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, 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.
June 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 August 4, 2000
was 1,522,280 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE THREE MONTHS ENDED JUNE 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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<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000 AND MARCH 31, 2000
June 30, March 31,
2000 2000
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 10,078 $ 207,943
Accounts Receivable 63,361 112,574
Interest Receivable -0- 18,024
Securities Available for Sale,
at Fair Value 4,511,278 3,073,907
Inventory 2,887,900 2,750,941
Prepaid Expenses and Other
Current Assets 37,801 42,607
Current Portion of Loans Receivable 132,357 104,246
__________ __________
Total Current Assets 7,642,775 6,310,242
__________ __________
Long-Term Assets:
Real Estate Investments:
Land 11,065 11,065
Building, Improvements and Equipment
net of accumulated depreciation of
$102,402 and $99,268, respectively 409,164 346,923
__________ __________
Total Real Estate Investments 420,229 357,988
Loans Receivable 2,338,609 2,400,558
__________ __________
Total Long-Term Assets 2,758,838 2,758,546
__________ __________
TOTAL ASSETS $ 10,401,613 $ 9,068,788
========== ==========
</TBALE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF JUNE 30, 2000 AND MARCH 31, 2000
June 30, March 31,
2000 2000
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued $ 211,705 $ 460,012
Expenses
Loans Payable 2,424,354 1,388,693
Inventory Financing 2,166,421 1,875,811
__________ __________
Total Current Liabilities 4,802,480 3,724,516
Other Liabilities 73,799 70,393
__________ __________
Total Liabilities 4,876,279 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) 292,843 (32,829)
Retained Earnings 390,865 465,082
__________ __________
Total Shareholders' Equity 5,525,334 5,273,879
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 10,401,613 $ 9,068,788
========== ==========
</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, 2000 AND 1999
2000 1999
<S> <C> <C>
Income:
Sales of
Manufactured Homes $ 1,036,470 $ 1,245,736
Interest and Dividend Income 179,828 87,754
Rental Income -0- 42,324
Other Income 29,771 27,733
_________ _________
Total Income 1,246,069 1,403,547
_________ _________
Expenses:
Cost of Sales of
Manufactured Homes 921,307 956,255
Selling Expense 85,082 83,191
Salaries and Employee Benefits 66,733 76,521
Professional Fees 44,116 37,082
Interest Expense 76,486 43,360
Other Expenses 126,562 188,125
_________ _________
Total Expenses 1,320,286 1,384,534
_________ _________
Income (Loss) Before Income Taxes (74,217) 19,013
Income Taxes -0- (4,400)
_________ _________
NET INCOME (LOSS) $ (74,217) $ 14,613
========= =========
NET INCOME (LOSS) PER SHARE -
BASIC AND DILUTED $ (.05) $ (.01)
========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,522,280 1,513,982
========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (74,217) $ 14,613
Depreciation and Amortization 10,650 14,442
Changes In Operating Assets
and Liabilities:
Accounts Receivable 49,213 (15,473)
Interest Receivable 18,024 (8,314)
Inventory (136,959) (117)
Prepaid Expenses and
Other Current Assets 4,806 22,325
Accounts Payable and
Accrued Expenses (248,307) 1,254
Other Liabilities 3,406 20,375
Net Cash Provided (Used) by _________ _________
Operating Activities (373,384) 49,105
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (163,120) (273,929)
Collections and Other Decreases
in Loans Receivable 196,958 234,337
Purchase of Securities
Available for Sale (1,122,782) -0-
Sales and Other Decreases in
Securities Available for Sale 11,083 14,852
Additions to Building,
Improvements and Equipment (72,891) (104,575)
___________ _________
Net Cash Used by Investing Activities (1,150,752) (129,315)
___________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Loans
Payable and Inventory Financing 1,326,271 163,785
Proceeds from the Issuance of
Class A Common Stock -0- 501
_________ _________
Net Cash Provided by Financing Activities 1,326,271 164,286
_________ _________
Net Increase (Decrease) in Cash (197,865) 84,076
Cash at Beginning of Period 207,943 102,599
_________ _________
Cash at End of Period $ 10,078 $ 186,675
========= =========
</TABLE>
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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 June
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 three months ended June 30, 2000, the Company
purchased $1,122,782 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 $163,120 were made for the three months ended
June 30, 2000. Loans are primarily at 10%-15% for fifteen
years and secured by the homes.
Collections and other decreases of loans receivable
totaled $196,958 for the three months ended June 30, 2000.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the three months
ended June 30, 2000 and 1999 were as follows:
2000 1999
Interest $ 76,486 $ 43,360
Taxes 3,819 7,924
-7-
<PAGE>
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 used by operating activities for the three months
ended June 30, 2000 amounted to $373,384 as compared to
$49,105 net cash provided by operating activities for the
three months ended June 30, 1999. This increase in net
cash used by operating activities is primarily due to a
decrease in Accounts Payable and Accrued Expenses. There
was also 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, 2000. Inventory
increased by $136,959 for the three months ended June 30,
2000.
Securities available for sale increased by $1,437,371
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 decreased by $33,838 during the three
months ended June 30, 2000. This was the result of
collections and other decreases of $196,958 offset by new
loans made of $163,120.
Loans Payable and Inventory Financing increased by
$1,326,271 during the three months ended June 30, 2000.
This was primarily the result of the purchases of
securities available for sale on margin and purchases of
inventory.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income is comprised primarily of sales of manufactured
homes and interest and dividend income. Sales of
manufactured homes amounted to $1,036,470 and $1,245,736
for the three months ended June 30, 2000 and 1999,
respectively. This was primarily due to the closing of
certain unprofitable sales locations.
-8-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Interest and dividend income increased by $92,074 for the
three months ended June 30, 2000 as compared to the three
months ended June 30, 1999. This was primarily due to
purchases of securities available for sale.
Rental income decreased by $42,324 for the three months
ended June 30, 2000 as compared to the three months ended
June 30, 1999. This was a result of the sale of the
Bethlehem, Pennsylvania building in March 2000.
Cost of sales of manufactured homes expense decreased from
$956,255 for the three months ended June 30, 1999 to
$921,307 for the three months ended June 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.
Salaries and employee benefits and Professional fees
remained relatively stable for the three months ended June
30, 2000 as compared to the three months ended June 30,
1999.
Interest expense increased from $43,360 for the three
months ended June 30, 1999 to $76,486 for the three months
ended June 30, 2000. This was primarily the result of the
purchases of securities available for sale on margin.
Other expenses decreased by $61,563 for the three months
ended June 30, 2000 as compared to the three months ended
June 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 $4,500,000. The Company has a $2,500,000
line of credit to finance its inventory purchases. As of
June 30, 2000, $2,166,421 of the line was utilized. The
margin loan on the securities available for sale amounted
to $2,424,354 as of June 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-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED JUNE 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 - None
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K - None
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
MONMOUTH CAPITAL CORPORATION
Date: August 10, 2000 By: /s/ Eugene W. Landy
EUGENE W. LANDY
President
Date: August 10, 2000 By: /s/ Anna T. Chew
ANNA T. CHEW
Controller
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