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, 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.
September 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 November 11,
1999 was 1,514,073 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE SIX MONTHS ENDED SEPTEMBER 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 SEPTEMBER 30, 1999 AND MARCH 31, 1999
<S> <C> <C>
September 30 March 31,
1999 1999
ASSETS
Current Assets:
Cash $ 234,628 $ 102,599
Accounts Receivable 73,168 146,070
Securities Available for Sale, at Fair Value 310,194 356,789
Inventory 2,457,841 3,142,702
Prepaid Expenses and Other Current Assets 36,715 45,977
Current Portion of Loans Receivable 104,246 122,296
__________ __________
Total Current Assets 3,216,792 3,916,433
__________ __________
Long-Term Assets:
Real Estate Investments:
Land 183,065 183,065
Building, Improvements and Equipment
net of accumulated depreciation of
$185,672 and $156,790, respectively 1,241,360 985,087
__________ __________
Total Real Estate Investments 1,424,425 1,168,152
__________ __________
Loans Receivable:
Performing 2,549,446 2,565,949
Non-Performing -0- 175,231
Allowance for Losses -0- (65,000)
__________ __________
Total Loans Receivable 2,549,446 2,676,180
__________ __________
Total Long-Term Assets 3,973,871 3,844,332
__________ __________
TOTAL ASSETS $ 7,190,663 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 SEPTEMBER 30, 1999 AND MARCH 31, 1999
<S> <C> <C>
September 30, March 31,
1999 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 65,680 $ 139,956
Inventory Financing 1,730,225 2,193,343
__________ __________
Total Current Liabilities 1,795,905 2,333,299
Other Liabilities 73,879 79,243
__________ __________
Total Liabilities 1,869,784 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 (Loss) (8,946) 3,083
Retained Earnings 510,776 526,592
__________ __________
Total Shareholders' Equity 5,320,879 5,348,223
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,190,663 $ 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 AND SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Three Months Six Months
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Income:
Sales of
Manufactured Homes $1,198,126 $1,606,318 $2,443,862 $2,897,466
Interest Income 83,307 89,485 171,061 159,961
Rental Income 44,695 33,499 87,019 65,203
Other Income 36,259 19,066 63,992 32,726
__________ __________ _________ _________
Total Income 1,362,387 1,748,368 2,765,934 3,155,356
__________ __________ _________ _________
Expenses:
Cost of Sales of
Manufactured Homes 1,005,158 1,274,853 1,961,413 2,329,552
Selling Expense 124,231 158,183 207,422 258,470
Salaries and
Employee Benefits 66,108 95,579 142,629 150,511
Professional Fees 14,982 38,623 52,064 72,169
Interest Expense 37,762 31,780 81,122 65,782
Other Expenses 148,975 179,528 337,100 338,033
__________ __________ _________ _________
Total Expenses 1,397,216 1,778,546 2,781,750 3,214,517
__________ __________ _________ _________
Loss Before Income Taxes (34,829) (30,178) (15,816) (59,161)
Income Taxes 4,400 -0- -0- -0-
__________ __________ _________ _________
$ (30,429) $ (30,178) $ (15,816) $ (59,161)
========== ========== ========= =========
NET LOSS PER SHARE -
BASIC AND DILUTED $ (0.02) $ (0.02) $ (0.01) $ (0.04)
========== ========== ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,514,073 1,486,469 1,514,021 1,487,902
========== ========== ========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (15,816) $ (59,161)
Depreciation and Amortization 28,882 13,242
Changes In Operating Assets and Liabilities:
Accounts Receivable 72,902 12,110
Interest Receivable -0- (4,962)
Inventory 684,861 (345,882)
Prepaid Expenses and Other Current Assets 9,262 (460)
Accounts Payable and Accrued Expenses (74,276) (85,087)
Other Liabilities (5,364) -0-
__________ __________
Net Cash Provided (Used) by
Operating Activities 700,451 (470,200)
__________ __________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (360,497) (948,369)
Collections and Other Decreases in Loans
Receivable 395,050 177,991
Sales and Other Decreases in Securities
Available for Sale 34,566 26,384
Additions to Building, Improvements
and Equipment (174,924) (13,406)
__________ __________
Net Cash Used by Investing Activities (105,805) (757,400)
__________ __________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Loans Payable
and Inventory Financing (463,118) 709,210
Dividends Paid -0- (35,671)
Proceeds from the Issuance of Class A Common
Stock 501 32,503
__________ __________
Net Cash Provided (Used) by Financing
Activities (462,617) 706,042
__________ __________
Net Increase (Decrease) in Cash 132,029 (521,558)
Cash at Beginning of Period 102,599 547,020
__________ __________
Cash at End of Period $ 234,628 $ 25,462
========== ==========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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
September 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 $360,497 were made for the six months ended
September 30, 1999. Loans are primarily at 10%-15% for
fifteen years and secured by the homes.
