SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
Commission file number 0-179
PALMETTO REAL ESTATE TRUST
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0405064
(State or other jurisdiction (I.R.S. Employer
of incorporation of organization) Identification No.)
45 Liberty Lane
Greenville, SC 29607
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: (803) 233-6007
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) or 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 [ ]
The number of shares outstanding of the Issuer's Shares of Beneficial Interest:
1,770,006
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PALMETTO REAL ESTATE TRUST
Quarterly Report on Form 10-QSB
For the Quarterly Period Ended March 31, 1996
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Balance Sheet at March 31, 1996
Unaudited Condensed Statements of Income and Undistributed Earnings
for the Three Months Ended March 31, 1996 and 1995
Unaudited Condensed Statement of Cash Flows for the Three Months
Ended March 31, 1996 and 1995
Unaudited Note to Interim Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL CONDITION
There have been no significant changes in the Trust's liquidity or financial
condition since December 31, 1995. At present, there are no large capital
expenditures planned that would present a liquidity problem.
RESULTS OF OPERATIONS
Income from operations for the first three months ended March 31, 1996 decreased
approximately 27% as compared to the same period in 1995. Rental income
increased 26% as a result of the Trust acquiring new rental properties during
the third and fourth quarter of 1995, and a number of lease renewal options
being exercised at an increased base annual rent. Other revenue also decreased
approximately $6 thousand due to the Trust receiving an insurance settlement
claim in the first quarter of 1995.
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RESULTS OF OPERATIONS (continued)
Depreciation, interest expense and property taxes increased 37%, 110% and 34%,
respectively, in relation to the purchase and financing of new properties during
the third and fourth quarter of 1995. Also, administrative expenses, which
include utilities and insurance, increased 23% in relation to the properties
acquired during 1995. Repairs and maintenance increased $8 thousand due
primarily to roof repairs on various properties dudring the first quarter of
1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings, other than ordinary routine
litigation incidental to its business, to which the Palmetto Real Estate Trust
is a party or of which any of its property is the subject.
Item 2. Changes in Securities
There have been no changes in securities during the reporting period.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission to Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A.Exhibit A : Selected Financial Statements
B.There were no reports on Form 8-K for the three months ended March 31, 1996.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PALMETTO REAL ESTATE TRUST
May 15, 1996 /s/ Bill Franks
- ------------- -----------------
Date Bill Franks
Property Manager
May 15, 1996 /s/ James A. Boling
- ------------- --------------------
Date James A. Boling
Chairman
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PALMETTO REAL ESTATE TRUST
Balance Sheet
March 31, 1996
March 31,
1996
Assets (unaudited)
----------
Investment in real estate
Rental property, net of accumulated depreciation $7,987,605
Timberlands 24,864
----------
8,012,469
Cash 40,785
Rent receivable 16,175
Note receivable 286,621
Prepaid expense 868
Deferred loan and lease expense,
net of accumulated amortization 26,896
----------
Total assets $8,383,814
==========
Liabilities and shareholders' equity
Liabilities:
Mortgage notes payable $4,959,329
Demand note payable 370,000
Accounts payable and accrued expenses 51,976
Deferred revenue 169,084
----------
5,550,389
Shareholders' equity:
Shares of beneficial interest, $1 stated value;
5,000,000 shares authorized; 1,770,006 shares
issued and outstanding 1,770,006
Capital surplus 498,734
Undistributed earnings 564,685
----------
2,833,425
----------
Total liabilities and shareholders' equity $8,383,814
==========
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Income and Undistributed Earnings
For the Three Months Ended March 31, 1996 and 1995
Three Months Ended
March 31,
1996 1995
(unaudited)
Income: -------- --------
Rental income $354,100 $280,559
Other income 6,679 12,377
-------- --------
360,779 292,936
Expenses:
Depreciation and amortization 71,157 51,917
Interest 110,212 52,360
Repairs and maintenance 10,881 2,812
Property taxes 37,487 28,065
General and administrative 39,472 32,094
-------- --------
269,209 167,248
Income from operations 91,570 125,688
Gain on sale of real estate 1,791 1,637
-------- --------
Net income 93,361 127,325
Undistributed earnings, beginning 471,324 412,599
Dividends declared - 15,627
-------- --------
Undistributed earnings, ending $564,685 $524,297
======== ========
Net income per share of beneficial interest $ 0.053 $ 0.063
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Cash Flows
For the Three Months Ended March 31, 1996 and 1995
Three Months Ended
March 31,
1996 1995
(unaudited)
Cash Flows from operating activities: -------- --------
Net income $ 93,361 $127,325
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation expense 69,709 50,469
Amortization of deferred expenses 1,448 1,448
Gain on sale of real estate (1,791) (1,637)
(Increase) decrease in:
Rent receivable 31,525 9,775
Increase (decrease) in:
Accounts payable and accrued expenses (91,487) (72,211)
Dividends payable (185,850) (117,825)
-------- --------
Net cash used in operating activities (83,085) (2,656)
Cash flows from investing activities
Property additions and improvements (3,656) (6,132)
Collections of mortgage note receivable 3,558 3,244
-------- --------
Net cash used in investing activities (98) (2,888)
Cash flows from financing activities
Payments on mortgage notes payable (50,098) (31,045)
Net borrowings on demand note payable 90,000 15,000
Payment of dividends - (153,278)
-------- --------
Net cash provided by (used in) financing activities 39,902 (89,738)
Decrease in cash (43,281) (12,670)
Cash at beginning of period 84,066 77,943
-------- --------
Cash at end of period $ 40,785 $ 65,273
======== ========
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PALMETTO REAL ESTATE TRUST
Note to Interim Financial Statements
March 31, 1996
(1) Basis of Presentation
The accompanying unaudited condensed financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not include all
information or footnotes necessary for a complete presentation of financial
condition, results of operations, and increases (decreases) in cash flows in
conformity with generally accepted accounting principles. However, all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the financial statements have been included. The results of
operations for the three-month period ended March 31, 1996 and 1995 are not
necessarily indicative of the results which may be expected for the entire year.
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<COMMON> 1770006
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