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 December 31, 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.
December 31, 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 December 31, 1996
was 1,324,258 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE NINE MONTHS ENDED DECEMBER 31, 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 7-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II - OTHER INFORMATION 12
SIGNATURES 13
- 2-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND MARCH 31, 1996
12/31/96 3/31/96
<S> <C> <C>
Current Assets:
Cash $ 64,447 $ 94,625
Accounts Receivable 44,801 75,752
Interest Receivable 48,880 32,842
Securities Available for Sale at Fair
Value (cost $1,129,377 and $983,788 at
December 31, 1996 and March 31, 1996,
respectively) 1,156,511 966,614
Inventory 1,815,170 1,168,216
Prepaid Expenses and Other Current Assets 62,102 56,290
Current Portion of Loans Receivable 507,977 523,021
_________ _________
Total Current Assets 3,699,888 2,917,360
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 172,000 172,000
Building and Improvements net of
accumulated depreciation of $56,225
and $37,487, respectively 918,475 937,213
_________ _________
Total Real Estate Investments 1,090,475 1,109,213
_________ _________
Loans Receivable:
Performing 1,656,772 1,436,625
Non-Performing (less allowance for
losses of $119,753 at December 31,
1996 and March 31, 1996) 288,849 288,849
_________ _________
Total Loans Receivable 1,945,621 1,725,474
_________ _________
Total Long-Term Assets 3,036,096 2,834,687
_________ _________
TOTAL ASSETS $6,735,984 $5,752,047
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF DECEMBER 31, 1996 AND MARCH 31, 1996
<S> <C> <C>
12/31/96 3/31/96
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 194,054 $ 240,801
Loans Payable 1,298,327 726,587
_________ _________
Total Current Liabilities 1,492,381 967,388
Other Liabilities 91,660 77,904
_________ _________
Total Liabilities 1,584,041 1,045,292
_________ _________
Shareholders' Equity:
Capital Stock (Authorized 10,000,000
shares par value $1.00; Issued and
outstanding 1,324,258 shares at
December 31, 1996 and 1,139,184
shares at March 31, 1996) 1,324,258 1,139,184
Additional Paid-in Capital 2,934,074 2,662,555
Unrealized Investment Gain (Loss) 27,134 (17,174)
Retained Earnings 866,477 922,190
_________ _________
Total Shareholders' Equity 5,151,943 4,706,755
_________ _________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $6,735,984 $5,752,047
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPAITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995
Three Months Nine Months
<S> <C> <C> <C> <C>
1996 1995 1996 1995
INCOME:
Sales of Manufactured Homes $ 470,711 $ 509,780 $1,541,493 $1,459,245
Interest Income 81,641 108,994 254,975 300,230
Rental Income 44,445 40,882 133,212 122,510
Other Income 15,872 31,671 33,559 89,329
_________ _________ _________ _________
Total Income 612,669 691,327 1,963,239 1,971,304
_________ _________ _________ _________
EXPENSES:
Cost of Sales of
Manufactured Homes 353,325 395,017 1,194,579 1,157,876
Interest Expense 30,374 20,433 88,354 49,122
Selling Expense 55,920 30,904 137,710 105,060
Salaries & Employee Benefits 39,605 54,126 131,412 134,831
Professional Fees 14,517 23,139 64,513 79,389
Other Expenses 167,253 116,498 342,996 260,117
_________ _________ _________ _________
Total Expenses 660,994 640,117 1,959,564 1,786,395
_________ _________ _________ _________
Income Before Income Taxes (48,325) 51,210 3,675 184,909
Income Taxes (15,800) 30,000 1,600 80,700
_________ _________ _________ _________
NET INCOME $ (32,525) $ 21,210 $ 2,075 $ 104,209
========= ========= ========= =========
NET INCOME PER SHARE $ (.03) $ .02 $ -0- $ .09
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,148,084 1,108,417 1,168,823 1,103,409
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED DECEMBER 31, 1996
<S> <C> <C>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,075 $ 104,209
Depreciation and Amortization 18,738 9,369
Changes In:
Accounts Receivable 30,951 (9,216)
Interest Receivable (16,038) (26,302)
Inventory (646,954) (614,322)
Prepaid Expenses and
Other Current Assets (5,812) (12,217)
Accounts Payable and Accrued Expenses (46,747) (91,979)
Other 13,756 319,292
_________ _________
Net Cash Used by Operating Activities (650,031) (321,166)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (519,687) (1,323,438)
Collections and Other Decreases in Loans 314,584 172,519
Decrease in Securities 25,431 520,314
Purchase of Securities Available for Sale (171,020) -0-
_________ _________
Net Cash Used by Investing Activities (350,692) (630,605)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable 571,740 842,409
Proceeds from the Issuance of Class A
Common Stock 442,615 60,781
Costs Associated with the Issuance of
Class A Common Stock -0- (19,246)
Dividends Paid (43,810) (55,004)
_________ _________
Net Cash Provided by Financing Activities 970,545 828,940
_________ _________
Net Decrease in Cash (30,178) (122,831)
Cash at Beginning of Period 94,625 205,804
_________ _________
Cash at End of Period $ 64,447 $ 82,973
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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 December
31, 1996 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, 1996
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 - 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.
