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, 1996
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 April 30, 1996.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1996 (Unaudited) and December 31, 1995 1
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1996 and 1995 (Unaudited) 2
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1996 and 1995 (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 6
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Part I Financial Information
Item I Financial Statements
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
ASSETS
<S> <C> <C>
Investment Properties, net of accumulated
depreciation:
Commercial and industrial $1,935,169 $1,969,318
Hotel and club facility 8,817,757 8,971,370
Yacht Slips 1,689,283 1,689,283
Land held for development 7,586,327 8,103,304
Real estate development in progress 1,204,390 1,204,390
----------- -----------
Total investment properties, net 21,232,926 21,937,665
Investments in and receivables from
unconsolidated entities 2,670,826 2,439,010
Notes and Advances Due From Related Parties 1,235,216 1,168,788
Cash and Cash Equivalents 362,632 1,094,999
Other Assets 2,171,963 2,241,610
----------- -----------
TOTAL ASSETS $27,673,563 $28,882,072
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses $2,078,171 $2,222,972
Mortgages and Notes payable 8,188,286 8,325,567
Other Liabilities 1,960,687 2,031,782
----------- -----------
TOTAL LIABILITIES 12,227,144 12,580,321
----------- -----------
Minority interests 438,267 613,643
----------- -----------
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 31,587,611 31,637,177
Undistributed losses from operations (43,111,854) (42,481,464)
----------- -----------
16,004,614 16,684,570
Less: Treasury Stock, at cost (78,800 shares) in
1996 and 1995 (996,462) (996,462)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 15,008,152 15,688,108
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $27,673,563 $28,882,072
=========== ===========
</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
March 31,
1996 1995
<S> <C> <C>
REVENUES
Rentals and related revenue $321,538 $819,384
Hotel, club and marina revenues 2,036,575 1,131,541
Gain from sale of marketable securities 87,213 51,086
Interest from invested cash, dividends and other 91,915 151,967
--------- ---------
Total revenues 2,537,241 2,153,978
--------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 383,427 423,751
Hotel, club and marina expenses:
Payroll and related expenses 798,993 615,390
Cost of food and beverage 358,584 186,883
Administrative and general expenses 913,687 435,962
Depreciation and amortization 279,446 459,098
--------- ---------
Total operating expenses 2,734,137 2,121,084
Interest 221,826 248,996
Advisor's fee 218,751 218,751
General and administrative 90,874 116,056
Directors' fees and expenses 9,500 15,845
Minority partners' interests in operating
(losses) gains of consolidated entities (65,338) 84,425
Gains from unconsolidated entities (42,119) (40,042)
--------- ---------
Total expenses 3,167,631 2,765,115
--------- ---------
Loss before sales of real estate (630,390) (611,137)
(Loss) gain on sales of real estate, net (49,566) 816,396
--------- ---------
Net (Loss) Income ($679,956) $205,259
========= ========
Earnings (Loss) Per Common Share
(Based on 1,166,835 weighted average shares outsta ($0.58) $0.18
========= ========
</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>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Net (loss) income ($679,956) $205,259
Adjustments to reconcile net (loss) income to net cash used in
operating activities:
Depreciation and amortization 279,446 459,098
Gain from unconsolidated entities (42,119) (40,042)
Loss (gain) on sales of real estate, net 49,566 (816,396)
Abandonment of pre-development costs of prior year
Net gain from sales of marketable securities (87,213) (51,086)
Minority partners' interest in operating (losses) gains (65,338) 84,425
Changes in assets and liabilities:
Decrease (increase) in other assets 52,547 (186,651)
Increase in due from affiliates (66,428) (66,078)
Decrease in accounts payable and accrued expenses (144,801) (353,136)
(Decrease) increase in other liabilities (71,095) 329,644
----------- ----------
Total adjustments (95,435) (640,222)
----------- ----------
Net cash used in operating activities (775,391) (434,963)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (79,333) (1,054,139)
Net proceeds from disposals of properties 466,799 2,213,658
Net contributions to unconsolidated entities (189,697) (98,512)
Net proceeds from sales and redemptions of securities 107,080 79,988
Purchases of investments in securities (15,117)
----------- ----------
Net cash provided by investing activities 289,732 1,140,995
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgages and notes payables (137,281) (1,222,577)
Net distributions to minority partners (109,427) (425,939)
----------- ----------
Net cash used in financing activities (246,708) (1,648,516)
----------- ----------
Net decrease in cash and cash equivalents (732,367) (942,484)
Cash and cash equivalents at beginning of the period 1,094,999 5,382,501
----------- ----------
Cash and cash equivalents at end of the period $362,632 $4,440,017
======== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest (net of
amounts capitalized $222,000 $249,000
======== ========
</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,
1995. The results of operations for the three months ended March 31, 1996 are
not necessarily indicative of the results to be expected for the full year.
