UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (C) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period __________ to __________
Commission File Number 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, Freehold, NJ 07728
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (732) 577-9993
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 par value
Indicate by check mark whether the registrant (1) has filed
all reports required by Section 13 or 15(d) of the
Securities 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 if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ____
The aggregate market value of voting stock held by non-
affiliates of the Registrant was $2,958,454 (based on
1,198,361 shares of common stock at $2.46875 per share,
the average of the bid and asked price on June 8, 2000).
The number of shares outstanding of issuer's common stock
as of June 8, 2000 was 1,522,280 shares.
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PART I
ITEM 1. BUSINESS
General Development of Business
Monmouth Capital Corporation (the Company) sells
and finances manufactured homes and owns one real estate
investment. The Company is a corporation organized in
the State of New Jersey. The Company commenced operations in 1961.
Prior to fiscal 1994, the Company operated as a
small business investment company under the Small Business
Investment Company Act of 1958 and as an investment
company under the Investment Company Act of 1940. As such, the
Company was able to distribute its income prior to income taxes as
dividends to shareholders. The Company was allowed a
deduction from taxable income for these distributions.
With shareholder approval, the Company surrendered
its license to operate as a small business investment
company and deregistered as an investment company. On
January 15, 1993, the Small Business Administration
approved the surrender of the Company's license. On
July 20, 1993, the Securities and Exchange Commission
entered an Order that the Company had ceased to be an
investment company. Since the Company is no longer an
investment company, earnings are now fully taxable.
Certain members of the Company's Board of Directors
manage two real estate investment trusts. In 1995, the
Company success fully completed a Rights Offering to
its shareholders. The Company raised approximately
$1,600,000 after expenses bringing total equity to
approximately $4,500,000.
Narrative Description of the Business
During fiscal 1994, the Company formed a wholly-
owned subsidiary, The Mobile Home Store, Inc., to finance
and sell manufactured homes. At March 31, 2000, loans
receivable relating to the financing of manufactured
home sales amounted to $2,476,510. A description of the
Company's total loan portfolio of $2,504,804 is incorporated
herein by reference to Note 3 of the Notes to Consolidated
Financial Statements - Loans Receivable.
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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.
On March 31, 1994, the Company purchased a net
leased industrial building in Bethlehem, Pennsylvania.
During fiscal 2000, this building was sold at a gain of
$245,419. 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. The Company has purchased these securities
on margin since the interest and dividend yields exceed
the cost of funds. Such securities are subject to risk
arising from adverse changes in market rates and
prices, primarily interest rate risk relating to debt
securities and equity price risk relating to equity
securities.
Management
The management of the Company currently operates
Monmouth Real Estate Investment Corporation (MREIC) and
UMH, two REITs. MREIC is now specializing in net leased
industrial properties to rated tenants on medium term
leases. UMH specializes in investments in manufactured
home communities. It is intended that the Company will
invest in real estate ventures that do not qualify under
the investment objectives of MREIC and UMH. To the extent
that there may be conflicts of interest as to prospective
investments, the Company may be deprived of investment
opportunities.
Environmental, Regulatory and Energy Problems
The Company must comply with certain Federal
Environmental Protection Agency Regulations as well as
state and local governmental regulations.
In conjunction with the sale of the Bethlehem building,
a Phase I environmental assessment was performed. This assessment
consisted of searches of Federal and State databases to
determine potential sources of contamination, investigation
of the site history, and visual inspection. The assessment
concluded that there was no evidence to suggest that the
site has ever experienced a significant spill or
environmental incident. Management is not aware of any material
environmental problems affecting the Company.
Number of Employees
At March 31, 2000, the Company had nine full-time employees.
A Board of Directors consisting of eight directors is responsible
for the general policies of the Company.
ITEM 2. PROPERTIES
The Company had one property, located in Bethlehem,
Pennsylvania. This property was sold in fiscal 2000.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Prior to October 19, 1995, the shares of the Company
were traded on the over-the-counter market. As of October
19, 1995, the Company's shares are traded on the National
Association of Securities Dealers Automatic Quotations
(NASDAQ) Small Capitalization market under the symbol "MONM".
The per share range of high and low market during each quarter
of the last three fiscal years were as follows:
2000-1999 1999-1998 1998-1997
Market Price Market Price Market Price
Qtr. High Low High Low High Low
First 2-3/4 2-3/8 3-1/2 2-3/4 3-5/8 2-1/2
Second 2-3/4 2-1/8 3-3/8 2-3/4 3-5/8 3-1/4
Third 2-5/8 2-1/4 4 2-1/2 3 2-5/8
Fourth 2-5/8 2-5/16 3-7/8 2-1/2 2-3/4 2-11/16
The over-the-counter market quotations reflect the interdealer
prices, without retail mark-up, mark-down or commission, and may not
necessarily represent actual transactions.
As of March 31, 2000, there were approximately 423 holders of
the Company's common stock based on the number of record owners.
For the years ended March 31, 2000, 1999 and 1998, total
dividends paid by the Company amounted to $75,710 or $.05 per
share, $74,666 or $.05 per share and $73,515 or $.05 per share,
respectively.
Future dividend policy will depend on the Company's earnings,
capital requirements, financial condition, availability and cost of bank
financing and other factors considered relevant by the Board of Directors.
