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, 1995
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
June 30, 1995 No. 2-29442
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-1897375
(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:(908)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___
Indicate by check mark whether the financial statements required
by instruction H have been reviewed by an independent public
accountant. Yes ___ No X
Indicate the number of shares or other units outstanding of each
of the issuer's classes of securities. 3,304,388
Page 1
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1995
C O N T E N T S
Page No.
Part I - Financial Information
Item 1 - Financial Statements (Unaudited):
Balance Sheets 3
Statements of Income 4
Statements of Cash Flows 5
Notes to Financial Statements 6-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-9
Part II- Other Information 10
Signatures 11
Page 2
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
BALANCE SHEETS
AS OF JUNE 30, 1995 AND SEPTEMBER 30, 1994
<S> <C> <C>
6/30/95 9/30/94
ASSETS
Real Estate Investments:
Land $ 4,545,324 $ 4,281,324
Buildings, Improvements and
Equipment, Net of Accumulated
Depreciation of $3,440,665
and $2,873,357, respectively 24,164,156 21,331,075
Mortgage Loans Receivable 302,078 348,729
__________ __________
Total Real Estate Investments 29,011,558 25,961,128
Cash and Cash Equivalents 113,480 1,454,240
Equity Securities Available for Sale at
Fair Value(Cost $214,298) 255,150 214,298
Interest and Other Receivables 528,875 438,360
Prepaid Expenses 124,913 114,606
Lease Costs - Net of Accumulated
Amortization 81,636 90,634
Other Assets 334,674 960,862
__________ __________
TOTAL ASSETS $30,450,286 $29,234,128
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage Notes Payable $15,790,063 $15,458,310
Deferred Gain - Installment Sale 232,604 247,004
Other Liabilities 429,292 371,475
__________ __________
Total Liabilities 16,451,959 16,076,789
__________ __________
Shareholders' Equity:
Common Stock-Class A-$.01 Par Value,
8,000,000 Shares Authorized, 3,304,388
and 3,066,002 Shares Issued
and Outstanding, respectively 33,044 30,660
Common Stock-Class B-$.01 Par Value,
100,000 Shares Authorized, No shares
Issued or Outstanding -0- -0-
Additional Paid-in Capital 14,012,055 12,796,784
Unrealized Investment Gain 40,852 -0-
Undistributed Income (87,624) 329,895
__________ __________
Total Shareholders' Equity 13,998,327 13,157,339
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $30,450,286 $29,234,128
========== ==========
Unaudited
See Accompanying Notes to Financial Statements
Page 3
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
INCOME STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1995 AND 1994
<S> <C> <C> <C> <C>
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
6/30/95 6/30/95 6/30/94 6/30/94
INCOME:
Rental Income/Tenant
Reimbursements $1,021,527 $3,128,960 $ 987,997 $2,693,981
Interest and Other Income 18,410 54,604 24,634 173,592
_________ _________ _________ _________
TOTAL INCOME 1,039,937 3,183,564 1,012,631 2,867,573
_________ _________ _________ _________
EXPENSES:
Interest Expense 342,398 1,043,311 304,416 812,591
Real Estate Taxes 54,831 141,713 41,715 126,773
Operating Expenses 94,311 260,192 138,714 374,285
General and Administrative
Expenses 151,518 415,195 120,672 350,446
Depreciation 203,715 567,308 172,644 473,484
_________ _________ _________ _________
TOTAL EXPENSES 846,773 2,427,719 778,161 2,137,579
_________ _________ _________ _________
INCOME BEFORE GAINS 193,164 755,845 234,470 729,994
_________ _________ _________ _________
Gain on Sales of Assets 4,800 14,400 3,900 11,700
_________ _________ _________ _________
NET INCOME $ 197,964 $ 770,245 $ 238,370 $ 741,694
========= ========= ========= =========
PER SHARE INFORMATION
Weighted Average Shares
Outstanding 3,252,010 3,169,860 2,928,581 2,835,269
========= ========= ========= =========
Net Income Per Share $ .06 $ .24 $ .08 $ .26
========= ========= ========= =========
Unaudited
See Notes to Financial Statements
Page 4
</TABLE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1995 AND 1994
<S> <C> <C>
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 770,245 $ 741,694
Noncash Items Included in Net Income:
Depreciation 567,308 473,484
Amortization 107,445 108,359
Gain on Sale of Investments (14,400) (11,700)
Changes In:
Interest and Other Receivables (90,515) (30,113)
Prepaid Expenses (10,307) 40,263
Other Assets 527,741 (11,835)
Other Liabilities 57,817 65,619
__________ __________
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,915,334 1,375,771
__________ __________
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on Installment Sales 46,651 19,199
Collections on Loans -0- 3,571,321
Additions to Land, Buildings,
Improvements and Equipment (3,664,389) (10,129,034)
__________ __________
NET CASH USED BY INVESTING ACTIVITIES (3,617,738) (6,538,514)
__________ __________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Mortgages 2,500,000 13,135,014
Principal Payments of Mortgages (2,168,247) (9,660,265)
Proceeds from Issuance of Class A
Common Stock 1,217,655 1,918,929
Dividends Paid (1,187,764) (1,056,730)
__________ __________
NET CASH PROVIDED BY FINANCING ACTIVITIES 361,644 4,336,948
__________ __________
Net Decrease in Cash and Cash Equivalents (1,340,760) (825,795)
Cash and Cash Equivalents at
Beginning of Period 1,454,240 1,066,006
__________ __________
Cash and Cash Equivalents at
End of Period $ 113,480 $ 240,211
========== ==========
Unaudited
See Accompanying Notes to Financial Statements
Page 5
</TABLE>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICY
The interim 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, 1995
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 Real Estate Investment Corporation (the Company) for the year
ended September 30, 1994 have been omitted.
