<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission file number 0-13754
NOONEY REALTY TRUST, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-1339136
- ------------------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
- ------------------------------------------- ----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
- -------------------------------------------------------------------------------
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 Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date. As of March 31, 1991 there were 866,624 shares of the
Registrant's common stock, par value $1 per share, issued and outstanding.
Page 1 of 11 Pages
<PAGE> 2
PART I
Item 1 - Financial Statements:
- ------------------------------
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
BALANCE SHEETS
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS:
Cash $ 550,226 $ 517,317
Accounts receivable 293,685 261,972
Prepaid expenses 100,996 84,803
Investment property, at cost:
Land and improvements 2,568,955 2,568,955
Buildings 17,587,161 17,587,161
------------ ------------
20,156,116 20,156,116
Less accumulated depreciation 5,497,785 5,344,765
------------ ------------
14,658,331 14,811,351
Deferred expenses-at amortized cost 305,496 333,574
------------ ------------
$15,908,734 $16,009,017
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 397,200 $ 328,529
Mortgage notes payable 4,892,515 4,912,421
Refundable tenant deposits 46,851 46,851
------------ ------------
Total liabilities 5,336,566 5,287,801
------------ ------------
Shareholders' Equity:
Common Stock, $1 par value; Authorized, 5,000,000 shares;
Issued and outstanding, 866,624 in 1996 and 1995 866,624 866,624
Additional paid-in capital 14,252,532 14,252,532
Distributions in excess of net income (4,546,988) (4,397,940)
------------ ------------
Total Shareholder's Equity 10,572,168 10,721,216
------------ ------------
$15,908,734 $16,009,017
============ ============
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 3
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
1996 1995
------------ ------------
<S> <C> <C>
REVENUES:
Rental and other income $ 722,826 $ 696,722
Interest 3,647 1,114
------------ ------------
726,473 697,836
EXPENSES:
Interest 103,022 104,621
Depreciation and amortization 179,243 179,599
Real estate taxes 154,739 127,122
Advisory Fee 29,226 28,962
Property management fees paid to Nooney Krombach Company 26,965 25,924
Operating expenses 209,001 194,851
------------ ------------
702,196 661,079
------------ ------------
EARNINGS FROM OPERATIONS $ 24,277 $ 36,757
============ ============
EARNINGS PER SHARE $ 0.03 $ 0.04
============ ============
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 4
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<CAPTION>
COMMON STOCK
--------------------------
ADDITIONAL DISTRIBUTION
NUMBER OF PAID-IN IN EXCESS OF
SHARES AMOUNT CAPITAL NET INCOME
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, January 1, 1996 866,624 $866,624 $14,252,532 $(4,397,940)
Earnings from Operations 24,277
Distributions to Shareholders (173,325)
------------ ------------ ------------ ------------
Balance, March 31, 1996 866,624 $866,624 $14,252,532 $(4,546,988)
============ ============ ============ ============
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 5
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from operations $ 24,277 $ 36,757
Adjustments to reconcile earnings from operations to net cash from operating
activities:
Depreciation and amortization 179,243 179,599
Changes in assets and liabilities:
(Increase) Decrease in accounts receivable (31,713) 57,095
Increase in prepaid expenses (16,193) (64,207)
Decrease (Increase) in deferred expenses 1,855 (52,253)
Increase (Decrease) in accounts payable and accrued expenses 68,671 (42,046)
Change in refundable tenant deposits 0 0
------------ ------------
Total Adjustments 201,863 78,188
------------ ------------
Net cash provided by operating activities 226,140 114,945
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to investment property 0 (81,045)
------------ ------------
Net cash used in investing activities 0 (81,045)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to shareholders (173,325) (129,994)
Payments on mortgage notes payable (19,906) (18,307)
------------ ------------
Net cash used in financing activities (193,231) (148,301)
------------ ------------
NET INCREASE (DECREASE) IN CASH 32,909 (114,401)
------------ ------------
CASH
Beginning of period 517,317 601,604
------------ ------------
CASH
End of period $550,226 $487,203
============ ============
Supplemental disclosure interest paid in cash $103,022 $104,621
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 6
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
NOTE A:
Refer to the Registrant's financial statements for the year ended December 31,
1995, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without
change. Also, refer to the footnotes to those statements for additional
details of the Registrant's financial condition. The details in those notes
have not changed except as a result of normal transactions in the interim or as
noted below.
NOTE B:
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at March 31, 1996 and for all periods
presented have been made.
NOTE C:
The Registrant has employed Nooney Advisors, Ltd., a Missouri limited
partnership, to serve as the Registrant's investment and financial counselor
and to supervise the day-to-day operations of the Registrant. Certain General
Partners of Nooney Advisors, Ltd. are also officers and directors of the
Registrant. Advisory fees of $29,226 and $28,962 were paid to Nooney Advisors,
Ltd. for the three months ended March 31, 1996 and 1995, respectively.