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<TABLE>
<CAPTION>
ITEM 6. SELECTED FINANCIAL DATA
FOR THE YEARS ENDED MARCH 31,
2000 1999 1998 1997 1996
Income Statement Data:
<S> <C> <C> <C> <C> <C>
Total Income $5,453,916 $5,965,265 $4,288,031 $2,788,741 $2,644,137
Total Expenses 5,685,135 6,178,666 4,242,531 2,769,531 2,267,250
Gain on Sale of
Real Estate
Investments 245,419 -0- -0- -0- -0-
Income Taxes -0- -0- 34,239 6,700 171,308
Net Income (Loss) 14,200 (213,401) 11,261 12,510 205,579
Net Income (Loss)
Per Share 0.01 (0.14) 0.01 0.01 0.18
========================================================================
Balance Sheet Data:
Total Assets $9,068,788 $7,760,765 $6,855,686 $5,994,684 $5,752,047
Shareholders'
Equity 5,273,879 5,348,223 5,518,321 5,342,174 4,706,755
========================================================================
Cash Dividends
Per Share $0.05 $0.05 $0.05 $0.05 $0.05
Average Number
of Shares
Outstanding 1,516,528 1,496,727 1,458,811 1,217,129 1,111,624
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Liquidity and Capital Resources
Net cash provided by operating activities for the year ended
March 31, 2000 amounted to $553,657 as compared to net cash
used by operating activities of $870,704 and $663,806 for
the years ended March 31, 1999 and 1998, respectively. The
increase in fiscal 2000 in net cash provided by operating
activities was due primarily to a decrease in inventory and
an increase in accounts payable for the year. Cash used by
operating activities remained relatively stable during 1999 and 1998.
Securities available for sale increased by $2,717,118
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.
Inventory decreased by $391,761 as a result of decreased
purchases of manufactured homes. The Company anticipates exiting
the manufactured home sales business by January 1, 2001.
Loans receivable decreased by $293,672 during fiscal 2000.
This decrease was the result of principal repayments and other
decreases of $793,403 offset by new loans of $609,962. The
Company also transferred $110,231 representing certain equipment
and fixtures that collateralized a non-performing loan to
Building, Improvements and Equipment.
Loans payable increased by $1,388,693 during fiscal 2000.
This represents the margin loan on securities available for sale.
The Company purchased these securities on margin since the
interest and dividend yields exceed the cost of funds.
Inventory financing decreased by $317,532 during fiscal 2000
as a direct result of the decrease in inventory.
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<PAGE>
Results of Operations
Income is comprised primarily of sales of manufactured homes by
The Mobile Home Store, Inc. (MHS), the Company's wholly owned subsidiary,
interest income and rental income. Sales of manufactured homes
increased from $3,730,244 in 1998 to $5,396,530 in 1999. MHS had
been experiencing increased sales since its inception in fiscal 1994.
Sales of manufactured homes decreased during fiscal 2000 to $4,759,648.
This was primarily due to the closing of certain unprofitable sales
locations.
Interest and dividend income increased by $57,412 during fiscal
2000 primarily due to the purchases of securities available for sale.
Interest and dividend income remained relatively stable during 1999
and 1998.
Rental income, primarily related to the Bethlehem, Pennsylvania
net-leased industrial building, increased by $29,613 during fiscal 2000.
This was primarily a result of an increase in reimbursable expenses.
Rental income decreased during 1999 due to the loss of one tenant.
Other income increased from $59,648 in 1998 to $82,503 in 1999 to
$121,012 in fiscal 2000 due primarily to increased income received for
retail loan volume. Other income in fiscal 2000 also included a gain on
sale of securities available for sale of $16,841.
Cost of manufactured home sales increased from $2,849,627 in 1998 to
$4,442,148 in 1999 and decreased to $3,974,912 in fiscal 2000. Selling
expense increased from $431,901 in 1998 to $490,771 in 1999 and
decreased to $474,134 in fiscal 2000. These changes are directly
attributable to the change in sales of manufactured homes.
Salaries and employee benefits remained relatively stable during
fiscal 2000. Salaries and employee benefits increased from $199,080 in
1998 to $318,291 in 1999 due to additional employees. During 1998,
outside professionals were used rather than employees. There was a
corresponding decrease in professional fees during 1999.
Interest expense increased from $81,289 in 1998 to $130,706 in 1999
to $152,509 in fiscal 2000. The increase during 1999 was due to an
increase in inventory financing. The increase during fiscal 2000 was due
to the purchase of securities for sale on margin.
Other expenses remained relatively stable during fiscal 2000.
Other expenses increased from $453,687 during 1998 to $649,905 during
1999 due to the expansion of the operations of MHS.
The change in income taxes was due to the changes in income.
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<PAGE>
Year 2000
The Company has experienced no significant impact of its operations
or its ability to accurately process financial information due to a
Year 2000 related issue. In addition, the Company has no information that
indicates a significant tenant, vendor or service provider may be unable to
meet their rental obligations, sell goods or provide services to the
Company because of Year 2000 issues. The Company will continue to
monitor its operations for Year 2000 related issues.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Item 1. Business
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data listed in
Part IV, Item 14 (a)(1) are incorporated herein by reference and filed
as a part of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
-8-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Several of the Directors and Officers of the Company also serve
as directors of Monmouth Real Estate Investment Corporation (MREIC)
and United Mobile Homes, Inc. (UMH), both publicly-owned real estate
investment trusts.
Director Since/
Principal Occupation Shares Owned
Name, Age and Title Past Five Years and % of Total
Ernest V. Treasurer and Director of 1961
Bencivenga MREIC; Secretary/Treasurer Owns 6,417 shs
(82) and Director of UMH. .42% (1)
Secretary/Treasurer
and Director
Anna T. Chew Certified Public Accountant; 1994
(42) Vice President, Chief Owns 8,499 shs
Controller Financial Officer and .56% (2)
and Director Director of UMH; Controller
and Director of MREIC.
Boniface DeBlasio Director of MREIC. 1961
(79) Owns 20,452 shs
Chairman of the 1.34%
Board and Director
Charles P. Self-employed investor; 1970
Kaempffer Director of MREIC, UMH and Owns 15,331 shs
(63) Community Bank of New 1.01% (3)
Director Jersey.
