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, 1998
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, 1998 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
The number of shares or other units outstanding of each of
the issuer's classes of securities as of August 3, 1998 was
1,489,812 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE THREE MONTHS ENDED JUNE 30, 1998
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
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II - OTHER INFORMATION 10
SIGNATURES 11
- 2-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1998 AND MARCH 31, 1998
6/30/98 3/31/98
<S> <C> <C>
Current Assets:
Cash $ 194,113 $ 547,020
Accounts Receivable 57,289 86,998
Interest Receivable 1,755 3,342
Securities Available for Sale at
Fair Value 393,425 412,919
Inventory 2,923,117 2,556,851
Prepaid Expenses and Other Current Assets 99,114 81,714
Current Portion of Loans Receivable 77,112 80,417
_________ _________
Total Current Assets 3,745,925 3,769,261
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 183,065 178,170
Building and Improvements net of
accumulated depreciation of $117,608
and $110,987, respectively 1,026,237 1,022,020
_________ _________
Total Real Estate Investments 1,209,302 1,200,190
Loans Receivable (less allowance for
losses of $65,000 at June 30, 1998
and March 31, 1998) 2,447,568 1,886,235
_________ _________
Total Long-Term Assets 3,656,870 3,086,425
_________ _________
TOTAL ASSETS $7,402,795 $6,855,686
========= =========
</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, 1998 AND MARCH 31, 1998
6/30/98 3/31/98
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts Payable and Accrued Expenses $ 172,718 $ 241,609
Loans Payable -0- 35,671
Inventory Financing 1,638,294 985,233
_________ _________
Total Current Liabilities 1,811,012 1,262,513
Other Liabilities 74,852 74,852
_________ _________
Total Liabilities 1,885,864 1,337,365
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per
share; authorized 10,000,000 shares;
issued and outstanding 1,489,688 and
1,477,839 shares at June 30, 1998 and
March 31, 1998, respectively 1,489,688 1,477,839
Additional Paid-in Capital 3,246,259 3,225,605
Unrealized Investment (Loss) Gain (4,692) 218
Retained Earnings 785,676 814,659
_________ _________
Total Shareholders' Equity 5,516,931 5,518,321
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $7,402,795 $6,855,686
========= =========
</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,
1998 1997
<S> <C> <C>
INCOME:
Sales of Manufactured Homes $1,291,148 $ 874,396
Interest Income 70,476 70,620
Rental Income 31,704 46,510
Other Income 13,660 11,127
_________ _________
Total Income 1,406,988 1,002,653
_________ _________
EXPENSES:
Cost of Manufactured
Homes Sales 1,054,699 691,144
Selling Expense 100,287 55,519
Salaries & Employee Benefits 54,932 56,821
Professional Fees 33,546 33,353
Interest Expense 34,002 21,942
Other Expenses 158,505 126,875
_________ _________
Total Expenses 1,435,971 985,654
_________ _________
Income (Loss) Before Income Taxes (28,983) 16,999
Income Taxes -0- 7,000
_________ _________
NET INCOME (LOSS) $ (28,983) $ 9,999
========= =========
NET INCOME (LOSS) PER SHARE
BASIC AND DILUTED (.02) .01
========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING
BASIC AND DILUTED 1,486,469 1,426,431
========= =========
</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,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ (28,983) $ 9,999
Depreciation and Amortization 6,621 6,621
Changes In Operating Assets and
Liabilities:
Accounts Receivable 29,709 (65,229)
Interest Receivable 1,587 10,169
Inventory (366,266) (296,499)
Prepaid Expenses and Other
Current Assets (17,400) 87,688
Accounts Payable and Accrued Expenses (68,891) (69,577)
Other Liabilities -0- 8,963
_________ _________
Net Cash Used by Operating Activities (443,623) (307,865)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
New Loans Receivable (631,395) (304,583)
Collections and Other Decreases in
Loans Receivable 73,367 126,467
Sales and Other Decreases in Securities
Available for Sale 14,584 8,772
Additions to Real Estate Investments (15,733) -0-
_________ _________
Net Cash Used by Investing Activities (559,177) (169,344)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Inventory Financing 653,061 249,945
Principal Payments on Loans (35,671) -0-
Proceeds from the Issuance of Class A
Common Stock 32,503 106,035
_________ _________
Net Cash Provided by Financing Activities 649,893 355,980
_________ _________
Net Decrease in Cash (352,907) (121,229)
Cash at Beginning of Period 547,020 228,928
_________ _________
Cash at End of Period $ 194,113 $ 107,699
========= =========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
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,
1998 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, 1998
have been omitted.