NOTE 2 - ACQUISITIONS
On October 13, 1994, the Company purchased a 102,135 square foot warehouse
facility in O'Fallon, Missouri from Commercial Realty Investors of
O'Fallon, L.P., an unrelated entity. This warehouse facility is 100% net
leased to PPG Industries, Ltd. (PPG). The purchase price was $3,525,000.
The Company obtained a $2,500,000 mortgage on this property with Midwestern
United Life Insurance Company (Midwestern), and paid $1,000,000 in cash
which was derived from its line of credit with NatWest NJ Bank.
NOTE 3 - INVESTMENTS
During fiscal 1995, the Company adopted Statement of Financial
Accounting Standard No. 115. Under this statement the Company has
classified its investments as "Available-for-sale" which is reported at
fair value with unrealized gains and losses reported as a separate
component of shareholders' equity.
NOTE 4 - MORTGAGES PAYABLE
On October 13, 1994, the Company obtained a $2,500,000 mortgage with
Midwestern for the acquisition of the O'Fallon, Missouri warehouse
facility. This mortgage payable is at an interest rate of 8.5% (subject
to an adjustment after five years, at Midwestern's option) and is due
on December 1, 2007. Midwestern has the right to accelerate the
maturity to December 1, 2005.
NOTE 5 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On June 15, 1995, the Company paid $405,354 as a dividend of $.125 per
share to shareholders of record May 15, 1995. The total dividends paid
for the nine months ended June 30, 1995 amounted to $1,187,764.
For the nine months ended June 30, 1995, the Company received
$1,217,655 from the Dividend Reinvestment and Stock Purchase Plan
(DRIP). There were 238,386 new shares issued resulting in 3,304,388
shares outstanding.
Page 6
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the nine months ended June 30, 1995 and 1994 for
interest and taxes are as follows:
6/30/95 6/30/94
Interest $1,043,311 $ 812,591
Taxes 46,472 25,138
Page 7
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company generated net cash provided from operations of $1,915,334
for the current nine months as compared to $1,375,771 for the prior
period. The Company raised $1,217,655 from the issuance of shares of
common stock through a Dividend Reinvestment and Stock Purchase Plan
(DRIP). Current cash dividends paid amounted to $1,187,764.
Cash decreased by $1,340,760 primarily as a result ofthe recent
acquisition of the industrial warehouse facility in O'Fallon, Missouri.
Land, Buildings, Improvements and Equipment increased by $3,664,389 as
a result of the acquisition of the warehouse facility in O'Fallon, Missouri.
Other Assets, which included Deposits of $594,693 at September 30, 1994,
decreased by $626,188 primarily due to the completion of the acquisition of
the warehouse facility in O'Fallon, Missouri.
Mortgage notes payable increased by a net of $331,753 during the nine
month period ended June 30. 1995. This increase resulted from
$2,500,000 of additional mortgage borrowings for the above mentioned
acquisition offset by repayments of $2,168,247.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Rental income and tenant reimbursements increased for the nine month
period ended June 30, 1995 to $3,128,960 as compared to $2,693,981 for
the prior period. Rental income and tenant reimbursements increased for
the three months ended June 30, 1995 to $1,021,527 as compared to
$987,997 for the prior period. This is due primarily to acquisitions
made during fiscal 1994 and 1995.
