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, 1996
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, 1996 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 re-
quired 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 ac-
countant. Yes ___ No X
The number of shares or other units outstanding of each of the
issuer's classes of securities as of June 30, 1996 was
3,697,025.
Page 1
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1996
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
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<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
BALANCE SHEETS
AS OF JUNE 30, 1996 AND SEPTEMBER 30, 1995
6/30/96 9/30/95
<S> <C> <C>
ASSETS
Real Estate Investments:
Land $ 4,929,924 $ 4,545,324
Buildings, Improvements and
Equipment, Net of Accumulated
Depreciation of $4,230,901
and $3,657,061, respectively 25,558,120 23,966,469
Mortgage Loans Receivable 268,511 293,997
___________ ___________
Total Real Estate Investments 30,756,555 28,805,790
Cash and Cash Equivalents 152,115 144,019
Equity Securities Available for Sale at
Fair Value(Cost $358,806 and
$214,298 respectively) 375,476 273,038
Interest and Other Receivables 551,196 581,247
Prepaid Expenses 113,974 114,815
Lease Costs - Net of Accumulated
Amortization 31,672 59,742
Other Assets 273,866 311,209
___________ ___________
TOTAL ASSETS $32,254,854 $30,289,860
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans and Mortgage Notes
Payable $15,963,147 $15,463,561
Deferred Gain - Installment Sale 190,238 208,238
Other Liabilities 522,292 370,194
___________ ___________
Total Liabilities 16,675,677 16,041,993
___________ ___________
Shareholders' Equity:
Common Stock-Class A-$.01 Par Value,
8,000,000 Shares Authorized,
3,697,025 and 3,392,045 Shares
Issued and Outstanding, respectively 36,970 33,920
Common Stock-Class B-$.01 Par Value,
100,000 Shares Authorized, No shares
Issued or Outstanding -0- -0-
Additional Paid-in Capital 15,888,051 14,155,207
Unrealized Holding Gain on
Equity Securities Available
for Sale 16,670 58,740
Undistributed Income (362,514) -0-
___________ ___________
Total Shareholders' Equity 15,579,177 14,247,867
___________ ___________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $32,254,854 $30,289,860
=========== ===========
Unaudited
See Accompanying Notes to Financial Statements
Page 3
</TABLE>
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<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1996 AND 1995
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
6/30/96 6/30/96 6/30/96 6/30/96
<S> <C> <C> <C> <C>
INCOME:
Rental and Occupancy
Charges $1,119,184 $3,298,288 $1,021,527 $3,128,960
Interest and Other Income 28,998 110,917 18,410 54,604
__________ __________ __________ __________
TOTAL INCOME 1,148,182 3,409,205 1,039,937 3,183,564
__________ __________ __________ __________
EXPENSES:
Interest Expense 315,299 931,259 342,398 1,043,311
Real Estate Taxes 51,360 210,057 54,831 141,713
Operating Expenses 89,114 287,982 94,311 260,192
General and Administrative
Expenses 164,305 442,829 151,518 415,195
Depreciation 196,147 588,806 203,715 567,308
_________ __________ __________ __________
TOTAL EXPENSES 816,225 2,460,933 846,773 2,427,719
_________ __________ __________ __________
INCOME BEFORE GAINS 331,957 948,272 193,164 755,845
Gain on Sales of Assets 6,000 18,000 4,800 14,400
_________ __________ __________ __________
NET INCOME $ 337,957 $ 966,272 $ 197,964 $ 770,245
========= ========== ========== ==========
PER SHARE INFORMATION
Weighted Average Shares
Outstanding 3,635,491 3,535,794 3,252,010 3,169,860
========= ========== ========= ==========
Net Income Per Share $ 0.09 $ 0.27 $ 0.06 $ 0.24
========= ========== ========= ==========
Unaudited
See Notes to Financial Statements
Page 4
</TABLE>
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<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 966,272 $ 770,245
Noncash Items Included in Net Income:
Depreciation 588,806 567,308
Amortization 83,799 107,445
Gain on Sale of Investments (84,933) (14,400)
Changes In:
Interest and Other Receivables 30,051 (90,515)
Prepaid Expenses 841 (10,307)
Other Assets and Lease Costs (18,386) 527,741
Other Liabilities 152,098 57,817
__________ ___________
NET CASH PROVIDED FROM OPERATING
ACTIVITIES 1,718,548 1,915,334
__________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on Installment Sales 25,486 46,651
Collections on Loans -0- -0-
Additions to Land, Buildings,
Improvements and Equipment (2,565,057) (3,664,389)
Purchase of Equity Securities
Available for Sale (292,225) -0-
Proceeds from Sale of Equity
Securities Available for Sale 214,650 -0-
__________ ___________
NET CASH PROVIDED OR (USED BY)
INVESTING ACTIVITIES (2,617,146) (3,617,738)
__________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Loans and Mortgages 2,500,000 2,500,000
Principal Payments of Loans
and Mortgages (2,000,414) (2,168,247)
Proceeds from Issuance of Class A
Common Stock 1,158,866 1,217,655
Dividends Paid (751,758) (1,187,764)
___________ ___________
NET CASH PROVIDED FROM (USED BY)
FINANCING ACTIVITIES 906,694 361,644
___________ ___________
Net Increase (Decrease)in Cash
and Cash Equivalents 8,096 (1,340,760)
Cash and Cash Equivalents at Beginning
of Period 144,019 1,454,240
___________ ___________
Cash and Cash Equivalents at End
of Period $ 152,115 $ 113,480
=========== ===========
Unaudited
See Accompanying Notes to Financial Statements
Page 5
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICY
The interim financial statements furnished herein reflect all adjust-
ments which were, in the opinion of management, necessary to present
fairly the financial position, results of operations and cash flows at
June 30, 1996 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, 1995 have
been omitted. Certain amounts in the financial statements for the prior
period have been reclassified to conform to the statement presentation
for the current period.
NOTE 2 - EQUITY SECURITIES AVAILABLE FOR SALE
During the nine month period ended June 30, 1996, a security held by
the Company was liquidated. The Company received $214,650 as a
liquidating dividend, resulting in a realized gain of $66,933. This
gain has been included in Other Income in the financial statements. The
Company also purchased additional securities totaling $292,225 during
this period.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On June 15, 1996, the Company paid $455,635 as a dividend of $.125 per
share to shareholders of record May 15, 1996. The total dividends paid
for the nine months ended June 30, 1996 amounted to $1,328,786.
For the nine months ended June 30, 1996, the Company received
$1,735,894 from the Dividend Reinvestment and Stock Purchase Plan
(DRIP). There were 304,980 new shares issued resulting in 3,697,025
shares outstanding.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the nine months ended June 30, 1996 and 1995 for in-
terest is $931,259 and $1,043,311, respectively.
During the nine months ended June 30, 1996 and 1995, the Company had
dividend reinvestments of $577,028 and $571,725, respectively, which
required no cash transfers.
Page 6
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Contd.)
NOTE 5 - ACQUISITIONS
On May 10, 1996, the Company purchased a 67,926 square foot warehouse
facility in Virginia Beach, Virginia for approximately $2,500,000.
This warehouse facility is 100% net-leased to the Raytheon Service
Company (Raytheon). The Company entered into a $1,500,000 mortgage
loan with Life Savings Bank at a rate of 8.5% (subject to an adjustment
after five years) which matures on June 1, 2021. The Company used
$1,000,000 of its line of credit with United Jersey Bank, of which
$500,000 was subsequently repaid.
Page 7
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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 operating activities of
$1,718,548 for the current nine months as compared to $1,915,334 for
the prior period. The Company raised $1,735,894 from the issuance of
shares of common stock through a Dividend Reinvestment and Stock Pur-
chase Plan (DRIP). Current cash dividends paid amounted to $1,328,786.
