FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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.
June 30, 1997 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: (732) 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 August 1, 1997 was
1,468,449 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE THREE MONTHS ENDED JUNE 30, 1997
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 9-10
PART II - OTHER INFORMATION 11
SIGNATURES 12
- 2-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 AND MARCH 31, 1997
6/30/97 3/31/97
<S> <C> <C>
Current Assets:
Cash $ 107,699 $ 228,928
Accounts Receivable 85,353 20,124
Interest Receivable 31,984 42,153
Securities Available for Sale at
Fair Value 407,604 420,986
Inventory 1,906,405 1,609,906
Prepaid Expenses and Other Current Assets 107,388 195,076
Current Portion of Loans Receivable 514,279 517,202
_________ _________
Total Current Assets 3,160,712 3,034,375
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 172,000 172,000
Building and Improvements net of
accumulated depreciation of $69,224
and $37,487, respectively 912,991 919,612
_________ _________
Total Real Estate Investments 1,084,991 1,091,612
_________ _________
Loans Receivable:
Performing 1,391,450 1,208,155
Non-Performing (less allowance for
losses of $119,753 at June 30, 1997
and March 31, 1997, respectively) 658,286 660,542
_________ _________
Total Loans Receivable 2,049,736 1,868,697
_________ _________
Total Long-Term Assets 3,134,727 2,960,309
_________ _________
TOTAL ASSETS $6,295,439 $5,994,684
========= =========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF JUNE 30, 1997 AND MARCH 31, 1997
<S>
<C> <C>
6/30/97 3/31/97
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 47,122 $ 116,699
Loans Payable 724,189 474,244
_________ _________
Total Current Liabilities 771,311 590,943
Other Liabilities 70,530 61,567
_________ _________
Total Liabilities 841,841 652,510
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per
share; authorized 10,000,000 shares;
issued and outstanding 1,446,006 and
1,408,464 shares at June 30, 1997 and
March 31, 1997, respectively 1,446,006 1,408,464
Additional Paid-in Capital 3,154,963 3,086,470
Unrealized Investment Loss (34,283) (29,673)
Retained Earnings 886,912 876,913
_________ _________
Total Shareholders' Equity 5,453,598 5,342,174
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,295,439 $5,994,684
========= =========
</TABLE>
UNAUDITED
See Notes to the Consolidated Financial Statements
-4-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30,
1997 1996
<S> <C> <C>
INCOME:
Sales of Manufactured Homes $ 874,396 $ 577,485
Interest Income 70,620 79,593
Rental Income 46,510 44,137
Other Income 11,127 11,499
_________ _________
Total Income 1,002,653 712,714
_________ _________
EXPENSES:
Cost of Sales of
Manufactured Homes 691,144 457,449
Selling Expense 55,519 34,600
Salaries & Employee Benefits 56,821 53,345
Professional Fees 33,353 28,670
Interest Expense 21,942 25,482
Other Expenses 126,875 104,589
_________ _________
Total Expenses 985,654 704,135
_________ _________
Income Before Income Taxes 16,999 8,579
Income Taxes 7,000 3,400
_________ _________
NET INCOME $ 9,999 $ 5,179
========= =========
NET INCOME PER SHARE $ .01 $ -0-
========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,426,431 1,148,084
========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED JUNE 30,
<S> <C> <C>
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 9,999 $ 5,179
Depreciation and Amortization 6,621 6,246
Changes In Operating Assets and
Liabilities:
Accounts Receivable (65,229) 58,191
Interest Receivable 10,169 (10,215)
Inventory (296,499) (442,651)
Prepaid Expenses and Other
Current Assets 87,688 5,195
Accounts Payable and Accrued Expenses (69,577) (128,939)
Other 8,963 4,364
_________ _________
Net Cash Used by Operating Activities (307,865) (502,630)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
New Loans (304,583) (174,692)
Collections and Other Decreases in
Loans Receivable 126,467 73,875
Sales and Other Decreases in Securities
Available for Sale 8,772 7,982
_________ _________
Net Cash Used by Investing Activities (169,344) (92,835)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable 249,945 719,921
Proceeds from the Issuance of Class A
Common Stock 106,035 41,702
_________ _________
Net Cash Provided by Financing Activities 355,980 761,623
_________ _________
Net Increase (Decrease) in Cash (121,229) 166,158
Cash at Beginning of Period 228,928 94,625
_________ _________
Cash at End of Period $ 107,699 $ 260,783
========= =========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
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 June 30,
1997 and for all periods presented. All adjustments
made in the interim period were of a normal recurring
nature. Certain footnote 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, 1997
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 manufactured homes, loans
totaling $304,583 were made for the three months ended June
30, 1997. Loans are primarily at 10%-15% for fifteen years
and secured by the homes.
