<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ---- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ---- EXCHANGE ACT OF 1934
For the transition period from ........... to ...........
Commission file number 1-10093
-------
RPS REALTY TRUST
----------------
(Exact name of registrant as specified in its charter.)
MASSACHUSETTS 13-6908486
- - ------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
733 Third Avenue, New York, New York 10017
- - ------------------------------------ -----
(Address of principal executive offices) (Zip Code)
212-370-8585
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of 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
-------- ---------
Number of shares of beneficial interest ($.10 par value) of the
Registrant outstanding as of November 8, 1994: 28,492,421.
<PAGE> 2
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
I N D E X
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1994 (unaudited) and
December 31, 1993 (audited) ........................................................3
Consolidated Statements of Operations (unaudited) - Nine Months and Quarters Ended
September 30, 1994 and 1993 ........................................................4
Consolidated Statement of Shareholders' Equity (unaudited) - Nine Months Ended
September 30, 1994..................................................................5
Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended
September 30, 1994 and 1993.........................................................6
Notes to Consolidated Financial Statements...........................................7
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................................12
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..............................................14
</TABLE>
-2-
<PAGE> 3
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS:
Mortgage Loans Receivable
(Net of allowance for possible loan losses of $9,157,236
in 1994 and $23,724,537 in 1993) $ 44,407,872 $100,692,130
Short-term Investments 75,851,279 37,747,388
Investment In Real Estate-Net 56,080,854 33,740,202
Interest and Accounts Receivable 9,283,285 9,977,893
Deferred Acquisition Expenses
(Net of accumulated amortization of $1,270,240 in 1994
and $1,121,842 in 1993) 2,401,573 2,549,971
Cash 701,013 1,053,375
Other Assets 1,391,146 659,037
------------ ------------
TOTAL ASSETS $190,117,022 $186,419,996
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage Payable $ $ 5,027,023
Distributions Payable 2,279,394 2,285,058
Accounts Payable and Accrued Expenses 1,663,034 1,430,273
Deposits on Sale of Loans - 1,365,042
------------ ------------
TOTAL LIABILITIES 3,942,428 10,107,396
SHAREHOLDERS' EQUITY 186,174,594 176,312,600
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $190,117,022 $186,419,996
============ ============
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE> 4
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended Ended
September 30, September 30,
------------------- ---------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Interest income:
Mortgage loans $ 3,782,973 $ 4,202,571 $ 8,146,873 $10,356,120
Short-term investments 684,134 310,077 1,677,138 814,268
Rental income 2,344,829 1,021,701 4,625,896 2,985,424
Additional contingent interest
and prepayment premium income 8,405,813 - 8,405,813 -
Gain on sale of securities - 1,906,998 - 2,080,035
Other - 93,743 - 347,543
----------- ----------- ----------- -----------
15,217,749 7,535,090 22,855,720 16,583,390
----------- ----------- ----------- -----------
Expenses:
General and administrative 449,578 525,824 1,511,316 1,575,987
Payroll and related expenses 509,566 482,927 1,328,735 1,473,811
Provision for possible losses - 15,000,000 - 15,000,000
Interest on note payable - 522,816 - 1,521,031
Amortization of deferred
acquisition expenses 49,466 49,466 148,398 148,398
Loss on disposition of
real estate 227,708 - 227,708 -
Interest on mortgages 205,810 113,621 426,414 490,498
Property operating 576,317 216,925 1,121,828 675,770
Real estate taxes 273,345 282,483 617,933 613,566
Depreciation on real estate 230,478 152,475 535,478 404,350
----------- ----------- ----------- -----------
2,522,268 17,346,537 5,917,810 21,903,411
----------- ----------- ----------- -----------
Net Income (Loss) $12,695,481 $(9,811,447) $16,937,910 $(5,320,021)
=========== ============ =========== ============
Net Income (Loss) Per Share $.44 $.(35) $.59 $.(19)