NOTE 3 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes, loans
totaling $519,687 were made for the nine months ended
December 31, 1996. Loans are primarily at 10%-15% for
fifteen years and secured by property.
Collections and other decreases of loans receivable totalled
$314,584 for the nine months ended December 31, 1996.
NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the nine months ended December 31, 1996, the Company
received $456,593 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 185,074 new shares issued,
resulting in 1,324,258 shares outstanding.
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
DECEMBER 31, 1996
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the nine months ended
December 31, 1996 and 1995 were as follows:
1996 1995
Interest $ 88,354 $105,060
Taxes 139,751 114,124
During the nine months ended December 31, 1996, the Company
had dividend reinvestments of $13,978 which required no cash
transfers.
NOTE 6 - SUBSEQUENT EVENT
On January 15, 1997, the Company sold $235,366 in Marketable
Securities realizing a gain of $64,346.
-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 operations for the nine months ended
December 31, 1996 amounted to $650,031 as compared to
$321,166 for the nine months ended December 31, 1995. This
increase is primarily due to the purchase of manufactured
home inventory by The Mobile Home Store, Inc. (MHS), the
Company's wholly owned subsidiary. MHS has opened two sales
centers and is in the process of opening another sales
center.
Loans Receivable increased by $205,103 during the nine months
ended December 31, 1996. This was the result of new loans
made of $519,687 offset by $314,584 in collections and other
decreases.
Inventory increased by $646,954 during the nine months ended
December 31, 1996 as a result of increased purchases of
manufactured homes for sale to be used as models for the new
sales centers.
Loans payable increased by $571,740 during the nine months
ended December 31, 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 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 nine
months ended December 31, 1996, the Company raised $456,593
from the DRIP, resulting in 185,074 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 $470,711 for the three months ended
December 31, 1996 as compared to $509,780 for the three
months ended December 31, 1995 and $1,541,493 for the nine
months ended December 31, 1996 as compared to $1,459,245 for
the nine months ended December 31, 1995. Sales decreased
during the quarter due to a delay in the expansion of one of
the communities into which MHS sells.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Interest income amounted to $81,641 for the months ended
December 31, 1996 as compared to $108,994 for the three
months ended December 31, 1995 and $254,975 for the nine
months ended December 31, 1996 as compared to $300,230 for
the nine months ended December 31, 1995. This decrease is
due to a decrease in loans receivable. Total loans
receivable at December 31, 1996 was $2,453,598 as compared to
$2,783,977 at December 31, 1995.
Rental Income amounted to $44,445 for the three months ended
December 31, 1996 as compared to $40,882 for the three months
ended December 31, 1995 and $133,212 for the nine months
ended December 31, 1996 as compared to $122,510 for the nine
months ended December 31, 1995. Rental income is
attributable to the Company's purchase of a net-leased
industrial building on March 31, 1994.
Other Income amounted to $15,872 for the three months ended
December 31, 1996 as compared to $31,671 for the three months
ended December 31, 1995 and $33,559 for the nine months ended
December 31, 1996 as compared to $89,319 for the nine months
ended December 31, 1995. This decrease is due to the gain on
the repurchase of a convertible debenture in 1995.
The change in Cost of Sales of Manufactured Homes and Selling
Expense is directly attributable to the changes in sales of
manufactured homes made by MHS. Interest expense increased
to $30,374 for the three months ended December 31, 1996 as
compared to $20,433 for the three months ended December 31,
1995 and $88,354 for the nine months ended December 31, 1996
as compared to $49,122 for the nine months ended December 31,
1995. The increase in interest expense is due to an increase
in loans payable.
Other Expenses amounted to $167,253 for the three months
ended December 31, 1996 as compared to $116,498 for the three
months ended December 31, 1995 and $342,996 for the nine
months ended December 31, 1996 as compared to $260,117 for
the nine months ended December 31, 1995. This increase is
primarily due to increased advertising and other expenses for
MHS as a result of the opening of its new sales centers.
-10-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D.)
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
December 31, 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 of
receivables, availability of bank borrowings, the Dividend
Reinvestment and Stock Purchase Plan and access to the
capital markets.
-11-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED DECEMBER 31, 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 - None
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K - None
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to besigned 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
PERIOD ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 64,447
<SECURITIES> 1,156,511
<RECEIVABLES> 2,667,032
<ALLOWANCES> 119,753
<INVENTORY> 1,815,170
<CURRENT-ASSETS> 3,699,888
<PP&E> 1,146,700
<DEPRECIATION> 56,225
<TOTAL-ASSETS> 6,735,984
<CURRENT-LIABILITIES> 1,492,381
<BONDS> 0
0
0
<COMMON> 1,324,258
<OTHER-SE> 3,827,685
<TOTAL-LIABILITY-AND-EQUITY> 6,735,984
<SALES> 1,541,493
<TOTAL-REVENUES> 1,963,239
<CGS> 1,194,579
<TOTAL-COSTS> 333,635
<OTHER-EXPENSES> 342,996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88,354
<INCOME-PRETAX> 3,675
<INCOME-TAX> 1,600
<INCOME-CONTINUING> 2,075
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,075
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
