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 December 31, 1995
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.
December 31, 1995 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 December 31, 1995
was 1,119,436 shares.
MONMOUTH CAPITAL CORPORATION
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
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 7-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II - OTHER INFORMATION 12
SIGNATURES 13
-2-
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND MARCH 31, 1995
<S> <C> <C>
ASSETS
12/31/95 3/31/95
Real Estate Investments:
Land $ 172,000 $ 172,000
Building & Improvements net of
accumulated depreciation of
$21,861 and $12,492, respectively 952,839 962,208
_________ _________
Total Real Estate Investments 1,124,839 1,134,208
_________ _________
Loans Receivable:
Performing ($356,662 and $297,500,
respectively due from related party) 1,513,817 853,640
Non Performing (less allowance for
losses of $119,753 at December 31,
1995 and March 31, 1995) 681,156 278,849
_________ _________
Total Loans Receivable 2,194,973 1,132,489
_________ _________
Securities Held to Maturity -0- 494,737
_________ _________
Securities Available for Sale at Fair
Value (cost $987,673 at December 31,
1995 and $1,031,250 at March 31, 1995) 988,390 1,022,315
_________ _________
Other Current Assets:
Cash and Cash Equivalent 82,973 205,804
Accounts Receivable 27,920 18,704
Interest Receivable 74,675 48,373
Inventory 1,062,438 448,116
Prepaid Expenses and Other
Current Assets 74,944 62,727
Current Portion of Loans Receivable 589,004 500,569
_________ _________
Total Other Current Assets 1,911,954 1,284,293
_________ _________
TOTAL ASSETS $6,220,156 $5,068,042
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (Cont.)
AS OF DECEMBER 31, 1995 AND MARCH 31, 1995
<S> <C> <C>
12/31/95 3/31/95
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 110,392 $ 202,371
Loan Payable 1,161,449 319,040
_________ _________
Total Current Liabilities 1,271,841 521,411
Deferred Installment Gain 294,361 -0-
Other Liabilities 94,272 69,341
_________ _________
Total Liabilities 1,660,474 590,752
_________ _________
Shareholders' Equity:
Capital Stock (Authorized 10,000,000
shares par value $1.00; Issued and
outstanding,1,119,436 and
1,100,071 shares, respectively) 1,119,436 1,100,071
Additional Paid-in Capital 2,607,167 2,596,172
Unrealized Investment Gain 717 9,065
Retained Earnings 832,362 771,982
_________ _________
Total Shareholders' Equity 4,559,682 4,477,290
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,220,156 $5,068,042
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
<S> <C> <C> <C> <C>
Three Months Nine Months
1995 1994 1995 1994
INCOME:
Sales of Mobile Homes $ 509,780 $137,000 $1,459,245 $734,900
Interest Income 108,994 39,114 300,230 130,286
Rental Income 40,882 34,580 122,510 115,867
Other Income 31,671 8,758 89,319 9,343
_________ _______ _________ _______
Total Income 691,327 219,452 1,971,304 990,396
_________ _______ _________ _______
EXPENSES:
Cost of Sales of
Mobile Homes 395,017 107,437 1,157,876 497,836
Interest Expense 20,433 9,643 49,122 22,442
Selling Expense 30,904 17,441 105,060 30,929
Salaries & Employee
Benefits 54,126 41,769 134,831 83,221
Professional Fees 23,139 5,638 79,389 27,528
Other Expenses 116,498 51,201 260,117 122,125
_________ _______ _________ _______
Total Expenses 640,117 233,129 1,786,395 784,081
_________ _______ _________ _______
Income (Loss) Before
Income Taxes 51,210 (13,677) 184,909 206,315
Income Taxes 30,000 3,439 80,700 97,819
_________ _______ _________ _______
NET INCOME $ 21,210 $(17,116) $ 104,209 $108,496
========= ======= ========= =======
NET INCOME PER SHARE $ .02 $ (.03) $ .09 $ .21
========= ======= ========= =======
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,108,417 510,680 1,103,409 510,680
========= ======= ========= =======
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED DECEMBER 31,
<S> <C> <C>
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 104,209 $ 108,496
Depreciation and Amortization 9,369 9,369
Changes In:
Accounts Receivable (9,216) 2,896
Interest Receivable (26,302) 10,274
Inventory (614,322) (82,354)
Prepaid Expenses and Other
Current Assets (12,217) (18,878)
Accounts Payable and
Accrued Expenses (91,979) 50,041
Other 319,292 17,911
_________ _________
Net Cash Provided (Used) by
Operating Activities (321,166) 97,755
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (1,323,438) (416,143)