Equity Securities Available for Sale increased by $102,438 primarily as
the result of the purchase of stock at a cost of $292,225, offset by
the liquidation of one of the Company's security holdings.
Loans and Mortgage notes payable increased by $499,586 during the
nine months ended June 30, 1996. This increase was a result of new
loans for the purchase of the Raytheon Building (See Note 5), offset by
principal repayments.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Rental and occupany charges increased for the quarter ended June 30,
1996 to $1,119,184 as compared to $1,021,527 for the quarter ended June
30, 1995. Rental and occupancy charges increased for the nine months
ended June 30, 1996 to $3,298,288 as compared to $3,128,960 for the
nine months ended June 30, 1995. This is due primarily to
acquisitions made during fiscal 1995 and 1996.
Interest and other income increased by $10,588 for the three months
ended June 30, 1996 as compared to the three months ended June 30,
1995. Interest and other income increased by $56,313 for the nine
months ended June 30, 1996 as compared to the nine months ended June
30, 1995. This is primarily as a result of the gain on liquidation of
equity securities.
Interest expense decreased by $27,099 for the three months ended June
30, 1996 as compared to the three months ended June 30, 1995. Interest
expense decreased by $112,052 from $1,043,311 for the nine months ended
June 30, 1995 to $931,259 for the nine months ended June 30, 1996.
This was the result of principal repayments offset by new loans.
Operating expenses remained relatively stable for the three months
ended June 30, 1996 as compared to the three months ended June 30,
1995. Operating expenses increased from $260,192 for the nine months
ended June 30, 1995 to $287,982 for the nine months ended June 30,
1996. This is primarily as a result of additional costs relating to
this year's harsh winter.
Depreciation expense increased by $21,498 for the nine month period
ended June 30, 1996, as compared to the nine month period ended June
30, 1995 due to the real estate acquisition in October, 1994.
Page 8
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General and administrative expenses increased by $12,787 and $27,634
for the three and nine month periods ended June 30, 1996, respectively,
as compared to the three and nine month periods ended June 30, 1995,
respectively, due primarily to an increase in professional fees.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities decreased during the nine
months ended June 30, 1996 to $1,718,548 as compared to $1,915,334
generated during the nine months ended June 30, 1995. This was
primarily the result of the decrease in Other Assets during the nine
months ended June 30, 1995. Other Assets at September 30, 1994
included deposits of $594,693 for the acquisition of a warehouse
facility. The acquisition was completed in October, 1994. The Company
has been raising capital through the DRIP and investing in net leased
industrial properties.
The Company owns fourteen properties of which ten carried mortgage
loans totaling $15,963,147 at June 30, 1996. 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
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<PAGE>
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 April 25, 1996
to elect a Board of Directors for the ensuing year, and to
approve the selection of Independent Auditors, 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 - None
(b) REPORTS ON FORM 8-K - None
Page 10
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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 6, 1996 By: /s/Eugene W. Landy
EUGENE W. LANDY,
President
Date: August 6,1996 By: /s/Anna T. Chew
ANNA T. CHEW
Controller
Page 11
<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 NINE MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 152,115
<SECURITIES> 375,476
<RECEIVABLES> 819,707
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,461,272
<PP&E> 34,718,945
<DEPRECIATION> 4,230,901
<TOTAL-ASSETS> 32,254,854
<CURRENT-LIABILITIES> 522,292
<BONDS> 15,963,147
0
0
<COMMON> 36,970
<OTHER-SE> 15,542,207
<TOTAL-LIABILITY-AND-EQUITY> 32,254,854
<SALES> 0
<TOTAL-REVENUES> 3,427,205
<CGS> 0
<TOTAL-COSTS> 498,039
<OTHER-EXPENSES> 1,031,635
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 931,259
<INCOME-PRETAX> 966,272
<INCOME-TAX> 0
<INCOME-CONTINUING> 966,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 966,272
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