Eugene W. Landy Attorney; President of 1961
(66) MREIC; Chairman of the Board Owns 196,435 shs
President and of UMH. 12.90% (4)
Director
Samuel A. Landy Attorney; President and 1994
(39) Director of UMH; Director Owns 59,799 shs
Director of MREIC. 3.93% (5)
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Director Since/
Principal Occupation Shares Owned
Name, Age and Title Past Five Years and % of Total
Robert G. Sampson Self-employed investor; 1963
(74) Director of MREIC and UMH; Owns 16,986 shs
Director General Partner for Sampco, Ltd. 1.12%
(1) Includes 5,069 shares held by Mr. Bencivenga's wife.
(2) Held jointly with Ms. Chew's husband.
(3) Includes (a) 726 shares in joint name with Mrs.Kaempffer;
(b) 270 shares held by Mr. Kaempffer's wife; and (c)7,000 shares
in joint name with Mrs. Kaempffer held as Trustees for Defined
Benefit Pension Plan.
(4) Includes (a) 7,191 shares held by Mr. Landy's wife; (b) 32,249
shares held in the Landy & Landy Employees' Pension Plan, of which
Mr. Landy is a Trustee with power to vote; and (c) 68,001 shares held
in the Landy & Landy Employees' Profit Sharing Plan, of which Mr. Landy
is Trustee with power to vote.
(5) Includes (a) 12,231 shares held by Mr. Landy's wife; (b)13,173
shares in custodial accounts for Mr. Landy's children under the
Uniform Gift to Minor's Act in which he disclaims any beneficial interest,
but has power to vote; and (c) 23,845 shares in the Samuel Landy
Family Limited Partnership.
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<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows compensation paid
by the Company to its chief executive officer for services rendered
during the fiscal years ended March 31, 2000, 1999 and 1998. Because
no executive officers received total annual salary and bonus exceeding
$100,000, only the compensation paid to the chief executive officer is
to be disclosed under the Securities and Exchange Commission disclosure
requirements.
Name and Principal Position Annual Compensation
Year Salary Bonus Other(1)
Eugene W. Landy 2000 $50,000 None $3,200
Chief Executive 1999 $37,500 None $15,700
Officer 1998 None None $58,200
(1) Represents base compensation, directors' fees as
well as legal and other fees to the firm of Landy & Landy.
Report of the Compensation Committee
Overview and Philosophy
The Company has a Compensation Committee consisting of two
independent outside Directors. This Committee is responsible for making
recommendations to the Board of Directors concerning executive
compensation. The Compensation Committee takes into consideration
three major factors in setting compensation.
The first consideration is the overall performance of the
Company. The Committee believes that the financial interests of the
executive officers should be aligned with the success of the Company and the
financial interests of its shareholders.
The second consideration is the individual achievements made by each
officer. The Company is relatively small. The Committee is aware of the
contributions made by each officer and makes an evaluation of individual
performance based on their own familiarity with the officer.
The final criteria in setting compensation is comparable wages in
the industry.
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Evaluation
The Committee reviewed the progress made by Eugene W. Landy, Chief
Executive Officer, in locating alternative business and investment
opportunities. The Committee decided to continue Mr. Landy's annual
compensation of $50,000.
Other Information
Except for specific agreements, the Company has no retirement
plan in effect for officers, directors or employees and, at present,
has no intention of instituting such a plan.
Comparative Performance
The following line graph compares the total return of the Company's
Common Stock for the last five fiscal years to the NASDAQ Total Return
Index and the NASDAQ Financial Stocks Total Return Index. The total return
reflects stock price appreciation and dividend reinvestment for all three
comparative indices. The information herein has been obtained from sources
believed to be reliable, but neither its accuracy nor its completeness is
guaranteed.
Monmouth Capital NASDAQ NASDAQ
Year Corporation Total Financial
1995 100 100 100
1996 118 136 138
1997 112 151 177
1998 92 229 276
1999 94 310 248
2000 89 574 237
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 31, 2000, no person owned of record or was known by
the Company to beneficially own more than 5% of the shares, except
as follows:
Name and Address Shares Owned Percent
of Beneficial Owner Beneficially of Class
Eugene W. Landy
20 Tuxedo Road 196,435 12.90%
Rumson, NJ 07760
Group consisting of
Walter Carucci,
Carucci Family Partners,
and Carr Securities Corp. 129,010 8.47%
1 Penn Plaza
New York, NY 10114
Group consisting of
Paul H. O'Leary, Raffles
Associates, L.P. and
Channel Partnership II 86,788 5.70%
1 Penn Plaza, Suite 4720
New York, NY 10119
James E. Mitchell &
Mitchell Partners 78,681 5.00%
611 Anton Blvd.
Costa Mesa, CA 92626
The Company believes that during fiscal 2000, all persons required
to report ownership and changes in ownership of common stock pursuant to
Section 16(a) of the Securities Exchange Act of 1934 have complied.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships and related party transactions are
incorporated herein by reference to part IV, Item 14(a)(1)(vi), Note 9
of the Notes to Consolidated Financial Statements-Payments to Affiliated
Persons and Related Party Transactions.
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<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) The following Financial Statements are filed as
part of this report:
Page
(i) Auditors' Report 15
(ii) Consolidated Balance Sheets as of March 31,
2000 and 1999 16-17
(iii) Consolidated Statements of Income for the
years ended March 31, 2000, 1999 and 1998 18
(iv) Consolidated Statements of Shareholders'
Equity for the years ended March 31, 2000,
1999 and 1998 19
(v) Consolidated Statements of Cash Flows for
the years ended March 31, 2000, 1999 and 1998 20
(vi) Notes to Consolidated Financial Statements 21-30
(a) (2) Financial Statement schedules are omitted for
the reason that they are not required, are not
applicable, or the required information is set
forth in the financial statements or notes thereto.