Collections and Other
Decreases in Loans 172,519 61,184
Decrease in Securities 520,314 8,401
_________ _________
Net Cash Used by Investing Activities (630,605) (346,558)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable 842,409 214,820
Proceeds from Issuance of
Capital Stock 60,781 -0-
Costs Associated with the Issuance
of Class A Common Stock (19,246) -0-
Dividends Paid (55,004) (25,534)
_________ _________
Net Cash Provided by
Financing Activities 828,940 189,286
_________ _________
Net Decrease in Cash (122,831) (59,517)
Cash at Beginning of Period 205,804 131,422
_________ _________
Cash at End of Period $ 82,973 $ 71,905
========= =========
CASH PAID DURING THE PERIOD
FOR INTEREST $ 105,060 $ 22,442
========= =========
FOR TAXES $ 114,124 $ 21,736
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
</TABLE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
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 December 31, 1995
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, 1995 have been
omitted. Certain amounts in the consolidated financial
statements for prior periods have been reclassified. These
reclassifications have no effect on net income.
NOTE 2 - LOANS RECEIVABLE
In conjunction with the sale of mobile homes, loans totaling
$1,323,438 were made for the nine-month period ended
December 31, 1995. Loans are primarily at 10%-15% for
fifteen years and secured by the property.
On April 28, 1995, ICS Acquisitions, Inc. (ICS) repurchased
its $50,000, 13% subordinated convertible debenture for a
purchase price of $396,291. The purchase price is to be
paid in quarterly installments over a five-year period
together with interest at prime plus 2% with a minimum rate
of 8% and a maximum rate of 13%. The Company will record
this sale under the installment method of accounting. Gross
profit will be recognized only to the extent that cash is
collected. The balance of this loan at December 31, 1995 is
$356,662. The related deferred gain at December 31, 1995
amounted to $294,361.
During April and May of 1995, an additional $19,000 was
advanced to Trombe Flooring, Inc. for improvements to the
property.
Repayments of loans receivable totaling $172,519 were
received for the nine-month period ended December 31, 1995.
-7-
MONMOUTH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (Cont.)
DECEMBER 31, 1995
NOTE 3 - INVESTMENT IN EQUITY SECURITIES
Effective October 1, 1995, the Company reclassified its
Securities Held to Maturity to Securities Available for
Sale. These securities are now carried at fair value.
Unrealized holding gains and losses are excluded from
earnings and reported as a separate component of
Shareholders' Equity until realized.
NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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
reinvest 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 its market price by making optional
cash payments. For the quarter ended December 31, 1995, the
Company received $60,781 from the DRIP. There were 19,365
new shares issued, resulting in 1,119,436 shares
outstanding.
On December 15, 1995, the Company paid $55,004 as a dividend
of $.05 per share to shareholders of record November 15,
1995.
NOTE 5 - SUBSEQUENT EVENT
On January 4, 1996, ICS fully repaid its loans totalling
$561,847. The Company recognized the remaining gain of
$294,361 which was previously deferred (See Note 2).
-8-
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 nine months ended
December 31, 1995 amounted to $321,166 as compared to net
cash provided by operations of $97,755 for the nine months
ended December 31, 1994. This decrease is primarily due to
the purchase of mobile home inventory by the Company's
wholly-owned subsidiary.
Loans Receivable increased by $1,150,919 during the nine
months ended December 31, 1995. This was the result of new
loans made of $1,323,438 offset by $172,519 in collections.
Of the new loans made, $396,291 was the result of the
repurchase by ICS Acquisitions, Inc. (ICS) of its $50,000,
13% convertible debenture. The purchase price is payable in
quarterly installments over a five-year period with interest
at prime plus 2% with a minimum rate of 8% and a maximum
rate of 13%. The Company recorded this sale under the
installment method of accounting. Gross profit will be
recognized only to the extent that cash is collected. At
December 31, 1995, the deferred gain associated with this
transaction amounted to $294,361. On January 4, 1996, ICS
repaid this loan.