==== ====== ==== ======
Cash Dividend Declared $.08 $.08 $.24 $.24
==== ==== ==== ====
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE> 5
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
<TABLE>
<CAPTION>
Additional Cumulative Total
Shares of Paid-In Earnings/ Shareholders'
Beneficial Interest Capital (Distributions) Equity
------------------------- ----------- --------------- ------------
Number Amount
----------- ----------
<S> <C> <C> <C> <C> <C>
Balance at
January 1, 1994 28,552,921 $2,855,292 $195,155,914 ($21,698,606) $176,312,600
Net income for the
nine months ended
September 30, 1994 -- -- -- 16,937,910 16,937,910
Shares repurchased
and retired (60,500) (6,050) (231,684) (237,734)
Cash distributions
declared -- -- -- (6,838,182) (6,838,182)
Balance at ---------- ---------- ------------ ------------ ------------
September 30, 1994 28,492,421 $2,849,242 $194,924,230 $(11,598,878) $186,174,594
========== ========== ============ ============= ============
</TABLE>
See notes to consolidated financial statements
-5-
<PAGE> 6
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
-----------------------------
1994 1993
------------ -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 16,937,910 $ (5,320,021)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for possible loan losses - 15,000,000
Loss on disposition of real estate 227,708 -
Amortization of Deferred Acquisition Expense 148,398 148,398
Depreciation 535,478 404,350
Changes in Operating Assets and Liabilities:
Interest and Accounts Receivable (1,066,415) 706,606
Other Assets (897,309) (647,124)
Accounts Payable and Accrued Expenses (606,640) 2,722,659
------------- ------------
Net Cash Provided by Operating Activities 15,279,130 13,014,868
------------ ------------
Cash Flows From Investing Activities:
Satisfaction of Mortgage Loans Receivable $ 44,522,430 $ 1,844,007
Investment in Mortgage Loans Receivable - (3,064,000)
Investments in Real Estate (8,590,097) (410,887)
Sale of Real Estate 112,500
------------ ------------
Net Cash Provided by Investing Activities 36,044,833 (1,630,880
------------ ------------
Cash Flows From Financing Activities:
Dividends Declared and Paid $ (6,843,846) $ (8,864,858)
Shares Repurchased (237,734) (113,051)
Repayment of Mortgages Payable (6,490,854) (4,613,482)
Marketable Securities Sold - 2,769,600
------------- -------------
Net Cash Used in Financing Activities (13,572,434) (10,821,791)
------------- -------------
Net Increase (Decrease) in Cash and Cash Equivalents $ 37,751,529 $ 562,197
Cash and Cash Equivalents, Beginning of Year 38,800,763 37,648,591
------------ ------------
Cash and Cash Equivalents, End of Period $ 76,552,292 $ 38,210,788
============ ============
Cash and Cash Equivalents, End of Period:
Cash $ 701,013 $ 538,696
Short-Term Investments 75,851,279 37,672,092
------------ ------------
$ 76,552,292 $ 38,210,788
============ ============
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 426,414 $ 490,498
============ ============
Supplemental Schedule of Noncash Investing and
Financing Activities:
Investment in Limited Partnership - $ 460,000
Investment in Real Estate 14,626,242 8,490,000
Accounts Payable (839,402) 1,117,147
Mortgages Payable Assumed (1,463,831) (3,465,693)
Interest and Accounts Receivable (1,761,023) (2,245,582)
Use of Allowance for Possible Loan Losses 14,567,301 5,794,128
Net Mortgages Receivable Sold (13,829,129) -
Deposit on Sale of Loans 1,365,042 -
Other Assets (165,200) -
Mortgage receivable exchanged (3,000,000)
Gross Mortgage receivable exchanged for real estate (9,500,000) (10,150,000)
</TABLE>
See notes to consolidated financial statements
-6-
<PAGE> 7
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
l. GENERAL
In the opinion of management of RPS Realty Trust (the "Trust"), the
accompanying unaudited interim consolidated financial statements
contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the consolidated financial
position as of September 30, 1994 and the results of operations for
the three and nine months ended September 30, 1994 and September 30,
1993. The financial statements, related footnotes and discussions
should be read in conjunction with the consolidated financial
statements, related footnotes and discussions contained in the
Trust's annual report on Form 10-K for the year ended December 31,
1993. Certain reclassifications have been made to prior year
financial statements to conform with current classifications.