The Registrant's properties are managed by Nooney Krombach Company, a wholly
owned subsidiary of Nooney Company. Certain officers and directors of the
Registrant are also officers and directors of Nooney Company or one of its
subsidiaries.
NOTE D:
The earnings per share for the three months ended March 31, 1996 and 1995 has
been computed based on 866,624 shares, the number outstanding during the
periods.
Item 7: Management Discussion and Analysis of Financial Condition and Results
of Operations
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Liquidity and Capital Resources
- -------------------------------
Cash on hand as of March 31, 1996 is $550,226, an increase of $32,909 from
year end December 31, 1995. During the first quarter of 1996 the operations of
the properties provided cash flow totaling $226,140 which enabled the Trust to
pay a dividend of $.20 per share and reduce the debt by $19,906. Based on the
current cash position and the properties ability to provide operating cash
flow, the Trust expects the properties to fund anticipated capital expenditures
<PAGE> 7
for the remainder of 1996. The anticipated capital expenditures by property are
as follows:
Other Leasing
Capital Capital Total
------------ ------------ ------------
Atrium at Alpha $ 33,000 $ 206,000 $ 239,000
Applied Communications Building 0 0 0
Franklin Park Distribution Center 15,000 15,000 15,000
------------ ------------ ------------
$ 48,000 $ 221,000 $ 254,000
During the remainder of 1996, approximately $254,000 of capital expenditures
are expected. Other capital at Atrium at Alpha will be expended to carpet and
vinyl the property's halls and corridors. At Franklin Park Distribution Center
a capital contingency reserve has been set-up. The leasing capital at Atrium at
Alpha includes capital for tenant alterations and lease commissions.
Results of Operations
- ---------------------
The results of operations for the Trust's properties for the quarters ended
March 31, 1996 and 1995 are detailed in the schedule below. Revenues and
expenses of the Trust are excluded.
Franklin Park Applied
Atrium at Distribution Comm.
Alpha Center Building
------------- ------------- -------------
1996
- ----
Revenues $ 278,437 $ 187,337 $ 255,196
Expenses 265,011 146,196 219,149
------------- ------------- -------------
Net Income $ 13,426 $ 41,141 $ 36,047
Depreciation and Amortization 82,975 44,546 47,601
------------- ------------- -------------
Funds from Operations $ 96,401 $ 85,687 $ 83,648
============= ============= =============
1995
- ----
Revenues $ 262,416 $ 184,751 $ 247,109
Expenses 225,145 143,567 218,027
------------- ------------- -------------
Net Income $ 37,271 $ 41,184 $ 29,082
Depreciation and Amortization 83,599 44,143 47,601
------------- ------------- -------------
Funds from Operations $ 120,870 $ 85,327 $ 76,683
============= ============= =============
<PAGE> 8
At Atrium at Alpha the operations of the property produced lower net income for
the first quarter of 1996 when compared to first quarter 1995. The decrease in
net income of $23,845 is attributable to an increase in expenses offset by an
increase in revenues. Revenues increased by $16,021 due to increase rental
income which is a direct result of an increase in occupancy when comparing
occupancy at March 31, 1996 to occupancy at March 31, 1995. Operating expenses
for the quarter ended March 31, 1996 and 1995 are $265,011 and $225,145,
respectively, an increase of $39,866. The increase is primarily attributable to
real estate taxes ($25,651), repairs and maintenance ($7,330) and utilities
($3,403). At Franklin Park Distribution Center the operating results for the
first quarter of 1996 were similar to those of the first quarter of 1995. The
net income at Applied Communications Building increased $6,965 due to an
increase in revenues. The increase in revenues relates to an increase in rental
income which is attributable to rent step-ups for the single tenant user.
Expenses remained relatively flat when comparing March 31, 1996 to March 31,
1995.
The occupancy levels at the Trust's properties during the first quarter remain
at a high level. These levels can be attributable to the Trust's ability to
renew the properties major tenants as their leases mature. The occupancy levels
at March 31, 1996, 1995 and 1994 are as follows:
Property 1996 1995 1994
- ------------------------------------------------------- ------ ------ ------
Atrium at Alpha 99% 94% 89%
Franklin Park Distribution Center 100% 100% 100%
Applied Communications Building 100% 100% 100%
The leasing activity at Atrium at Alpha during the first quarter increased
occupancy 1% to 99% as of March 31, 1996. The Trust had an existing tenant
expand into an additional 796 square feet. The building has two major tenants
which lease approximately 23% and 18% of the available space with leases
expiring in May 1999 and July 1996, respectively. The Trust has reached a
verbal agreement with the tenant whose lease expires in 1996. The renewal will
be for a period of five years. The Trust anticipates the lease to be executed
in the second quarter.
