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, 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
December 31, 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 December 31, 1996 was
3,918,254.
Page 1
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION
FOR THE QUARTER ENDED DECEMBER 31, 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
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
Part II- Other Information 9
Signatures 10
Page 2
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<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1996
12/31/96 9/30/96
<S> <C> <C>
ASSETS
Real Estate Investments:
Land $ 4,929,924 $ 4,929,924
Buildings, Improvements and
Equipment, Net of Accumulated
Depreciation of $4,714,629
and $4,494,322, respectively 25,110,092 25,294,699
Mortgage Loans Receivable 250,432 262,585
___________ ___________
Total Real Estate Investments 30,290,448 30,487,208
Cash and Cash Equivalents 1,332,575 244,394
Securities Available for Sale at
Fair Value 3,371,260 607,975
Interest and Other Receivables 571,301 552,091
Prepaid Expenses 61,134 123,669
Lease Costs - Net of Accumulated
Amortization 86,352 55,347
Other Assets 546,593 467,392
___________ ___________
TOTAL ASSETS $36,259,663 $32,538,076
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage Notes Payable $14,967,722 $15,216,610
Loans Payable 3,750,000 500,000
Deferred Gain - Installment Sale 179,989 185,989
Other Liabilities 615,415 526,095
___________ ___________
Total Liabilities 19,513,126 16,428,694
___________ ___________
Shareholders' Equity:
Common Stock-Class A-$.01 Par Value,
8,000,000 Shares Authorized,
3,918,254 and 3,800,924 Shares
Issued and Outstanding, respectively 39,183 38,009
Common Stock-Class B-$.01 Par Value,
100,000 Shares Authorized, No shares
Issued or Outstanding -0- -0-
Additional Paid-in Capital 16,710,011 16,044,359
Unrealized Holding Gain on
Securities Available for Sale 170,373 27,014
Undistributed Income (173,030) -0-
___________ ___________
Total Shareholders' Equity 16,746,537 16,109,382
___________ ___________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $36,259,663 $32,538,076
=========== ===========
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 MONTHS ENDED DECEMBER 31, 1996 AND 1995
1996 1995
<S> <C> <C>
INCOME:
Rental and Occupancy
Charges $1,250,158 $1,054,614
Interest and Other Income 47,773 77,145
__________ __________
TOTAL INCOME 1,297,931 1,131,759
__________ __________
EXPENSES:
Interest Expense 408,901 316,384
Real Estate Taxes 144,969 47,684
Operating Expenses 83,467 81,512
Office and General Expenses 135,244 138,265
Depreciation 220,307 196,329
__________ __________
TOTAL EXPENSES 992,888 780,174
__________ __________
INCOME BEFORE GAINS 305,043 351,585
Gains on Sale of Assets-
Investment Property 6,000 6,000
__________ __________
NET INCOME $ 311,043 $ 357,585
========== ==========
PER SHARE INFORMATION
Weighted Average Shares
Outstanding 3,856,890 3,443,273
========== ==========
Net Income Per Share $ 0.08 $ 0.10
========== ==========
Unaudited
See Notes to Financial Statements
Page 4
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<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
<S> <C> <C>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 311,043 $ 357,585
Noncash Items Included in Net Income:
Depreciation 220,307 196,329
Amortization 43,637 26,653
Gain on Sale of Investments (6,000) (72,933)
Changes In:
Interest and Other Receivables (19,210) 27,203
Prepaid Expenses 62,535 (18,653)
Other Assets and Lease Costs (126,343) 7,828
Other Liabilities 89,320 57,774
__________ ___________
NET CASH PROVIDED FROM OPERATING
ACTIVITIES 575,289 581,786
__________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on Installment Sales 12,153 8,285
Additions to Land, Buildings,
Improvements and Equipment (35,700) (4,724)
Purchase of Securities
Available for Sale (2,619,926) (37,754)
Proceeds from Sale of
Securities Available for Sale -0- 214,650
__________ ___________
NET CASH PROVIDED FROM (USED IN)
INVESTING ACTIVITIES (2,643,473) 180,457
__________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Loans 5,000,000 -0-
Principal Payments on Loans (1,750,000) -0-
Principal Payments of Mortgages (248,888) (729,943)
Financing Costs on Debt (27,500) -0-
Proceeds from Issuance of Class A
Common Stock 460,683 440,171
Dividends Paid (277,930) (242,070)
___________ ___________
NET CASH PROVIDED FROM (USED IN)
FINANCING ACTIVITIES 3,156,365 (531,842)
___________ ___________
Net Increase in Cash
and Cash Equivalents 1,088,181 230,401
Cash and Cash Equivalents at Beginning
of Period 244,394 144,019
___________ ___________
Cash and Cash Equivalents at End
of Period $ 1,332,575 $ 374,420
=========== ===========
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
December 31, 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,
1996 have been omitted.