2. NET EARNINGS PER SHARE
The weighted average number of shares outstanding for the nine months
ended September 30, 1994 and 1993 was 28,495,039 and 28,588,863,
respectively. The weighted average number of shares outstanding for
the quarters ended September 30, 1994 and 1993 was 28,492,421 and
28,596,321, respectively.
3. INVESTMENTS
The following tables summarizes the investments of the Trust as of
September 30, 1994:
<TABLE>
<CAPTION>
MORTGAGE INVESTMENTS
--------------------
TYPE OF NUMBER OF FUNDS RANGE OF
PROPERTY MORTGAGE LOANS(k)(l) ADVANCED(d)(e)(f)(i) INTEREST RATES (a)(b)
- - ---------------------- -------------------- --------------------- ---------------------
<S> <C> <C> <C>
Industrial Properties
First Mortgage Loan 1 $ 1,500,000 12.0%
Office Buildings
Wraparound Mortgage Loans 1 $ 468,493 10%
First Mortgage Loans 2 $ 5,850,000 5.0 - 8.3%
Loan Secured by First
Lien (c) 1 $ 3,000,000 6%
Shopping Center/Retail
Wraparound Mortgage Loans 4 $ 9,846,615 6.5 - 15.2%
First Mortgage Loans (g) 4 $32,900,000 7.5 - 13.3%
------------
Total 13 $ 53,565,108
== ============
</TABLE>
-7-
<PAGE> 8
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
Northeast Southeast Midwest West
--------- --------- ------- ----
<S> <C> <C> <C> <C>
Outstanding Principal
Amount of Loans (d) $41,496,615 $4,500,000 $ 7,100,000 $468,493
Percentage of
Funds Outstanding 77.5% 8.4% 13.2% 0.9%
Number of Loans 7 2 3 1
</TABLE>
Investments in Real Estate
The following table summarizes the Trust's equity investments in real
properties, and the carrying amount, net of accumulated depreciation of such
properties, as of September 30, 1994:
<TABLE>
<CAPTION>
Property (m) Location Carrying Value
- - -------- -------- --------------
<S> <C> <C>
Sunshine Plaza Tamarac, FL $ 9,145,218
Shopping Center
Crofton Shopping Center (h) Crofton, MD 10,062,973
Trinity Corners Pound Ridge, NY 2,919,944
Shopping Center
Toys R Us Commack, NY 2,803,334
Retail Center
Chester Center (j) Chester, NJ 18,205,030
Shopping Center
Lantana Plaza Lantana, FL 5,493,566
Shopping Center
9 North Wabash Chicago,IL 3,269,635
Retail Building
Norgate Center (i) Indianapolis, IN 4,181,154
Shopping Center -----------
Total $56,080,854
===========
</TABLE>
(a) Interest rates presented are the weighted averages of the sum of
cuurrent plus accrued interest rates.
(b) In addition to fixed interest, the Trust is entitled to contingent
interest on certain loans in an amount equal to a percentage of the
gross rent received by the borrower from the property securing the
mortgage above a base amount, payable annually, and additional
contingent interest (equity participation) based on a predetermined
multiple of the contingent interest or a percentage of the net value
of the property at such date payable at maturity. Contingent
interest in the amount of $440,688 and $364,711 was received in the
nine months ended September 30, 1994 and 1993, respectively.
Additional contingent interest of $5,505,813 was received for the
nine months ended September 30, 1994. Additionally, the Trust
received prepayment premium income of $2,900,000 for the nine months
ended September 30, 1994.
-8-
<PAGE> 9
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
(c) The loan is secured by a first lien on a separate collateral
assignment of a first mortgage loan which, in turn, is secured by a
fee position subject to a master lease on an office building in New
York, New York.
(d) Before taking into account allowance for possible loan losses of
$9,157,236.
