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, 2000
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, 2000 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.)
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold, NJ 07728
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (732) 577-9981
________________________________________________________________________
(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 6, 2000 was 1,522,280 shares.
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MONMOUTH CAPITAL CORPORATION
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
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
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 10
SIGNATURES 11
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<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2000 AND MARCH 31, 2000
September 30, March 31,
2000 2000
_________ _________
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 62,360 $ 207,943
Accounts Receivable 21,472 112,574
Interest Receivable -0- 18,024
Securities Available for Sale, at Fair Value 5,009,751 3,073,907
Inventory 2,284,759 2,750,941
Prepaid Expenses and Other Current Assets 36,408 42,607
Current Portion of Loans Receivable 139,233 104,246
_________ _________
Total Current Assets 7,450,496 6,310,242
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 11,065 11,065
Building, Improvements and Equipment
net of accumulated depreciation of
$113,052 and $99,268, respectively 398,514 346,923
_________ _________
Total Real Estate Investments 409,579 357,988
Loans Receivable 2,595,865 2,400,558
_________ _________
Total Long-Term Assets 3,005,444 2,758,546
_________ _________
TOTAL ASSETS $ 10,455,940 $ 9,068,788
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
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<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF SEPTEMBER 30, 2000 AND MARCH 31, 2000
September 30, March 31,
2000 2000
_________ _________
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 574,046 $ 460,012
Loans Payable 2,632,716 1,388,693
Inventory Financing 1,542,571 1,875,811
_________ _________
Total Current Liabilities 4,645,844 3,724,516
Other Liabilities 76,259 70,393
_________ _________
Total Liabilities 4,722,103 3,794,909
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per share;
authorized 10,000,000 shares; issued
and outstanding 1,522,280 shares 1,522,280 1,522,280
Additional Paid-In Capital 3,319,346 3,319,346
Unrealized Investment Gain (Loss) 472,354 (32,829)
Retained Earnings 419,857 465,082
_________ _________
Total Shareholders' Equity 5,733,837 5,273,879
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 10,455,940 $ 9,068,788
========== ==========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
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<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
THREE MONTHS SIX MONTHS
9/30/00 9/30/99 9/30/00 9/30/99
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Income:
Sales of
Manufactured Homes $ 1,180,458 $ 1,198,126 $ 2,216,928 $ 2,443,862
Interest and 208,993 83,307 388,821 171,061
Dividend Income
Rental Income 7,373 44,695 7,373 87,019
Other Income 67,401 36,259 97,172 63,992
_________ _________ _________ _________
Total Income 1,464,225 1,362,387 2,710,294 2,765,934
_________ _________ _________ _________
Expenses:
Cost of Sales of
Manufactured Homes 1,014,524 1,005,158 1,935,831 1,961,413
Selling Expense 100,301 124,231 185,383 207,422
Salaries and 56,020 66,108 122,753 142,629
Employee Benefits
Professional Fees 28,179 14,982 72,295 52,064
Interest Expense 99,495 37,762 175,981 81,122
Other Expenses 136,714 148,975 263,276 337,100
_________ _________ _________ _________
Total Expenses 1,435,233 1,397,216 2,755,519 2,781,750
_________ _________ _________ _________
Income (Loss) Before
Income Taxes 28,992 (34,829) (45,225) (15,816)
Income Taxes -0- 4,400 -0- -0-
_________ _________ _________ _________
NET INCOME (LOSS) $ 28,992 $ (30,429) $ (45,225) $ (15,816)
========= ========= ========= =========
NET INCOME(LOSS) PER
SHARE - BASIC
AND DILUTED $ 0.02 $ (0.02) $ (0.03) $ (0.01)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,522,280 1,514,073 1,522,280 1,514,021
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
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<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2000 1999
_________ _________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (45,225) $ (15,816)
Depreciation and Amortization 21,300 28,882
Gain on Sale of Securities
Available for Sale (4,714) -0-
Changes In Operating Assets and Liabilities:
Accounts Receivable 91,102 72,902
Interest Receivable 18,024 -0-
Inventory 466,182 684,861
Prepaid Expenses and Other Current Assets 6,199 9,262
Accounts Payable and Accrued Expenses 114,034 (74,276)
Other Liabilities 5,866 (5,364)
_________ _________
Net Cash Provided by Operating Activities 672,768 700,451
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (499,348) (360,497)
Collections and Other Decreases
in Loans Receivable 269,054 395,050
Purchase of Securities Available for Sale (1,486,526) -0-
Sales and Other Decreases in
Securities Available for Sale 60,577 34,566
Additions to Building, Improvements
and Equipment (72,891) (174,924)
_________ _________
Net Cash Used by Investing Activities (1,729,134) (105,805)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Loans Payable
and Inventory Financing 910,783 (463,118)
Proceeds from the Issuance of
Class A Common Stock -0- 501
_________ _________
Net Cash Provided (Used) by Financing Activities 910,783 (462,617)
_________ _________
Net Increase (Decrease) in Cash (145,583) 132,029
Cash at Beginning of Year 207,943 102,599
Cash at End of Year _________ _________
$ 62,360 $ 234,628
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
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MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
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, 2000 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, 2000 have been omitted.