Franklin Park Distribution Center currently is fully leased by two tenants. The
larger of the two tenants occupies approximately 57% of the building while the
other occupies approximately 43% of the building. The lease expire in December
1999 and June 1998, respectively.
The Applied Communications Building has a single tenant who occupies the entire
building. The tenant's lease expires August 1999.
1996 Comparisons
- ----------------
As of March 31, 1996, the Trust's consolidated revenues are $726,473 an
increase of $28,637 when compared to the results of the first quarter ended
March 31, 1995. The increase in revenues is attributable to increases in rental
income. Rental income increased $24,562 when comparing March 31, 1996 to March
31, 1995. The properties that contributed a majority of the increase in rental
income are the Applied Communications Building ($6,999) and Atrium at Alpha
($17,563). The increase at Applied Communications Building is attributable to
rent step-ups for the single tenant user. The increase at Atrium at Alpha is a
<PAGE> 9
direct result of an increase in occupancy when comparing occupancy at March 31,
1996 to occupancy at March 31, 1995.
During the first quarter ended March 31, 1996 consolidated expenses were
$702,196 compared to $661,079 for the first quarter ended March 31, 1995.
Consolidated expenses increased $41,117 or 6.22%. The increase in consolidated
expenses is attributable to an increase in real estate taxes along with an
increase in operating expenses. The increase in real estate taxes can be
attributed to an accrual adjustment made in January to properly state the
property's real estate tax liability. Operating expenses increased $14,150 or
7.26%. The increase relates to several expense categories and they are as
follows: repairs and maintenance ($5,869), snow removal ($3,515),
administrative costs ($3,265) and cleaning ($2,501).
1995 Comparisons
- ----------------
As of March 31, 1995 and 1994 consolidated revenues were $697,836 and 694,951,
respectively. On a consolidated basis revenues remained relatively stable,
however, at the property level Franklin Park Distribution Center had an
increase of $9,412 along with an increase at the Applied Communications
Building of $7,232 offset by a decrease at Atrium at Alpha of $12,637. The
increase at Franklin Park Distribution Center relates to increases in rental
revenue and tax recovery income. The rental income increase can be attributed
to the renewal of one of the tenants effective 1-1-95 while the tax recovery
income increased due to an increase in real estate tax expense. At Applied
Communications Building the increase in rental income is attributable to rent
step-ups for the single tenant user. The decrease in revenues at Atrium at
Alpha is attributable to a decrease in escalation income of $49,864 offset by
an increase in rental income of $36,170. The decrease in escalation income is
due to the expiration of a major tenant's lease in May 1994. The rental income
increase directly relates to an increase in occupancy along with slightly
increasing rental rates.
Consolidated expenses for the quarter ended March 31, 1995 and 1994 were
$661,079 and $672,802, respectively. The decrease in consolidated expenses is
attributable to a decrease in interest expense. The remaining expenses remained
relatively stable. The decrease in interest expense relates to the Trust's
refinancing of the first mortgage debt in November 1994. The interest rate
decreased to 8.4%.
Inflation
- ---------
The effects of inflation did not have a material impact upon the Trust's
operations in fiscal year 1995 and are not expected to have material impact in
1996.
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
See Exhibit Index on page 11.
(b) Reports on Form 8-K
None
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.
NOONEY REALTY TRUST, INC.
Dated: May 14, 1996 By: /s/ Gregory J. Nooney, Jr.
---------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
/s/ Patricia A. Nooney
---------------------------------
Patricia A. Nooney
President and Treasurer
<PAGE> 11
EXHIBIT INDEX
Exhibit Number Description
- -------------- --------------------------------------------------------------
3.(i) Articles of Incorporation dated June 12, 1984 are incorporated
by reference to Exhibit 3(a) to the Registration Statement on
Form S-11 under the Securities and Exchange Act of 1933, as
amended, (File No. 2-91851)
3.(ii) Bylaws of the Registrant, as amended, are incorporated by
reference to Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K, for fiscal year ended December 31, 1987, as filed
pursuant to Rule 13a-1 under the Securities Exchange Act of
1934, as amended, (File No. 0-13754)
27 Financial Data Schedule (provided for the information of the
U.S. Securities and Exchange Commission only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REALTY TRUST, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000748580
<NAME> NOONEY REALTY TRUST, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 550,226
<SECURITIES> 0
<RECEIVABLES> 293,685
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 944,907
<PP&E> 20,156,116
<DEPRECIATION> 5,497,785
<TOTAL-ASSETS> 15,908,734
<CURRENT-LIABILITIES> 397,200
<BONDS> 4,892,515
0
0
<COMMON> 866,624
<OTHER-SE> 9,705,544
<TOTAL-LIABILITY-AND-EQUITY> 15,908,734
<SALES> 722,826
<TOTAL-REVENUES> 726,473
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 599,174
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 103,022
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,277
<EPS-PRIMARY> .03
<EPS-DILUTED> 0
</TABLE>
