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 September 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 October 31, 1995.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
September 30, 1995 (Unaudited) and December 31, 1994 ................1
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 1995
and 1994 (Unaudited) ................................................2
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 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>
September 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Investment Properties, net of accumulated
depreciation:
Commercial and industrial $2,170,592 $8,775,714
Hotel and club facility 8,640,759 8,297,760
Yacht Slips 1,689,283 1,767,421
Land held for development 2,607,149 2,608,776
Real estate development in progress 10,604,185 8,927,198
----------- -----------
Total investment properties, net 25,711,968 30,376,869
Investments in and receivables from
unconsolidated entities 2,668,767 2,755,171
Notes and Advances Due From Related Parties 1,103,859 865,355
Cash and Cash Equivalents 2,097,162 5,382,501
Marketable Securities 19,998 93,999
Income Tax Receivable 334,912
Other Assets 1,948,227 1,875,081
----------- -----------
TOTAL ASSETS $33,549,981 $41,683,888
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses $1,716,999 $2,393,488
Mortgages and Notes payables 8,356,327 13,512,250
Other Liabilities 2,188,624 1,723,519
----------- -----------
TOTAL LIABILITIES 12,261,950 17,629,257
----------- -----------
Minority interests 2,150,120 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 31,328,804 29,381,281
Undistributed losses from operations (38,723,288) (36,676,405)
----------- -----------
20,134,373 20,233,733
Less: Treasury Stock, at cost (78,800
shares) in 1995 and 1994 (996,462) (996,462)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 19,137,911 19,237,271
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $33,549,981 $41,683,888
=========== ===========
</TABLE>
See notes to condensed consolidated financi
1
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED) Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Rentals and related revenue $312,308 $808,960 $1,534,685 $2,509,534
Hotel, club and marina revenues 592,368 400,272 2,731,807 1,887,678
Gain from sale of securities 450,431 131,228 501,517 168,503
Interest from invested cash,
dividends and other 83,510 84,256 612,095 225,581
--------- --------- --------- ---------
Total revenues 1,438,617 1,424,716 5,380,104 4,791,296
--------- --------- --------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 238,193 319,338 979,619 1,034,604
Hotel, club and marina expenses
Payroll and related expenses 500,231 479,521 1,704,532 1,651,662
Cost of food and beverage 79,090 86,927 422,583 333,509
Administrative and general
expenses 673,559 477,390 1,589,274 1,732,572
Depreciation and amortization 302,247 203,636 1,076,148 654,865
--------- --------- --------- ---------
Total operating expenses 1,793,320 1,566,812 5,772,156 5,407,212
Interest 177,976 159,996 666,162 603,893
Advisor's fee 218,751 218,751 656,253 656,253
General and administrative 125,962 328,619 374,296 1,090,176
Directors' fees and expenses 20,146 23,391 51,341 57,032
Minority partners' interests in
operating (losses) gains of
consolidated entities (59,869) 46,177 61,071 68,478
Gains from unconsolidated entities (38,672) (106,867) (154,292) (647,619)
--------- --------- --------- ---------
Total expenses 2,237,614 2,236,879 7,426,987 7,235,425
--------- --------- --------- ---------
Loss before gain on sales of real
estate (798,997) (812,163) (2,046,883) (2,444,129)
Gain on sales of real estate, net 1,159,670 310,660 1,947,523 1,673,149
--------- --------- --------- ---------
NET GAIN (LOSS) $360,673 ($501,503) ($99,360) ($770,980)
======== ========= ======== =========
Earnings (Loss) Per Common Share
(Based on 1,166,835 weighted average
shares outstanding): $0.31 ($0.43) ($0.09) ($0.66)
======== ========= ======== =========
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($ 99,360) ($ 770,980)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization 1,076,148 654,865
Gain from unconsolidated entities (154,292) (647,619)
Net gain from sales of real estate (1,947,523) (3,499,737)
Net gain from sales of securities (501,517) (168,503)
Changes in assets and liabilities:
Decrease (increase) in other receivables 128,797 (198,725)
Minority partners' interest in operating
gains 61,071 68,478
(Decrease) increase in accounts payable
and accrued expenses (211,384) 818,136
Decrease in income taxes payable (450,000)
Decrease in income tax receivable 334,912
(Increase) decrease in other assets (489,268) 93,251
Increase in due from affiliates (238,504) (7,508)
------------ ------------
Total adjustments (1,941,560) (3,337,362)
------------ ------------
Net cash used in operating activities (2,040,920) (4,108,342)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (2,751,055) (7,718,910)
Net proceeds from disposals of properties 8,871,113 13,673,269
Net distributions from unconsolidated entities 152,173 1,261,053
Net proceeds from sales and redemptions of
securities 664,041 1,020,894
Purchases of investments in securities (105,304)
------------ ------------
Net cash provided by investing activities 6,936,272 8,131,002
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to mortgages and notes payable 700,000 2,531,104
Repayment of mortgages and notes payables (5,855,923) (6,931,274)
Net (distributions to) contributions from
minority partners (3,024,768) 820,980
------------ ------------
Net cash used in financing activities (8,180,691) (3,579,190)
------------ ------------
Net (decrease) increase in cash and cash
equivalents (3,285,339) 443,470
Cash and cash equivalents at beginning of
the period 5,382,501 4,005,430
------------ ------------
Cash and cash equivalents at end of the period $ 2,097,162 $ 4,448,900
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest (net
of amounts capitalized) $ 666,000 $ 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 nine months ended September 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 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.