2. (LOSS) GAIN ON SALES OF REAL ESTATE
In January 1996, the Company sold 1.8 acres of vacant land located in
Houston, Texas for approximately $137,000. The Company recognized a gain on the
sale of approximately $11,000.
In January 1996, Courtrust Palm Bay, Ltd, sold its remaining acreage
(approximately 1.5 acres) located in Palm Bay, Florida for approximately
$359,000, and recognized a loss of approximately $61,000.
(4)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the three months ended March 31, 1996, as compared with
the same period in 1995, increased approximately $383,000 (18%) Total expenses
for the same comparable periods increased by approximately $402,000 (14%).
REVENUES
Rentals and related revenue for the three months ended March 31, 1996 as
compared with the same period in 1995, decreased by approximately $498,000
(61%). This decrease was primarily attributable to decreased rental income as
the result of 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 months ended March 31, 1996, hotel, club and marina revenues
increased by approximately $905,000 (80%) as compared to that of the same period
in 1995. This was primarily attributable to increased hotel occupancy and
increased food and beverage sales.
Interest from invested cash, dividends and other decreased by $60,000 (40%)
as compared to that of the same period in 1995. This was attributable primarily
to decreased cash balances and invested cash.
EXPENSES
Operating expenses of rental properties and other for the three months
ended March 31, 1996, as compared with the same period in 1995, decreased by
$40,000 (10%). This decrease was primarily attributable to the sale of the
office building located in Houston, Texas in April 1995.
Hotel, Club and Marina payroll and related expenses for the three months
ended March 31, 1996 increased by approximately $184,000 (30%) as compared with
that of the same period in 1995. Also, cost of food and beverage increased by
$172,000 (92%) between the two comparable periods. These increases were
primarily attributable to the increased food and beverage operations.
Hotel, club and marina administrative and general expenses for the three
months ended March 31, 1996, increased by $478,000 (110%) as compared with that
of the same period in 1995. This was primarily attributable to increased
advertising and promotional expenses.
General and administrative expenses for the three months ended March 31,
1996, decreased $25,000 (22%) as compared with that of the same period in 1995.
This was largely due to decreased professional fees.
Depreciation and amortization for the three months ended March 31, 1996, as
compared with the same period in 1995, decreased by $180,000 (39%). This
decrease was primarily due to the sale of the office building located in
Houston, Texas in April 1995.
Interest expense for the three months ended March 31, 1996, as compared
with the same period in 1995, increased by $27,000 (11%). This was primarily
attributable to the Company's decreased level of debt from that of the prior
year.
Minority partners' interests in operating losses of consolidated entities
for the three months ended March 31, 1996, as compared with the same period in
1995, increased by $150,000 (17%). This was primarily attributable to decreased
operating income of HMG-Fieber Associates.
(5)
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's material commitments for capital expenditures include the
completion of the shopping center in Jacksonville, Florida and required
contributions relating to the Grove Isle hotel and club operations. 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 1996 are expected to be satisfied from
available cash, sales of properties and operating revenue.
OTHER:
FUTURE ACCOUNTING CHANGES
The Company has adopted the provision of FASB No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," in
1996. The adoption of FASB No. 121 has not had a material effect on the carrying
value of the Company's long-lived assets.
The Company does not presently intend in 1996 to adopt the fair value based
method as encouraged by FASB No. 123 "Accounting for Stock-Based Compensation".
Accordingly, there will be no effect to the financial statements.
MATERIAL COMPONENTS OF CASH FLOWS
For the three months ended March 31, 1996, net cash used in operating
activities was approximately $775,000. Total expenses of $3.2 million exceeded
total revenues of $2.5 million.
For the three months ended March 31, 1996, net cash provided by investing
activities was approximately $290,000. This consisted primarily of net proceeds
from disposal of properties of $467,000, and net proceeds from sales of
securities of $107,000. These sources of cash were partially offset by net
contributions to unconsolidated entities of $190,000 and improvements of
properties of $79,000.
For the three months ended March 31, 1996, net cash used in financing
activities was approximately $247,000. This consisted primarily of repayment of
mortgages payable.
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,
1996.
(6)
<PAGE>
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, 1996 /s/ Lawrence Rothstein
-----------------------------
Lawrence Rothstein
Senior Vice President
Dated: May 11, 1996 /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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 362,632
<SECURITIES> 0
<RECEIVABLES> 1,235,216
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 24,838,775
<DEPRECIATION> 3,605,848
<TOTAL-ASSETS> 27,673,563
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,245,635
<OTHER-SE> 13,762,517
<TOTAL-LIABILITY-AND-EQUITY> 27,673,563
<SALES> 2,537,241
<TOTAL-REVENUES> 2,537,241
<CGS> 358,584
<TOTAL-COSTS> 2,375,553
<OTHER-EXPENSES> 433,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 221,826
<INCOME-PRETAX> (679,956)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (679,956)
<EPS-PRIMARY> (0.58)
<EPS-DILUTED> 0
</TABLE>
