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 December 31, 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.
December 31, 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 February 11, 2000
was 1,522,098 shares.
<PAGE>
MONMOUTH CAPITAL CORPORATION
FOR THE NINE MONTHS ENDED DECEMBER 31, 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 7-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
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 DECEMBER 31, 1999 AND MARCH 31, 1999
December 31, March 31,
1999 1999
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 62,152 $ 102,599
Accounts Receivable 115,922 146,070
Securities Available for Sale,
at Fair Value 986,632 356,789
Inventory 2,436,953 3,142,702
Prepaid Expenses and Other
Current Assets 35,440 45,977
Current Portion of Loans
Receivable 81,814 122,296
_________ _________
Total Current Assets 3,718,913 3,916,433
_________ _________
Long-Term Assets:
Real Estate Investments:
Land 183,065 183,065
Building, Improvements and
Equipment net of accumulated
depreciation of $197,918
and $156,790, respectively 1,232,631 985,087
_________ _________
Total Real Estate Investments 1,415,696 1,168,152
_________ _________
Loans Receivable:
Performing 2,468,084 2,565,949
Non-Performing -0- 175,231
Allowance for Losses -0- (65,000)
_________ _________
Total Loans Receivable 2,468,084 2,676,180
_________ _________
Total Long-Term Assets 3,883,780 3,844,332
_________ _________
TOTAL ASSETS $ 7,602,693 $ 7,760,765
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF DECEMBER 31, 1999 AND MARCH 31, 1999
December 31, March 31,
1999 1999
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued
Expenses $ 126,543 $ 139,956
Loans Payable 585,856 -0-
Inventory Financing 1,565,590 2,193,343
_________ _________
Total Current Liabilities 2,277,989 2,333,299
Other Liabilities 109,862 79,243
_________ _________
Total Liabilities 2,387,851 2,412,542
_________ _________
Shareholders' Equity:
Common Stock (par value $1.00
per share; authorized
10,000,000 shares; issued
and outstanding 1,521,916 and
1,513,891 shares, respectively 1,521,916 1,513,891
Additional Paid-In Capital 3,318,701 3,304,657
Unrealized Investment Gain (Loss) (20,562) 3,083
Retained Earnings 394,787 526,592
_________ _________
Total Shareholders' Equity 5,214,842 5,348,223
_________ _________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,602,693 $ 7,760,765
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-4-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE AND NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
Three Months Nine Months
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Income:
Sales of
Manufactured Homes $ 1,517,996 $ 1,503,174 $ 3,961,858 $ 4,400,640
Interest Income 83,678 92,003 254,739 251,964
Rental Income 47,926 49,745 134,945 114,948
Other Income 23,577 49,121 87,569 81,847
_________ _________ _________ _________
Total Income 1,673,177 1,694,043 4,439,111 4,849,399
_________ _________ _________ _________
Expenses:
Cost of Sales of
Manufactured Homes 1,297,324 1,245,662 3,258,737 3,575,214
Selling Expense 131,332 114,454 338,754 372,924
Salaries and Employee
Benefits 85,233 92,680 227,862 243,191
Professional Fees 25,101 48,935 77,165 121,104
Interest Expense 24,721 28,456 105,843 94,238
Other Expenses 149,745 150,818 486,845 488,851
_________ _________ _________ _________
Total Expenses 1,713,456 1,681,005 4,495,206 4,895,522
_________ _________ _________ _________
NET INCOME (LOSS) $ (40,279) $ 13,038 $ (56,095) $ (46,123)
========= ========= ========= =========
NET INCOME (LOSS)
PER SHARE -
BASIC AND DILUTED $ (0.03) $ 0.01 $ (0.04) $ (0.03)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,516,034 1,497,571 1,514,821 1,491,578
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (56,095) $ (46,123)
Depreciation and Amortization 41,128 31,863
Changes In Operating Assets
and Liabilities:
Accounts Receivable 30,148 (32,085)
Interest Receivable -0- (7,119)
Inventory 705,749 (576,837)
Prepaid Expenses and Other
Current Assets 10,537 28,562
Accounts Payable and Accrued
Expenses (13,413) (58,334)
Other Liabilities 30,619 (8,325)
_________ _________
Net Cash Provided (Used) by
Operating Activities 748,673 (668,398)
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Loans Made (150,965) (1,201,809)
Collections and Other Decreases in
Loans Receivable 289,312 440,438
Purchase of Securities Available
for Sale (699,533) -0-
Sales and Other Decreases in Securities
Available for Sale 46,045 46,483
Additions to Building,
Improvements and Equipment (178,441) (14,917)
_________ _________
Net Cash Used by Investing Activities (693,582) (729,805)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Loans
Payable and Inventory Financing (41,897) 1,005,830
Dividends Paid (54,142) (53,574)
Proceeds from the Issuance of
Class A Common Stock 501 94,013
_________ _________
Net Cash (Used) Provided by
Financing Activities (95,538) 1,046,269
_________ _________
Net Increase (Decrease) in Cash (40,447) (351,934)
Cash at Beginning of Period 102,599 547,020
_________ _________
Cash at End of Period $ 62,152 $ 195,086
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
-6-
</TABLE>
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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
December 31, 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 - SECURITIES AVAILABLE FOR SALE AND LOANS PAYABLE
During the nine months ended December 31, 1999, the
Company purchased $699,533 of securities on margin. The
margin loan is at 7% and due on demand.
