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 June 30, 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)
458,625 SHARES AS OF July 31, 1995
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
BALANCE SHEETS
ASSETS
June 30, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash 100,219 238,660
Current portion - mortgage loans receivable 5,500 7,222
Accounts receivable 17,323 17,894
Other 2,932 6,747
---------- ----------
Total current assets 125,974 270,523
---------- ----------
PROPERTY AND EQUIPMENT, AT COST
Land 4,112,975 4,289,975
Buildings and improvements 20,506,062 20,105,570
Furniture and equipment 51,481 51,481
---------- ----------
24,670,518 24,447,026
Less - accumulated depreciation 7,100,343 6,765,175
---------- ----------
Property and equipment - net 17,570,175 17,681,851
---------- ----------
OTHER ASSETS
Marketable securities
(1995 at market; cost $604,141)
(1994 at market; cost $883,571) 1,474,874 1,601,650
Long-term portion - mortgage loans 2,777 4,795
Deferred charges and other assets 37,470 40,780
---------- ----------
1,515,121 1,647,225
---------- ----------
19,211,270 19,599,599
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable 7,853 7,211
Notes payable 572,302 425,000
Accrued liabilities 155,507 329,149
Current maturities of long-term debt 275,420 612,392
Federal and State income taxes (1,389) 69,062
---------- ----------
Total current liabilities 1,009,693 1,442,814
---------- ----------
LONG-TERM DEBT 6,250,831 6,758,075
---------- ----------
DEFERRED INCOME TAXES 310,998 256,500
---------- ----------
STOCKHOLDERS' EQUITY
Common stock - $1 par value
Authorized - 5,000,000 shares
Issued
(1995-458,845 shares; 1994-461,313 shares) 458,845 461,313
Retained earnings 10,621,167 10,219,318
Net unrealized gain-marketable securities 559,736 461,579
---------- ----------
Total stockholders' equity 11,639,748 11,142,210
---------- ----------
19,211,270 19,599,599
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Income
Lease rental income 780,417 775,312 1,573,405 1,513,133
Interest income 745 289 923 606
Dividend income 23,452 29,484 47,362 57,718
Gain on sale of securities 37,180 69,063 58,028 87,804
--------- --------- --------- ---------
Total income 841,794 874,148 1,679,718 1,659,261
--------- --------- --------- ---------
Expenses
Depreciation 190,725 187,794 380,490 369,112
Interest 168,111 151,604 337,348 268,506
Salaries and wages 64,703 60,040 128,357 119,295
Property, payroll
and misc. taxes 19,979 18,613 35,124 33,662
Other expenses 48,699 46,619 92,136 91,582
--------- --------- --------- ---------
Total expenses 492,217 464,670 973,455 882,157
--------- --------- --------- ---------
Income before income taxes 349,577 409,478 706,263 777,104
Federal and State income taxes 126,000 147,500 254,000 279,800
--------- --------- --------- ---------
Net income 223,577 261,978 452,263 497,304
========= ========= ========= =========
Per share of common stock $0.50 $0.56 $0.98 $1.07
Weighted average shares
outstanding 459,662 465,823 459,392 465,234
Dividends declared per share $0.00 $0.18 $0.00 $0.18
<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
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income 452,263 497,304
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 383,800 376,253
(Gain) loss on sale of securities (58,028) (87,804)
Changes in assets and liabilities
Accounts receivable 572 600
Prepaid expenses and deferred charges 3,815 3,422
Accounts payable and accrued expenses (173,001) (116,044)
Federal and State income taxes (70,451) 31,965
-------- ---------
Net cash provided by operations 538,970 705,696
-------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property and equipment (268,814) (1,916,846)
Payments received on mortgage notes 3,740 4,745
Purchase of securities - (298,601)
Proceeds - sale of securities 337,459 287,856
-------- ---------
Net cash provided by (used in) investing activities 72,385 (1,922,846)
-------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments on long-term debt (128,216) (116,495)
Net borrowings under line of credit agreements (568,698) 1,375,000
Purchase of treasury stock (52,882) (94,995)
-------- ---------
Net cash provided by (used in) financing activities (749,796) 1,163,510
-------- ---------
Net increase (decrease) in cash (138,441) (53,640)
Cash at beginning of period 238,660 154,384
-------- ---------
Cash at end of period 100,219 100,744
======== =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for
Interest expense 356,261 265,384
Income tax payments 324,451 247,835
</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 six months of
1995 increased approximately $20,000 as compared to the same period for 1994.
The increase in lease rental income of approximately $60,000 was primarily due
to two convenience stores acquired April 1994, and a parcel of land acquired
in December 1994. These three properties produced rental income of
approximately $118,000 for the first six months of 1995 as compared to
approximately $38,000 for the same period in 1994. In addition, contingent
rentals based on sales overages increased approximately $8,000. These
increases were offset by a reduction of approximately $33,000 in rental income
resulting from the sale of a restaurant property in July 1994.
The increase of approximately $91,000 in total expenses is primarily due to
increased depreciation and interest costs aggregating approximately $80,000.
On June 19, 1995, a portion of real estate owned by the Company in Ankeny,
Iowa, was sold for $462,000, and on June 30, 1995, a convenience store located
in Clive, Iowa was acquired in a qualified IRS 1031 Exchange for $730,814.
The Ankeny property had a book value of $180,000 and the resultant non-taxable
gain of $282,000 reduced the basis of the Clive property to $448,814. The
cash balance of $272,302 needed to complete the exchange was financed with
funds drawn on the Company's short-term credit line.
As of June 30, 1995, the Company's main sources of liquidity consisted of:
$100,200 in cash, marketable securities having a marketable value of
approximately $1,475,000 and a remaining balance of $4,144,000 available for
withdrawal 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.
Management believes that its cash flow from operations and other potential
sources of cash will be sufficient to finance current and projected
operations. Future cash flow, however, may be impaired because of financial
difficulties being experienced by the tenant of three garden center
properties, which currently generate a monthly rental income of approximately
$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 8/2/95 By__/S/_Raymond_Di_Paglia_______
Raymond Di Paglia, President
Date 8/2/95 By__/S/_Robert_W_Guely__________
Robert W. Guely, Vice President
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 100,219
<SECURITIES> 1,474,874
<RECEIVABLES> 17,323
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 125,974
<PP&E> 24,670,518
<DEPRECIATION> 7,100,343
<TOTAL-ASSETS> 19,211,270
<CURRENT-LIABILITIES> 1,009,693
<BONDS> 0
<COMMON> 458,845
0
0
<OTHER-SE> 11,639,748
<TOTAL-LIABILITY-AND-EQUITY> 19,211,270
<SALES> 0
<TOTAL-REVENUES> 1,679,718
<CGS> 0
<TOTAL-COSTS> 973,455
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 337,348
<INCOME-PRETAX> 706,263
<INCOME-TAX> 254,000
<INCOME-CONTINUING> 452,263
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 452,263
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
</TABLE>