(e) As of September 30, 1994, the Trust had 4 loans that were in arrears
(three monthly payments or more) or otherwise considered to be
"problem loans" by the Trust. The aggregate gross principal amounts
of these loans, together with receivables relating to such loans
comprised of accrued interest and payments made on behalf of the
borrowers for mortgage payments relating to such properties, totaled
approximately $11,102,912, representing 6% of the Trust's invested
assets, at September 30, 1994. At September 30, 1994 and 1993, the
Trust was not accruing current and accrued interest on four and ten
of the above-mentioned loans, in the aggregate approximate principal
amount of $10,250,000 and $60,630,000, respectively. In addition, as
of September 30, 1994 and 1993 respectively, the Trust was not
accruing deferred interest on one and one additional loan, in the
aggregate approximate principal amount of $25,000,000 and $3,000,000,
respectively.
(f) On January 3, 1994, the Trust sold the following mortgage loans: (i)
its wrap-around mortgage loan secured by the Tampa Plaza shopping
center located in Northridge, California (the "Tampa Loan"); (ii) its
wrap-around mortgage loan secured by the Wellesley Plaza office
building located in Los Angeles, California (the "Wellesley Loan");
and (iii) its first mortgage loan secured by the Tackett Center
mixed-use retail center located in Palm Springs, California (the
"Tackett Loan"). On January 7, 1994, the Trust sold its first
mortgage loan secured by the Janss Mall shopping center located in
Thousand Oaks, California (the "Janss Mall Loan", and collectively,
the "California Mortgage Loans"). The California Mortgage Loans at
closing had an approximate aggregate outstanding balance of
$39,698,000 before taking into consideration allowance for possible
losses of approximately $14,567,000. The Tampa, Tackett and Janss
Mall Loans were sold pursuant to a competitive offering process,
pursuant to which bids for each of the Loans were solicited; the
Wellesley Loan was offered in the competitive offering process, but
was sold in an arms-length negotiation outside of the competitive
offering process. Secured Capital Corp. of Los Angeles, California
acted as the Trust's representative with respect to the offering and
sale of the California Mortgage Loans. In the aggregate, the Trust
received cash proceeds of $25,500,000 from the sale of the California
Mortgage Loans, before deduction of costs, fees and expenses relating
to such transactions, including the payment of a fee to Secured
Capital Corp.
(g) On January 25, 1994, the Trust restructured its mortgage loan in the
original principal amount of $31,000,000 which was secured by a
collateral assignment of mortgages on two properties, an office
building located on Rector Street, New York City (the "Rector
Property") and a shopping center located on Hylan Boulevard, Staten
Island, New York (the "Hylan Center"). Pursuant to the
restructuring, the Trust received a direct assignment of the first
mortgage with a principal amount of $25,000,000 and accrued interest
of $7,881,250 secured by the Hylan Center and retained the collateral
assignment of the Rector Property mortgage, the principal amount of
which was reduced to $3,000,000. The holder of the first mortgage
secured by the Rector Property has granted the Trust a pledge of a
senior participation interest in such mortgage. In addition, upon a
foreclosure, the Trust will obtain a direct first mortgage secured by
the Rector Property. The restructuring was completed in October
1994.
-9-
<PAGE> 10
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
(h) On September 30, 1994 the Trust exercised its right to prepay the
$4,868,046 first mortgage loan relating to the Crofton Plaza Shopping
Center property. The property is owned by a wholly owned subsidiary
of the Trust.
(i) On June 30, 1994, Norgate Shops, Corp., a wholly owned subsidiary of
the Trust, acquired title to the Norgate Shopping Center property.
The property was subject to a first mortgage in the approximate
amount of $1,463,830, which the Trust pre-paid at the time of such
acquisition.
(j) On July 12, 1994 Chester Plaza Shops, Inc., a wholly owned subsidiary
of the Trust acquired title to the Chester Springs Shopping Center,
an approximately 216,000 square foot community-type shopping center
located in Chester, New Jersey. The purchase price for the property
was approximately $18,262,000.
(k) On August 15, 1994 the Trust received proceeds of $18,354,047 from
the prepayment of the Meadowlands Industrial Park mortgage loan. The
proceeds consisted of the repayment of the principal loan balance of
$15,350,000, payment of current interest of $104,047 and prepayment
premium income (in lieu of equity participation) of $2,900,000.
