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 September 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.
September 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 November 1, 1997
was 1,470,286 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE SIX MONTHS ENDED SEPTEMBER 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 SEPTEMBER 30, 1997 AND MARCH 31, 1997
September 30, March 31,
1997 1997
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 303,148 $ 228,928
Accounts Receivable 72,113 20,124
Interest Receivable 22,282 42,153
Securities Available for Sale, at Fair Value 427,468 420,986
Inventory 1,903,577 1,609,906
Prepaid Expenses and Other Current Assets 100,165 195,076
Current Portion of Loans Receivable 154,638 517,202
_________ _________
Total Current Assets 2,983,391 3,034,375
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 172,000 172,000
Building, Improvements and Equipment net
of accumulated depreciation of $75,845
and $62,603, respectively 1,008,893 919,612
_________ _________
Total Real Estate Investments 1,180,893 1,091,612
_________ _________
Loans Receivable:
Performing 1,978,284 1,208,155
Non-Performing (less allowance for
losses of $107,884 at September 30, 1997
and $119,753 at March 31, 1997 260,388 660,542
_________ _________
Total Loans Receivable 2,238,672 1,868,697
_________ _________
Total Long-Term Assets 3,419,565 2,960,309
_________ _________
TOTAL ASSETS $ 6,402,956 $ 5,994,684
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF SEPTEMBER 30, 1997 AND MARCH 31, 1997
September 30, March 31,
1997 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts Payable and Accrued Expenses $ 44,949 $ 116,699
Loans Payable 713,694 474,244
Dividends Payable 73,514 -0-
_________ _________
Total Current Liabilities 832,157 590,943
Other Liabilities 70,732 61,567
_________ _________
Total Liabilities 902,889 652,510
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per share;
authorized 10,000,000 shares; issued
and outstanding 1,470,286 shares at
September 30, 1997 and 1,408,464
at March 31, 1997 1,470,286 1,408,464
Additional Paid-In Capital 3,212,387 3,086,470
Unrealized Investment Loss (6,488) (29,673)
Retained Earnings 823,882 876,913
_________ _________
Total Shareholders' Equity 5,500,067 5,342,174
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 6,402,956 $ 5,994,684
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Three Months Six Months
1997 1996 1997 1996
INCOME
<S> <C> <C> <C> <C>
Sales of Manufactured
Homes $ 1,160,936 $ 493,297 $ 2,035,332 $ 1,070,782
Interest Income 59,420 93,741 130,040 173,334
Rental Income 47,362 44,630 93,872 88,767
Other Income 23,032 6,188 34,159 17,687
_________ _________ _________ _________
Total Income 1,290,750 637,856 2,293,403 1,350,570
_________ _________ _________ _________
EXPENSES
Cost of Sales of
Manufactured Homes 886,940 383,805 1,578,084 841,254
Selling Expense 107,256 47,190 162,775 81,790
Salaries and Employee
Benefits 60,195 38,462 117,016 91,807
Professional Fees 49,712 21,326 83,065 49,996
Interest Expense 20,481 32,498 42,423 57,980
Other Expenses 148,982 71,154 275,857 175,743
_________ _________ _________ _________
Total Expenses 1,273,566 594,435 2,259,220 1,298,570
_________ _________ _________ _________
Income Before Income
Taxes 17,184 43,421 34,183 52,000
Income Taxes 6,700 14,000 13,700 17,400
_________ _________ _________ _________
NET INCOME $ 10,484 $ 29,421 $ 20,483 $ 34,600
========= ========= ========= =========
NET INCOME PER SHARE $ 0.01 $ 0.03 $ 0.01 $ 0.03
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,463,225 1,153,255 1,444,660 1,150,606
========= ========= ========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 20,483 $ 34,600
Depreciation and Amortization 13,242 12,492
Changes In:
Accounts Receivable (51,989) 13,551
Interest Receivable 19,871 (1,222)
Inventory (293,671) (335,972)
Prepaid Expenses and Other Current
Assets 94,911 8,287
Accounts Payable and Accrued Expenses (71,750) (113,539)
Other Liabilities 9,165 4,650
_________ _________
NET CASH USED BY OPERATING ACTIVITIES (259,738) (377,153)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (577,015) (247,817)
Collections and Other Decreases in Loans 569,604 151,821
Purchase of Building, Improvements and
Equipment (102,523) -0-
Decrease in Securities 16,703 18,584
Purchase of Securities Available for Sale -0- (171,020)
_________ _________
NET CASH USED BY INVESTING ACTIVITIES (93,231) (248,432)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable 239,450 681,486
Proceeds from the Issuance
of Class A Common Stock 187,739 51,705
_________ _________
NET CASH PROVIDED BY FINANCING ACTIVITIES 427,189 733,191
_________ _________
NET DECREASE IN CASH 74,220 107,606
CASH AT BEGINNING OF PERIOD 228,928 94,625
_________ _________
CASH AT END OF PERIOD $ 303,148 $ 202,231
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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
September 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 $577,015 were made for the six months ended
September 30, 1997. Loans are primarily at 10%-15% for
fifteen years and secured by the homes.