NOTE 2 - SECURITIES AVAILABLE FOR SALE AND LOANS PAYABLE
During the six months ended September 30, 2000, the Company purchased
$1,486,526 of securities on margin. The margin loan is at 8% and due on
demand.
NOTE 3 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes, loans totaling
$499,348 were made for the six months ended September 30, 2000. Loans are
primarily at 10%-15% for fifteen years and secured by the homes.
Collections and other decreases of loans receivable totaled $269,054 for
the six months ended September 30, 2000.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the six months ended September 30,
2000 and 1999 were as follows:
2000 1999
Interest $ 175,981 $ 81,122
Taxes 3,819 10,924
-7-
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MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
During fiscal 2000, the Company announced that it will exit the
manufactured home sales business since it has not proven to be profitable.
The sales operations were conducted at manufactured home communities owned
by United Mobile Homes, Inc. (UMH), a related real estate investment trust
(REIT). Effective January 1, 2001, the Company anticipates that UMH will
take over the sales operation, including inventory and possibly the
manufactured home loans receivable.
Net cash provided by operating activities for the six months ended
September 30, 2000 was relatively stable as compared to the six months
ended September 30, 1999. Inventory decreased by $466,182.
Securities available for sale increased by $1,935,846 primarily as a result
of new purchases. As an interim measure, the Company is investing in
securities of REITs. Based on current market conditions, management
believes that the prices of those REIT shares are at a discount from the
value of the underlying properties.
Loans Receivable increased by $230,294 during the six months ended
September 30, 2000. This was the result of new loans made of $499,348
offset by collections and other decreases of $269,054.
Loans Payable and Inventory Financing increased by $910,783 during the six
months ended September 30, 2000. This was primarily the result of the
purchases of securities available for sale on margin.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income is comprised primarily of sales of manufactured homes and interest
and dividend income. Sales of manufactured homes remained relatively
stable for the quarter ended September 30, 2000 as compared to the quarter
ended September 30, 1999. Sales of manufactured homes amounted to
$2,216,928 and $2,443,862 for the six months ended September 30, 2000 and
1999, respectively. This decrease was primarily due to the closing of
certain unprofitable sales locations.
Interest and dividend income increased by $125,686 and $217,760,
respectively, for the quarter and six months ended September 30, 2000 as
compared to the quarter and six months ended September 30, 1999. This was
primarily due to purchases of securities available for sale.
-8-
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MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Rental income decreased by $37,322 and $79,646, respectively, for the
quarter and six months ended September 30, 2000 as compared to the quarter
and six months ended September 30, 1999. This was a result of the sale of
the Bethlehem, Pennsylvania building in March 2000.
Cost of sales of manufactured homes expense remained relatively stable for
the quarter ended September 30, 2000 as compared to the quarter ended
September 30, 1999. Cost of sales of manufactured homes expense decreased
from $1,961,413 for the six months ended September 30, 1999 to $1,935,831
for the six months ended September 30, 2000. This was primarily due to a
decrease in sales. The Company has also experienced a decrease in the
gross margin. The Company has reduced sales prices in certain locations to
reduce inventory.
Selling expense, Salaries and employee benefits and Professional fees
remained relatively stable for the quarter and six months ended September
30, 2000 as compared to the quarter and six months ended September 30,
1999.
Interest expense increased from $37,762 for the quarter ended September 30,
1999 to $99,495 for the quarter ended September 30, 2000 and from $81,122
for the six months ended September 30, 1999 to $175,981 for the six months
ended September 30, 2000. This was primarily the result of the purchases of
securities available for sale on margin.
Other expenses remained relatively stable for the quarter ended September
30, 2000 as compared to the quarter ended September 30, 1999. Other
expenses decreased by $73,824 for the six months ended September 30, 2000
as compared to the six months ended September 30, 1999 primarily due to the
sale of the Bethlehem, Pennsylvania building and to the closing of certain
sales locations.
LIQUIDITY AND CAPITAL RESOURCES
The Company sells and finances manufactured homes and maintains a portfolio
of securities available for sale of approximately $5,000,000. The Company
has a $2,500,000 line of credit to finance its inventory purchases. As of
September 30, 2000, $1,542,571 of the line was utilized. The margin loan
on the securities available for sale amounted to $2,632,716 as of September
30, 2000.
The Company's ability to generate adequate cash to meet its needs is
dependent primarily on the success of the sale and financing of
manufactured homes, collections on receivables, liquidity of the securities
portfolio, availability of bank borrowings, the Dividend Reinvestment and
Stock Purchase Plan and access to the capital markets.
-9-
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MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
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 21, 2000 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
-10-
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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 10, 2000 By: /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date: November 10, 2000 By: /s/ Anna T. Chew
ANNA T. CHEW
Controller
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