(l) On September 29, 1994 the Trust received proceeds of $11,805,825 from
the prepayment of the Plainview Shopping Center mortgage loan. The
proceeds consisted of the repayment of the principal loan balance of
$5,250,000, payment of accrued interest of $994,187, current interest
of $55,825 and additional contingent interest (equity participation)
of $5,505,813.
(m) On September 28, 1994 the Trust sold the capital stock of The
Saratoga Building, Inc. a wholly owned subsidiary of the Trust for
$12,500. The Trust had previously provided an allowance for
impairment of $1,580,000 against this asset. The sale resulted in an
additional loss of approximately $227,708.
4. DIVIDENDS TO SHAREHOLDERS
Under the Internal Revenue Code, a REIT must meet certain
qualifications including a requirement that it distribute annually to
its shareholders at least 95% of its taxable income. The Trust's
policy is to distribute to shareholders all taxable income.
Dividends declared for the nine months ended September 30, 1994 are
summarized below:
<TABLE>
<CAPTION>
RECORD DATE DIVIDEND PAYMENT DATE
------------- ---------- --------------
<S> <C> <C>
April 28, 1994 $ .08 May 17, 1994
July 28, 1994 $ .08 August 17, 1994
October 27, 1994 $ .08 November 16, 1994
</TABLE>
During 1994, the Trust will have tax write-offs on certain of the
mortgages held by it, which write-offs were previously recognized for
financial reporting purposes in prior years.
5. SHARE REPURCHASES
Pursuant to its share repurchase program, during January of 1994, the
Trust purchased 60,500 of its shares at an average price of $3.93 per
share.
-10-
<PAGE> 11
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
6. BUSINESS COMBINATION
On July 14, 1994 the Trust and Ramco-Gershenson, Inc. entered into a
letter of intent pursuant to which the parties agreed in principle to
effectuate a business combination through an operating limited
partnership. On October 15, 1994, the letter of intent was extended
and now terminates on December 13, 1994, unless a definite agreement
is entered into by the parties on or prior to such date.
As comtemplated by the letter of intent, Ramco will contribute 22
shopping center properties, containing approximately 3,900,000
leasable square feet, and stock in its property mangagement
corporation, while the Trust will contribute seven retail properties,
containing approximately 970,000 leasable square feet, and
$75,000,000 in cash, to the operating partnership. This will result
in the operating partnership owning and managing shopping centers and
other retail properties containing almost 5,000,000 leasable square
feet.
The Trust will be the sole general partner of the operating
partnership and will hold between 63% and 70% of the interests in the
operating partnership, and Ramco will hold between 30% and 37%. The
percentage interests to be received by the parties will be based upon
formula calculations of the "agreed upon" values of the assets
contributed by the parties, and are subject to adjustment based on
changes in funds from operations attributable to the Ramco
properties. It is also contemplated that prior to consummation of
the transaction, the Trust will dispose of its mortgage loan assets
through prepayments, sales or a spinoff of such assets to the Trust's
shareholders.
The proposed business combination, which is currently anticipated to
close in the first quarter of 1995, is subject to the completion of
due diligence investigations by both parties and the preparation of
definitive documentation, and is subject to a number of conditions,
including the Trust's Board of Trustees and shareholder approval,
receipt of a fairness opinion from the Trust's financial advisor,
disposition of the Trust's mortgage loan assets or consummation of
the spin-off transaction, and the refinancing of certain Ramco
property debt on specified terms. The transaction is also subject to
the condition that, Ramco's interest in the operating partnership
will not be less than 30%; however, based upon current market
conditions (including the increase in interest rates since the date
the letter of intent was originally executed), Ramco's percentage
interest in the operating partnership (calculated in accordance with
the formula described in the letter of intent) may be less than 30%.
Notwithstanding such calculations, Ramco has continued to negotiate
with respect to a definitive agreement; however, there can be no
assurance that the contemplated transaction will occur, or if it does
occur, on which terms it will occur.