(a) (3) The Exhibits set forth in the following index
of Exhibits are filed as a part of this Report.
Exhibit No. Description
(3) Articles of Incorporation and By-Laws - Reference is hereby
made to that filed with the Securities and Exchange Commission with
the Company's Form 10-K/A No. 2 for the year ended March 31, 1994.
(21) Subsidiaries of the Registrant - During fiscal 1994, the Registrant
formed a wholly-owned subsidiary, The Mobile Home Store, Inc. to
finance and sell manufactured homes. This subsidiary was incorporated
in the State of New Jersey.
(27) Financial Data Schedule
(a)(3)(b) Reports on Form 8-K
On March 1, 2000, the Company filed a report on Form 8-K for the sale
of its warehouse facility in Bethlehem, Pennsylvania.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Monmouth Capital Corporation
Freehold, New Jersey
We have audited the accompanying consolidated balance sheets of
Monmouth Capital Corporation as of March 31, 2000 and 1999, and
the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended
March 31, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position
of Monmouth Capital Corporation at March 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of
the three years in the period ended March 31, 2000 in conformity with
generally accepted accounting principles.
/s/ Cowan, Gunteski & Co.
June 26, 2000
Toms River, New Jersey
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<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31,
2000 1999
ASSETS
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 207,943 $ 102,599
Accounts Receivable 112,574 146,070
Interest Receivable 18,024 -0-
Securities Available for Sale,
at Fair Value 3,073,907 356,789
Inventory 2,750,941 3,142,702
Prepaid Expenses and Other Current Assets 42,607 45,977
Current Portion of Loans Receivable 104,246 122,296
_________ _________
Total Current Assets 6,310,242 3,916,433
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 11,065 183,065
Building, Improvements and Equipment, net
of accumulated depreciation of $99,268
and $156,790, respectively 346,923 985,087
_________ _________
Total Real Estate Investments 357,988 1,168,152
_________ _________
Loans Receivable:
Performing 2,400,558 2,565,949
Non-Performing -0- 175,231
Allowance for Losses -0- (65,000)
_________ _________
Total Loans Receivable 2,400,558 2,676,180
_________ _________
Total Long-Term Assets 2,758,546 3,844,332
_________ _________
TOTAL ASSETS $ 9,068,788 $ 7,760,765
========= =========
See Accompanying Independent Auditors' Report and
Notes to Consolidated Financial Statements
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<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT.)
AS OF MARCH 31,
2000 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts Payable and Accrued
Expenses $ 460,012 $ 139,956
Loans Payable 1,388,693 -0-
Inventory Financing 1,875,811 2,193,343
_________ _________
Total Current Liabilities 3,724,516 2,333,299
Other Liabilities 70,393 79,243
_________ _________
Total Liabilities 3,794,909 2,412,542
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00 per
share; authorized 10,000,000
shares; issued and outstanding
1,522,280 and 1,513,891 shares,
respectively in 2000 and 1999 1,522,280 1,513,891
Additional Paid-In Capital 3,319,346 3,304,657
Accumulated Other Comprehensive
Income (Loss) (32,829) 3,083
Retained Earnings 465,082 526,592
_________ _________
Total Shareholders' Equity 5,273,879 5,348,223
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 9,068,788 $ 7,760,765
========= =========
See Accompanying Independent Auditors' Report and
Notes to Consolidated Financial Statements
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<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED MARCH 31,
2000 1999 1998
<S> <C> <C> <C>
Income:
Sales of Manufactured Homes $4,759,648 $5,396,530 $3,730,244
Interest and Dividend Income 388,709 331,298 309,828
Rental Income 184,547 154,934 188,311
Other Income 121,012 82,503 59,648
_________ _________ _________
Total Income 5,453,916 5,965,265 4,288,031
_________ _________ _________
Expenses:
Cost of Sales of
Manufactured Homes 3,974,912 4,442,148 2,849,627
Selling Expense 474,134 490,771 431,901
Salaries and Employee Benefits 315,290 318,291 199,080
Professional Fees 126,299 146,845 226,947
Interest Expense 152,509 130,706 81,289
Other Expenses 641,991 649,905 453,687
_________ _________ _________
Total Expenses 5,685,135 6,178,666 4,242,531
_________ _________ _________
Income (Loss) Before Gain on Sale of
Real Estate Investment (231,219) (213,401) 45,500
Gain on Sale of Real Estate Investment 245,419 -0- -0-
_________ _________ _________
Income (Loss) Before Income Taxes 14,200 (213,401) 45,500
Income Taxes -0- -0- 34,239
_________ _________ _________
NET INCOME (LOSS) $ 14,200 $ (213,401) $ 11,261
========= ========= =========
NET INCOME (LOSS) PER
SHARE-BASIC AND DILUTED $ 0.01 $ (0.14) $ 0.01
========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,516,528 1,496,727 1,458,811
========= ========= =========
See Accompanying Independent Auditors' Report and
Notes to Consolidated Financial Statements
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<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
Accumu-
lated
Other
Additional Compre- Compre-
Common Stock Paid-In hensive Retained hensive
Number Amount Capital Income Earnings Income
Balance
March 31, 1997 1,408,464 $1,408,464 $3,086,470 $(29,673) $876,913
Common Stock
Issued with
the DRIP* 69,375 69,375 139,135 -0- -0-
Net Income -0- -0- -0- -0- 11,261 $ 11,261
Distributions -0- -0- -0- -0- (73,515)
Unrealized Net
Holding Gains
on Securities
Available for
Sale -0- -0- -0- 29,891 -0- 29,891
_________ _________ _________ ________ _________ _________
Balance
March 31, 1998 1,477,839 1,477,839 3,225,605 218 814,659 $ 41,152
=========
Common Stock
Issued with
