413,000, and a decrease in accounts payable and
accrued expenses of $209,000.
For the six months ended June 30, 1995, net cash provided by investing
activities was approximately $1.1 million. This consisted primarily of net
proceeds from disposal of properties of $6.7 million, which was partially offset
by $2.1 million in acquisitions and improvements of properties (primarily
relating to pre-development of the project in Houston, Texas).
For the six months ended June 30, 1995, net cash used in financing
activities was approximately $5.8 million. This consisted primarily of repayment
of mortgages payable on property sold during the quarter.
6
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) A report on Form 8-K was filed on June 21, 1995 reporting that the
Company and its independent accountants, Deloitte & Touche L.L.P.
decided to end their relationship by mutual consent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HMG/COURTLAND PROPERTIES, INC.
Dated: August 15, 1995
Lawrence Rothstein
Senior Vice President
Dated: August 15, 1995
Carlos Camarotti
Vice President - Finance
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000311817
<NAME> HMG/COURTLAND PROPERTIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,531,497
<SECURITIES> 67,130
<RECEIVABLES> 1,071,567
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 26,205,097
<DEPRECIATION> 3,039,587
<TOTAL-ASSETS> 35,550,894
<CURRENT-LIABILITIES> 3,907,809
<BONDS> 9,104,255
<COMMON> 1,245,635
0
0
<OTHER-SE> 17,531,603
<TOTAL-LIABILITY-AND-EQUITY> 35,550,894
<SALES> 3,941,487
<TOTAL-REVENUES> 3,941,487
<CGS> 343,493
<TOTAL-COSTS> 3,978,836
<OTHER-EXPENSES> 1,210,537
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 488,186
<INCOME-PRETAX> (460,033)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (460,033)
<EPS-PRIMARY> $.39
<EPS-DILUTED> 0
</TABLE>
