US 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 OCTOBER 31, 2000
-----------------
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number 0-1684
Gyrodyne Company of America, Inc.
---------------------------------
(Exact name of small business issuer as specified in its charter)
New York 11-1688021
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
102 Flowerfield, St. James, N.Y. 11780
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(Address of principal executive offices)
(631) 584-5400
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(Issuer's telephone number)
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(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: 1,117,583 Common $1 P.V. as of November 20, 2000
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Seq. Page 1
<PAGE>
INDEX TO QUARTERLY REPORT
QUARTER ENDED OCTOBER 31, 2000
Seq. Page
Form 10-QSB Cover 1
Index to Form 10-QSB 2
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Footnotes to Consolidated Financial Statements 6
Management's Discussion and Analysis or Plan of
Operation 7
Part II - Other Information 8
Signatures 8
Seq. Page 2
<PAGE>
GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS
October 31,
2000
-----------
REAL ESTATE
Rental property:
Land $ 4,746
Building and improvements 4,645,857
Machinery and equipment 334,026
-----------
4,984,629
Less accumulated depreciation 3,524,271
-----------
1,460,358
-----------
Land held for development:
Land 803,592
Land development costs 1,215,354
-----------
2,018,946
-----------
Total real estate, net 3,479,304
CASH AND CASH EQUIVALENTS 1,359,897
RENT RECEIVABLE, net of allowance for doubtful
accounts of $29,548 109,541
PREPAID EXPENSES AND OTHER ASSETS 130,947
INVESTMENT IN CITRUS GROVE PARTNERSHIP 1,585,104
PREPAID PENSION COSTS 1,684,743
-----------
$ 8,349,536
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 155,101
Tenant security deposits payable 232,593
Loans payable 769,311
Deferred income taxes 937,319
-----------
Total liabilities 2,094,324
-----------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 4,000,000
shares; 1,531,086 shares issued 1,531,086
Additional paid-in capital 7,545,360
Deficit (442,973)
-----------
8,633,473
Less cost of shares of common stock held in
treasury (2,378,261)
-----------
Total stockholders' equity 6,255,212
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$ 8,349,536
===========
See notes to consolidated financial statements
Seq. Page 3
<PAGE>
GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
October 31, October 31,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE FROM RENTAL PROPERTY $1,204,679 $1,169,344 $ 579,897 $ 575,386
RENTAL PROPERTY EXPENSES:
Real estate taxes 198,128 183,186 99,064 91,593
Operating and maintenance 320,186 448,861 147,485 197,697
Interest expense 33,595 35,624 16,760 17,776
Depreciation 50,160 50,390 25,186 25,220
---------- ---------- ---------- ----------
602,069 718,061 288,495 332,286
---------- ---------- ---------- ----------
INCOME FROM RENTAL PROPERTY 602,610 451,283 291,402 243,100
---------- ---------- ---------- ----------
GENERAL AND ADMINISTRATIVE 487,516 591,313 231,831 324,475
TERMINATION COST 2,115 70,902 0 54,806
---------- ---------- ---------- ----------
489,631 662,215 231,831 379,281
---------- ---------- ---------- ----------
INCOME/(LOSS) FROM OPERATIONS 112,979 (210,932) 59,571 (136,181)
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSE):
Lease termination income, net 87,406 0 87,406 0
Aerospace income, net 0 26,459 0 38,989
Income from oil investment, net 0 51,096 0 13,105
Gain on sale of oil investment 0 360,000 0 360,000
Interest income 20,413 19,128 9,963 10,554
---------- ---------- ---------- ----------
107,819 456,683 97,369 422,648
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX 220,798 245,751 156,940 286,467
PROVISION FOR INCOME TAXES 91,864 102,482 63,946 117,303
---------- ---------- ---------- ----------
NET INCOME $ 128,934 $ 143,269 $ 92,994 $ 169,164
========== ========== ========== ==========
NET INCOME PER COMMON SHARE:
Basic $ 0.12 $ 0.13 $ 0.08 $ 0.15
========== ========== ========== ==========
Diluted $ 0.11 $ 0.13 $ 0.08 $ 0.15
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Basic 1,117,583 1,098,219 1,117,583 1,104,159
---------- ---------- ---------- ----------
Diluted 1,123,644 1,108,101 1,120,844 1,123,923