In August 1995, Orange Park North Partnership sold its property located in
Jacksonville, Florida for approximately $1.3 million, and recognized a gain on
the sale of approximately $670,000. The Company's portion of the gain was
approximately $603,000.
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 was liquidated in August 1995, and upon liquidation
the Company recognized a gain of approximately $620,000.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the three and nine months ended September 30, 1995,
increased $14,000 (1%) and $589,000 (12%), respectively, as compared with the
same periods in 1994. Total operating expenses for the three and nine months
ended September 30, 1995 increased $227,000 (14%) and $365,000 (7%),
respectively.
REVENUES
Rentals and related revenue for the three and nine months ended September
30, 1995 decreased $497,000 (61%) and $975,000 (39%), 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 nine months ended September 30, 1995, Hotel, club and
marina revenues increased by approximately $192,000 (48%) and $844,000 (45%),
respectively, from the comparable periods in 1994. This was primarily
attributable to increased hotel occupancy and increased food and beverage
operations.
Gain from sale of marketable securities for the three and nine months ended
September 30, 1995 increased $319,000 (243%) and $333,000 (198%), respectively,
from the same periods in 1994. This increase was primarily attributable to
increased sales of securities held by Courtland Investments, Inc.
Interest from invested cash, dividends and other revenues for the nine
months ended September 30, 1995, increased $386,000 (171%), as compared with the
same period in 1994. This was attributable primarily to increased interest
income on cash balances held by Key Largo Lodge, Ltd.
EXPENSES
For the three and nine months ended September 30, 1995, operating expenses
of rental properties and other, as compared with the same periods in 1994,
decreased by $81,000 (25%) and $55,000 (5%), respectively. These decreases were
primarily the result of the sale of the office building in Houston, Texas in
April 1995.
Depreciation and amortization for the three and nine months ended September
30, 1995 increased by $99,000 (48%) and $421,000 (64%), 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 nine months ended
September 30, 1995 decreased by $203,000 (62%) and $716,000 (66%) 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 nine months ended September 30, 1995, as compared with the
same periods in 1994 decreased by $106,000 and $7,000 respectively. This
decrease was primarily due to increased operating losses from Key Largo Lodge,
Ltd. ( a 50.5% owned partnership) which was liquidated in August 1995.
5
<PAGE>
Gains from unconsolidated entities for the three and nine months ended
September 30, 1995 decreased $68,000 (64%) and $493,000 (76%), as compared with
the same periods in 1994, respectively. The decrease in the nine 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 nine months ended September 30, 1995, net cash used in operating
activities was approximately $2,041,000. This is reflected primarily in a loss
before gain on sales of real estate of $2,047,000 less depreciation and
amortization of $1,076,000 and a decrease in income tax receivable of $335,000,
plus net gain from sales of securities of $501,000, an increase in other assets
and due from affiliates of $832,000, and a decrease in accounts payable and
accrued expenses of $211,000.
For the nine months ended September 30, 1995, net cash provided by
investing activities was approximately $6.9 million. This consisted primarily of
net proceeds from disposal of properties of $8.9 million, and net proceeds from
sales and redemptions of securities of $664,000. These proceeds were partially
offset by $2.7 million in acquisitions and improvements of properties (primarily
relating to pre-development of the project in Houston, Texas).
For the nine months ended September 30, 1995, net cash used in financing
activities was approximately $8.2 million. This consisted of repayment of
mortgages payable on property sold during the year of $5.9 million and net
distributions to minority partners of $3 million.
6
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) There were no reports on Form 8-K filed for the quarter ended
September 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HMG/COURTLAND PROPERTIES, INC.
Dated: November 13, 1995 /s/ Lawrence Rothstein
----------------- ---------------------------
Lawrence Rothstein
Senior Vice President
Dated: November 13, 1995 /s/ Carlos Camarotti
----------------- ---------------------------
Carlos Camarotti
Vice President - Finance
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000311817
<NAME> HMG/COURTLAND PROPERTIES, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,097,162
<SECURITIES> 19,998
<RECEIVABLES> 1,103,859
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 25,711,968
<DEPRECIATION> 3,215,134
<TOTAL-ASSETS> 33,549,981
<CURRENT-LIABILITIES> 3,905,623
<BONDS> 8,356,327
<COMMON> 1,245,635
0
0
<OTHER-SE> 17,892,276
<TOTAL-LIABILITY-AND-EQUITY> 35,549,981
<SALES> 5,380,104
<TOTAL-REVENUES> 5,380,104
<CGS> 422,583
<TOTAL-COSTS> 5,349,573
<OTHER-EXPENSES> 1,654,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 666,162
<INCOME-PRETAX> (99,360)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (99,360)
<EPS-PRIMARY> ($.09)
<EPS-DILUTED> 0
</TABLE>