Upon consummation of the transaction, the Trust's headquarters will
move to Southfield, Michigan and the Trust will change its name to
Ramco-Gershenson Properties Trust.
-11-
<PAGE> 12
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
As of December 31, 1993 the Trust had $100,692,130 invested in mortgage loans
(after deducting allowance for possible loan losses of $23,724,537),
$33,740,202 invested in real properties and $37,747,388 in short-term
investments. During the first quarter of 1994, the Trust sold four mortgage
loans comprising the Trust's California mortgage loan portfolio and received
proceeds of $25,500,000 from the sale, before deduction of costs, fees and
expenses relating to such transaction. During the second quarter of 1994, the
Trust, through a wholly owned subsidiary acquired the Norgate Shopping Center
property. Immediately prior to the acquisition the Trust pre-paid the first
mortgage loan relating to the Norgate property in the approximate amount of
$1,463,830. During the third quarter of 1994, the Trust through a wholly owned
subsidiary acquired the Chester Springs Shopping Center property for a purchase
price of approximately $18,262,000. Additionally, during the third quarter of
1994 the Trust received aggregate proceeds of $30,159,872 from the prepayment
of two mortgage loans. The Trust also sold the capital stock of the Saratoga
Building, Inc. a wholly owned subsidiary of the Trust for $12,500. As of
September 30, 1994 the Trust had $44,407,872 invested in mortgage loans (after
deducting allowance for possible loan losses of $9,157,236), $56,080,854
invested in real properties and $75,851,279 in short-term investments.
RESULTS OF OPERATIONS
Nine months ended September 30, 1994 compared to nine months ended September
30, 1993.
Total revenues for the nine months ended September 30, 1994 (before rental
income) increased $4,631,858 or 34.1% from that of the previous year. During
the nine month period of 1994 the Trust received $8,405,813 in additional
contingent interest and prepayment premium income as compared to none in the
1993 period. Short-term interest income increased $862,870 or 105.9% as a
result of higher balances in short-term investments. Interest income from
mortgage loans decreased $2,209,247 or 21.3% as a result of the reduction in
the Trust's mortgage loan portfolio. Gain on sale of securities and other
income decreased 100% or $2,080,035 and $347,543 respectively as a result of
the Trust selling its marketable securities in 1993.
During the nine months ended September 30, 1994 expenses (excluding interest on
mortgages, property operating, real estate taxes and depreciation) decreased
$16,503,070 or 83.7% compared to the same period a year ago, primarily because
during the 1993 period a provision for possible loan losses was made in the
amount of $15,000,000 as compared to none during the 1994 period. Interest
expense on the note payable decreased $1,521,031 or 100% as a result of the
Trust redeeming in full the note issued pursuant to the Note Issuance Agreement
in 1993. During the nine month period of 1994 the Trust recognized a loss of
$227,708 as a result of selling its capital stock of the Saratoga Building,
Inc., a wholly owned subsidiary of the Trust. General and administrative
expenses and payroll and related expenses decreased by $64,671 and $145,076,
respectively.
-12-
<PAGE> 13
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
During the nine months of 1994 the Trust recognized rental income of $4,625,896
as compared to $2,985,424 for the same period of 1993. This resulted in an
increase of $1,640,472 or 54.9%. During the 1994 period the Trust received
rental income from 8 properties as compared to 6 during the 1993 period.
During the nine month period of 1994 the Trust's interest expense on mortgages
payable decreased $64,084 or 13.1% due to principal paydowns. Property
operating expenses, real estate taxes and depreciation expense increased during
the 1994 period by $446,058, $4,367 and $131,128, respectively, over the nine
month period of 1993 due to the aforementioned increase in the number of
properties. During the nine months of 1994 the Trust recognized net income
from investment in real estate of $1,924,243 as compared to $801,240 in the
nine months of 1993.
Net income for the nine months of 1994 as compared to the nine months of 1993
increased $22,257,931 as a result of the items discussed above.
Three months ended September 30, 1994 compared to three months ended September
30, 1993.
