<PAGE>
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 nine month period ended September 30, 1995
- - ----- TRANSITION REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT
For the period of transition from ________ to _______
Commission File No. 0-1322
KNICKERBOCKER VILLAGE, INC.
------------------------------------------------------
(exact name of registrant as specified in its Charter)
NEW YORK 13-0924285
- - ------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Monroe Street, New York, N.Y. 10002
- - ------------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 227-0955
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 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
--- ---
The number of shares outstanding of each of the issuer's classes of common
stock, as the close of the period covered by this report is 147,464, $2.15 par
value.
Total number of sequentially numbered pages - 10
No exhibits filed.
<PAGE>
FORM 10-QSB
-----------
KNICKERBOCKER VILLAGE, INC.
---------------------------
BALANCE SHEET
-------------
AS OF SEPTEMBER 30, 1995
------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS:
Cash $ 0
Accounts receivable, less allowance for
doubtful accounts of $249,000 235,093
Interest and other receivables 30,261
Prepaid expenses and other current assets 1,136,494
-----------
1,401,848
-----------
SPECIAL FUNDS AND DEPOSITS:
Funds for replacements, painting and
decorating (Note 2) 603,716
Tenants' security deposits - contra 620,088
-----------
1,223,804
-----------
FIXED ASSETS, AT COST (Notes 3 and 4):
Land 3,273,281
Buildings and building equipment 13,551,670
-----------
Less: Accumulated depreciation 16,824,951
NET FIXED ASSETS 10,130,127
-----------
6,694,824
-----------
OTHER ASSETS 87,437
-----------
TOTAL ASSETS $ 9,407,913
===========
</TABLE>
In the opinion of management, the accompanying financial statements of
Knickerbocker Village, Inc. as of September 30, 1995 and for the related periods
then ended include all adjustments necessary in order to make the financial
statements not misleading.
-2-
<PAGE>
FORM 10-QSB
-----------
KNICKERBOCKER VILLAGE, INC.
---------------------------
BALANCE SHEET
-------------
AS OF SEPTEMBER 30, 1995
------------------------
(UNAUDITED)
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
CURRENT LIABILITIES:
<S> <C>
Accounts payable and accrued expenses $1,258,770
Unearned rent income 50,048
Dividends payable (Note 1) 19,023
Current maturities of mortgage payable (Note 4) 150,895
Bank overdraft 1,781
----------
TOTAL CURRENT LIABILITIES 1,480,517
TENANTS' SECURITY DEPOSITS - CONTRA 620,088
LONG-TERM DEBT:
Mortgage payable, less current maturities (Note 4) 6,048,261
----------
TOTAL LIABILITIES 8,148,866
----------
STOCKHOLDERS' EQUITY (Note 1):
Limited dividend capital stock, par value
$2.15 per share, authorized-348,837 shares
issued and outstanding - 147,464 shares 317,048
----------
Retained earnings 941,999
----------
TOTAL STOCKHOLDERS' EQUITY 1,259,047
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,407,913
==========
</TABLE>
-3-
<PAGE>
FORM 10-QSB
-----------
KNICKERBOCKER VILLAGE, INC.
---------------------------
STATEMENTS OF INCOME AND RETAINED EARNINGS
------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
REVENUES:
Rentals - Net $6,951,938 $6,708,566
Gain on sale of securities 0 90,340
Interest and other income 29,966 13,735
---------- ----------
6,981,904 6,812,641
---------- ----------
EXPENSES:
Wages and related costs 1,595,838 1,591,400
Real estate taxes 556,291 546,470
Utilities 1,365,614 1,320,862
Maintenance, repairs and decorating 832,336 684,636
Depreciation and amortization 300,284 286,617
Interest 483,726 489,225
Miscellaneous operating and general
expenses 1,131,866 1,018,674
Management fee (Note 5) 632,258 635,247
---------- ----------
6,898,213 6,573,131
---------- ----------
Income before income taxes and
extraordinary credit 83,691 239,510
Provision for taxes 29,000 86,500
---------- ----------
Income before extraordinary credit 54,691 153,010
Extraordinary item-utilization of
operating loss carryforward 0 29,700
---------- ----------
Net Income 54,691 182,710
Retained earnings at beginning of period 887,308 794,250
---------- ----------
Retained at end of period $ 941,999 $ 976,250
========== ==========
Net Income per share $ 0.37 $ 1.24
========== ==========
Average number of shares outstanding 147,464 147,464
during the period ========== ==========
</TABLE>
-4-
<PAGE>
FORM 10-QSB
-----------
KNICKERBOCKER VILLAGE, INC.