Collections and other decreases of loans receivable
totaled $395,050 for the six months ended September 30,
1999.
In April, 1999, the Company repossessed certain equipment
and fixtures that collateralized a non-performing loan.
Effective September 1, 1999, this property was leased on a
five-year lease for $1,650 per month for the first year
with 5% annual increases thereafter. The Company wrote
off $65,000 of the loan against the Allowance for Losses
and transferred the remaining balance of $110,231 to
Building, Improvements and Equipment.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the six months ended September 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 six months ended
September 30, 1999 and 1998 were as follows:
1999 1998
Interest $81,122 65,782
Taxes 10,924 14,000
During the six months ended September 30, 1999, the Company wrote off
$65,000 of a non-performing loan against the Allowance for Losses and
transferred the remaining balance of $110,231 to Buildings, Improvements
and Equipment (See Note 2).
-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 six
months ended September 30, 1999 amounted to $700,451 as
compared to $470,200 net cash used by operating activities
for the six months ended September 30, 1998. This
increase in net cash provided by operating activities is
primarily due to a decrease in manufactured home inventory
of The Mobile Home Store, Inc. (MHS), the Company's wholly-
owned subsidiary for the period ended September 30, 1999.
Inventory decreased by $684,861 for the six months ended
September 30, 1999 as compared to an increase in inventory
of $345,882 for the six months ended September 30, 1998.
Loans Receivable decreased by $144,784 during the six
months ended September 30, 1999. This was the result of
collections and other decreases of $395,050 offset by new
loans made of $360,497. The Company also transferred
$110,231 representing certain equipment and fixtures that
collateralized a non-performing loan to Building,
Improvements and Equipment.
Inventory financing decreased by $463,118 during the six
months ended September 30, 1999. This was a result of the
reduction of inventory.
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 $1,198,126 and $1,606,318
for the three months ended September 30, 1999 and 1988,
respectively and $2,443,862 and $2,897,466 for the six
months ended September 30, 1999 and 1998, respectively.
Interest income remained relatively stable for the three
and six months ended September 30, 1999 as compared to the
three and six months ended September 30, 1998.
Rental income, including tenant reimbursements, increased
from $33,499 and $65,203 for the three and six months ended
September 30, 1998, respectively to $44,695 and $87,019 for
the three and six months ended September 30, 1999, respectively.
This was the 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 decreases in Cost of manufactured homes sales and
selling expense are directly attributable to the decrease
in sales of manufactured homes made by MHS.
Salaries and employee benefits decreased from $95,579 for
the three months ended September 30, 1998 to $66,108 for
the three months ended September 30, 1999. This was due to
a decrease in personnel in the second quarter of fiscal
2000. Salaries and Employee Benefits remained relatively
stable for the six months ended September 30, 1999.
Professional fees decreased from $38,623 and $72,169 for
the three and six months ended September 30, 1998,
respectively to $14,982 and $52,064 for the three and six
months ended September 30, 1999, respectively. This was
due to a decrease in legal and other professional fees
associated with the opening of the new sales centers
incurred during the three and six months ended September
30, 1998.
Interest expense remained relatively stable for the three
months ended September 30, 1999. Interest expense
increased from $65,782 for the six months ended September
30, 1998 to $81,122 for the six months ended September 30,
1999. The increase in interest expense is due to an
increase in inventory financing during the first quarter
of fiscal 2000.
Other expenses remained relatively stable for the three
and six months ended September 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company sells and finances manufactured homes and owns
one real estate investment.
The Company has a $2,500,000 line of credit to finance its
inventory purchases. As of September 30, 1999,
$1,730,225 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
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
YEAR 2000
The Company is currently in the process of completing its
Year 2000 compliance plan. The Company has assessed all
hardware and software for Year 2000 readiness. The Company
has substantially completed its renovation and testing
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.
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 SEPTEMBER 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
The annual meeting of shareholders was held on
September 23, 1999 to elect a Board of Directors
for the ensuing year and to approve the selection
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, 1999 By:/s/Eugene W. Landy
EUGENE W. LANDY
President
Date: November 11, 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 SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> SEP-30-1999
<CASH> 234,628
<SECURITIES> 310,194
<RECEIVABLES> 2,726,860
<ALLOWANCES> 0
<INVENTORY> 2,457,841
<CURRENT-ASSETS> 3,216,792
<PP&E> 1,610,097
<DEPRECIATION> 185,672
<TOTAL-ASSETS> 7,190,663
<CURRENT-LIABILITIES> 1,795,905
<BONDS> 0
0
0
<COMMON> 1,514,073
<OTHER-SE> 3,806,806
<TOTAL-LIABILITY-AND-EQUITY> 7,190,663
<SALES> 2,443,862
<TOTAL-REVENUES> 2,765,934
<CGS> 1,961,413
<TOTAL-COSTS> 402,115
<OTHER-EXPENSES> 337,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 81,122
<INCOME-PRETAX> (15,816)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,816)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,816)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
