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, 1996 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)
455,135 SHARES AS OF April 30, 1996
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash 45,379 123,831
Mortgage loans receivable 2,256 3,304
Accounts receivable 13,999 17,734
Other 4,524 6,767
---------- ----------
Total current assets 66,158 151,636
---------- ----------
PROPERTY AND EQUIPMENT, AT COST
Land 4,245,625 4,245,625
Buildings and improvements 20,572,485 20,572,495
Furniture and equipment 62,816 63,512
---------- ----------
24,880,926 24,881,632
Less - accumulated depreciation 7,674,494 7,487,308
---------- ----------
Property and equipment - net 17,206,432 17,394,324
---------- ----------
OTHER ASSETS
Marketable securities
(1996 at market; cost $624,823)
(1995 at market; cost $596,563) 1,529,100 1,537,475
Deferred charges and other assets 32,723 34,160
---------- ----------
1,561,823 1,571,635
---------- ----------
18,834,413 19,117,595
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable 13,068 19,022
Notes payable 400,000 800,000
Accrued liabilities 141,382 176,064
Current maturities of long-term debt 163,851 564,704
Federal and State income taxes 147,709 3,333
---------- ----------
Total current liabilities 866,010 1,563,123
---------- ----------
LONG-TERM DEBT 5,350,216 5,148,123
---------- ----------
DEFERRED INCOME TAXES 322,827 335,906
---------- ----------
STOCKHOLDERS' EQUITY
Common stock - $1 par value
Authorized - 5,000,000 shares
Issued
(1996-455,135 shares; 1995-455,655 shares) 455,135 455,655
Retained earnings 11,258,775 11,009,782
Net unrealized gain-marketable securities 581,450 605,006
---------- ----------
Total stockholders' equity 12,295,360 12,070,443
---------- ----------
18,834,413 19,117,595
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF INCOME
For Quarter Ended
March 31,
1996 1995
<S> <C> <C>
Income
Lease rental income 835,046 792,988
Interest income 29 178
Dividend income 20,095 23,910
Gain on sale of securities - 20,848
------- -------
Total income 855,170 837,924
------- -------
Expenses
Depreciation 192,106 189,765
Interest 137,804 169,237
Salaries and wages 64,220 63,654
Property, payroll
and misc. taxes 14,976 15,145
Other expenses 41,521 43,437
------- -------
Total expenses 450,627 481,238
------- -------
Income before income taxes 404,543 356,686
Federal and State income taxes 145,000 128,000
------- -------
Net income 259,543 228,686
======= =======
Per share of common stock 57 cents 50 cents
Weighted average shares
outstanding 455,235 459,931
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,
1996 1995
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income 259,543 228,686
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 193,543 191,420
(Gain) loss on sale of securities - (20,848)
Changes in assets and liabilities
Accounts receivable 3,735 11,162
Prepaid expenses and deferred charges 2,252 1,910
Accounts payable and accrued expenses (40,636) (32,016)
Federal and State income taxes 144,376 65,277
-------- --------
Net cash provided by operations 562,813 445,591
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property and equipment (4,223) -
Payments received on mortgage notes 1,048 1,857
Purchase of securities (28,260) -
Proceeds - sale of securities - 87,950
-------- --------
Net cash provided by (used in) investing activities (31,435) 89,807
-------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments on long-term debt (243,760) (63,353)
Net payments under line of credit agreements (355,000) (510,000)
Purchase of treasury stock (11,070) (34,695)
-------- --------
Net cash provided by (used in) financing activities (609,830) (608,048)
-------- --------
Net decrease in cash (78,452) (72,650)
Cash at beginning of period 123,831 238,660
-------- --------
Cash at end of period 45,379 166,010
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for
Interest expense 138,710 187,177
Income tax payments 624 62,723
</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
1996 increased approximately $17,000 as compared to the same period for 1995.
The increase in lease rental income of approximately $42,000 was primarily
due to a convenience store building acquired in June 1995 and a restaurant
building and land acquired in December, 1995. In addition, contingent
rentals based on sales overages increased approximately $6,000.
Total expenses for the three months ended March 31, 1996, decreased
approximately $30,000 as compared to the same period for 1995. The decrease
is primarily due to a decrease in interest cost on approximately $1,300,000
less debt outstanding on March 31, 1996, as compared to March 31, 1995.
As of March 31, 1996, the Company's main sources of liquidity consisted of:
$45,000 in cash, marketable securities having a market value of approximately
$1,500,000 and a $7,750,000 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 $11,000.000.
On March 30, 1996, the Company entered into an agreement to acquire a
convenience store, now under construction in Atlanta, Georgia, on a purchase
and leaseback arrangement, at a cost of $1,445,000. Closing is scheduled to
take place in November, 1996. The purchase will be financed with funds drawn
on the Company's long term line of credit.
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 __3/15/96__ By _____/S/__Raymond_Di_Paglia_________
Raymond Di Paglia, President Chief
Executive Officer
Date __3/15/96__ By _____/S/__Robert_W._Guely__________
Robert W. Guely, Vice President
and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 45,379
<SECURITIES> 1,529,100
<RECEIVABLES> 13,999
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,158
<PP&E> 24,880,926
<DEPRECIATION> 7,674,494
<TOTAL-ASSETS> 18,834,413
<CURRENT-LIABILITIES> 866,010
<BONDS> 0
<COMMON> 455,135
0
0
<OTHER-SE> 12,295,360
<TOTAL-LIABILITY-AND-EQUITY> 18,834,413
<SALES> 0
<TOTAL-REVENUES> 855,170
<CGS> 0
<TOTAL-COSTS> 450,627
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137,804
<INCOME-PRETAX> 404,543
<INCOME-TAX> 145,000
<INCOME-CONTINUING> 259,543
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 259,543
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
</TABLE>
