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, 1997
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, 1997
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Balance Sheet at March 31, 1997
Unaudited Condensed Statements of Income and Undistributed
Earnings for the Three Months Ended March 31, 1997 and 1996
Unaudited Condensed Statement of Cash Flows for the Three Months
Ended March 31, 1997 and 1996
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, 1996. 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, 1997 increased approximately 40% as compared to the same
period in 1996. Rental income increased 11% as a result of a
number of lease renewal options being exercised at an
increased base annual rent.
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Results of Operations (continued)
Depreciation, interest expense and property taxes for 1997
remained stable compared to the first quarter of 1996.
Administrative expenses, which include commissions, increased
21% over the first quarter of 1996. The majority of this
increase relates to commissions paid in leasing property
during the first quarter of 1997.
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, 1997.
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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
Date /s/Bill Franks
--------------
Bill Franks
Property Manager
Date /s/James A. Boling
------------------
James A. Boling
Chairman
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PALMETTO REAL ESTATE TRUST
Balance Sheet
March 31, 1997
March 31,
Assets 1997
(unaudited)
--------
Investment in real estate
Rental property, net of accumulated depreciation $ 8,432,678
Timberlands 24,864
---------
8,457,542
Cash 63,324
Rent receivable 31,684
Note receivable 270,655
Prepaid expense 4,034
Deferred loan and lease expense, net of accumulated amortization 25,296
---------
Total assets $ 8,852,535
=========
Liabilities and shareholders' equity
Liabilities:
Mortgage notes payable $ 5,660,781
Demand note payable 95,372
Accounts payable and accrued expenses 59,400
Income taxes payable 1,000
Deferred revenue 161,754
---------
5,978,307
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 605,488
---------
2,874,228
---------
Total liabilities and shareholders' equity $ 8,852,535
=========
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Income and Undistributed Earnings
For the Three Months Ended March 31, 1997 and 1996
THREE MONTHS ENDED
MARCH 31,
1997 1996
-------- --------
(unaudited)
Income:
Rental income $ 393,238 $ 354,100
Other income 16,403 6,679
-------- --------
409,641 360,779
Expenses:
Depreciation and amortization 76,477 71,157
Interest 108,353 110,212
Repairs and maintenance 11,003 10,881
Property taxes 37,487 37,487
General and administrative 47,807 39,472
-------- --------
281,127 269,209
-------- --------
Income from operations 128,514 91,570
Provision for Federal and state income taxes (1,000) -
Gain on sale of real estate 1,958 1,791
-------- --------
Net income 129,472 93,361
Undistributed earnings, beginning 476,396 471,324
Dividends declared 380 -
-------- --------
Undistributed earnings, ending $ 605,488 $ 564,685
======== ========
Net income per share of beneficial interest $ .074 $ .053
======== ========
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PALMETTO REAL ESTATE TRUST
Condensed Statements of Cash Flows
For the Three Months Ended March 31, 1997 and 1996
THREE MONTHS ENDED
MARCH 31,
1997 1996
-------- --------
(unaudited)
Cash flows from operating activities:
Net income $ 129,472 $ 93,361
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation expense 75,101 69,709
Amortization of deferred expenses 1,376 1,448
Gain on sale of real estate (1,958) (1,791)
(Increase) decrease in:
Rent receivable 5,672 31,525
Increase (decrease) in:
Accounts payable and accrued expenses (54,342) (91,487)
Income taxes payable 1,000 -
Dividends payable (154,500) (185,850)
-------- --------
Net cash provided by (used in) operating activities 1,821 (83,085)
Cash flows from investing activities:
Property additions and improvements - (3,656)
Collections of mortgage note receivable 4,785 3,558
-------- --------
Net cash provided by (used in) investing activities 4,785 (98)
Cash flows from financing activities:
Payments on mortgage notes payable (70,706) (50,098)
Net borrowings (payments) on demand
note payable (65,000) 90,000
Payment of dividends (380) -
-------- --------
Net cash provided by (used in)
financing activities (136,086) 39,902
-------- --------
Decrease in cash (129,480) (43,281)
Cash at beginning of year 192,804 84,066
-------- --------
Cash at end of period $ 63,324 $ 40,785
======== ========
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PALMETTO REAL ESTATE TRUST
Note to Interim Financial Statements
March 31, 1997
(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, 1997 and 1996 are not necessarily
indicative of the results which may be expected for the entire year.
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0
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