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, 1997
---------------------------------------------------
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
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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>
PART I
Item 1 - Financial Statements:
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
-------------- --------------
<S> <C> <C>
ASSETS:
Cash $ 644,288 $ 641,127
Accounts receivable 286,112 353,619
Prepaid expenses 101,283 29,266
Investment property, at cost:
Land 2,568,955 2,568,955
Buildings and improvements 17,593,831 17,593,831
-------------- --------------
20,162,786 20,162,786
Less accumulated depreciation 6,096,615 5,948,166
-------------- --------------
14,066,171 14,214,620
Deferred expenses - at amortized cost 244,657 243,006
-------------- --------------
$ 15,342,511 $ 15,481,638
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 399,789 $ 370,347
Mortgage notes payable 4,808,592 4,830,236
Refundable tenant deposits 36,600 36,600
-------------- --------------
Total liabilities 5,244,981 5,237,183
-------------- --------------
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 (5,021,626) (4,874,701)
-------------- --------------
Total Shareholder's Equity 10,097,330 10,244,455
-------------- --------------
$ 15,342,511 $ 15,481,638
============== ==============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</TABLE>
2
<PAGE>
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31, March 31,
1997 1996
---------- -----------
<S> <C> <C>
REVENUES:
Rental and other income $ 741,602 $ 722,826
Interest 2,559 3,647
---------- -----------
744,161 726,473
EXPENSES:
Interest 101,284 103,022
Depreciation and amortization 170,318 179,243
Real estate taxes 139,608 154,739
Advisory fee 29,502 29,226
Property management fees paid to
Nooney Krombach Company 29,054 26,965
Trustee Fees 11,715 3,913
Cleaning & Supplies 31,607 32,552
Payroll 22,019 18,528
Insurance 17,811 17,921
Utilities 67,376 66,466
Professional Services 27,152 8,319
Snow Removal 8,506 11,532
Operating expenses 44,477 49,770
---------- -----------
700,429 702,196
---------- -----------
EARNINGS FROM OPERATIONS $ 43,732 $ 24,277
========== ===========
EARNINGS PER SHARE $ 0.05 $ 0.03
========== ===========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</TABLE>
3
<PAGE>
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997
(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, 1997 866,624 $ 866,624 $ 14,252,532 $ (4,874,701)
Earnings from Operations 43,732
Distributions to Shareholders (190,657)
--------- --------- ------------ ------------
Balance, March 31, 1997 866,624 $ 866,624 $ 14,252,532 $ (5,021,626)
========= ========= ============ ============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</TABLE>
4
<PAGE>
<TABLE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31, March 31,
1997 1996
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from operations $ 43,732 $ 24,277
Adjustments to reconcile earnings from
operations to net cash provided by operating activities:
Depreciation and amortization 170,318 179,243
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable 67,507 (31,713)
Increase in prepaid expenses (72,017) (16,193)
Decrease (Increase) in deferred expenses (23,520) 1,855
Increase in accounts payable and accrued expenses 29,442 68,671
---------- ---------
Total Adjustments 171,730 201,863
---------- ---------
Net cash provided by operating activities 215,462 226,140
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to shareholders (190,657) (173,325)
Payments on mortgage notes payable (21,644) (19,906)
---------- ---------
Net cash used in financing activities (212,301) (193,231)
---------- ---------
NET INCREASE IN CASH 3,161 32,909
CASH, Beginning of period 641,127 517,317
---------- ---------
CASH, End of period $ 644,288 $ 550,226
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during period for interest $ 101,284 $ 103,022
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</TABLE>
5
<PAGE>
NOONEY REALTY TRUST, INC.
(A REAL ESTATE INVESTMENT TRUST)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
NOTE A:
Refer to the Registrant's financial statements for the year ended December 31,
1996, 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, 1997 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 $29,502 and $29,226 were paid to Nooney Advisors,
Ltd. for the three months ended March 31, 1997 and 1996, 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, 1997 and 1996 has
been computed based on 866,624 shares, the number outstanding during the
periods.
6
<PAGE>
ITEM 7: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of March 31, 1997, is $644,288 an increase of $3,161 from the
year ended December 31, 1996. During the first quarter, the operations of the
properties provided cash flow of $215,462 of which the Trust used to pay a
dividend of $.22 per share to shareholders and made payments on its mortgage
notes payable of $21,644. 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 for the remainder of 1996. The anticipated
capital expenditures by property are as follows:
Leasing Capital Other Capital Total
--------------- ------------- ----------
Atrium at Alpha Business Center $216,081 $33,000 $249,081
Applied Communications Building 0 0 0
Franklin Park Distribution Center 0 15,000 15,000
------------ ---------- ---------
$216,081 $48,000 $264,081
Leasing Capital at Atrium at Alpha Business Center is for tenant improvements
and lease commissions for new and renewal tenants. Other Capital is anticipated
for heating, ventilation & air conditioning control boards and new restroom
faucets and countertops. At Franklin Park Distribution Center, a $15,000
contingency reserve has been set up.
Results of Operations
The results of operations for the Trust's properties for the quarters ended
March 31, 1997 and 1996 are detailed in the schedule below. Revenues and
expenses of the Trust are excluded.