NOTE 2 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes, loans
totaling $631,395 were made for the three months ended June
30, 1998. Loans are primarily at 10%-15% for fifteen years
and secured by the homes.
Collections and other decreases of loans receivable totalled
$73,367 for the three months ended June 30, 1998.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the three months ended June 30, 1998, the Company
received $32,503 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 11,849 new shares issued,
resulting in 1,489,688 shares outstanding.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the three months ended
June 30, 1998 and 1997 were as follows:
1998 1997
Interest $ 34,002 $ 21,942
Taxes 11,000 19,000
-7-
<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, 1998 amounted to $443,623 as compared to
$307,865 for the three months ended June 30, 1997. This
increase in net cash used by operating activities is
primarily due to a decrease in prepaid expenses and other
current assets and to an increase in manufactured home
inventory of The Mobile Home Store, Inc. (MHS), the Company's
wholly-owned subsidiary. Inventory increased by $366,266 for
the three months ended June 30, 1998 as compared to an
increase of $296,499 for the three months ended June 30, 1997
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 increased by $558,028 during the three
months ended June 30, 1998. This was the result of new loans
made of $631,395 offset by $73,367 in collections.
Inventory financing increased by $653,061 during the three
months ended June 30, 1998.
This was a result of the new $2,500,000 financing agreement
which allows the Company to finance all inventory purchases.
In the past, only inventory purchased at certain locations
was financed.
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 $1,291,148 for the three months ended June
30, 1998 as compared to $874,396 for the three months ended
June 30, 1997. MHS has been experiencing increased sales
since its inception in fiscal 1994.
-8-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Rental income, including tenant reimbursements, amounted to
$31,704 for the three months ended June 30, 1998 as compared
to $46,510 for the three months ended June 30, 1997. Rental
income is attributable to the Company's purchase of a net-
leased industrial building on March 31, 1994. The decrease
in the three months ending June 30, 1998 as compared to the
three months ended June 30, 1997 was the result of a decrease
in reimburseable expenses.
Interest income and other income remained relatively stable
for the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997.
The increase in Cost of manufactured homes sales and Selling
expense is directly attributable to the increase in sales of
manufactured homes made by MHS. The Company is investing in
new sales centers and increasing market share. Interest
expense increased to $34,002 for the three months ended June
30, 1998 as compared to $21,942 for the three months ended
June 30, 1997. The increase in interest expense is due to a
increase in inventory financing.
Salaries and employee benefits and Professional fees remained
relatively stable for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
Other expenses increased to $158,505 for the three months
ended June 30, 1998 as compared to $126,875 for the three
months ended June 30, 1997 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 $2,500,000 line of credit to finance its
inventory purchases. As of June 30, 1998, $1,638,294 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.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED JUNE 30, 1998
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
-10-
<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 12, 1998 By: /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date August 12, 1998 By: /s/ Anna T. Chew
ANNA T. CHEW
Controller
-11-
<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, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 194,113
<SECURITIES> 393,425
<RECEIVABLES> 2,648,724
<ALLOWANCES> 65,000
<INVENTORY> 2,923,117
<CURRENT-ASSETS> 3,745,925
<PP&E> 1,326,910
<DEPRECIATION> 117,608
<TOTAL-ASSETS> 7,402,795
<CURRENT-LIABILITIES> 1,811,012
<BONDS> 0
0
0
<COMMON> 1,489,688
<OTHER-SE> 4,027,243
<TOTAL-LIABILITY-AND-EQUITY> 7,402,795
<SALES> 1,291,148
<TOTAL-REVENUES> 1,406,988
<CGS> 1,054,699
<TOTAL-COSTS> 188,765
<OTHER-EXPENSES> 158,505
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,002
<INCOME-PRETAX> (28,983)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28,983)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28,983)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