the DRIP* 36,052 36,052 79,052 -0- -0-
Net Loss -0- -0- -0- -0- (213,401) $(213,401)
Distributions -0- -0- -0- -0- (74,666)
Unrealized Net
Holding Gains
on Securities
Available for
Sale -0- -0- -0- 2,865 -0- 2,865
_________ _________ _________ ________ _________ _________
Balance
March 31, 1999 1,513,891 1,513,891 3,304,657 3,083 526,592 $(210,536)
=========
Common Stock
Issued with
the DRIP* 8,389 8,389 14,689 -0- -0-
Net Income -0- -0- -0- -0- 14,200 $ 14,200
Distributions -0- -0- -0- -0- (75,710)
Unrealized Net
Holding Losses
on Securities
Available for
Sale
-0- -0- -0- (35,912) -0- (35,912)
_________ _________ _________ ________ _________ _________
Balance
March 31, 2000 1,522,280 $1,522,280 $3,319,346 $(32,829) $ 465,082 $(21,712)
========= ========= ========= ======== ========= =========
*Dividend Reinvestment and Stock Purchase Plan
See Accompanying Independent Auditors' Report and
Notes to Consolidated Financial Statements
-19-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31,
<S> <C> <C> <C>
2000 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 14,200 $ (213,401) $ 11,261
Adjustments to reconcile net income
to net cash used by operating
activities:
Depreciation and Amortization 79,908 45,803 48,384
Gain on Sale of Securities
Available for Sale (16,841) -0- -0-
Gain on Sale of Real Estate
Investments (245,419) -0- -0-
Changes In Operating Assets and
Liabilities:
Accounts Receivable 33,496 (59,072) (66,874)
Interest Receivable (18,024) 3,342 38,811
Inventory 391,761 (585,851) (946,945)
Prepaid Expenses and Other
Current Assets 3,370 35,737 113,362
Accounts Payable and Accrued
Expenses 320,056 (101,653) 124,910
Other Liabilities (8,850) 4,391 13,285
_________ _________ _________
Net Cash Provided (Used) by Operating
Activities 553,657 (870,704) (663,806)
_________ _________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (609,962) (1,390,025) (1,024,608)
Collections and Other Decreases in
Loans Receivable 793,403 558,201 1,443,855
Purchase of Securities Available
for Sale (2,852,770) -0- -0-
Proceeds from Sales and Other
Decreases in Securities Available
for Sale 116,581 58,995 37,958
Additions to Real Estate Investments (171,437) (13,765) (156,962)
Proceeds from Sale of Real Estate
Investments 1,257,343 -0- -0-
_________ _________ _________
Net Cash Provided (Used) by Investing
Activities (1,466,842) (786,594) 300,243
_________ _________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Loans Payable and
Inventory Financing 1,071,161 1,172,439 546,660
Dividends Paid (54,142) (53,575) (52,751)
Proceeds from the Issuance of Class
A Common Stock 1,510 94,013 187,746
_________ _________ _________
Net Cash Provided by Financing
Activities 1,018,529 1,212,877 681,655
_________ _________ _________
Net Increase (Decrease) in Cash and Cash
Equivalents 105,344 (444,421) 318,092
Cash and Cash Equivalents at
Beginning of Year 102,599 547,020 228,928
_________ _________ _________
Cash and Cash Equivalents at End of Year $ 207,943 $ 102,599 $ 547,020
========= ========= =========
See Accompanying Independent Auditors' Report and
Notes to Consolidated Financial Statements
-20-
</TABLE>
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Business
Monmouth Capital Corporation (the Company) is a corporation organized
in New Jersey which commenced operations in 1961. Prior to fiscal
1994, the Company was an investment company under the Investment Company
Act of 1940 and a small business investment company licensed under
the Small Business Investment Company Act of 1958. The Company currently
sells and finances manufactured homes. The Company also receives rental
income from one real estate investment.
Revenue Recognition
Sale of manufactured homes is recognized on the full accrual basis when
certain criteria are met. These criteria include the following:
(a) initial and continuing payment by the buyer must be adequate; (b) the
receivable, if any, is not subject to future subordination; (c) the
benefits and risks of ownership are substantially transferred to the
buyer; and (d) the Company does not have a substantial continued
involvement with the home after the sale. Alternatively, when the
foregoing criteria are not met, the Company recognizes gains by the
installment method. Interest income on loans receivable is not accrued
when, in the opinion of management, the collection of such interest
appears doubtful. Rental income is recognized on the straight-line basis
over the term of the lease.
Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
Building, Improvements and Equipment
Building, Improvements and Equipment are stated at the lower of
depreciated cost or net realizable value. Depreciation is computed based
on the straight-line method over the estimated useful life of the assets
(5 to 27.5 years). If there is an event or change in circumstances that
indicates that the basis of an investment property may not be recoverable,
management assesses the possible impairment of value through evaluation
of the estimated future cash flows of the property, on an undiscounted
basis, as compared to the property's current carrying value. A
property's carrying value would be adjusted, if necessary, to reflect an
impairment in the value of the property.
-21-
<PAGE>
Securities Available for Sale
The Company's securities are classified as Available-forSale, and
are carried at fair value. Gains or losses on the sale of securities are
based on identifiable cost and are accounted for on a trade date basis.
Unrealized holding gains and losses are excluded from earnings and reported
as a separate component of Shareholders' Equity until realized. A decline
in the market value of any security below cost that is deemed to be other
than temporary results in a reduction in the carrying amount to fair value.
Any impairment is charged to earnings and a new cost basis for the
security is established.
