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, 1999
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, 1999 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 12, 1999
was 1,514,073 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE THREE MONTHS ENDED JUNE 30, 1999
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 8-10
Item 3 - Quantitative and Qualitative Disclosure
About Market Risk
There have been no material changes to
information required regarding quantitative
and qualitative disclosures about market
risk from the end of the preceding year to
the date of this Form 10-Q .
PART II - OTHER INFORMATION 11
SIGNATURES 12
-2-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1999 AND MARCH 31, 1999
June 30, March 31,
1999 1999
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 186,675 $ 102,599
Accounts Receivable 161,543 146,070
Interest Receivable 8,314 -0-
Securities Available for
Sale, at Fair Value 332,065 356,789
Inventory 3,142,819 3,142,702
Prepaid Expenses and Other
Current Assets 23,652 45,977
Current Portion of Loans Receivable 108,919 122,296
--------- ---------
Total Current Assets 3,963,987 3,916,433
--------- ---------
Long-Term Assets:
Real Estate Investments:
Land 183,065 183,065
Building, Improvements and
Equipment net of accumulated
depreciation of $171,232
and $156,790, respectively 1,075,220 985,087
--------- ---------
Total Real Estate Investments 1,258,285 1,168,152
--------- ---------
Loans Receivable:
Performing 2,729,149 2,565,949
Non-Performing -0- 175,231
Allowance for Losses -0- (65,000)
--------- ---------
Total Loans Receivable 2,729,149 2,676,180
--------- ---------
Total Long-Term Assets 3,987,434 3,844,332
--------- ---------
TOTAL ASSETS $ 7,951,421 $ 7,760,765
========= =========
</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, 1999 AND MARCH 31, 1999
June 30, March 31,
1999 1999
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts Payable and Accrued
Expenses $ 141,210 $ 139,956
Inventory Financing 2,357,128 2,193,343
--------- ---------
Total Current Liabilities 2,498,338 2,333,299
Other Liabilities 99,618 79,243
--------- ---------
Total Liabilities 2,597,956 2,412,542
--------- ---------
Shareholders' Equity:
Common Stock (par value $1.00
per share; authorized 10,000,000
shares; issued and outstanding
1,514,073 and 1,513,891
shares, respectively 1,514,073 1,513,891
Additional Paid-In Capital 3,304,976 3,304,657
Unrealized Investment Gain (6,789) 3,083
Retained Earnings 541,205 526,592
--------- ---------
Total Shareholders' Equity 5,353,465 5,348,223
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,951,421 $ 7,760,765
========= =========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED JUNE 30, 1999 AND 1998
June 30, June 30,
1999 1998
<S> <C> <C>
Income:
Sales of Manufactured Homes $ 1,245,736 $ 1,291,148
Interest Income 87,754 70,476
Rental Income 42,324 31,704
Other Income 27,733 13,660
--------- ---------
Total Income 1,403,547 1,406,988
--------- ---------
Expenses:
Cost of Sales of Manufactured
Homes 956,255 1,054,699
Selling Expense 83,191 100,287
Salaries and Employee Benefits 76,521 54,932
Professional Fees 37,082 33,546
Interest Expense 43,360 34,002
Other Expenses 188,125 158,505
--------- ---------
Total Expenses 1,384,534 1,435,971
--------- ---------
Income (Loss) Before Income Taxes 19,013 (28,983)
Income Taxes (4,400) -0-
--------- ---------
NET INCOME (LOSS) $ 14,613 $ (28,983)
========= =========
NET INCOME (LOSS) PER
SHARE-BASIC AND DILUTED $ 0.01 $ (0.02)
========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,513,982 1,486,469
========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THREE MONTHS ENDED JUNE 30, 1999 AND 1998
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 14,613 $ (28,983)
Depreciation and Amortization 14,442 6,621
Changes In Operating Assets and
Liabilities:
Accounts Receivable (15,473) 29,709
Interest Receivable (8,314) 1,587
Inventory (117) (366,266)
Prepaid Expenses and Other Current Assets 22,325 (17,400)
Accounts Payable and Accrued Expenses 1,254 (68,891)
Other Liabilities 20,375 -0-
-------- -------
Net Cash Provided (Used) by Operating
Activities 49,105 (443,623)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (273,929) (631,395)
Collections and Other Decreases in
Loans Receivable 234,337 73,367
Decreases in Securities Available for
Sale 14,852 14,584
Additions to Building, Improvements
and Equipment (104,575) (15,733)
------- -------
Net Cash Used by Investing Activities (129,315) (559,177)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable
and Inventory Financing 163,785 653,061
Dividends Paid -0- (35,671)
Proceeds from the Issuance of Class A
Common Stock 501 32,503
------- -------
Net Cash Provided by Financing
Activities 164,286 649,893
------- -------
Net Increase (Decrease) in Cash 84,076 (352,907)
Cash at Beginning of Year 102,599 547,020
------- -------
Cash at End of Year $ 186,675 $ 194,113
======= =======
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
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, 1999 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, 1999 have been omitted.
