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, 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.
December 31, 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 January 31, 1998
was 1,477,839 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE NINE MONTHS ENDED DECEMBER 31, 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 DECEMBER 31, 1997 AND MARCH 31, 1997
12/31/97 3/31/97
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 204,174 $ 228,928
Accounts Receivable 35,916 20,124
Interest Receivable 10,289 42,153
Securities Available for Sale
at Fair Value 421,179 420,986
Inventory 2,125,353 1,609,906
Prepaid Expenses and Other
Current Assets 108,260 195,076
Current Portion of Loans Receivable 95,150 517,202
_________ _________
Total Current Assets 3,000,321 3,034,375
_________ _________
Long Term Assets:
Real Estate Investments:
Land 172,000 172,000
Building and Improvements net of
accumulated depreciation of
$87,121 and $62,603,
respectively 1,003,109 919,612
_________ _________
Total Real Estate Investments 1,175,109 1,091,612
_________ _________
Loans Receivable:
Performing 1,908,657 1,208,155
Non-Performing (less allowance
for losses of $107,884 at
December 31, 1997 and $119,753
at March 31, 1997, respectively) 260,057 660,542
_________ _________
Total Loans Receivable 2,168,714 1,868,697
_________ _________
Total Long-Term Assets 3,343,823 2,960,309
_________ _________
TOTAL ASSETS $6,344,144 $5,994,684
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (Cont.)
AS OF DECEMBER 31, 1997 AND MARCH 31, 1997
12/31/97 3/31/97
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts Payable and Accrued Expenses $ 82,674 $ 116,699
Loans Payable 664,183 474,244
_________ _________
Total Current Liabilities 746,857 590,943
Other Liabilities 75,236 61,567
_________ _________
Total Liabilities 822,093 652,510
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per
share; authorized 10,000,000 shares;
issued and outstanding 1,477,839 and
1,408,464 shares at December 31, 1997
and March 31, 1997, respectively 1,477,839 1,408,464
Additional Paid-in Capital 3,225,604 3,086,470
Unrealized Investment Loss (1,698) (29,673)
Retained Earnings 820,306 876,913
_________ _________
Total Shareholders' Equity 5,522,051 5,342,174
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,344,144 $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 NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
Three Months Nine Months
1997 1996 1997 1996
INCOME:
<S> <C> <C> <C> <C>
Sales of Manufactured Homes $1,039,541 $ 470,711 $3,074,873 $1,541,493
Interest Income 68,471 81,641 198,511 254,975
Rental Income 47,149 44,445 141,021 133,212
Other Income 13,478 15,872 47,637 33,559
_________ _________ _________ _________
Total Income 1,168,639 612,669 3,462,042 1,963,239
_________ _________ _________ _________
EXPENSES:
Cost of Sales of
Manufactured Homes 771,921 353,325 2,350,005 1,194,579
Interest Expense 22,187 30,374 64,610 88,354
Selling Expense 110,056 55,920 331,933 137,710
Salaries & Employee Benefits 78,442 39,605 195,458 131,412
Professional Fees 51,403 14,517 134,468 64,513
Other Expenses 140,713 167,253 357,468 342,996
_________ _________ _________ _________
Total Expenses 1,174,722 660,994 3,433,942 1,959,564
_________ _________ _________ _________
Income Before Income Taxes (6,083) (48,325) 28,100 3,675
Income Taxes (Benefit) (2,500) (15,800) 11,200 1,600
_________ _________ _________ _________
NET INCOME $ (3,583) $ (32,525) $ 16,900 $ 2,075
========= ========= ========= =========
NET INCOME PER SHARE $ -0- $ (.03) $ .01 $ -0-
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,472,174 1,148,084 1,453,103 1,168,823
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED DECEMBER 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 16,900 $ 2,075
Depreciation and Amortization 24,518 18,738
Changes In:
Accounts Receivable (15,792) 30,951
Interest Receivable 31,864 (16,038)
Inventory (515,447) (646,954)
Prepaid Expenses and Other Current Assets 86,816 (5,812)
Accounts Payable and Accrued Expenses (34,025) (46,747)
Other Liabilities 13,669 13,756
_________ _________
NET CASH USED BY OPERATING ACTIVITIES (391,497) (650,031)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (678,886) (519,687)
Collections and Other Decreases in Loans 800,921 314,584
Purchase of Building,
Improvements and Equipment (108,015) -0-
Decrease in Securities 27,782 25,431
Purchase of Securities Available for Sale -0- (171,020)
_________ _________
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 41,802 (350,692)
_________ _________
CASH FLOWS BY FINANCING ACTIVITIES
Net Increase in Loans Payable 189,939 571,740
Proceeds from the Issuance of Class A
Common Stock 187,728 442,615
Dividends Paid (52,726) (43,810)
_________ _________
NET CASH PROVIDED BY FINANCING ACTIVITIES 324,941 970,545
_________ _________
NET DECREASE IN CASH (24,754) (30,178)
CASH AT BEGINNING OF PERIOD 228,928 94,625
_________ _________
CASH AT END OF PERIOD $ 204,174 $ 64,447
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
</TABLE>
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<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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 December 31,
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.