NOTE 3 - LOANS RECEIVABLE
In conjunction with the sale of manufactured homes,
loans totaling $150,965 were made for the nine months
ended December 31, 1999. Loans are primarily at 10%-15%
for fifteen years and secured by the homes.
Collections and other decreases of loans receivable
totaled $289,312 for the nine months ended December 31,
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. In January, 2000,
this lease was terminated. The Company is currently
trying to release this property.
NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the nine months ended December 31, 1999, the Company
received $23,069 from the Dividend Reinvestment and Stock
Purchase Plan (DRIP). There were 8,025 new shares issued,
resulting in 1,521,916 shares outstanding.
-7-
<PAGE>
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and taxes for the nine months ended
December 31, 1999 and 1998 were as follows:
1999 1998
Interest $105,843 $121,104
Taxes 17,600 16,500
During the nine months ended December 31, 1999 and 1998,
the Company had dividend reinvestments of $21,568 and
$21,091, respectively, which required no cash transfers.
During the nine months ended December 31, 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 Building, Improvements and
Equipment (See Note 3).
-8-
<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 nine
months ended December 31, 1999 amounted to $748,673 as
compared to $668,398 net cash used by operating activities
for the nine months ended December 31, 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 December 31, 1999.
Inventory decreased by $705,749 for the nine months ended
December 31, 1999 as compared to an increase in inventory
of $576,837 for the nine months ended December 31, 1998.
Loans Receivable decreased by $248,578 during the nine
months ended December 31, 1999. This was the result of
collections and other decreases of $289,312 offset by new
loans made of $150,965. 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 $585,856 during the nine months
ended December 31, 1999. This was the result of the
purchases of securities available for sale on margin.
Inventory financing decreased by $627,753 during the nine
months ended December 31, 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 $1,517,996 and $1,503,174
for the three months ended December 31, 1999 and 1998,
respectively and $3,961,858 and $4,400,640 for the nine
months ended December 31, 1999 and 1998, respectively.
Interest income remained relatively stable for the three
and nine months ended December 31, 1999 as compared to the
three and nine months ended December 31, 1998.
Rental income, including tenant reimbursements, remained
relatively stable for the three months ended December 31,
1999 as compared to the three months ended December 31,
1998. Rental income increased from $114,948 for the nine
months ended December 31, 1998 to $134,945 for the nine
months ended December 31, 1999. This was a result of an
increase in reimbursable expenses.
-9-
<PAGE>
MONMOUTH CAPITAL CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (CONT'D)
Cost of sales of manufactured homes and selling expense
increased from $1,245,662 and $114,454, respectively, for
the three months ended December 31, 1998 to $1,297,324 and
$131,332, respectively for the three months ended December
31, 1999. This was primarily due to an increase in sales.
The Company has also experienced a small decrease in the
gross margin. The Company has reduced sales prices in
certain locations to reduce inventory. The decrease in
Cost of sales of manufactured homes for the nine months
ended December 31, 1999 as compared to the nine months
ended December 31, 1998 is attributable to the decrease in
sales of manufactured homes made by MHS.
Salaries and employee benefits decreased from $92,680 and
$243,191 for the three and nine months ended December 31,
1998, respectively to $85,233 and $227,862 for the three
and nine months ended December 31, 1999, respectively.
This was due to a decrease in personnel in the second
quarter of fiscal 2000.
Professional fees decreased from $48,935 and $121,104 for
the three and nine months ended December 31, 1998,
respectively to $25,101 and $77,165 for the three and nine
months ended December 31, 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 nine months ended December
31, 1998.
Interest expense remained relatively stable for the three
months ended December 31, 1999. Interest expense
increased from $94,238 for the nine months ended December
31, 1998 to $105,843 for the nine months ended December
31, 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 nine months ended December 31, 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 December 31, 1999, $1,565,590
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.
-10-
<PAGE>
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED DECEMBER 31, 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 - None
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: February 11, 2000 By: /s/Eugene W. Landy
EUGENE W. LANDY
President
Date: February 11, 2000 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 DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 62,152
<SECURITIES> 986,632
<RECEIVABLES> 2,665,820
<ALLOWANCES> 0
<INVENTORY> 2,436,953
<CURRENT-ASSETS> 3,718,913
<PP&E> 1,613,614
<DEPRECIATION> 197,918
<TOTAL-ASSETS> 7,602,693
<CURRENT-LIABILITIES> 2,277,989
<BONDS> 0
0
0
<COMMON> 1,521,916
<OTHER-SE> 3,692,926
<TOTAL-LIABILITY-AND-EQUITY> 7,602,693
<SALES> 3,961,858
<TOTAL-REVENUES> 4,439,111
<CGS> 3,258,737
<TOTAL-COSTS> 643,781
<OTHER-EXPENSES> 486,845
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 105,843
<INCOME-PRETAX> (56,095)
<INCOME-TAX> 0
<INCOME-CONTINUING> (56,095)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (56,095)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
