SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD FROM ___________ TO _________ .
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: (864) 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 $1 Beneficial
Interest as of March 31, 2000 was 1,770,006.
Transitional Small Business Disclosure Format:
Yes [ ] No [ X ]
<PAGE>
PALMETTO REAL ESTATE TRUST
Quarterly Report on Form 10-QSB
For the Quarterly Period Ended March 31, 2000
Form 10-QSB Index
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Balance Sheet at March 31, 2000 . . . . . .1
Unaudited Statements of Income and Undistributed
Earnings for the Three Months Ended
March 31, 2000 and 1999. . . . . . . . . . . . . . .2
Unaudited Statements of Cash Flows for the Three
Months Ended March 31, 2000 and 1999 . . . . . . . .3
Notes to Unaudited Financial Statements. . . . . . . .4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . .5
Part II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . .6
Item 2. Changes in Securities . . . . . . . . . . . . . . . .6
Item 3. Defaults Upon Senior Securities . . . . . . . . . . .6
Item 4. Submission of Matters to a Vote of Security Holders. .6
Item 5. Other Information . . . . . . . . . . . . . . . . . .6
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . .6
Signatures . . . . . . . . . . . . . . . . . . . . . .7
Financial Data Schedule . . . . . . . . . . . . . 8 -9
<PAGE>
PALMETTO REAL ESTATE TRUST
Balance Sheet
(unaudited)
March 31, 2000
Assets
------
Real estate investments, at cost:
Rental property, net of accumulated depreciation $ 9,630,466
Timberlands 24,864
---------
Total real estate investments 9,655,330
Other assets:
Cash 109,427
Rent receivable 2,070
Note receivable 198,059
Deferred loan expense, net of accumulated amortization 23,198
---------
Total other assets 332,754
---------
Total assets $ 9,988,084
=========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities:
Mortgage notes payable $ 6,848,500
Accounts payable and accrued expenses 79,620
Deferred revenue 135,370
Income taxes payable 1,000
---------
7,064,490
Shareholders' equity:
Shares of beneficial interest, $1 par value; 5,000,000
shares authorized; 1,770,006 shares issued and
outstanding 1,770,006
Capital surplus 498,734
Undistributed earnings 654,854
---------
Total shareholders' equity 2,923,594
---------
Total liabilities and shareholders' equity $ 9,988,084
=========
The accompanying notes are an integral part of these financial statements.0
1
<PAGE>
PALMETTO REAL ESTATE TRUST
Statements of Income and Undistributed Earnings
For the Three Months Ended March 31, 2000 and 1999
Three Months Ended
March 31,
2000 1999
------ ------
(unaudited)
Income:
Rental income $ 479,083 $ 462,584
Other income 5,527 4,859
------ ------
Total income 484,610 467,443
------ ------
Expenses:
Depreciation and amortization 76,444 65,504
Interest 134,921 136,565
Repairs and maintenance 16,357 16,087
Property taxes 42,600 45,422
General and administrative 40,590 42,511
------ ------
Total expenses 310,912 311,310
------ ------
Income from operations before income taxes 173,698 156,133
Gain on sale of real estate 2,563 2,344
Income before income taxes 176,261 158,477
Income tax expense 1,000 1,000
------ ------
Net income 175,261 157,477
Undistributed earnings, beginning 479,593 487,437
------ ------
Undistributed earnings, ending $ 654,854 $ 644,914
======= =======
Basic earnings per share of beneficial interest $ .10 $ .09
======= =======
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PALMETTO REAL ESTATE TRUST
Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999
Three Months Ended
March 31,
2000 1999
------ ------
(unaudited)
Cash flows from operating activities:
Net income $ 175,261 $ 157,477
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 74,844 69,541
Amortization of deferred expenses 1,600 1,184
Gain on sale of real estate (2,556) (2,344)
(Increase) decrease in:
Rent receivable 4,376 11,045
Increase (decrease) in:
Accounts payable and accrued expenses (66,450) (30,727)
Income taxes payable 1,000 1,000
------- -------
Net cash provided by operating activities 188,075 207,176
------- -------
Cash flows from investing activities:
Collections of mortgage note receivable 3,644 3,331
Property additions and improvements (15,393) (5,129)
------- -------
Net cash used in investing activities (11,749) (1,798)
------- -------
Cash flows from financing activities:
Payments on mortgage notes payable (39,500) (58,500)
Payment of dividends (297,088) (216,826)
------- -------
Net cash used in financing activities (336,588) (275,326)
------- -------
Decrease in cash (160,262) (69,948)
Cash at beginning of period 269,689 300,878
------- -------
Cash at end of period $ 109,427 $ 230,930
======= =======
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PALMETTO REAL ESTATE TRUST
Notes to Financial Statements
March 31, 2000
(1) Basis of Presentation
The accompanying unaudited financial statements, which are for interim
periods, do not include all disclosures provided in the annual financial
statements. These unaudited financial statements should be read in
conjunction with the financial statements and the footnotes thereto
contained in the Annual Report on Form 10-KSB for the year ended December
31, 1999 of Palmetto Real Estate Trust (the "Trust"), as filed with the
Securities and Exchange Commission.
(2) Interim Periods
In the opinion of the Trust, the accompanying unaudited financial
statements contain all adjustments (which are of a normal recurring nature)
necessary for a fair presentation of the financial statements. The results
of operations for the three months ended March 31, 2000 are not necessarily
indicative of the results to be expected for the full year.
4
<PAGE>
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, 1999 other than debt payments and
dividend payments. At present, there are no large capital expenditures
planned that would present a liquidity problem.
Results of Operations - Three months ended March 31, 2000 compared to
three months ended March 31, 1999.
Income from operations for the three months ended March 31, 2000
increased approximately 8% as compared to the same period in 1999.
Rental income increased due to higher rental rates and the acquisition
of new rental property in the fourth quarter of 1999.
Depreciation increased during the first quarter of 2000 compared to the
first quarter of 1999 as a result of acquiring new property during the
fourth quarter of 1999. All other expenses remained relatively stable.
5
<PAGE>
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 to 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 of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
A. Exhibit 27.1 Financial Data Schedule
B. Reports on Form 8-K: None
6
<PAGE>
SIGNATURES
In accordance with 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.
PALMETTO REAL ESTATE TRUST
May 9, 2000 By: /s/ Bill Franks
- ----------- ---------------
Date Bill Franks
Property Manager
(Principal Financial and Accounting Officer)
May 9, 2000 By: /s/ James A. Boling
- ----------- -------------------
Date James A. Boling
Chairman
(Principal Executive Officer)
7
<PAGE>
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