Inventories
Inventories, consisting of manufactured homes for sale, are valued
at the lower of cost or market value and are determined by the specific
identification method. All inventories are considered finished goods.
Income Taxes
The Company accounts for income taxes in accordance with Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes". Income taxes are accounted for by the asset/liability method.
Net Income Per Share
Basic net income per share is calculated by dividing net income by
the weighted-average number of common shares outstanding during the
period (1,516,528, 1,496,727, and 1,458,811 in 2000, 1999 and 1998,
respectively). Diluted net income per share is calculated by dividing
net income by the weighted-average number of common shares outstanding
plus the weighted-average number of net shares that would be issued
upon exercise of stock options pursuant to the treasury stock method
(See Note 6). There were no dilutive stock options as of March 31, 2000,
1999 and 1998.
Stock Option Plan
The Company's stock option plan is accounted for under the intrinsic
value based method as prescribed by Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees". As such,
compensation expense would be recorded on the date of grant only if the
current market price on the underlying stock exceeds the exercise price.
Included in these Notes to Consolidated Financial Statements are the
pro forma disclosures required by SFAS No. 123, "Accounting for Stock-Based
Compensation," which assumes the fair value based method of accounting has
been adopted.
Other Comprehensive Income
Comprehensive income consists of net income and net unrealized
gains or losses on securities available for sale and is presented in
the consolidated statements of shareholders' equity.
-22-
<PAGE>
Reclassification
Certain amounts in the financial statements for the prior years
have been reclassified to conform to the statement presentation for
the current year.
NOTE 2 - INVESTMENT IN SUBSIDIARY
The Company formed a wholly-owned subsidiary, The Mobile Home Store,
Inc. (MHS), to finance and sell manufactured homes. MHS was incorporated in
the State of New Jersey on July 28, 1993. The consolidated financial
statements of the Company include the accounts of MHS. All intercompany
transactions and balances have been eliminated in consolidation.
NOTE 3 - LOANS RECEIVABLE
The following is a summary of the loans held by the Company at
March 31, 2000 and 1999:
Balance
Rate Date 3/31/00 3/31/99
Financed Manufactured
Homes 10%-15% various $2,476,510 $2,658,779
Other* various various 28,294 204,697
_________ _________
Total Loans Receivable 2,504,804 2,863,476
Current Portion 104,246 122,296
_________ _________
Long-Term Portion $2,400,558 $2,741,180
========= =========
* Includes a non-performing loan of $175,231 in 1999. In
April, 1999, the Company repossessed certain equipment and fixtures
that collateralized this 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. In January 2000,
this lease was terminated. The Company is currently trying to release this
property.
During 1994, MHS began selling manufactured home units and financing
these sales. At March 31, 2000 and 1999, financed manufactured homes
consist of 116 loans. These loans range from approximately $400 to
approximately $62,000. Loans receivable for financed manufactured homes
are secured by the property financed. Generally, the terms of the loans
do not exceed 20 years. No allowance for uncollectable accounts
has been recorded. Management believes that the fair market value of
a unit under repossession exceeds the loan balance due.
-23-
<PAGE>
NOTE 4 - SECURITIES AVAILABLE FOR SALE
The following is a summary of investments in debt and equity securities
at March 31, 2000 and 1999:
Shares/ Cost Fair Value
Description $ Amount 3/31/00 3/31/99 3/31/00 3/31/99
Equity Securities-
Preferred Stock:
Associated Estates
Realty Corp 9.75%
Class A 16,500 254,204 -0- 293,298 -0-
Camden Property Trust
$2.25 Series A 1,000 22,000 -0- 22,188 -0-
Crescent Real Estate
Equities Co 6.75% 2,000 27,266 -0- 28,250 -0-
Crown American Realty
Trust 11% 8,200 306,430 -0- 304,425 -0-
Equity Inns Inc 9.5%
Series A 11,300 183,921 -0- 182,213 -0-
Equity Office
Properties Trust
8.98% Series A 1,000 21,995 -0- 22,563 -0-
Felcor Lodging Trust
Inc 1.95% 4,000 66,520 -0- 63,252 -0-
Felcor Lodging Trust
Inc. 9% Series B 9,000 147,794 -0- 148,500 -0-
First Industrial Realty
Trust 9.5% Series A 2,000 44,925 -0- 45,500 -0-
First Industrial Realty
Trust 8.75% Series B 1,000 20,245 -0- 20,000 -0-
G&L Realty Corp 10.25%
Series A 1,000 15,683 -0- 15,063 -0-
Glenborough Realty
Trust 7.75% Series A 6,000 87,823 -0- 90,000 -0-
Glimcher Realty Trust
9.25% Series B 2,000 28,803 -0- 29,500 -0-
Healthcare Property
Investors 7.875%
Series A 1,000 15,558 -0- 14,313 -0-
Healthcare Property
Investors 8.7%
Series B 2,000 31,240 -0- 33,000 -0-
Highwoods Properties
Inc 8% Series D 1,000 17,170 -0- 17,750 -0-
Hospitality Properties
Trust 9.5% Series A 3,200 61,578 -0- 63,402 -0-
JDN Realty Corp 9-3/8%
Series A 2,000 35,665 -0- 34,376 -0-
Kranzco Realty Trust
9.5% Series D 11,000 177,930 -0- 176,000 -0-
Mid America Apartment
Communities Inc
8.825% Series B 7,000 115,341 -0- 120,750 -0-
New Plan Excel Realty
Trust 8.5% 1,000 20,558 -0- 19,250 -0-
Prime Group Realty
Trust 9% Series B 3,000 48,040 -0- 46,689 -0-
Sovran Self Storage Inc
9.85% Series B 1,000 19,245 -0- 20,125 -0-
Starwood Financial Inc
9-3/8% Series B 17,000 267,504 -0- 263,500 -0-
