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 March 31, 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
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 S. Bayshore Drive, Coconut Grove, Florida 33133
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(Address of principal executive offices) (Zip Code)
305-854-6803
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(Registrant's telephone number, including area code)
Not Applicable
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(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 April 30, 1995.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1995 (Unaudited) and December 31, 1994 1
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1995 and 1994 (Unaudited) 2
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 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>1
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Part I Financial Information
(UNAUDITED) Item I Financial Statements
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
ASSETS
Investment Properties, net of accumulated
depreciation:
Commercial and industrial $7,545,501 $8,775,714
Hotel and club facility 8,404,286 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 9,693,184 8,927,198
----------- -----------
Total investment properties, net 29,974,099 30,376,869
Investments in and receivables from
unconsolidated entitites 2,893,725 2,755,171
Notes and Advances Due From Related Parties 931,433 865,355
Cash and Cash Equivalents 4,440,017 5,382,501
Marketable Securities 65,097 93,999
Income Tax Receivable 340,000 440,000
Other Assets 1,897,918 1,769,993
----------- -----------
TOTAL ASSETS $40,542,289 $41,683,888
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses $2,040,352 $2,393,488
Mortgages and Notes payables 12,289,673 13,512,250
Other Liabilities 2,053,163 1,723,519
----------- -----------
TOTAL LIABILITIES 16,383,188 17,629,257
----------- -----------
Minority interests 4,716,571 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 30,197,677 29,381,281
Undistributed losses from operations (37,287,542) (36,676,405)
----------- -----------
20,438,992 20,233,733
Less: Treasury Stock, at cost (78,800 shares)
in 1995 and 1994 (996,462) (996,462)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 19,442,530 19,237,271
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $40,542,289 $41,683,888
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>2
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED) Three months ended
March 31,
1995 1994
<S> <C> <C>
REVENUES
Rentals and related revenue $819,384 $916,336
Hotel, club and marina revenues 1,131,541 848,049
Gain from sale of securities 51,086 4,333
Interest from invested cash, dividends and other 151,967 63,422
--------- ---------
Total revenues 2,153,978 1,832,140
--------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 423,751 412,425
Hotel, club and marina expenses:
Payroll and related expenses 615,390 594,132
Cost of food and beverage 186,883 129,917
Administrative and general expenses 435,962 536,934
Depreciation and amortization 459,098 241,903
--------- ---------
Total operating expenses 2,121,084 1,915,311
Interest 248,996 215,489
Advisor's fee 218,751 218,751
General and administrative 116,056 233,005
Directors' fees and expenses 15,845 12,000
Minority partners' interests in operating
gains of consolidated entities 84,425 17,371
Gains from unconsolidated entities (40,042) (510,461)
--------- ---------
Total expenses 2,765,115 2,101,466
--------- ---------
Loss before gain on sales of real estate (611,137) (269,326)
Gain on sales of real estate, net 816,396 1,189,502
--------- ---------
NET INCOME $205,259 $920,176
======== ========
Earnings Per Common Share
(Based on 1,166,835 weighted average shares
outstanding): $0.18 $0.79
===== =====
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>3
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $205,259 $920,176
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 459,098 241,903
Gain from unconsolidated entities (40,042) (510,461)
Net gain from sales of real estate (816,396) (1,189,502)
Net gain from sales of securities (51,086) (4,333)
Changes in assets and liabilities:
(Increase) decrease in other receivables (83,560) 92,051
Minority partners' interest in operating gains 84,425 17,371
(Decrease) increase in accounts payable
and accrued expenses (23,492) 93,736
Decrease in income taxes payable (450,000)
Decrease in income tax receivable 100,000
(Increase) decrease in other assets (203,091) 338,242
Increase in due from affiliates (66,078) (36,151)
---------- ----------
Total adjustments (640,222) (1,407,144)
---------- ----------
Net cash used in operating activities (434,963) (486,968)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (1,054,139) (751,922)
Net proceeds from disposals of properties 2,213,658 12,034,978
Net (contributions to) distributions from
unconsolidated entitites (98,512) 735,669
Net proceeds from sales and redemptions of
securities 79,988 26,833
Purchases of investments in securities (61,847)
---------- ----------
Net cash provided by investing activities 1,140,995 11,983,711
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgages and notes payables (1,222,577) (6,591,178)
Net (distributions to) contributions from
minority partners (425,939) (750,796)
---------- ----------
Net cash used in financing activities (1,648,516) (7,341,974)
---------- ----------
Net (decrease) increase in cash and cash
equivalents (942,484) 4,154,769
Cash and cash equivalents at beginning of
the period 5,382,501 4,005,430
---------- ----------
Cash and cash equivalents at end of the
period $4,440,017 $8,160,199
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest
(net of amounts capitalized) $249,000 $215,000
======== ========
Cash paid during the period for income taxes $450,000
========
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>4
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 three months ended March 31, 1995 are
not necessarily indicative of the results to be expected for the full year.