Total revenues for the three months ended September 30, 1994 (before rental
income) increased $6,359,531 or 97.6% from that of the previous year. During
the three month period of 1994 the Trust received $8,405,813 in additional
contingent interest and prepayment premium income as compared to none in the
1993 period. Short-term interest income increased $374,057 or 120.6% as a
result of higher balances in short-term investments. Interest income from
mortgage loans decreased $419,598 or 10.0% as a result of the reduction in the
Trust's mortgage loan portfolio. Gain on sale of securities and other income
decreased 100% or $1,906,998 and $93,743 respectively as a result of the Trust
selling its marketable securities in 1993.
During the three months ended September 30, 1994 expenses (excluding interest
on mortgages, property operating, real estate taxes and depreciation) decreased
$15,344,715 or 92.5% compared to the same period a year ago, primarily because
during the 1993 period a provision for possible loan losses was made in the
amount of $15,000,000 as compared to none during the 1994 period. Interest
expense on the note payable decreased $522,816 or 100% as a result of the Trust
redeeming in full the note issued pursuant to the Note Issuance Agreement in
1993. During the three month period of 1994 the Trust recognized a loss of
$227,708 as a result of selling its capital stock of the Saratoga Building,
Inc., a wholly owned subsidiary of the Trust. General and administrative
expenses decreased by $76,246 while payroll and related expenses increased
$26,639.
During the three months of 1994 the Trust recognized rental income of
$2,344,829 as compared to $1,021,701 for the same period of 1993. This
resulted in an increase of $1,323,128 or 129.5%. During the 1994 period the
Trust received rental income from 8 properties as compared to 6 during the 1993
period. During the three month period of 1994 the Trust's interest expense on
mortgages payable increased $92,189 or 81.1% due to the prepayment of the first
mortgage loan relating to the Crofton Plaza Shopping Center property. Property
operating expenses and depreciation expense increased during the 1994 period by
$359,392 and $78,003, respectively, over the three month period of 1993 due to
the aforementioned increase in the number of properties. Real estate taxes
decreased $9,138 between comparable periods. During the three months of 1994
the Trust recognized net income from investment in real estate of $1,058,879 as
compared to $256,197 in the three months of 1993.
Net income for the three months of 1994 as compared to the three months of 1993
increased $22,506,928 as a result of the items discussed above.
-13-
<PAGE> 14
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. No exhibits are filed with this report.
B. Current Report on Form 8-K filed July 28, 1994.
-14-
<PAGE> 15
RPS REALTY TRUST FORM 10-Q SEPTEMBER 30, 1994
SIGNATURES
Pursuant to 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.
RPS REALTY TRUST
By:/s/ Joel M. Pashcow
---------------------------
Joel M. Pashcow
Chairman and Trustee
(Principal Executive Officer)
By:/s/ Herbert Liechtung
---------------------------
Herbert Liechtung
President and Trustee
(Principal Executive Officer)
By:/s/ Edwin R. Frankel
----------------------------
Edwin R. Frankel
Senior Vice President and Treasurer
(Chief Financial Officer)
Date: November 11, 1994
<PAGE> 16
EXHIBIT INDEX
--------------
Sequentially
Numbered
Exhibit No. Description Page No.
- - ----------- ----------------- ------------
Ex-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 76,552,292
<SECURITIES> 0
<RECEIVABLES> 9,283,285
<ALLOWANCES> 9,157,236
<INVENTORY> 0
<CURRENT-ASSETS> 104,281,445
<PP&E> 0
<DEPRECIATION> 1,270,240
<TOTAL-ASSETS> 190,117,022
<CURRENT-LIABILITIES> 3,942,428
<BONDS> 0
<COMMON> 2,849,242
0
0
<OTHER-SE> 183,325,352
<TOTAL-LIABILITY-AND-EQUITY> 190,117,022
<SALES> 0
<TOTAL-REVENUES> 22,855,720
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,491,396
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 426,414
<INCOME-PRETAX> 16,937,910
<INCOME-TAX> 0
<INCOME-CONTINUING> 16,937,910
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,937,910
<EPS-PRIMARY> $ .59
<EPS-DILUTED> $ .59
</TABLE>
