FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31, 1995 Commission file number 0-305
NATIONAL PROPERTIES CORPORATION
(Exact name of registrant as specified in its charter)
Iowa 42-0860581
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4500 Merle Hay Road, Des Moines, Iowa 50310
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 278-1132
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 Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirement for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK (PAR VALUE $1.00)
459,745 SHARES AS OF April 30, 1995
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
BALANCE SHEETS
ASSETS
March 31, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash 166,010 238,660
Current portion - mortgage loans receivable 6,500 7,222
Accounts receivable 6,734 17,894
Other 4,837 6,747
---------- ----------
Total current assets 184,081 270,523
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PROPERTY AND EQUIPMENT, AT COST
Land 4,289,975 4,289,975
Buildings and improvements 20,105,570 20,105,570
Furniture and equipment 51,481 51,481
---------- ----------
24,447,026 24,447,026
Less - accumulated depreciation 6,954,940 6,765,175
---------- ----------
Property and equipment - net 17,492,086 17,681,851
---------- ----------
OTHER ASSETS
Marketable securities
(1995 at market; cost $816,469)
(1994 at market; cost $883,571) 1,675,400 1,601,650
Long-term portion - mortgage loans 3,660 4,795
Deferred charges and other assets 39,125 40,780
---------- ----------
1,718,185 1,647,225
---------- ----------
19,394,352 19,599,599
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable 11,722 7,211
Notes payable 200,000 425,000
Accrued liabilities 292,624 329,149
Current maturities of long-term debt 268,948 612,392
Federal and State income taxes 134,339 69,062
---------- ----------
Total current liabilities 907,633 1,442,814
---------- ----------
LONG-TERM DEBT 6,753,166 6,758,075
---------- ----------
DEFERRED INCOME TAXES 306,800 256,500
---------- ----------
256,500
STOCKHOLDERS' EQUITY
Common stock - $1 par value
Authorized - 5,000,000 shares
Issued
(1995-459,745 shares; 1994-461,313 shares) 459,745 461,313
Retained earnings 10,414,877 10,219,318
Net unrealized gain-marketable securities 552,131 461,579
---------- ----------
Total stockholders' equity 11,426,753 11,142,210
---------- ----------
19,394,352 19,599,599
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF INCOME
For Quarter Ended
March 31,
1995 1994
<S> <C> <C>
Income
Lease rental income 792,988 737,821
Interest income 178 117
Dividend income 23,910 28,434
Gain on sale of securities 20,848 18,741
------- -------
Total income 837,924 785,113
------- -------
Expenses
Depreciation 189,765 181,318
Interest 169,237 116,902
Salaries and wages 63,654 59,255
Property, payroll
and misc. taxes 15,145 14,999
Other expenses 43,437 45,013
------- -------
Total expenses 481,238 417,487
------- -------
Income before income taxes 356,686 367,626
Federal and State income taxes 128,000 132,300
------- -------
Net income 228,686 235,326
======= =======
Per share of common stock 50 cents 50 cents
Weighted average shares
outstanding 459,931 466,411
Dividends declared per share None None
<FN>
Prepared from the books of the Company without audit. In the opinion of
management, all adjustments (none of which were other than normal recurring
accruals) necessary to present fairly the results of operations for the above
stated periods have been included.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income 228,686 235,326
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 191,420 184,888
(Gain) loss on sale of securities (20,848) (18,741)
Changes in assets and liabilities
Accounts receivable 11,162 10,863
Prepaid expenses and deferred charges 1,910 1,717
Accounts payable and accrued expenses (32,016) (25,678)
Federal and State income taxes 65,277 104,977
-------- --------
Net cash provided by operations 445,591 493,352
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property and equipment - -
Payments received on mortgage notes 1,857 2,401
Purchase of securities - (80,397)
Proceeds - sale of securities 87,950 74,572
-------- --------
Net cash provided by (used in) investing activities 89,807 (3,424)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments on long-term debt (63,353) (57,500)
Net borrowings under line of credit agreements (510,000) (350,000)
Purchase of treasury stock (34,695) (55,525)
-------- ---------
Net cash provided by (used in) financing activities (608,048) (463,025)
-------- --------
Net increase (decrease) in cash (72,650) 26,903
Cash at beginning of period 238,660 154,384
-------- --------
Cash at end of period 166,010 181,287
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for
Interest expense 187,177 144,280
Income tax payments 62,723 27,323
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company, an Iowa corporation, is engaged principally in the development of
commercial real estate for lease to qualified tenants under net lease
arrangements.
As detailed on the Income Statement,total income for the first quarter of 1995
increased approximately $53,000 as compared to the same period for 1994
primarily as a result of an increase in lease rental income of approximately
$55,000. Two convenience stores acquired in April 1994, and a parcel of land
acquired in December of 1994, produced rental income of approximately $59,000
in the first quarter of 1995. In addition, contingent rentals based on sales
overages increased approximately $11,000. These increases were offset by a
reduction of approximately $16,000 in rental income resulting from the sale of
a restaurant property in July 1994.
The increase in depreciation and interest expense aggregating approximately
$61,000 is directly related to property acquisitions. In addition, the prime
rate of interest on borrowings increased from slightly more than an average of
6.0% in the first quarter of 1994 to slightly more than an average of 8.5% in
the first quarter of 1995.
As of March 31, 1995, the Company's main sources of liquidity consisted of:
$166,000 in cash, marketable securities having a market value of approximately
$1,675,000 and a $4,685,000 remaining loan balance available on three lines of
credit with two local banks. In addition, the Company owns unencumbered real
estate having an aggregate cost of approximately $10,000.000. A convenience
store, constructed at a cost of approximately $650,000 on Company owned land,
is scheduled for closing June 1, 1995, and will be financed by funds drawn on
the Company's credit line.
Management believes that its cash flow from operations and other potential
sources of cash will be sufficient to finance current and projected
operations. However, future cash flow may be impaired because of financial
difficulties being experienced by the tenant of three garden center
properties, which currently generated a monthly rental income of $38,000.
PART II. OTHER INFORMATION.
No applicable items.
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.
NATIONAL PROPERTIES CORPORATION
Date 5/5/95 By______________________________
Raymond Di Paglia, President
Date 5/5/95 By______________________________
Robert W. Guely, Vice President
and Chief Financial Officer