Inventory increased by $614,322 during the nine months ended
December 31, 1995 as a result of increased purchases of
mobile homes for sale.
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 quarter ended December 31, 1995, the
Company raised $60,781 from the DRIP, resulting in 19,365
new shares issued.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income is comprised primarily of sales, interest income and
rental income. Sales income amounted to $509,780 for the
three months ended December 31, 1995 as compared to $137,000
for the three months ended December 31, 1994 and $1,459,245
for the nine months ended December 31, 1995 as compared to
$734,900 for the nine months ended December 31, 1994.
During fiscal 1994, a new subsidiary was formed to sell and
finance mobile homes.
-9-
MONMOUTH CAPITAL CORPORATION
MANAGEMENT's DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (Cont.)
Rental Income amounted to $40,882 for the three months ended
December 31, 1995 as compared to $34,580 for the three
months ended December 31, 1994, and $122,510 for the nine
months ended December 31, 1995 as compared to $115,867 for
the nine months /ended December 31, 1994. Rental income is
attributable to the Company's purchase of a net-leased
industrial building on March 31, 1994.
Interest income increased to $108,994 for the three months
ended December 31, 1995 as compared to $39,114 for the three
months ended December 31, 1994 and $300,230 for the nine
months ended December 31, 1995 as compared to $130,286 for
the nine months ended December 31, 1994. This was due
primarily to the increase in loans made.
Other income represents gain on the repurchase by ICS of its
convertible debenture and commission income on resale of
previously owned mobile homes.
The increase in Cost of Sales of Mobile Homes and Selling
Expense is directly attributable to the increase in sales of
mobile homes made by the Company's wholly-owned subsidiary.
Interest expense increased to $20,433 for the three months
ended December 31, 1995 as compared to $9,643 for the three
months ended December 31, 1994 and $49,122 for the nine
months ended December 31, 1995 as compared to $22,442 for
the nine months ended December 31, 1994. The increase in
interest expense is due to an increase in loans payable.
Salaries and Employee Benefits increased to $54,126 for the
three months ended December 31, 1995 as compared to $41,769
for the three months ended December 31, 1994 and $134,831
for the nine months ended December 31, 1995 as compared to
$83,221 for the nine months ended December 31, 1994. This
increase is primarily due to new employees for the Company's
wholly-owned subsidiary.
Professional Fees and Other Expenses increased for the three
and nine months ended December 31, 1995 as compared to the
three months ended December 31, 1994 primarily due to the
expansion of the operations of the Company's wholly-owned
subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently engaged in real estate activities,
including the sale and financing of mobile homes.
The Company has a $550,000 line of credit with Deutsche
Financial Services to finance its inventory purchases. As
of December 31, 1995, the Company had utilized $444,045 of
this line.
-10-
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (Cont.)
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 mobile homes, collection of loans
receivable, availability of bank borrowings, the Dividend
Reinvestment and Stock Purchase Plan and access to the
capital markets.
-11-
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
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 - None
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K - None
-12-
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: February 12, 1996 By s/Eugene W. Landy
EUGENE W. LANDY
President
Date: February 12, 1996 By s/Anna T. Chew
ANNA T. CHEW
Controller
-13-
<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
QUARTER ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 82,973
<SECURITIES> 988,390
<RECEIVABLES> 3,006,325
<ALLOWANCES> 119,753
<INVENTORY> 1,062,438
<CURRENT-ASSETS> 2,900,344
<PP&E> 1,146,700
<DEPRECIATION> 21,861
<TOTAL-ASSETS> 6,220,156
<CURRENT-LIABILITIES> 1,271,841
<BONDS> 0
<COMMON> 1,119,436
0
0
<OTHER-SE> 3,440,246
<TOTAL-LIABILITY-AND-EQUITY> 6,220,156
<SALES> 1,459,245
<TOTAL-REVENUES> 1,971,304
<CGS> 1,157,876
<TOTAL-COSTS> 319,280
<OTHER-EXPENSES> 260,117
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,122
<INCOME-PRETAX> 184,909
<INCOME-TAX> 80,700
<INCOME-CONTINUING> 104,209
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104,209
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