NOTE 2 - SECURITIES AVAILABLE FOR SALE
During the quarter ended December 31, 1996, the Company purchased
securities available for sale in the amount of $2,619,926. Total
securities available at fair value at December 31, 1996 amounted to
$3,371,260 which includes an unrealized holding gain of $170,373.
NOTE 3 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On December 16, 1996, the Company paid $484,073 as a dividend of $.125
per share to shareholders of record November 15, 1996. For the quarter
ended December 31, 1996, the Company received $666,826 from the
Dividend Reinvestment and Stock Purchase Plan (DRIP). There were
117,330 new shares issued resulting in 3,918,254 shares outstanding.
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the quarter ended December 31, 1996 and 1995 for
interest are $408,901 and $316,384, respectively.
During the quarter ended December 31, 1996 and 1995, the Company had
dividend reinvestments of $206,143 and $189,273, respectively, which
required no cash transfers.
NOTE 5 - LOANS PAYABLE
On October 4, 1996, the Company entered into a $5,000,000 term loan
with Summit Bank which may be used for acquisitions or working capital
purposes. The loan bears interest at prime plus 1/2%. Principal
payments of $250,000 plus interest are due quarterly. This loan
matures on October 4, 2001. The outstanding balance of this loan was
$3,750,000 on December 31, 1996.
Page 6
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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
$575,289 for the current three months as compared to $581,786 for the
prior period. Funds from operations (defined as net income, excluding
gains from sales of property, plus depreciation) were $525,350 for the
current three months as compared to $547,914 for the prior period. The
Company raised $666,826 from the issuance of shares of common stock
through a Dividend Reinvestment and Stock Purchase Plan (DRIP).
Current cash dividends paid amounted to $484,073.
Securities Available for Sale increased by $2,763,285 due to purchases
of $2,619,926 and unrealized holding gain of $170,373.
Mortgage notes payable decreased by $248,888 during the three months
ended December 31, 1996. This decrease was the result of principal
repayments.
Loans payable increased by $3,250,000 as a result of a new term loan
with Summit Bank. The Company borrowed $5,000,000 from Summit Bank of
which $1,750,000 was repaid.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Rental and occupany charges increased by $195,544 for the three months
ended December 31, 1996 as compared to the three months ended December
31, 1995. This increase was due to acquisitions during fiscal 1996 as
well as an increase in occupancy charges. There was a corresponding
increase in real estate taxes.
Interest and other income decreased by $29,372 for the three months
ended December 31, 1996 as compared to the three months ended December
31, 1995. This is primarily as a result of the gain on liquidation of
equity securities in the prior period.
Interest expense increased by $92,517 for the three months ended
December 31, 1996 as compared to the three months ended December 31,
1995 as a result of the new loan with Summit Bank.
Real estate taxes increased by $97,285 for the three months ended
December 31, 1996 as compared to the three months ended December 31,
1995. This was the result of 1996 acquisitions and the timing of real
estate taxes paid. There was a corresponding increase in rental and
occupancy charges.
Depreciation expense increased by $23,978 for the three months ended
December 31, 1996, as compared to the three months ended December 31,
1995 due to the real estate acquisitions in fiscal 1996.
Operating expenses and office and general expenses remained relatively
stable for the three months ended December 31, 1996 as compared to the
three months ended December 31, 1995
Page 7
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION
MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONT'D)
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities decreased during the three
months ended December 31, 1996 to $575,289 as compared to $581,786
generated during the three months ended December 31, 1995. Other
Assets at December 31, 1996 included deposits of $254,804 for the
acquisition of a warehouse facility. 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 $14,967,722 at December 31, 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 will provide sufficient funds to adequately meet its
obligations over the next several years.
Page 8
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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 - NONE
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 9
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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: February 6, 1997 By:/s/ Eugene W. Landy
EUGENE W. LANDY,
President
Date: February 6, 1997 By:/s/ Anna T. Chew
ANNA T. CHEW
Controller
Page 10
<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 DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 1,332,575
<SECURITIES> 3,371,260
<RECEIVABLES> 571,301
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,336,270
<PP&E> 34,754,645
<DEPRECIATION> 4,714,629
<TOTAL-ASSETS> 36,259,663
<CURRENT-LIABILITIES> 615,415
<BONDS> 14,967,722
0
0
<COMMON> 39,183
<OTHER-SE> 16,707,354
<TOTAL-LIABILITY-AND-EQUITY> 36,259,663
<SALES> 0
<TOTAL-REVENUES> 1,303,931
<CGS> 0
<TOTAL-COSTS> 228,436
<OTHER-EXPENSES> 355,551
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 408,901
<INCOME-PRETAX> 311,043
<INCOME-TAX> 0
<INCOME-CONTINUING> 311,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 311,043
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