2. GAIN 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.
3. EVENTS SUBSEQUENT TO MARCH 31, 1995
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) is estimated at $50,000.
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) has
pending a civil action in the Circuit Court of Dade County, Florida. In April
1995, the parties to the lawsuit entered into a stipulation approved by the
court authorizing a cash distribution in the amount of $1.1 million to each HMG
of Key Largo, Inc. and the limited partner. The remaining proceeds of
approximately $2 million is frozen pending further order of the court.
<PAGE>5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the three months ended March 31, 1995, as compared
with the same periods in 1994, $322,000 (18%). Total expenses for the same
comparable periods increased $664,000 (32%).
REVENUES
Rentals and related revenue for the three months ended March 31, 1995
increased, from the same period in 1994. This decrease was primarily
attributable to decreased rental income from Briar Bay Associates, Ltd., a
51%-owned partnership which sold its sole asset (a shopping center in Miami,
Florida in February 1994).
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 months ended March 31, 1995 hotel, club and marina
revenues increased by approximately $283,000 (33%) as compared to that of the
same period in 1994. This was primarily attributable to increased hotel
occupancy and increased food and beverage operations.
Interest from invested cash, dividends and other increased by $88,000
(140%) as compared to that of the same period in 1994. This was attributable
primarily to increased interest income on cash balances held by Key Largo Lodge,
Ltd.
EXPENSES
Operating expenses of rental properties and other for the three months
ended March 31, 1995, as compared with the same period in 1994, increased by
$11,000 (3%). This increase was primarily attributable to increased rental
operating expenses at Grove Isle hotel, club and marina.
Hotel, club and marina administrative and general expenses decreased
by $101,000 (19%) as compared with that of the same period in 1994. This was
primarily attributable to reduced repairs and maintenance expenses.
General and administrative expenses decreased $117,000 (50%) as
compared with that of the same period in 1994. This was largely due to decreased
legal fees.
<PAGE>6
Depreciation and amortization for the three months ended March 31,
1995, as compared with the same period in 1994, increased by $217,000 (90%).
This increase was primarily due to increased depreciation from the Grove Isle
hotel and club facility which underwent renovations in 1994.
Interest expense for the three months ended March 31, 1995, as
compared with the same period in 1994, increased by $34,000 (16%). This was
primarily attributable to the Company's increased level of debt from that of the
prior year, and increased interest rates.
Minority partners' interests in operating gains of consolidated
entities for the three months ended March 31, 1995, as compared with the same
period in 1994, increased by $67,000 (386%). This was primarily attributable to
increased operating income of HMG-Fieber Associates.
Gains from unconsolidated entities for the three months ended March
31, 1995, decreased by $470,000 from that of the same period in 1994. This
decrease was primarily the result of a previously-reported non-recurring gain
from a partnership in which Courtland Investments, Inc. held a 2% interest.
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 three months ended March 31, 1995, net cash used in operating
activities was approximately $435,000. This is reflected primarily in a loss
before gain on sales of real estate of $611,000 less depreciation and
amortization of $459,000 plus net gain from sales of securities of $51,000, net
gain from unconsolidated entities of $40,000 and an increase in other assets and
due from affiliates of $269,000.
For the three months ended March 31, 1995, net cash provided by
investing activities was approximately $1.1 million. This consisted primarily of
net proceeds from disposal of properties of $2.2 million, which was partially
offset by $1.1 million in acquisitions and improvements of properties (primarily
relating to pre-development of the project in Houston, Texas).
For the three months ended March 31, 1995, net cash used in financing
activities was approximately $1.6 million. This consisted primarily of repayment
of mortgages payable on property sold during the quarter.
<PAGE>7
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
March 31, 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: May 11, 1995
Lawrence Rothstein
Senior Vice President
Dated: May 11, 1995
Carlos Camarotti
Vice President - Finance
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000311817
<NAME> HMG/COURTLAND PROPERTIES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,440,017
<SECURITIES> 65,097
<RECEIVABLES> 1,271,433
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 29,974,099
<DEPRECIATION> 8,348,803
<TOTAL-ASSETS> 40,542,289
<CURRENT-LIABILITIES> 4,093,515
<BONDS> 12,289,673
<COMMON> 1,245,635
0
0
<OTHER-SE> 18,196,895
<TOTAL-LIABILITY-AND-EQUITY> 40,542,289
<SALES> 2,153,978
<TOTAL-REVENUES> 2,153,978
<CGS> 186,883
<TOTAL-COSTS> 2,121,084
<OTHER-EXPENSES> 644,031
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 248,996
<INCOME-PRETAX> 205,259
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 205,259
<EPS-PRIMARY> $.18
<EPS-DILUTED> 0
</TABLE>