========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements
Seq. Page 4
<PAGE>
GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
October 31,
------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 128,934 $ 143,269
---------- ----------
Adjustments to reconcile net income to net
cash provided by/(used in)operating activities:
Depreciation and amortization 50,160 54,074
Bad debt expense 6,000 10,000
Deferred income tax provision 88,319 98,661
Non-cash compensation 0 229,969
Pension (income) (18,412) (27,677)
Write off of land development costs 75,879 0
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (35,313) (61,105)
Prepaid expenses and other assets (15,802) (101,610)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (236,172) (13,404)
Tenant security deposits 4,534 19,982
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Total adjustments (80,807) 208,890
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Net cash provided by operating activities 48,127 352,159
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of land development costs (51,509) 0
Acquisition of property, plant and equipment (30,068) (163,009)
---------- ----------
Net cash (used in) investment activities (81,577) (163,009)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans payable (27,577) (26,451)
Proceeds from exercise of stock options 0 39,486
---------- ----------
Net cash (used in)/provided by financing activities (27,577) 13,035
---------- ----------
Net (decrease)/increase in cash and cash equivalents (61,027) 202,185
Cash and cash equivalents at beginning of period 1,420,924 1,329,155
---------- ----------
Cash and cash equivalents at end of period $1,359,897 $1,531,340
========== ==========
</TABLE>
See notes to consolidated financial statements
Seq. Page 5
<PAGE>
FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Quarterly Presentations:
The accompanying quarterly financial statements have been prepared in conformity
with generally accepted accounting principles. The financial statements of the
Registrant included herein have been prepared by the Registrant pursuant to the
rules and regulations of the Securities and Exchange Commission and, in the
opinion of management, reflect all adjustments which are necessary to present
fairly the results for the three and six month periods ended October 31, 2000,
and 1999.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations; however,
management believes that the disclosures are adequate to make the information
presented not misleading.
This report should be read in conjunction with the financial statements and
footnotes therein included in the audited annual report on Form 10-KSB as of
April 30, 2000.
The results of operations for the three and six month periods ended October 31,
2000, and 1999 are not necessarily indicative of the results to be expected for
the full year.
2. Principle of Consolidation:
The accompanying consolidated financial statements include the accounts of
Gyrodyne Company of America, Inc. ("GCA") and its wholly-owned subsidiaries. All
intercompany balances and transactions have been eliminated.
3. Earnings Per Share:
Basic earnings per common share is computed by dividing the net income (loss) by
the weighted average number of shares of common stock outstanding during the
period. Dilutive earnings per share give effect to stock options and warrants
which are considered to be dilutive common stock equivalents. Treasury shares
have been excluded from the weighted average number of shares.
The following is a reconciliation of the weighted average shares:
Six months ended Three Months Ended
October 31, October 31,
2000 1999 2000 1999
--------------------------------------------------------------------------------
Basic 1,117,583 1,098,219 1,117,583 1,104,159
--------------------------------------------------------------------------------
Effect of dilutive securities 6,061 9,882 3,261 19,764
--------------------------------------------------------------------------------
Diluted 1,123,644 1,108,101 1,120,844 1,123,923
--------------------------------================================================
4. Income Taxes:
Deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.
5. Reclassification:
The current and prior year quarterly results from the Consolidated Statements of
Operations reflect a reclassification of termination costs from general and
administrative.