Starwood Financial Inc
9.2% Series C 1,000 15,245 -0- 15,250 -0-
Thornburg Mortgage
Asset Corp 9.68%
Series A 1,000 19,514 -0- 19,375 -0-
United Dominion Realty
Trust 9.25% Series A 4,000 75,497 -0- 78,000 -0-
United Dominion Realty
Trust 8.6% Series B 1,000 16,620 -0- 18,125 -0-
Vornado Realty Trust
8.5% Series C 1,000 19,683 -0- 19,625 -0-
_________ ________ _________ ________
Total Equity Securities-
Preferred Stock 2,183,997 -0- 2,224,282 -0-
_________ ________ _________ ________
-24-
<PAGE>
Shares/ Cost Fair Value
Description $ Amount 3/31/00 3/31/99 3/31/00 3/31/99
Equity Securities-
Common Stock:
LaSalle Hotel
Properties 1,000 12,308 -0- 12,500 -0-
New Plan Excel Realty
Trust Inc 5,000 70,188 -0- 68,750 -0-
Pennsylvania Real
Estate Investment
Trust 5,000 82,300 -0- 81,250 -0-
Sizeler Properties
Investors Inc 54,200 406,637 -0- 345,525 -0-
Tork Time Control Inc 1,500 10,125 10,125 19,875 18,375
United Dominion Realty
Trust 5,000 49,875 -0- 50,315 -0-
_________ ________ _________ ________
Total Equity Securities-
Common Stock 631,433 10,125 578,215 18,375
_________ ________ _________ ________
Total Equity Securities 2,815,430 10,125 2,802,497 18,375
_________ ________ _________ ________
Debt Securities:
Government National
Mortgage Association
6.5% 2/20/14 288,975 291,306 343,581 271,410 338,414
_________ ________ _________ ________
Total Securities
Available for Sale $3,106,736 $353,706 $3,073,907 $356,789
========= ======== ========= ========
Gross unrealized losses on debt securities amounted to
$19,896 and $5,167 as of March 31, 2000 and 1999, respectively. Gross
unrealized gains on equity securities amounted to $69,837 and $8,250
as of March 31, 2000 and 1999, respectively. Gross unrealized losses on
equity securities amounted to $82,770 and $0- as of March 31, 2000 and 1999,
respectively.
NOTE 5 - LOANS PAYABLE AND INVENTORY FINANCING
During fiscal 2000, the Company purchased securities on margin.
At March 31, 2000, the margin loan amounted to $1,388,693 at an
interest rate of 7.25% and is secured by investment securities with
a market value of $3,073,907. This margin loan is due on demand.
The Company has a $2,500,000 agreement with Conseco Finance Servicing
Corp. (formerly Greentree Financial Servicing Corporation) to
finance inventory purchases. The interest rates range from prime for
each advance to prime plus 2.75% after one year. Advances under this
line of credit are secured by the manufactured homes for which the
advances were made. Total advances under this line of credit at
March 31, 2000 and 1999 amounted to $1,875,811 and $2,193,343, respectively.
-25-
<PAGE>
NOTE 6 - EMPLOYEE STOCK OPTION PLAN
On July 14, 1994, the shareholders approved and ratified the Company's
1994 Stock Option Plan authorizing the grant to officers and key
employees of options to purchase up to 300,000 shares of common stock.
Options may be granted any time up to December 31, 2003. No option
shall be available for exercise beyond ten years. All options are
exercisable after one year from the date of grant. The option price
shall not be below the fair market value at date of grant. Canceled or
expired options are added back to the "pool" of shares available under the
plan.
The Company elected to continue following APB Opinion No. 25 in
accounting for its stock option plans and, accordingly, no compensation
cost has been recognized. Had compensation cost been determined
consistent with SFAS No. 123, the Company's net income and earnings per
share would have been reduced to the pro forma amounts as follows:
2000 1999 1998
Net Income As Reported $14,200 $(213,401) $11,261
(Loss) Pro forma 6,589 (225,169) 3,387
Net Income As Reported .01 (.14) .01
(Loss) Pro forma .01 (.15) .01
Per Share
The fair value of each option grant is estimated on the date of the
grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for grants in 2000, 1999 and 1998:
dividend yield of .3 percent; expected volatility of 25 percent;
risk-free interest rates of 6.5 percent; and expected lives of five
years.
A summary of the status of the Company's stock option plans as of
March 31, 2000, 1999, and 1998 and changes during the years then ended
are as follows:
2000 1999 1998
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding at
beginning of
year 55,000 $3.04 35,000 $3.21 35,000 $3.21
Issued -0- -0- 20,000 2.75 -0- -0-
Expired (20,000) 3.00 -0- -0- -0- -0-
______ ______ ______
Outstanding at
end of year 35,000 2.64 55,000 3.04 35,000 3.21
====== ====== ======
Weighted-average
fair value of
options granted
during the year -0- .97 -0-
====== ====== ======
-26-
<PAGE>
The following is a summary of stock options outstanding as
of March 31, 2000:
Date of Number of Number of Option Expiration
Grant Employees Shares Price Date
3/4/96 3 15,000 3.50 3/4/2001
4/8/98 2 20,000 2.75 4/8/2003
______
35,000
======
As of March 31, 2000, there were 265,000 shares available for
grant under the Plan.
NOTE 7 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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 reinvest 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 its market price by making optional cash
payments. For the years ended March 31, 2000 and 1999, the
Company received $23,078 and $115,104 from the DRIP, respectively.
There were 8,389 and 36,052 new shares issued, respectively.
On December 15, 1999, the Company paid $75,710 as a dividend of
$.05 per share to shareholders of record November 15, 1999.
