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Previous: PAINE WEBBER GROUP INC, 10-Q, EX-27, 2000-08-14 |
Next: PALMETTO REAL ESTATE TRUST, 10QSB, EX-27, 2000-08-14 |
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 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 of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 45 Liberty Lane Greenville, SC |
29607 |
| (Address of principal executive offices) |
(Zip Code) |
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 June 30, 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 June 30, 2000
Form 10-QSB Index
| Part I. | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Unaudited Balance Sheet at June 30, 2000 | 1 | |
| Unaudited Statements of Income and Undistributed Earnings for the Three Months and Six Months Ended June 30, 2000 and 1999 |
2 | |
| Unaudited Statements of Cash Flows for the Six Months Ended June 30, 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 | 7 |
| Signatures | 8 | |
| Financial Data Schedule | 9 |
PAGE
PALMETTO REAL ESTATE TRUST
Balance Sheet
(unaudited)
June 30, 2000
Assets
| Real estate investments, at cost: | ||
| Rental property, net of accumulated depreciation | $ | 9,562,014 |
| Timberlands | 24,864 | |
| Total real estate investments | 9,586,878 | |
| Other assets: | ||
| Cash | 206,283 | |
| Rent receivable | 2,635 | |
| Note receivable | 194,333 | |
| Deferred loan expense, net of accumulated amortization | 21,597 | |
| Total other assets | 424,848 | |
| Total assets | $ | 10,011,726 |
Liabilities and Shareholders' Equity
| Liabilities: | ||
| Mortgage notes payable | $ | 6,759,000 |
| Accounts payable and accrued expenses | 115,619 | |
| Income taxes payable | 2,000 | |
| 6,876,619 | ||
| 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 | 866,647 | |
| Total shareholders' equity | 3,135,107 | |
| Total liabilities and shareholders' equity | $ | 10,011,726 |
The accompanying notes are an integral part of these financial statements.
PAGE 1
PALMETTO REAL ESTATE TRUST
Statements of Income and Undistributed Earnings
For the Three and Six Months Ended June 30, 2000 and 1999
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2000 | 1999 | 2000 | 1999 | |
| Income: | ||||
| Rental income | $ 486,159 | $ 421,018 | $ 965,242 | $ 883,602 |
| Other income | 5,118 | 4,943 | 10,365 | 9,802 |
| Total income | 491,277 | 425,961 | 975,607 | 893,404 |
| Expenses: | ||||
| Depreciation and amortization | 76,577 | 70,725 | 153,021 | 141,450 |
| Interest | 135,411 | 89,819 | 270,332 | 226,384 |
| Repairs and maintenance | 8,805 | 18,112 | 25,162 | 34,199 |
| Property taxes | 42,600 | 45,422 | 85,200 | 90,844 |
| General and administrative | 44,078 | 58,556 | 84,668 | 101,067 |
| Total expenses | 307,471 | 282,634 | 618,383 | 593,944 |
| Income from operations before income taxes |
183,806 | 143,327 | 357,224 | 299,460 |
| Gain on sale of real estate | 135,370 | 2,343 | 137,933 | 4,687 |
| Income before income taxes | 319,176 | 145,670 | 495,157 | 304,147 |
| Income tax expense | (1,000) | (1,000) | (2,000) | (2,000) |
| Net income | 318,176 | 144,670 | 493,157 | 302,147 |
| Undistributed earnings, beginning | 654,574 | 644,914 | 479,593 | 487,437 |
| Dividends paid | 106,383 | 88,507 | 106,383 | 88,507 |
| Undistributed earnings, ending | $866,367 | $701,077 | $866,367 | $701,077 |
| Basic earnings per share of beneficial interest |
$.18 | $.08 | $.28 | $.17 |
The accompanying notes are an integral part of these financial statements.