Collections and other decreases of loans receivable totalled
$126,467 for the three months ended June 30, 1997.
On April 15, 1997, the Company foreclosed on property
securing the J. Trombe Flooring Co. loan. On April 30, 1997,
the Company signed an agreement to sell this property back to
the owners of J. Trombe Flooring Co. for $400,000. This sale
was scheduled to close in May, 1997, but was postponed until
August, 1997. The Company will continue to account for the
above as a non-performing loan until the completion of the
sale. The balance of the loan at June 30, 1997 is $408,602
and is included in Loans Receivable-Non-Performing. Accrued
interest on this loan amounted to $12,064. The total
investment in the property is $420,666. This sale will
result in a loss of approximately $21,000, which is fully
reserved.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the three months ended June 30, 1997, the Company
received $106,032 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 37,542 new shares issued,
resulting in 1,446,006 shares outstanding.
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
JUNE 30, 1997
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the three months ended
June 30, 1997 and 1996 were as follows:
1997 1996
Interest $ 21,942 $ 25,482
Taxes 19,000 139,000
NOTE 5 - SUBSEQUENT EVENT
The Company has signed an agreement to sell the property
securing the J. Trombe Flooring Co. loan back to the original
owners (See Note 3).
-8-
<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 operating activities for the three months
ended June 30, 1997 amounted to $307,865 as compared to
$502,630 for the three months ended June 30, 1996. This
decrease in net cash used by operating activities is
primarily due to a smaller increase in manufactured home
inventory of The Mobile Home Store, Inc. (MHS), the Company's
wholly-owned subsidiary. Inventory increased by $442,651 for
the three months ended June 30, 1996 as compared to an
increase of $$296,499 for the three months ended June 30,
1997.
Loans Receivable increased by $178,116 during the three
months ended June 30, 1997. This was the result of new loans
made of $304,583 offset by $126,467 in collections.
Inventory increased by $296,499 during the three months ended
June 30, 1997 as a result of increased purchases of
manufactured homes for sale to be used as models for a new
sales center in Magnolia, Ohio.
Loans payable increased by $249,945 during the three months
ended June 30, 1997. 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 aproximately 95% of the market price. Shareholders may
also purchase additional shares at approximately 95% of the
market price by making optional cash payments. For the three
months ended June 30, 1997, the Company raised $106,035 from
the DRIP, resulting in 37,542 new shares issued.
MATERIAL CHANGES IN RESULTS OF OPERATION
Income is comprised primarily of sales of manufactured homes,
interest income and rental income. Sales of manufactured
homes amounted to $874,396 for the three months ended June
30, 1997 as compared to $577,485 for the three months ended
June 30, 1996. MHS has been experiencing increased sales
since its inception in fiscal 1994. MHS currently has three
sales centers in operation.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Rental income amounted to $46,510 for the three months ended
June 10, 1997 as compared to $44,137 for the three months
ended June 30, 1996. Rental income is attributable to the
Company's purchase of a net-leased industrial building on
March 31, 1994.
Interest income remained relatively stable for the three
months ended June 30, 1997 as compared to the three months
ended June 30, 1996.
The increase 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
decreased to $21,942 for the three months ended June 30, 1997
as compared to $25,482 for the three months ended June 30,
1996. The decrease in interest expense is due to a decrease
in loan payable.
Salaries and Employee Benefits and professional fees remained
relatively stable for the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996.
Other Expenses increased to $126,875 for the three months
ended June 30, 1997 as compared to $104,589 for the three
months ended June 30, 1996 primarily due to the expansion of
the operations of MHS.
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 $1,400,000 line of credit with Deutsche
Financial Services to finance its inventory purchases. As of
June 30, 1997, $714,079 of the line was 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 of 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 QUARTER ENDED JUNE 30, 1997
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
-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 August 11, 1997 By /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date August 11, 1997 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 JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 107,699
<SECURITIES> 407,604
<RECEIVABLES> 2,801,105
<ALLOWANCES> 119,753
<INVENTORY> 1,906,405
<CURRENT-ASSETS> 3,160,712
<PP&E> 1,154,215
<DEPRECIATION> 69,224
<TOTAL-ASSETS> 6,295,439
<CURRENT-LIABILITIES> 771,311
<BONDS> 0
0
0
<COMMON> 1,446,006
<OTHER-SE> 4,007,592
<TOTAL-LIABILITY-AND-EQUITY> 6,295,439
<SALES> 874,396
<TOTAL-REVENUES> 1,002,653
<CGS> 691,144
<TOTAL-COSTS> 145,693
<OTHER-EXPENSES> 126,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,942
<INCOME-PRETAX> 16,999
<INCOME-TAX> 7,000
<INCOME-CONTINUING> 9,999
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,999
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