NOTE 8 - INCOME TAXES
For the years ended March 31, 2000, 1999 and 1998, total income
tax expense amounted to $-0-, $-0- and $34,239, respectively. For
the year ended March 31, 2000, the Company had a net operating loss
carryforward of approximately $140,000 to offset future taxable income.
-27-
<PAGE>
The following is a reconciliation of income tax expense at the
statutory rate to income tax expense at the Company's effective rate
for the year ended March 31, 1998:
1998
Computed tax at the expected
statutory rate $15,470
Surtax Exemption (8,645)
Deferred income/expense 2,255
State income taxes-net of
federal tax benefits 23,205
Other 1,954
______
Income tax expense $34,239
======
There were no deferred tax assets or liabilities recognized as of
March 31, 2000, 1999 and 1998.
NOTE 9 - PAYMENTS TO AFFILIATED PERSONS AND RELATED PARTY TRANSACTIONS
Payments to Affiliated Persons
Total payments to all officers, directors and affiliated persons
during the fiscal years ended March 31, 2000, 1999 and 1998 amounted to
$98,800, $104,850 and $110,200, respectively. Eugene W. Landy, President
of the Company, received $53,200 in salary, management and director fees
during each of the years ended March 31, 2000, 1999 and 1998, respectively.
In addition, Mr. Landy received $-0-, $-0- and $5,000 in legal fees,
respectively.
Transactions with United Mobile Homes, Inc.
MHS has rental expenses to United Mobile Homes, Inc. (United).
United owns and operates manufactured home communities. Six Directors of
the Company are also Directors and shareholders of United. MHS pays United
market rent on sites where MHS has a home for sale. Total site rental
expense to United amounted to $161,377, $148,249 and $129,603,
respectively, for the years ended March 31, 2000, 1999 and 1998. MHS also
leases space from United to be used as sales lots, at market rates, at
most of United's communities. Total rental expense relating to these
sales lots amounted to $145,670, $139,200 and $102,300 for the years
ended March 31, 2000, 1999 and 1998, respectively.
-28-
<PAGE>
During fiscal 2000, 1999 and 1998, MHS sold to United 21, 15 and 4
homes, respectively, for a total sales price of $437,137, $370,908 and
$90,532, respectively, at MHS's cost. These sales represented 9%, 7% and
2%, respectively, of total sales made by MHS. These manufactured homes
were available through MHS, but could have been acquired by United
from a third party at approximately the same price.
During the years ended March 31, 2000, 1999 and 1998, MHS acquired
certain inventory from United. These purchases amounted to $64,984,
$155,400 and $133,791, representing 2%, 3% and 4%, respectively, of total
purchases made by MHS during fiscal 2000, 1999 and 1998. This inventory
was available through United, but could have been acquired from a third-
party at approximately the same cost.
NOTE 10 - GROUP CONCENTRATIONS OF CREDIT RISK
The Company sells and finances manufactured homes located throughout
the Northeast region of the United States. The loan portfolio is
diversified. Generally, loans are collateralized by the manufactured homes.
At March 31, 2000 and 1999, all loans were secured.
NOTE 11 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company is required to disclose certain information about fair
values of financial instruments, as defined in Statement of Financial
Accounting Standards No. 107, "Disclosures About Fair Value of Financial
Instruments".
Limitations
Estimates of fair value are made at a specific point in time based
upon where available, relevant market prices and information about the
financial instrument. Such estimates do not include any premium or discount
that could result from offering for sale at one time the Company's
entire holdings of a particular financial instrument. For a portion of
the Company's financial instruments, no quoted market value exists.
Therefore, estimates of fair value are necessarily based on a number of
significant assumptions (many of which involve events outside the control of
management). Such assumptions include assessments of current economic
conditions, perceived risks associated with these financial instruments
and their counterparties, future expected loss experience and other factors.
Given the uncertainties surrounding these assumptions, the reported fair
values represent estimates only, and, therefore, cannot be compared to
the historical accounting model. Use of different assumptions or
methodologies is likely to result in significantly different fair value
estimates.
The fair value of cash and cash equivalents and loans receivable
approximates their current carrying amounts since all such items are
short-term in nature. The fair value of securities available for sale is
based upon quoted market values (See Note 4). The fair value of loans
payable approximates their current carrying amounts since such amounts
payable are at a current market rate of interest.
-29-
<PAGE>
NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the years ended March 31, 2000, 1999 and 1998 for
interest and taxes are as follows:
3/31/00 3/31/99 3/31/98
Interest $152,509 $130,706 $81,289
Taxes 5,643 17,800 36,591
During the years ended March 31, 2000, 1999 and 1998 the Company
had dividend reinvestments of $21,568, $21,091 and $13,979 respectively,
which required no cash transfers.
During the year ended March 31, 2000, 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 Building, Improvements and Equipment.
-30-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
BY: /s/ Eugene W. Landy
EUGENE W. LANDY
President
Dated: June 22, 2000
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been duly signed below by the following persons
on behalf of the registrant and in the capacities and on the date
indicated.
Title Date
/s/ Boniface DeBlasio Chairman of the Board
BONIFACE DEBLASIO and Director June 22, 2000
/s/ Eugene W. Landy
EUGENE W. LANDY President and Director June 22, 2000
/s/ Ernest V. Bencivenga Secretary/Treasurer and June 22, 2000
ERNEST V. BENCIVENGA Director
/s/ Anna T. Chew
ANNA T. CHEW Controller and Director June 22, 2000
/s/ Charles P. Kaempffer
CHARLES P. KAEMPFFER Director June 22, 2000
/s/ Samuel A. Landy
SAMUEL A. LANDY Director June 22, 2000
/s/ Robert G. Sampson
ROBERT G. SAMPSON Director June 22, 2000
-31-