PAGE 2
PALMETTO REAL ESTATE TRUST
Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 1999
| Six Months Ended | ||
| June 30, | ||
| 2000 | 1999 | |
| (unaudited) | ||
| Cash flows from operating activities: | ||
| Net income | $ 493,157 | $ 302,147 |
| Adjustments to reconcile net income to net cash provided by operating activities: |
||
| Depreciation | 149,819 | 139,081 |
| Amortization of deferred expenses | 3,202 | 2,369 |
| Gain on sale of real estate | (137,933) | (4,687) |
| (Increase) decrease in: | ||
| Rent receivable | 3,811 | 24,380 |
| Increase (decrease) in: | ||
| Accounts payable and accrued expenses | (30,451) | (32,754) |
| Income taxes payable | 2,000 | 2,000 |
| Net cash provided by operating activities | 483,605 | 432,536 |
| Cash flows from investing activities: | ||
| Property additions and improvements | (21,916) | (5,130) |
| Collections of mortgage note receivable | 7,370 | 6,738 |
| Net cash provided by (used in) investing activities | (14,546) | 1,608 |
| Cash flows from financing activities: | ||
| Payments on mortgage notes and demand note payable | (129,000) | (117,000) |
| Payment of dividends | (403,465) | (305,333) |
| Net cash used in financing activities | (532,465) | (422,333) |
| Increase (decrease) in cash | (63,406) | 11,811 |
| Cash at beginning of period | 269,689 | 300,878 |
| Cash at end of period | $ 206,283 | $ 312,689 |
The accompanying notes are an integral part of these financial statements.
PAGE 3
PALMETTO REAL ESTATE TRUST
Notes to Financial Statements
June 30, 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 and six months ended June 30, 2000 are not necessarily indicative of the results to be expected for the full year.
(3) Deferred Revenue
During the quarter ended June 30, 2000, the Trust recognized the remainder of the installment sale gain of $137,933 in accordance with Financial Accounting Standards 66, Accounting for Sales of Real Estate. Principal payments received through June 30, 2000 equal 25% of the sales value, which meets the requirement for the full accrual method of recognizing profit from real estate sales. Therefore, the Trust changed to the full accrual method and recognized the remaining profit in income. The recognition of this gain increased basic earnings per share of beneficial interest $.08 per share but has no tax effect for the Trust.
PAGE 4
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 - Six months ended June 30, 2000 compared to six months ended June 30, 1999.
Net income for the six months ended June 30, 2000 increased approximately 60% 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.
During the quarter ended June 30, 2000, the Trust recognized the remainder of the installment sale gain of $137,933 in accordance with Financial Accounting Standards 66, Accounting for Sales of Real Estate. Principal payments received through June 30, 2000 equal 25% of the sales value, which meets the requirement for the full accrual method of recognizing profit from real estate sales. Therefore, the Trust changed to the full accrual method and recognized the remaining profit in income. The recognition of this gain increased basic earnings per share of beneficial interest $.08 per share but has no tax effect for the Trust.
Expenses related to real estate held for rental increased during the second quarter of 2000 compared to the second quarter of 1999 as a result of acquiring new property during the fourth quarter of 1999. General and administrative expenses for the six months ended June 30, 2000 decreased due to a reduction in bad debts during the quarter ended June 30, 2000.
PAGE 5
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
The Annual Meeting of Stockholders of the Trust ("Meeting") was held on June 1, 2000. The results of the vote on the matters presented at the Meeting were as follows:
| Vote For | Vote Against | Abstain | |
| James A Boling | 1,237,422 | -0- | -0- |
| William J. Ables | 1,237,422 | -0- | -0- |
| S. Hunter Howard, Sr. | 1,237,422 | -0- | -0- |
| Melvin K. Younts | 1,237,422 | -0- | -0- |
| S. Hunter Howard, Jr. | 1,237,422 | -0- | -0- |
| Billy B. Huskey | 1,237,422 | -0- | -0- |
| R. Riggie Ridgeway | 1,237,422 | -0- | -0- |
| C. Laney Younts | 1,237,422 | -0- | -0- |
| For 1,237,422 | Against -0-; | Abstain -0- |
Item 5. Other Information
None.
PAGE 6
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit Description 27 Financial Data Schedule
B. Reports on Form 8-K: None.
PAGE 7
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 | ||
| August 9, 2000 | By: /s/ Bill Franks | |
| Date | Bill Franks | |
| Property Manager | ||
| (Principal Financial and Accounting Officer) | ||
| August 9, 2000 | By: /s/ James A. Boling | |
| Date | James A. Boling | |
| Chairman | ||
| (Principal Executive Officer) |
PAGE 8
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