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 September 30, 1994 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)
457,005 SHARES AS OF November 1, 1995
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
BALANCE SHEETS
ASSETS
September 30, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash 108,437 238,660
Current portion - mortgage loans receivable 4,000 7,222
Accounts receivable 2,552 17,894
Other 791 6,747
---------- ----------
Total current assets 115,780 270,523
---------- ----------
PROPERTY AND EQUIPMENT, AT COST
Land 4,114,036 4,289,975
Buildings and improvements 20,506,062 20,105,570
Furniture and equipment 51,481 51,481
---------- ----------
24,671,579 24,447,026
Less - accumulated depreciation 7,292,238 6,765,175
---------- ----------
Property and equipment - net 17,379,341 17,681,851
OTHER ASSETS
Marketable securities
(1994 at market; cost $566,289)
(1994 at market; cost $883,571) 1,501,599 1,601,650
Long-term portion - mortgage loans 487 4,795
Deferred charges and other assets 35,815 40,780
---------- ----------
1,537,901 1,647,225
---------- ----------
19,033,022 19,599,599
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable 8,733 7,211
Notes payable 625,000 425,000
Accrued liabilities 116,853 329,149
Current maturities of long-term debt 282,051 612,392
Federal and State income taxes 5,811 69,062
---------- ----------
Total current liabilities 1,038,448 1,442,814
---------- ----------
LONG-TERM DEBT 5,753,787 6,758,075
Deferred Income Tax 333,906 256,500
---------- ----------
STOCKHOLDERS' EQUITY
Common stock - $1 par value
Authorized - 5,000,000 shares
Issued
(1995-457,935 shares; 1994-461,313 shares) 457,935 461,313
Retained earnings 10,847,541 10,219,318
Net Unrealized Gain on Marketable Securities 601,405 461,579
---------- ----------
Total stockholders' equity 11,906,881 11,142,210
---------- ----------
19,033,022 19,599,599
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF INCOME
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Income
Lease rental income 785,669 754,499 2,359,074 2,267,632
Interest income 179 4,183 1,102 4,789
Dividend income 20,810 22,380 68,172 80,098
Gain on sale of securities 44,795 5,486 102,823 93,290
-------- -------- --------- ---------
Total income 851,453 786,548 2,531,171 2,445,809
-------- -------- --------- ---------
Expenses
Depreciation 191,895 191,377 572,385 560,489
Interest 155,309 162,411 492,657 430,917
Salaries and wages 68,490 60,845 196,847 180,140
Property, payroll and
misc. taxes 11,499 11,913 46,623 45,525
Other expenses 45,916 43,766 138,052 135,398
-------- -------- --------- ---------
Total expenses 473,109 470,312 1,446,564 1,352,469
-------- -------- --------- ---------
Income before income taxes 378,344 316,236 1,084,607 1,093,340
Federal and State income taxes 136,500 113,800 390,500 393,600
-------- -------- --------- ---------
Net income 241,844 202,436 694,107 699,740
======== ======== ========= =========
Per share of common stock 0.53 0.44 1.51 1.51
Weighted average
shares outstanding 459,075 464,559 458,758 463,884
Cash dividend paid - 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
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income 694,107 699,740
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 577,350 571,200
(Gain) loss on sale of securities (102,823) (93,290)
Changes in assets and liabilities
Accounts receivable 15,343 12,903
Prepaid expenses and deferred charges 5,956 1,213
Accounts payable and accrued expenses (210,775) (109,804)
Federal and State income taxes (63,251) 36,490
---------- ----------
Net cash provided by operations 915,907 1,118,452
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property and equipment (269,875) (1,899,520)
Payments received on mortgage notes 7,530 9,403
Purchase of securities (98,687) (329,127)
Proceeds - sale of securities 518,792 311,499
---------- ----------
Net cash provided by (used in) investing activities 157,760 (1,907,745)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments on long-term debt (194,628) (176,881)
Purchase of treasury stock (69,262) (140,883)
Dividends Paid -0- (83,607)
Net borrowings under line of credit agreements (940,000) 1,115,000
---------- ----------
Net cash provided by (used in) financing activitie (1,203,890) 713,629
---------- ----------
Net decrease in cash (130,223) (75,664)
Cash at beginning of period 238,660 154,384
---------- ----------
Cash at end of period 108,437 78,720
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for
Interest expense 510,648 419,458
Income tax payments 453,751 357,110
SUPPLEMENTAL NON-CASH FLOW INFORMATION
Sale of real estate 462,000 473,551
Basis of property 180,000 269,156
---------- ----------
Deferred 1031 gain 282,000 204,395
---------- ----------
</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 nine
months of 1995 increased approximately $85,000 as compared to the same period
for 1994. The increase in lease rental income of approximately $91,000 was
primarily due to two convenience stores acquired April 1994, and a parcel of
land acquired in December, 1994. These properties produced rental income of
approximately $196,000 for the first nine months of 1995 as compared to
approximately $85,000 for the same period in 1994. In addition, contingent
rentals based on sales overages increased approximately $10,000. These
increases were offset by a reduction of approximately $35,000 in rental income
resulting from the sale of a restaurant property in July, 1994.
Total expenses for the nine months ended September 30, 1995, increased
approximately $94,000 as compared to the same period for 1994. The increase is
primarily due to increased depreciation, interest and payroll costs aggregating
approximately $90,000.
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 September 30, 1995, the Company's main sources of liquidity
consisted of: $108,400 in cash, marketable securities having a marketable value
of approximately $1,502,000 and a remaining balance of $4,500,000 available for
withdrawal on three lines of credit with two local banks.
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 11/4/95 By___/S/RAYMOND DI PAGLIA___
Raymond Di Paglia, President
Date 11/4/95 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> SEP-30-1995
<CASH> 100,437
<SECURITIES> 1,501,599
<RECEIVABLES> 2,552
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 115,780
<PP&E> 24,671,579
<DEPRECIATION> 7,292,238
<TOTAL-ASSETS> 19,033,022
<CURRENT-LIABILITIES> 1,038,448
<BONDS> 0
<COMMON> 457,935
0
0
<OTHER-SE> 11,906,881
<TOTAL-LIABILITY-AND-EQUITY> 19,033,022
<SALES> 0
<TOTAL-REVENUES> 2,531,171
<CGS> 0
<TOTAL-COSTS> 1,446,564
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 492,657
<INCOME-PRETAX> 1,084,607
<INCOME-TAX> 390,500
<INCOME-CONTINUING> 694,107
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 694,107
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
</TABLE>
