FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from
____________________to__________________
For the Quarter ended Commission File No.
September 30, 1996 0-24282
MONMOUTH CAPITAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
New Jersey 21-0740878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 Wyckoff Road, Eatontown, New Jersey 07724
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (908) 542-4927
____________________________________________________________
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities and 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__
Indicate by check mark whether the financial statements
required by instruction H have been reviewed by an
independent public accountant. Yes ___ No X
The number of shares or other units outstanding of each of
the issuer's classes of securities as of November 1, 1996
was 1,153,970 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996
CONTENTS
PART I - FINANCIAL INFORMATION PAGE NO.
Item 1 - Financial Statements (Unaudited):
Consolidated Balance Sheets 3-4
Consolidated Statements of Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II - OTHER INFORMATION 11
SIGNATURES 12
-2-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1996 AND MARCH 31, 1996
ASSETS
9/30/96 3/31/96
<S> <C> <C>
Current Assets:
Cash $ 202,231 $ 94,625
Accounts Receivable 62,201 75,752
Interest Receivable 34,064 32,842
Securities Available for Sale
at Fair Value(cost $1,136,224
and $983,788 at September 30,
1996 and March 31, 1996,
respectively) 1,142,318 966,614
Inventory 1,504,188 1,168,216
Prepaid Expenses and Other
Current Assets 48,003 56,290
Current Portion of Loans
Receivable 491,980 523,021
_________ _________
Total Current Assets 3,484,985 2,917,360
_________ _________
Long Term Assets:
Real Estate Investments:
Land 172,000 172,000
Building and Improvements
net of accumulated
depreciation of $49,979 and
$37,487, respectively 924,721 937,213
_________ _________
Total Real Estate Investments 1,096,721 1,109,213
_________ _________
Loans Receivable:
Performing 1,563,662 1,436,625
Non-Performing (less
allowance for losses of
$119,753 at September 30,
1996 and March 31, 1995) 288,849 288,849
_________ _________
Total Loans Receivable 1,852,511 1,725,474
_________ _________
Total Long-Term Assets 2,949,232 2,834,687
_________ _________
TOTAL ASSETS $6,434,217 $5,752,047
========== ==========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (Cont.)
AS OF SEPTEMBER 30, 1996 AND MARCH 31, 1996
9/30/96 3/31/96
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued
Expenses $ 127,262 $ 240,801
Loans Payable 1,408,073 726,587
Dividend Payable 57,700 -0-
__________ __________
Total Current Liabilities 1,593,035 967,388
Other Liabilities 82,554 77,904
__________ __________
Total Liabilities 1,675,589 1,045,292
__________ __________
Shareholders' Equity:
Capital Stock (Authorized
10,000,000 shares par value
$1.00; Issued and outstanding
1,153,970 shares at September
30, 1996 and 1,139,184 shares
at March 31, 1996 1,153,970 1,139,184
Additional Paid-in Capital 2,699,474 2,662,555
Unrealized Investment
Gain/Loss 6,094 (17,174)
Retained Earnings 899,090 922,190
__________ __________
Total Shareholders' Equity 4,758,628 4,706,755
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,434,217 $5,752,047
========== ==========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<S> <C> <C> <C> <C>
Three Months Six Months
1996 1995 1996 1995
INCOME:
Sales of Manu-
factured Homes $493,297 $637,528 $1,070,782 $ 949,465
Interest Income 93,741 108,636 173,334 191,236
Rental Income 44,630 41,156 88,767 81,628
Other Income 6,188 27,823 17,687 57,648
________ ________ _________ _________
Total Income 637,856 815,143 1,350,570 1,279,977
________ ________ _________ _________
EXPENSES:
Cost of Sales of
Manufactured
Homes 383,805 512,328 841,254 762,859
Interest Expense 32,498 19,371 57,980 28,689
Selling Expense 47,190 53,567 81,790 74,156
Salaries &
Employee Benefits 38,462 46,720 91,807 80,705
Professional Fees 21,326 24,960 49,996 56,250
Other Expenses 71,154 83,098 175,743 143,619
________ ________ _________ _________
Total Expenses 594,435 740,044 1,298,570 1,146,278
________ ________ _________ _________
Income Before
Income Taxes 43,421 75,099 52,000 133,699
Income Taxes 14,000 26,800 17,400 50,700
________ ________ _________ _________
NET INCOME $ 29,421 $ 48,299 $ 34,600 $ 82,999
========= ======== ========= =========
NET INCOME
PER SHARE $ .03 $ .04 $ .03 $ .08
========= ======== ========= =========
WEIGHTED AVERAGE
SHARES
OUTSTANDING 1,153,255 1,100,071 1,150,606 1,100,071
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 34,600 $ 82,999
Depreciation and Amortization 12,492 6,246
Changes In:
Accounts Receivable 13,551 (1,863)
Interest Receivable (1,222) (3,304)