---------------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 54,691 $ 182,710
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 300,284 286,617
Provision for bad debts 9,299 50,000
Deferred income 0 (68,886)
Changes in assets (increase) decrease:
Rents receivable (63,478) (58,056)
Interest and other receivables 66,651 (27,890)
Prepaid expenses and other assets 403,551 418,869
Changes in liabilities increase (decrease):
Accounts payable and accrued expenses (271,856) (369,281)
Unearned rental income 5,619 23,031
Federal income taxes payable 0 68,890
--------- ---------
Net cash provided by operating
activities 504,761 506,004
--------- ---------
Cash Flows From Investing Activities:
Interest earned on reserve fund investments
-Use of funds restricted, subject to DHCR
approval (8,633) (9,415)
Capital expenditures (421,424) (169,232)
Contributions of cash from operations to
reserve fund (425,000) (430,000)
Reimbursement of capital expenditures
and expenses by housing company from
replacement fund 386,340 160,481
--------- ---------
Net cash used in investing activities (468,747) (448,257)
--------- ---------
Cash Flows From Financing Activities:
Payments on long-term debt (103,709) (93,878)
Proceeds from bank overdraft 1,781 0
--------- ---------
Net cash used in financing activities (101,928) (93,878)
Net (decrease) in cash (65,914) (36,131)
Cash at beginning of period 65,914 39,608
--------- ---------
Cash at end of period $ 0 $ 3,477
========= =========
Supplemental Disclosures Of Cash Flow Information:
Cash paid during the periods for:
Interest $ 162,365 $ 479,136
Income taxes 0 59,511
</TABLE>
-5-
<PAGE>
KNICKERBOCKER VILLAGE, INC.
---------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1995
------------------
(UNAUDITED)
-----------
NOTE 1 - CORPORATE ORGANIZATION
----------------------
Knickerbocker Village, Inc. (the Registrant) is a public limited
dividend housing company formed, pursuant to the Housing Laws of the
State of New York, on September 5, 1933. The holders of its capital
stock cannot at any time receive, in repayment of their investment, any
sums in excess of the par value of the stock together with cumulative
dividends at the rate of 6% of par value per annum (without interest).
Any surplus in excess of such amounts upon dissolution reverts to the
public authorities. Cumulative dividends unpaid to September 30, 1995
amounted to $508,865 or approximately $3.45 per share. Dividends
amounting to $19,023 were declared during 1979, but were not paid as of
September 30, 1995. Such dividends were approved by the New York State
Division of Housing and Community Renewal. No dividends were declared
or paid in 1995.
NOTE 2 - REPLACEMENT, PAINTING AND DECORATING FUNDS
------------------------------------------
Maintenance of these funds is required by the Commissioner of Housing
and Community Renewal of the State of New York. These funds were
comprised of the following at September 30, 1995:
Cash $ 198,610
Investments - Treasury Bills 405,106
-------------
$ 603,716
=============
NOTE 3 - FIXED ASSETS
------------
Depreciation is provided on the straight-line method. Estimated useful
lives used in computing depreciation for building improvements and
equipment ranges from 5 to 30 years. Replacements of and major
improvements to property are capitalized. Expenditures for maintenance
and repairs are charged to operations as incurred. Upon sale or
retirement of property, the cost and accumulated depreciation are
removed from the respective accounts and any gain or loss is reflected
in operations for the year (See Note 7).
NOTE 4 - LONG-TERM DEBT
--------------
Long-term debt represents a mortgage payable to the Greater New York
Savings Bank, collateralized by land, buildings and boiler, due July 1,
1997. Monthly payments inclusive of interest at 10% per annum are
$63,642 and the balance of the principal is due on July 1, 1997.
Principal payments due on this mortgage are approximately $36,000 (1995
- three months); $155,000 (1996) and $6,007,000 (1997).
-6-
<PAGE>
KNICKERBOCKER VILLAGE, INC.