Seq. Page 6
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Not Applicable
(b) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results for the second quarter ending October 31, 2000, reflect net income of
$92,994 compared to the $169,164 posted for the same period last year. Several
nonrecurring events took place during these two reporting periods which impacted
the Company's financial results. In the second quarter of last year, the Company
received proceeds of $410,100 related to the sale of its oil investments and the
disposal of the defunct helicopter division. Likewise, during this current
reporting period ending October 31, 2000, Gyrodyne recognized net proceeds of
$87,406 in connection with the termination of a lease agreement with Marriott
Senior Living Services (MSLS). Giving consideration to these two items, prior
year results benefited by $322,694 over the current year period.
Net income for the six months ending October 31, 2000, amounted to $128,934
compared to $143,269 for the like period last year. These results were impacted
by the nonrecurring events discussed above.
Diluted per share earnings amounted to $0.08 and $0.11 for the three and six
month periods ended October 31, 2000, respectively, compared to $0.15 and $0.13
for the comparative periods from the prior year, respectively.
Revenue from rental property amounted to $579,897 for the current quarter and
$575,386 for the same period last year. Revenues for the six month period
totaled $1,204,679 as compared to $1,169,344 last year.
Rental property expenses amounted to $288,495 for the three months ending
October 31, 2000 compared to $332,286 for the same period last year. Expenses
totaled $602,069 and $718,061 for the first six months of 2000 and 1999,
respectively. Major contributing factors for the three and six month periods
include reductions in salary expense totaling $29,842 and $40,887; building
maintenance, $9,886 and $42,837; fairgrounds expense, $1,695 and $15,667;
equipment maintenance, $11,118 and $21,990; respectively.
As a result of the foregoing, income from rental property for the quarter ending
October 31, 2000 amounted to $291,402 compared to $243,100 for the same period
last year. Similarly, income for the six months ending October 31, 2000 and 1999
amounted to $602,610 and $451,283, respectively.
General and administrative expenses amounted to $231,831 for the quarter and
$487,516 for the six months ending October 31, 2000, compared to $324,475 and
$591,313 for the same periods last year, respectively. While salary expense was
comparable for the quarter, it was $25,501 below last year's total for the six
month period; stock option compensation was also $39,680 and $16,031 less than
the prior year's three and six month periods, respectively. Directors' fees
declined by $18,412 and $34,606 for the three and six month reporting periods as
did corporate governance which reflected decreases of $15,536 and $18,273,
respectively. Professional fees also decreased by $17,991 in this current
quarter and by $12,279 for the six months ended.
There were no expenses related to the termination of the Company's former
president during the current quarter which amounted to $54,806 during the same
period last year. Six month results include termination expenses of $2,115 and
$70,902 for the period ending October 31, 2000, and 1999, respectively.
Overall, income from operations improved in both reporting periods. For the
three months ended October 31, 2000, the Company recorded a profit of $59,571
which compares to a loss of $136,181 for the same period last year. For the six
months ended October 31, 2000, the Company recorded income of $112,979 compared
to a loss of $210,932 last year.
Other income, which includes the nonrecurring items discussed above, amounted to
$97,369 and $422,648 for the quarter ending October 31, 2000 and 1999,
respectively. Income for the six month periods totaled $107,819 and $456,683,
respectively.
Seq. Page 7
<PAGE>
As of October 31, 2000, the Company had cash and cash equivalents of $1,359,897
and anticipates having the capacity to fund normal operating and administrative
expenses and its regular debt service requirements. Also, as of statement date,
capitalized expenses associated with the Company's Flowerfield property were
carried at $1,215,354.
The results of operations for both the quarter and six months ending October 31,
2000, are not necessarily indicative of nor should they be used to project full
year or future results.
Part II Other Information
Items 1 through 5 are not applicable to the August 1, 2000, through October 31,
2000, period.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits required - None
(b) Reports on Form 8-K - None were filed by the Company for the second
quarter of FY 2001.
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.
GYRODYNE COMPANY OF AMERICA, INC.
(Registrant)
Date: December 1, 2000 SGD/ Stephen V. Maroney
-----------------------
Stephen V. Maroney
President, Chief Executive Officer
and Treasurer
Date: December 1, 2000 SGD/ Frank D'Alessandro
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Frank D'Alessandro
Controller
Seq. Page 8