Inventory (335,972) (266,187)
Prepaid Expenses and Other
Current Assets 8,287 16,248
Accounts Payable and
Accrued Expenses (113,539) (95,718)
Other 4,650 335,089
________ ________
Net Cash Provided (Used) by
Operating Activities (377,153) 73,510
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (247,817) (1,030,586)
Collections and Other Decreases
in Loans 151,821 128,283
Decrease in Securities 18,584 515,976
Purchase of Securities Available
for Sale (171,020) -0-
________ ________
Net Cash Used by Investing Activities (248,432) (386,327)
________ ________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable 681,486 218,147
Proceeds from the Issuance of
Class A Common Stock 51,705 -0-
Costs Associated with the Issuance
of Class A Common Stock -0- (19,246)
________ ________
Net Cash Provided by Financing
Activities 733,191 198,901
________ ________
Net Increase (Decrease) in Cash 107,606 (113,916)
Cash at Beginning of Period 94,625 205,804
________ ________
Cash at End of Period $ 202,231 $ 91,888
========= =========
CASH PAID DURING THE PERIOD
FOR INTEREST $ 57,980 $ 28,689
========= =========
FOR TAXES $ 145,000 $ 90,577
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
</TABLE>
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 - ACCOUNTING POLICY
The interim consolidated financial statements furnished
herein reflect all adjustments which were, in the opinion of
management, necessary to present fairly the financial
position, results of operations, and cash flows at September
30, 1996 and for all periods presented. All adjustments
made in the interim period were of a normal recurring
nature. Certain footnotes disclosures which would
substantially duplicate the disclosures contained in the
audited financial statements and notes thereto included in
the annual report of Monmouth Capital Corporation (the
Company) for the year ended March 31, 1996 have been
omitted.
NOTE 2 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes, loans
totaling $247,817 were made for the six months ended
September 30, 1996. Loans are primarily at 10%-15% for
fifteen years and secured by the property.
Collections and other decreases of loans receivable totalled
$151,821 for the six months ended September 30, 1996.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the six months ended September 30, 1996, the Company
received $51,705 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 14,786 new shares
issued, resulting in 1,153,970 shares outstanding.
NOTE 4 - SECURITIES AVAILABLE FOR SALE
On July 2, 1996, the Company purchased $171,020 of
marketable securities. These securities are classified as
Securities Available for Sale and carried at fair value.
Page 7
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
Net cash used by operations for the six months ended
September 30,1996 amounted to $377,153 as compared to net
cash provided by operations of $73,510 for the six months
ended September 30, 1995. This decrease is primarily due to
the purchase of manufactured home inventory by The Mobile
Home Store, Inc. (MHS), the Company's wholly-owned
subsidiary. MHS is in the process of opening a new sales
center.
Loans Receivable increased by $95,996 during the six months
ended September 30, 1996. This was the result of new loans
made of $247,817 offset by $151,821 in collections.
Inventory increased by $335,972 during the six months ended
September 30, 1996 as a result of increased purchases of
manufactured homes for sale to be used as models for the new
sales center.
Loans payable increased by $681,486 during the six months
ended September 30, 1996. Proceeds from these loans were
used to finance inventory purchases as well as manufactured
home sales to customers.
Effective August 28, 1995, the Company implemented a
Dividend Reinvestment and Stock Purchase Plan (DRIP). Under
the terms of the DRIP, shareholders who participate may
invest all or part of their dividends in additional shares
of the Company at approximately 95% of the market price.
Shareholders may also purchase additional shares at
approximately 95% of their market price by making optional
cash payments. For the six months ended September 30, 1996,
the Company raised $51,705 from the DRIP, resulting in
14,786 new shares issued.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income is comprised primarily of sales of manufactured
homes, interest income and rental income. Sales of
manufactured homes amounted to $493,297 for the three months
ended September 30, 1996 as compared to $637,528 for the
three months ended September 30, 1995 and $1,070,782 for
the six months ended September 30, 1996 as compared to
$949,465 for the six months ended September 30, 1995. MHS
has been experiencing increased sales since its inception in
fiscal 1994.