Interest and other income decreased by $6,224 and $118,988 for the
three and nine months respectively ended June 30, 1995 as compared to
the three and nine months ended June 30, 1994. This is primarily as a
result of principal repayments on mortgage loans receivable. The
Company has replaced mortgage investments with equity investments in
net leased industrial properties.
Interest expense increased by $37,982 for the three months ended
June 30, 1995 as compared to the three months ended June 30, 1994. Interest
expense increased by $230,720 from $812,591 for the nine months ended
June 30, 1994 to $1,043,311 for the nine months ended June 30, 1995.
These increases are primarily the result of new borrowings for
acquisitions.
Page 8
Operating expenses decreased by $44,403 for the three months ended
June 30, 1995 as compared to the three months ended June 30, 1994.
Operating expenses decreased from $374,285 for the nine months ended
June 30, 1994 to $260,192 for the nine months ended June 30, 1995.
This is primarily as a result of a reduction in professional fees.
Depreciation expense increased by $31,071 and $93,824 for the three
and nine months respectively ended June 30, 1995 as compared to the
three and nine months ended June 30, 1994 due to new real estate
acquisitions.
General and administrative expenses increased by $30,846 and $64,749
for the three and nine months respectively ended June 30, 1995 as
compared to the three and nine months ended June 30, 1994 due primarily
to amortization of loan costs associated with the line of credit.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased during the nine
months ended June 30, 1995 to $1,915,334, as compared to $1,375,771
generated during the nine months ended June 30, 1994. The Company has
been raising capital through the DRIP and investing in net leased
industrial properties.
The Company owns thirteen properties of which nine carried mortgage
loans totaling $15,790,063 at June 30, 1995. The Company believes that
funds generated from operations, the Dividend Reinvestment and Stock
Purchase Plan, together with the ability to finance and refinance its
properties and net receivables will provide sufficient funds to
adequately meet its obligations over the next several years.
Page 9
PART II: OTHER INFORMATION
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
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 May 4, 1995
to elect a Board of Directors for the ensuing year, to
approve the selection of Independent Auditors, and to
approve an amendment to the Certificate of Incorporation
authorizing the Company to increase the number of authorized
Class A common stock, $.01 par value, from 4,000,000 shares
to 8,000,000 shares. 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
(a) EXHIBITS - Certificate of Amendment to the Certificate
of Incorporation of Monmouth Real Estate Investment
Corporation.
(b) REPORTS ON FORM 8-K - None
Page 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
Date: August 10, 1995 By: s/ Eugene W. Landy
EUGENE W. LANDY
President
Date: August 10, 1995 By: s/ Anna T. Chew
ANNA T. CHEW
Controller
Page 11
EXHIBIT
CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF MONMOUTH REAL ESTATE INVESTMENT CORPORATION
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Monmouth Real Estate Investment Corporation.
2. The Certificate of Incorporation of the Corporation is
hereby amended by striking out Article IV(a) thereof and by
substituting in lieu of said Article IV(a) the following new Article
IV(a):
"Eight Million (8,000,000) shares of Class A
Common Stock, with a par value of $0.01 for
each share of such stock. In the event of a
liquidation of the Corporation, Class A Common
Stock shall be entitled to all assets allocated
to holders of Common Stock. Class A Common Stock
shall be subject to redemption by the Corporation
in accordance with Article X of this Certificate."
3. The Amendment of the Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
Signed on May 9, 1995.
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
By s/Eugene W. Landy
EUGENE W. LANDY
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MONMOUTH REAL ESTATE INVESTMENT CORPORATION AS OF
AND FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 113,480
<SECURITIES> 255,150
<RECEIVABLES> 528,875
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,022,418
<PP&E> 32,150,145
<DEPRECIATION> 3,440,665
<TOTAL-ASSETS> 30,450,286
<CURRENT-LIABILITIES> 429,292
<BONDS> 15,790,063
<COMMON> 33,044
0
0
<OTHER-SE> 13,965,283
<TOTAL-LIABILITY-AND-EQUITY> 30,450,286
<SALES> 0
<TOTAL-REVENUES> 3,197,964
<CGS> 0
<TOTAL-COSTS> 401,905
<OTHER-EXPENSES> 982,503
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,043,311
<INCOME-PRETAX> 770,245
<INCOME-TAX> 0
<INCOME-CONTINUING> 770,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 770,245
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
