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 September 30, 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 September 30, 1996
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Balance Sheet at September 30, 1996
Unaudited Condensed Statements of Income and Undistributed Earnings
for the Three Months and Nine Months Ended September 30, 1996 and
1995
Unaudited Condensed Statement of Cash Flows for the Nine Months Ended
September 30, 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
During September 1996, the Trust acquired property in Greenville,
South Carolina for $675,000. This purchase was financed by a bridge
loan of $671,000. The Trust is in the process of refinancing its
long-term debt at the date of filing this report.
Other than described above, 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 nine months ended September 30, 1996
decreased by approximately 16% as compared to the same period in
1995. Rental income increased 37% as a result of the Trust acquiring
new rental properties during the fourth quarter of 1995, and a number
of lease renewal options being exercised at an increased base rent.
Other revenue decreased approximately $9 thousand due to the Trust
receiving an insurance settlement claim during the first quarter of
1995.
Depreciation, interest expense and property taxes increased 39%, 98%
and 29%, respectively, in relation to the purchase and financing of
new properties during the fourth quarter of 1995. Also,
administrative expenses, which include utilities and insurance,
increased 27% in relation to the properties acquired during 1995.
Repairs and maintenance increased $12 thousand due primarily to roof
repairs on various properties during 1996.
Gain on the sale of real estate decreased $43 thousand as a result of
the sale of property during 1995. The gain of $7 thousand recognized
during 1996 relates to the deferred gain on sale of property in prior
years.
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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 filed for the nine months
ended September 30, 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
November 13, 1996 /s/ BILL FRANKS
- ------------------ ----------------
Date Bill Franks
Property Manager
November 13, 1996 /s/ JAMES A. BOLING
- ------------------ --------------------
Date James A. Boling
Chairman
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PALMETTO REAL ESTATE TRUST
Balance Sheet
September 30, 1996
September 30,
1996
Assets: (unaudited)
- ------- ----------
Investment in real estate
Rental property, net of accumulated depreciation $ 8,543,267
Timberlands 24,864
----------
8,568,131
Cash 176,909
Rent receivable 14,175
Prepaid expense 868
Note receivable 279,254
Deferred loan and lease expense, net of accumulated
amortization 23,999
----------
Total assets $ 9,063,336
Liabilities and Shareholders' equity
- ------------------------------------
Liabilities:
Mortgage notes payable $ 5,528,512
Demand note payable 370,000
Accounts payable and accrued expenses 125,779
Deferred revenue 163,712
----------
6,188,003
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 606,593
----------
2,875,333
Total liabilities and shareholders' equity $ 9,063,336
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Income and Undistributed Earnings
For the Three Months and Nine Months Ended September 30, 1996 and 1995
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
(unaudited) (unaudited)
Income:
Rental income $ 351,667 $ 245,670 $1,061,960 $ 774,409
Other income 6,554 7,972 19,834 29,078
-------- -------- -------- --------
358,221 253,642 1,081,794 803,487
Expenses:
Depreciation and amortization 73,912 52,048 217,182 155,949
Interest 109,171 56,057 329,013 165,900
Repairs and maintenance 6,744 6,532 25,511 12,785
Property taxes 37,487 31,035 112,461 87,165
General and administrative 40,048 30,580 127,920 100,736
-------- -------- -------- --------
267,362 176,252 812,087 522,535
Income from operations 90,859 77,390 269,707 280,952
Gain on sale of real estate 3,581 50,352 7,164 50,352
-------- -------- -------- --------
Net income 94,440 127,742 276,871 331,304
Undistributed earnings, beginning 582,953 537,734 471,324 412,599
Dividends declared 70,800 62,800 141,602 141,227
Undistributed earnings, ending $ 606,593 $ 602,676 $ 606,593 $ 602,676
Net income per share of
beneficial interest $ .053 $ .081 $ .156 $ .211
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 1996 and 1995
Nine Months Ended
September 30,
1996 1995
(unaudited)
-------- --------
Cash flows from operating activities
Net income $ 276,871 $ 331,304
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 212,838 151,605
Amortization of deferred expenses 4,344 4,344
Gain on sale of real estate (7,164) (50,352)
(Increase) decrease in:
Rent receivable 33,525 4,533
Deferred loan and lease expense - (2,742)
Increase (decrease) in:
Accounts payable and accrued expenses (17,682) (16,175)
Deferred revenue - (4,911)
Dividends payable (185,850) (117,825)
-------- --------
Net cash provided by operating expenses 316,882 299,781
Cash flows from investing activities
Property additions and improvements (702,447) (750,702)
Proceeds from sale of real estate - 314,089
Collections of mortgage note receivable 10,925 9,960
-------- --------
Net cash used in investing activities (691,522) (426,653)
Cash flows from financing activities
Payments on mortgage notes payable (151,915) (93,328)
Payments on demand note payable - (120,000)
Proceeds from new borrowings 761,000 445,000
Payment of dividends (141,602) (141,227)
-------- --------
Net cash provided by financing activities 467,483 90,445
-------- --------
Increase (decrease) in cash 92,843 (36,427)
Cash at beginning of period 84,066 68,437
-------- --------
Cash at end of period $ 176,909 $ 32,010
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PALMETTO REAL ESTATE TRUST
Note to Interim Financial Statements
September 30, 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 and nine-month period ended September 30, 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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