-8-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (Cont.)
Rental Income amounted to $44,630 for the three months ended
September 30, 1996 as compared to $41,156 for the three
months ended September 30, 1995 and $88,767 for the six
months ended September 30, 1996 as compared to $81,628 for
the six months ended September 30, 1995. Rental income is
attributable to the Company's purchase of a net-leased
industrial building on March 31, 1994.
Other Income amounted to $6,188 for the three months ended
September 30, 1996 as compared to $27,823 for the three months
ended September 30, 1995 and $17,687 for the six months ended
September 30, 1996 as compared to $57,648 for the six months
ended September 30, 1995. This decrease is due to the gain on
the repurchase of a convertible debenture in 1995.
Interest income remained relatively stable for the three and
six months ended September 30, 1996 as compared to the
three and six months ended September 30, 1995.
The change in Cost of Sales of Manufactured Homes and
Selling Expense is directly attributable to the increase in
sales of manufactured homes made by MHS. Interest expense
increased to $32,498 for the three months ended September
30, 1996 as compared to $19,371 for the three months ended
September 30, 1995 and $57,980 for the six months ended
September 30, 1996 as compared to $28,689 for the six months
ended September 30, 1995. The increase in interest expense
is due to an increase in loans payable.
Salaries and Employee Benefits amounted to $38,462 for the
three months ended September 30, 1996 as compared to $46,720
for the three months ended September 30, 1995 and $91,807
for the six months ended September 30, 1996 as compared to
$80,705 for the six months ended September 30, 1995. The
increase for the six months ended September 30, 1996 is
primarily due to increased personnel.
Other Expenses amounted to $71,154 for the three months
ended September 30, 1996 as compared to $83,098 for the
three months ended September 30, 1995 and $175,743 for
the six months ended September 30, 1996 as compared to
$143,619 for the six months ended September 30, 1995. The
increase for the six months ended September 30, 1996 is
primarily due to the increased expenses for MHS in the first
quarter due to the opening of its new sales center.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT.)
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently engaged in real estate activities,
including the sale and financing of manufactured homes.
The Company has a $750,000 line of credit with Deutsche
Financial Services to finance its inventory purchases. As
of September 30, 1996, this line was fully utilized
The Company's ability to generate adequate cash to meet its
needs is dependent primarily on its real estate investment,
leveraging of its real estate investment, the success of the
sale and financing of manufactured homes, collections
receivable, availability of bank borrowings, the Dividend
Reinvestment and Stock Purchase Plan and access to the
capital markets.
-10-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996
Item 1 - Legal Proceedings - None
Item 2 - Changes in Securities - None
Item 3 - Defaults Upon Senior Securities - None
Item 4 - Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders was held on September
12, 1996 to elect ten directors to serve for one year and
to ratify the appointment of independent auditors.
Proxies for the meeting were solicited pursuant to
Regulation 14 under the Securities and Exchange Act of
1934.
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K - None
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
MONMOUTH CAPITAL CORPORATION
Date: November 12, 1996 By: /s/Eugene W. Landy
EUGENE W. LANDY
President
Date: November 12, 1996 By: /s/Anna T. Chew
ANNA T. CHEW
Controller
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MONMOUTH CAPITAL CORPORATION AS OF AND FOR THE PERIOD
ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 202,231
<SECURITIES> 1,142,318
<RECEIVABLES> 2,560,509
<ALLOWANCES> 119,753
<INVENTORY> 1,504,188
<CURRENT-ASSETS> 3,484,985
<PP&E> 1,146,700
<DEPRECIATION> 49,979
<TOTAL-ASSETS> 6,434,217
<CURRENT-LIABILITIES> 1,593,035
<BONDS> 0
0
0
<COMMON> 1,153,970
<OTHER-SE> 3,604,653
<TOTAL-LIABILITY-AND-EQUITY> 6,434,217
<SALES> 1,070,782
<TOTAL-REVENUES> 1,350,570
<CGS> 841,254
<TOTAL-COSTS> 223,593
<OTHER-EXPENSES> 175,743
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,980
<INCOME-PRETAX> 52,000
<INCOME-TAX> 17,400
<INCOME-CONTINUING> 34,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,600
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
