<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended September 30, 1997
[_] Transition Report Pursuant to Section 13 or 19(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to __________________
Commission File Number 0-7865.
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SECURITY LAND AND DEVELOPMENT CORPORATION
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GEORGIA 58-1088232
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(State of other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
2816 Washington Road, #103, Augusta, Georgia 30909
- - -------------------------------------------- -----
(Address of Principal Executive Offices) Zip Code
Issuer's Telephone Number (706) 736-6334
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(Former Name, Address & fiscal year, if changed from last report.)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the 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
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at December 31, 1996
- - ---------------------------- --------------------------------
Common Stock, $.10 Par Value 5,237,607 shares
Transitional Small Business Disclosure Format: Yes No X
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following condensed consolidated financial statements of Security Land and
Development Corporation and Subsidiary are included herein:
<TABLE>
<CAPTION>
Page
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<S> <C>
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996 2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED DECEMBER 31, 1996 AND 1995 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED DECEMBER 31, 1996 AND 1995 4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5
</TABLE>
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SECURITY LAND AND DEVELOPMENT CORPORATION
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
DECEMBER 31, 1996
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS
<S> <C>
Cash $ 39,618
Other current assets 1,480
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TOTAL CURRENT ASSETS 41,098
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INVESTMENTS AND OTHER ASSETS
Land and improvements, at cost 317,014
Property leased to others under operating leases, less accumulated
depreciation $774,308 5,606,088
Deferred tax 16,244
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5,939,346
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$5,980,444
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,517
Current portion of long-term debt 101,766
Other current liabilities 31,113
Short-term loans, related party 50,500
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TOTAL CURRENT LIABILITIES 186,896
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LONG-TERM DEBT, LESS CURRENT MATURITIES 4,057,063
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DEFERRED TAXES 23,756
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DEFERRED INCOME 453,995
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STOCKHOLDERS' EQUITY
Common stock, at par value 623,761
Paid-in capital 333,766
Retained earnings 401,207
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1,358,734
Less subscribed shares 100,000
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1,258,734
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$5,980,444
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</TABLE>
See notes to the condensed consolidated financial statements.
2
<PAGE>
SECURITY LAND AND DEVELOPMENT CORPORATION
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revenues, rent earned $ 195,421 $ 145,830
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Operating expenses:
Payroll and related costs 8,511 8,620
Depreciation 34,313 31,571
Taxes 14,554 -
Professional services 3,450 25
Insurance 3,271 1,918
Commissions 13,000 -
Other 9,287 9,603
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86,386 51,737
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Operating income 109,035 94,093
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Financial income (expense):
Interest income 296 1,837
Interest (expense) (82,202) (84,405)
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(81,906) (82,568)
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Income before income taxes 27,129 11,525
Applicable income taxes 4,856 -
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Net income $ 22,273 $ 11,525
========= =========
Income per common share $ - $ _
========= =========
</TABLE>
See notes to the condensed consolidated financial statements.
3
<PAGE>
SECURITY LAND AND DEVELOPMENT CORPORATION
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from leases $ 217,328 $ 145,830
Interest received 296 1,837
Cash paid to suppliers and employees (95,203) (87,358)
Interest paid (82,202) (84,405)
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 40,219 (24,096)
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CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (24,698) (22,833)
Principal payments on long-term debt, stockholder - (11,827)
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NET CASH (USED IN) FINANCING ACTIVITIES (24,698) (34,660)
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NET INCREASE (DECREASE) IN CASH 15,521 (58,756)
CASH AT BEGINNING OF PERIOD 24,097 77,811
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CASH AT END OF PERIOD $ 39,618 $ 19,055
========= =========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income $ 22,273 $ 11,525
Deferred income tax 4,856 -
Adjustments to reconcile net income to net cash provided by
(used in) operating activities
Depreciation 34,313 31,571
Changes in assets and liabilities
Increase in other assets (1,339) -
(Decrease) in accounts payable, accrued expenses and deferrals (19,884) (67,192)
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NET CASH (USED IN) OPERATING ACTIVITIES $ 40,219 $ (24,096)
========= =========
</TABLE>
See notes to the condensed consolidated financial statements.