<TABLE>
<CAPTION>
Franklin Park Applied
Atrium at Alpha Distribution Communications
1997 Business Center Center Building
---- ---------------- -------------------- -----------------
<S> <C> <C> <C>
Revenues $ 293,932 $ 188,910 $ 265,722
Expenses 251,425 145,176 211,787
--------- ---------- ---------
Net Income $ 42,507 $ 43,734 $ 53,935
Depreciation and Amortization 81,231 44,546 40,359
--------- ---------- ---------
Funds from Operations $ 123,738 $ 88,280 $ 94,294
========= ========== =========
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
========= ========== =========
</TABLE>
7
<PAGE>
At Atrium at Alpha Business Center revenues increased $15,495 or 5.6% when
comparing first quarter 1997 to the first quarter of 1996. The increase in
revenue can be attributable to an increase in base rental rates ($12,563) and an
increase in electric income ($2,089). Expenses decreased 5% or $13,586 when
comparing the first quarter of 1997 to the first quarter end of 1996. This
decrease in expenses can be attributable to a decrease in the real estate tax
expense ($14,450), slightly offset by an increase in the common area expenses
($4,000). At Franklin Park Distribution Center, the operating results for the
first quarter of 1997 were stable when compared to the first quarter of 1996.
Revenues increased less than 1% and operating expenses decreased less than 1%.
At the Applied Communications Building in Omaha, Nebraska, revenues increased
$10,526 or 4% when comparing the first quarter of 1997 to the first quarter of
1996. This increase in revenue relates to the annual base rent escalation built
in to the single tenant's lease as well as an increase in the escalation income
($2,635). Expenses decreased at the Applied Communications Building due to a
decrease in the amortization expense ($7,242).
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, 1997, 1996 and 1995 are as follows:
Occupancy levels as of March 31,
Property 1997 1996 1995
-------- ---- ---- ----
Atrium at Alpha Business Center 95% 99% 94%
Franklin Park Distribution Center 100% 100% 100%
Applied Communications Building 100% 100% 100%
During the first quarter of 1997, leasing activity at the Atrium at Alpha
Business Center consisted of one tenant renewing their lease for 1,318 square
feet. Occupancy at March 31, 1997, was 95% compared to 99% at March 31, 1996.
The Trust anticipates re-leasing space during the second quarter to bring
occupancy up once again. The property has two major tenants, one which leases
20% of the building with a lease expiring July 2001. The other major tenant
occupies 23% of the building with leases expiring March 1997, May 1997 and May
1999. The tenant has vacated the portion of the space which expired at the end
of the quarter, March 31, 1997, and they will be vacating the space that is
under the lease expiring May 1997.
Franklin Park Distribution Center is currently 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 leases 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.
8
<PAGE>
1997 Comparisons
As of March 31, 1997, the Trust's consolidated revenues are $744,161 an increase
of $17,688 when compared to the results of the first quarter ended March 31,
1996. The increase in revenues is attributable to increases in rental income at
the Atrium at Alpha Business Center and the Applied Communications Building. The
increase in rental income at the Atrium Building is due to increases in the base
rental rate ($12,563) and electric income ($2,089). At the Applied
Communications Building, the increases in rental income is due to the rent step
up built into the lease ($7,002) and an increase in escalation income ($2,635).
The increases in income at these two properties are offset by an increase in the
rent concession adjustment ($8,719) recorded at the trust.
During the first quarter ended March 31, 1997 consolidated expenses were
$700,429 compared to $702,196 for the first quarter ended March 31, 1996.
Consolidated expenses decreased $1,767 or less than 1%.
1996 Comparisons
As of March 31, 1996, the Trust's consolidated revenues were $726,473 an
increase of $28,637 when compared to the results of the first quarter ended
March 31, 1995. The increase in revenues was 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 were the Applied Communications Building ($6,999) and Atrium at Alpha
($17,563). The increase at Applied Communications Building was attributable to
rent step-ups for the single tenant user. The increase at Atrium at Alpha was a
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 6.2%. The increase in consolidated
expenses was attributable to an increase in real estate taxes along with an
increase in operating expenses. The increase in real estate taxes was attributed
to an accrual adjustment made in January to properly state the property's real
estate tax liability. Operating expenses increased $14,150 or 7.3%. 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).
Inflation
The effects of inflation did not have a material impact upon the Trust's
operations in fiscal year 1996 and are not expected to have material impact in
1997.
9
<PAGE>
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 15, 1997 By: /s/ Gregory J. Nooney, Jr.
-----------------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
/s/ Patricia A. Nooney
-----------------------------------------
Patricia A. Nooney
President and Treasurer
10
<PAGE>
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)
11
<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-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 644,288
<SECURITIES> 0
<RECEIVABLES> 286,112
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,031,683
<PP&E> 20,162,786
<DEPRECIATION> 6,096,615
<TOTAL-ASSETS> 15,342,511
<CURRENT-LIABILITIES> 399,789
<BONDS> 4,808,592
0
0
<COMMON> 866,624
<OTHER-SE> 10,097,330
<TOTAL-LIABILITY-AND-EQUITY> 15,342,511
<SALES> 741,602
<TOTAL-REVENUES> 744,161
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 599,145
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 101,284
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,732
<EPS-PRIMARY> .05
<EPS-DILUTED> 0
</TABLE>