Collections and other decreases of loans receivable totalled
$569,604 for the six months ended September 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 closed in August, 1997. The Company incurred a loss of
approximately $12,000, which was written off against the
allowance.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the three months ended September 30, 1997, the Company
received $81,704 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 24,280 new shares issued,
resulting in 1,470,286 shares outstanding. The total amount
received from the DRIP for the six months ended September
30, 1997 amounted to $187,739.
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
SEPTEMBER 30, 1997
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the six months ended
September 30, 1997 and 1996 were as follows:
1997 1996
Interest $ 42,423 $ 57,980
Taxes 16,000 145,000
-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 six months
ended September 30, 1997 amounted to $259,738 as compared to
$377,153 for the six months ended September 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 $335,972 for
the six months ended September 30, 1996 as compared to an
increase of $293,671 for the six months ended September 30,
1997.
Loans Receivable increased by $7,411 during the six months
ended September 30, 1997. This was the result of new loans
made of $577,015 offset by $569,604 in collections.
Inventory increased by $335,972 during the six months ended
September 30, 1997 as a result of increased purchases of
manufactured homes for sale to be used as models for new
sales center in Ohio and New York.
Loans payable increased by $239,450 during the six months
ended September 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 approximately 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 six
months ended September 30, 1997, the Company raised $187,739
from the DRIP, resulting in 61,822 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 $1,160,936 for the three months ended
September 30, 1977 as compared to $493,297 for the three
months ended September 30, 1996 and $2,035,332 for the six
months ended September 30, 1997 as compared to $1,070,782 for
the six months ended September 30, 1996. MHS has been
experiencing increased sales since its inception in fiscal
1994. MHS currently has six 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 $47,362 for the quarter ended
September 30, 1997 as compared to $44,630 for the quarter
ended September 30, 1996 and $93,872 for the six months ended
September 30, 1997 as compared to $88,767 for the six months
ended September 30, 1996. Rental income is attributable to
the Company's purchase of a net-leased industrial building on
March 31, 1994. Interest income decreased from $93,741 for
the quarter ended September 30, 1996 to $59,420 for the
quarter ended September 30, 1997 and from $173,334 for the
six months ended September 30, 1996 to $130,040 for the six
months ended September 30, 1997. This was the result of a
decrease in Securities Available for Sale. Securities
Available for Sale amounted to $427,468 at September 30, 1997
as compared to $1,142,318 at September 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. Salaries and
Employee Benefits and Professional Fees increased from a
total of $59,788 for the quarter ended September 30, 1996 to
$109,907 for the quarter ended September 30, 1997 and from
$141,803 for the six months ended September 30, 1996 to
$200,081 for the six months ended September 30, 1997. This
increase is primarily due to increased personnel. Interest
expense decreased from $32,498 for the quarter ended
September 30, 1996 to $20,481 for the quarter ended September
30, 1997 and from $57,980 for the six months ended September
30, 1996 to $42,423 for the six months ended September 30,
1997. The decrease in interest expense is due to a decrease
in loans payable. The balance of loans payable amounted to
$713,694 at September 30, 1997 as compared to $1,408,073 at
September 30, 1996. Other Expenses increased from $71,154
for the quarter ended September 30, 1996 to $148,982 for the
quarter ended September 30, 1997 and from $175,743 for the
six months ended September 30, 1996 to $275,857 for the six
months ended September 30, 1997. This increase was 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
September 30, 1997, $704,739 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 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, 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 -
The annual meeting of shareholders was held
on September 11, 1997 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 11, 1997 By /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date November 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 SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 303,148
<SECURITIES> 427,468
<RECEIVABLES> 2,595,589
<ALLOWANCES> 107,884
<INVENTORY> 1,903,577
<CURRENT-ASSETS> 2,983,391
<PP&E> 1,256,738
<DEPRECIATION> 75,845
<TOTAL-ASSETS> 6,402,956
<CURRENT-LIABILITIES> 832,157
<BONDS> 0
0
0
<COMMON> 1,470,286
<OTHER-SE> 4,029,781
<TOTAL-LIABILITY-AND-EQUITY> 6,402,956
<SALES> 2,035,332
<TOTAL-REVENUES> 2,293,403
<CGS> 1,578,084
<TOTAL-COSTS> 362,856
<OTHER-EXPENSES> 275,857
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,423
<INCOME-PRETAX> 34,183
<INCOME-TAX> 13,700
<INCOME-CONTINUING> 20,483
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,483
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