4
<PAGE>
SECURITY LAND AND DEVELOPMENT CORPORATION
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are presented in accordance with the
requirements of Form 10-QSB and consequently to not include all of the
disclosures normally required by generally accepted accounting principles or
those normally made in the Company's annual Form 10-KSB filing. Accordingly,
the reader of this Form 10-QSB may wish to refer to the Company's Form 10-KSB
for the year ended September 30, 1996 for further information.
The financial information has been prepared in accordance with the Company's
customary accounting practices and has not been audited. In the opinion of
management, the information presented reflects all adjustments necessary for a
fair statement of interim results. All such adjustments are of a normal and
recurring nature.
NOTE 2 - INVESTMENT IN LEASES AND PROPERTY UNDER OPERATING LEASES
Property leased or held for lease to others under operating leases consists of
the following at December 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
Land $ 813,660
Warehouse and buildings 5,566,736
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6,380,396
Less accumulated depreciation 774,308
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$5,606,088
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</TABLE>
Refer to the Company's Form 10-KSB for the year ended September 30, 1996 for
further information on operating lease agreements and terms.
NOTE 3 - SHORT-TERM LOANS - RELATED PARTY
Short-term loans from a director of the Company consisted of the following at
December 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
Cash advances, no stated interest rate or maturity date, unsecured $ 50,500
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NOTE 4 - LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 1996:
7.875% note payable to an insurance company due in monthly payments
of $35,633, including interest, through June 2015, collateralized by
real estate and assignment of lease payments from the property. $4,158,829
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Less current maturities 101,766
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$4,057,063
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</TABLE>
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company's results of operations for the three month period ended December
31, 1996 and a comparative analysis of the same period for the 1995 year are
presented below:
<TABLE>
<CAPTION>
Increase (Decrease)
1996 Compared to
1995
-------------------
1996 1995 Amount Percent
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Leasing revenue $195,421 $145,830 $49,591 34.0
Operating expenses 86,386 51,737 34,649 67.0
Interest expense 81,906 84,405 (2,499) (2.9)
</TABLE>
Revenue from leasing has increased from 1995 primarily as a result of additional
space being leased at the strip-center facility on Washington Road. On an
annualized basis, current revenues from leasing exceeds revenue from leasing for
the Company's fiscal year ended September 30, 1996, as much of the additional
space leased at the strip-center was leased near or subsequent to September 30,
1996. Lease revenue from other properties owned by the Company has remained
constant.
Refer to the Company's Form 10-KSB for the year ended September 30, 1996, for
further information regarding properties owned and lease terms.
Operating expenses have increased from 1995 primarily because of property taxes
recognized in the current period and commissions paid in the current period for
services related to obtaining new tenants at the strip-center. On an annualized
basis, operating expenses are comparable to the Company's fiscal year ended
September 30, 1996.
Interest expense for the current quarter is comparable to 1995 and, on an
annualized basis is comparable to the Company's interest expense for the fiscal
year ended September 30, 1996.
The Company's ratio of current assets to current liabilities at December 31,
1996 was .22. The ratio was also .22 at September 30, 1996, and was .16 at
December 31, 1995.
During the current quarter, the Company satisfied liquidity needs through
operating revenues. Management of the Company continues to expect future
liquidity needs to be met from operating revenues of the Company.
The Company does not expect any significant change in the number of employees.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three
months ended December 31, 1996.
6
<PAGE>
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.
SECURITY LAND & DEVELOPMENT CORPORATION
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(Registrant)
February 12, 1997 By: /s/ T. Greenlee Flanagin
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T. GREENLEE FLANAGIN
President
Chief Executive Officer
7
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INDEX TO EXHIBITS
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Exhibit Number Description Sequential Page Number
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 39,618
<SECURITIES> 0
<RECEIVABLES> 1,480
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41,098
<PP&E> 5,939,346
<DEPRECIATION> 774,308
<TOTAL-ASSETS> 5,980,444
<CURRENT-LIABILITIES> 186,896
<BONDS> 4,057,063
0
0
<COMMON> 623,761
<OTHER-SE> 333,766
<TOTAL-LIABILITY-AND-EQUITY> 5,980,444
<SALES> 0
<TOTAL-REVENUES> 195,421
<CGS> 0
<TOTAL-COSTS> 109,035
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82,202
<INCOME-PRETAX> 27,129
<INCOME-TAX> 4,856
<INCOME-CONTINUING> 22,273
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,273
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