NOTE 2 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes,
loans totaling $273,929 were made for the three months
ended June 30, 1999. Loans are primarily at 10%-15% for
fifteen years and secured by the homes.
Collections and other decreases of loans receivable
totaled $234,337 for the three months ended June 30, 1999.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the three months ended June 30, 1999, the Company
received $501 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 182 new shares issued,
resulting in 1,514,073 shares outstanding.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the three months
ended June 30, 1999 and 1998 were as follows:
1999 1998
Interest $ 43,360 $ 34,002
Taxes 7,924 14,000
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
Net cash provided by operating activities for the three
months ended June 30, 1999 amounted to $49,105 as compared
to $443,623 net cash used by operating activities for the
three months ended June 30, 1998. This increase is primarily
due to an increase in manufactured home inventory of The Mobile
Home Store, Inc. (MHS), the Company's wholly-owned subsidiary
for the period ended June 30, 1999. Inventory remained
relatively stable for the three months ended June 30, 1999
as compared to the three months ended June 30, 1998.
Loans Receivable increased by $39,592 during the three
months ended June 30, 1999. This was the result of new
loans made of $273,929 offset by $234,337 in collections
and other decreases.
Inventory financing increased by $163,785 during the three
months ended June 30, 1999. 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 $1,245,736 for the three
months ended June 30, 1999 as compared to $1,291,148 for
the three months ended June 30, 1998.
Interest income and other income remained relatively
stable for the three months ended June 30, 1999 as
compared to the three months ended June 30, 1998.
Rental income, including tenant reimbursements, amounted
to $42,324 for the three months ended June 30, 1999 as
compared to $31,704 for the three months ended June
30, 1998. Rental income is attributable to the Company's
purchase of a net-leased industrial building on March 31,
1994. The increase in 1999 is a result of an increase in
reimbursable expenses.
-8-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
The decrease in Cost of manufactured homes sales is due
to the decrease in sales of manufactured homes made by MHS
as well as an increase in the gross margin. The decrease
in selling expense is directly attributable to the
decrease in sales. Interest expense increased to $43,360
for the three months ended June 30, 1999 as compared to
$34,002 for the three months ended June 30, 1998. The
increase in interest expense is due to an increase in
inventory financing.
Salaries and employee benefits increased to $76,521 for
the three months ended June 30, 1999 as compared to
$54,932 for the three months ended June 30, 1998. This was
due to an increase in personnel in fiscal 1999.
Professional fees remained relatively stable for the three
months ended June 30, 1999 as compared to the three months
ended June 30, 1998.
Other expenses increased to $188,125 for the three months
ended June 30, 1999 as compared to $158,505 for the three
months ended June 30, 1998 primarily due to an increase in
franchise taxes.
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, 1999, $2,357,128
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.
YEAR 2000
The Company is currently in the process of implementing
its Year 2000 compliance plan. The Company has assessed
all hardware and software for Year 2000 readiness.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
The Company has developed and is currently implementing
renovation plans, including hardware replacement and
software upgrades, to ensure all hardware and software is
Year 2000 compliant. The Company has no significant
suppliers and vendors. Renovation and testing are
scheduled to be completed during the third quarter of
1999.
The Company has developed contingency plans for each of
its critical systems which includes moving many of the
Company's operations to a manual system. There can be no
assurances given that the Year 2000 compliance plan will
be completed successfully by the Year 2000, in which event
the Company could incur additional costs to implement its
contingency plans. Management does not anticipate that
such costs would be significant to the Company. The
total costs associated with the Company's Year 2000 plan
are anticipated to be immaterial.
Successful and timely completion of the Year 2000 plan is
based on management's best estimates derived from various
assumptions of future events, which are inherently
uncertain, including the effectiveness of remediation and
validation plans, and all vendors and suppliers readiness.
-10-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED JUNE 30, 1999
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
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
Dated: August 13, 1999 By:/s/Eugene W. Landy
EUGENE W. LANDY
President
Dated: August 13, 1999 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, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 186,675
<SECURITIES> 332,065
<RECEIVABLES> 2,838,068
<ALLOWANCES> 0
<INVENTORY> 3,142,819
<CURRENT-ASSETS> 3,963,987
<PP&E> 1,429,517
<DEPRECIATION> 171,232
<TOTAL-ASSETS> 7,951,421
<CURRENT-LIABILITIES> 2,498,338
<BONDS> 0
0
0
<COMMON> 1,514,073
<OTHER-SE> 3,839,392
<TOTAL-LIABILITY-AND-EQUITY> 7,951,421
<SALES> 1,245,736
<TOTAL-REVENUES> 1,403,547
<CGS> 956,255
<TOTAL-COSTS> 196,794
<OTHER-EXPENSES> 188,125
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43,360
<INCOME-PRETAX> 19,013
<INCOME-TAX> 4,400
<INCOME-CONTINUING> 14,613
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,613
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