NOTE 2 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes, loans
totaling $678,886 were made for the nine months ended
December 31, 1997. Loans are primarily at 10%-15% for
fifteen years and secured by the homes.
Collections and other decreases of loans receivable totalled
$800,921 for the nine months ended December 31, 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 December 31, 1997, the Company
received $20,781 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 7,553 new shares issued,
resulting in 1,477,839 shares outstanding. The total amount
received from the DRIP for the nine months ended December
31, 1997 amounted to $208,509.
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
DECEMBER 31, 1997
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the nine months ended
December 31, 1997 and 1996 were as follows:
1997 1996
Interest $64,610 $88,354
Taxes 28,261 139,751
During the nine months ended December 31, 1997 and 1996, the
Company had dividend reinvestments of $20,771 and $13,978,
respectively, which required no cash transfers.
-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 nine months
ended December 31, 1997 amounted to $391,497 as compared to
$650,031 for the nine months ended December 31, 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, and to a decrease in
prepaid expenses and other current assets. Inventory
increased by $515,447 for the nine months ended December 31,
1997 as compared to an increase of $646,954 for the three
months ended December 31, 1996 as a result of increased
purchases of manufactured homes for sale to be used as
models for new sales centers in Ohio and New York.
Loans Receivable decreased by $122,035 during the nine
months ended December 31, 1997. This was the result of new
loans made of $678,886 offset by $800,921 in collections.
Loans payable increased by $189,939 during the nine months
ended December 31, 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 their market price by making optional
cash payments. For the nine months ended December 31, 1997,
the Company raised $208,509 from the DRIP, resulting in
69,375 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 $1,039,541 for the three
months ended December 31, 1997 as compared to $470,711 for
the three months ended December 31, 1996 and $3,074,873 for
the nine months ended December 31, 1997 as compared to
$1,541,493 for the nine months ended December 31, 1996. MHS
has been experiencing increased sales since its inception in
fiscal 1994 and currently has six sales centers in
operation.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D.)
Rental income amounted to $47,149 for the quarter ended
December 31, 1997 as compared to $44,445 for the quarter
ended December 31, 1996 and $141,021 for the nine months
ended December 31, 1997 as compared to $133,212 for the nine
months ended December 31, 1996. Rental income is
attributable to the Company's purchase of a net-leased
industrial building on March 31, 1994. Interest income
decreased from $81,641 for the quarter ended December 31,
1996 to $68,471 for the quarter ended December 31, 1997 and
from $254,975 for the nine months ended December 31, 1996 to
$198,511 for the nine months ended December 31, 1997. This
was the result of a decrease in loans receivable.
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 $54,122 for the quarter ended December 31, 1996 to
$129,845 for the quarter ended December 31, 1997 and from
$195,925 for the nine months ended December 31, 1996 to
$329,926 for the nine months ended December 31, 1997. This
increase in primarily due to increased personnel. Interest
expense decreased from $30,374 for the quarter ended
December 31, 1996 to $22,187 for the quarter ended December
31, 1997 and from $88,354 for the nine months ended December
31, 1996 to $64,610 for the nine months ended December 31,
1997. The decrease in interest expense is due to a decrease
in loans payable. The balance of loans payable amounted to
$664,183 at December 31, 1997 as compared to $1,298,327 at
December 31, 1996. Other Expenses remained relatively
stable for the quarter and nine months ended December 31,
1997 as compared to the quarter and nine months ended
December 31, 1996.
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, $664,183 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 NINE MONTHS ENDED DECEMBER 31, 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: February 13, 1997 By /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date: February 13, 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 DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 204,174
<SECURITIES> 421,179
<RECEIVABLES> 2,417,953
<ALLOWANCES> 107,884
<INVENTORY> 2,125,353
<CURRENT-ASSETS> 3,000,321
<PP&E> 1,262,230
<DEPRECIATION> 87,121
<TOTAL-ASSETS> 6,344,144
<CURRENT-LIABILITIES> 746,857
<BONDS> 0
0
0
<COMMON> 1,477,839
<OTHER-SE> 4,044,212
<TOTAL-LIABILITY-AND-EQUITY> 6,344,144
<SALES> 3,074,873
<TOTAL-REVENUES> 3,462,042
<CGS> 2,350,005
<TOTAL-COSTS> 661,859
<OTHER-EXPENSES> 357,468
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 64,610
<INCOME-PRETAX> 28,100
<INCOME-TAX> 11,200
<INCOME-CONTINUING> 16,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,900
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