--------------------------
NOTES TO FINANCIAL STATEMENTS
----------------------------
SEPTEMBER 30, 1995
------------------
(UNAUDITED)
-----------
NOTE 5 - MANAGEMENT FEE
--------------
The management fee, set by the New York State Division of Housing and
Community Renewal, was paid to Cherry Green Property Corp. ("Cherry
Green"), the owner of approximately 95% of the outstanding shares of
the Registrant.
NOTE 6 - COMMITMENTS
-----------
As of September 30, 1995, the Registrant was in arrears on its
contributions to its special fund for replacements, painting and
decorating in the amount of $340,000. Such contributions are not
mandatory, but are made only for the purpose of financing future
capital improvements and extraordinary repairs.
NOTE 7 - DEPARTURE FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
-------------------------------------------------------
The Registrant has a policy of expensing appliances as they are
purchased. Management's experience has indicated that the normal useful
life of such appliances (including refrigerators and stoves) were
considerably shortened, since most occupants did not properly care for
the appliances. This departure results in a decrease in the
Registrant's net income of approximately $42,000 and $43,000 for the
nine months ended September 30, 1995 and 1994 respectively.
-7-
<PAGE>
FORM 10-QSB
-----------
KNICKERBOCKER VILLAGE, INC.
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
SEPTEMBER 30, 1995
------------------
(UNAUDITED)
-----------
Liquidity - As of September 30, 1995, the Registrant had a working capital
deficit of approximately $79,000. At December 31, 1994, the Registrant had
working capital of approximately $180,000. As of September 30, 1995 the
Registrant was in arrears on its contributions to its special fund for
replacements, painting and decorating in the amount of $340,000 as discussed
further in Note 6 to the financial statements.
Effective November 1, 1993, the registrant received authorization from the
Division of Housing and Community Renewal for a two step rent increase. The
first increase of approximately five and one-quarter percent was effective
November 1, 1993. The second increase of approximately five percent was
effective November 1, 1994.
Capital resources - The Registrant has set aside funds for capital improvements
and repairs amounting to approximately $604,000 and $556,000 as of September 30,
1995 and December 31, 1994, respectively.
Results of operations- During the nine months ended September 30, 1995, total
revenues increased as compared to the nine months ended September 30, 1994 by
approximately 2% due primarily to the rent increase referred to above, partially
offset by retroactive tenant surcharges relating to the year 1988 recorded in
the nine months ended September 30, 1994.
Operating expenses increased during the nine months ended September 30, 1995, as
compared to the nine months ended September 30, 1994, by 5% due primarily to
increases in maintenance, repairs and decorating, utilities and miscellaneous
operating and general expenses. Maintenance, repairs and decorating expenses
increased as a result of plumbing, structural and heating system repairs.
Utilities increased primarily as a result of increased electricity usage,
partially offset by decreases in oil costs. Miscellaneous operating and general
expenses increased for the nine months ended September 30, 1995, primarily due
to increased security services.
-8-
<PAGE>
PART II. OTHER INFORMATION
----------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
KNICKERBOCKER VILLAGE, INC.:
Dated: November 13, 1995 By: /s/ ROBERT GERSHON
-------------------------
ROBERT GERSHON,
Vice President and Treasurer
Dated: November 13, 1995 By: /s/ MELVIN GERSHON
------------------------
MELVIN GERSHON,
Secretary
-10-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
KNICKERBOCKER VILLAGE, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 484093
<ALLOWANCES> 249000
<INVENTORY> 0
<CURRENT-ASSETS> 1401848
<PP&E> 16824951
<DEPRECIATION> 10130127
<TOTAL-ASSETS> 9407913
<CURRENT-LIABILITIES> 1480517
<BONDS> 6048261
<COMMON> 317048
0
0
<OTHER-SE> 941999
<TOTAL-LIABILITY-AND-EQUITY> 9407913
<SALES> 6951938
<TOTAL-REVENUES> 6981904
<CGS> 0
<TOTAL-COSTS> 6898213
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 20596
<INTEREST-EXPENSE> 483726
<INCOME-PRETAX> 83691
<INCOME-TAX> 29000
<INCOME-CONTINUING> 54691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54691
<EPS-PRIMARY> .37
<EPS-DILUTED> 0
</TABLE>
