UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended June 30, 1995
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 1-5570
TRANSCO REALTY TRUST
(Exact name of small business issuer as specified in its charter)
Massachusetts 04607-1814
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 S. Bayshore Drive, Coconut Grove, Florida 33133
(Address of principal executive offices) (Zip Code)
305-854-6803
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Sections 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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Sections, 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
560,508 Common shares were outstanding as of July 31, 1995
<PAGE>
TRANSCO REALTY TRUST AND SUBSIDIARIES
(A MASSACHUSETTS BUSINESS TRUST)
INDEX
PAGE
NUMBER
PART I Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1995 and December 31, 1994 (Unaudited) ..................1
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 1995
and 1994 (Unaudited) ..............................................2
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1995 and 1994
(Unaudited) .......................................................3
Investment in Affiliates for the Three and Six
Months Ended June 30, 1995 and 1994 (Unaudited) ...................4
Notes to Condensed Consolidated Financial
Statements (Unaudited) ............................................5
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations .........................6
PART II Other Information:
Item 6. Reports of Form 8-K ..........................................7
<PAGE>
Transco Realty Trust and Subsidiaries Part I Financial Information
(A Massachusetts Business Trust) Item I Financial Statements
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash $9,256 $2,899
Land held for sale 17,676 17,676
Investments in and receivables from affiliates 2,790,403 3,019,621
Notes, mortgage loans and accrued interest
receivable 172,021 177,086
Investments in partnerships, other securities
and other 23,670 20,515
Deferred income taxes 229,200 201,000
---------- ----------
TOTAL ASSETS 3,242,226 3,438,797
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Loans and notes payable 65,000 65,000
Notes and accrued interest payable to affiliates 1,095,789 977,910
Dividends payable 240,000 200,000
Accounts payable, accrued expenses and other
liabilities 11,910 27,792
---------- ----------
TOTAL LIABILITIES 1,412,699 1,270,702
---------- ----------
SHAREHOLDERS' EQUITY
Shares of beneficial interest, no par value;
unlimited number authorized; 581,508 issued 4,147,196 4,147,196
$1.00 cummulative preferred stock, no par value,
non-voting - 80,000 shares authorized, issued and
outstanding at redemption value of $12.50 per
share 1,000,000 1,000,000
Accumulated deficit (3,092,669) (2,754,101)
Treasury stock (21,000 shares at cost) (225,000) (225,000)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 1,829,527 2,168,095
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,242,226 $3,438,797
========== ==========
</TABLE>
1
See notes to condensed consolidated financial statements
<PAGE>
Transco Realty Trust and Subsidiaries
(A Massachusetts Business Trust)
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INCOME
Equity in earnings of affiliates ($295,905) ($531,579) ($238,860) ($165,877)
Gains from partnerships and other investments 1,776 1,840
Interest, dividends and other income 5,004 4,523 9,798 9,220
--------- --------- --------- ---------
(290,901) (527,056) (227,286) (154,817)
--------- --------- --------- ---------
EXPENSES
Interest 10,049 5,974 17,704 11,575
Property and other operating expenses 19,775 18,471 27,617 27,709
Fees and salaries to trustees, officers and
related parties 27,000 27,000 54,200 54,200
--------- --------- --------- ---------
56,824 51,445 99,521 93,484
--------- --------- --------- ---------
Income (loss) before income taxes (347,725) (578,501) (326,807) (248,301)
Provision for income taxes (40,800) (28,200)
--------- --------- --------- ---------
NET INCOME (LOSS) ($306,925) ($578,501) ($298,607) ($248,301)
========= ========= ========= =========
Net income (loss) per share of beneficial interest:
Net income ($306,925) ($578,501) ($298,607) ($248,301)
Less preferred stock dividends 20,000 20,000 40,000
--------- --------- --------- ---------
Net (loss) income of beneficial interest ($306,925) ($598,501) ($318,607) ($288,301)
========= ========= ========= =========
Weighted average number of common shares of
beneficial interest outstanding during the period 560,508 560,508 560,508 560,508
======= ======= ======= =======
Net(loss) income per share of beneficial interest ($0.55) ($1.07) ($0.57) ($0.51)
====== ====== ====== ======
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE>
Transco Realty Trust and Subsidiaries
(A Massachusetts Business Trust)
Condensed Consolidated Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) ($298,607) ($248,301)
--------- ---------
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in losses (earnings) of affiliates
and partnerships 238,860 164,037
Changes in assets and liabilities:
Increase in deferred income taxes (28,200)
Decrease (increase) in other assets (3,244) (9,151)
Increase in accrued expenses and other
liabilities (25,485) (10,636)
--------- ---------
Total Adjustments 181,931 144,250
--------- ---------
Net cash used in operating activities (116,676) (104,051)
--------- ---------
Cash Flows from Investing Activities:
Payments received on mortgages and notes
receivable 5,065 7,205
Distributions from partnerships and affiliates 89 3,618
Advances from (to) affiliates 117,879 (2,494)
--------- ---------
Net cash provided by investing activities 123,033 8,329
--------- ---------
Cash Flows from Financing Activities:
Repayments of interest to affiliate (5,887)
--------- ---------
Net cash used in financing activities (5,887)
--------- ---------
Net (decrease) increase in cash 6,357 (101,609)
Cash at the beginning of the period 2,899 128,475
--------- ---------
Cash at the end of the period $9,256 $26,866
====== =======
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $18,000 $12,000
======= =======
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
Part I Financial Information (continued) - Investments in Affiliates -
HMG/Courtland Properties, Inc. (HMG)
The investment in affiliates at June 30, 1995 inclues the Trust's 40.91%
interest in HMG. HMG's Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 1995 and 1994 are presented below:
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Rentals and related revenue $402,993 $784,238 $1,222,377 $1,700,574
Hotel, club and marina revenues 1,007,898 639,357 2,139,439 1,487,406
Gain from sale of securities 51,086
Interest from invested cash, dividends and other 376,618 110,845 528,585 178,600
--------- --------- --------- ---------
Total revenues 1,787,509 1,534,440 3,941,487 3,366,580
--------- --------- --------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 317,675 468,218 741,426 880,643
Hotel, club and marina expenses:
Payroll and related expenses 588,911 676,027 1,204,301 1,270,159
Cost of food and beverage 156,610 116,655 343,493 246,582
Administrative and general expenses 479,753 454,863 915,715 991,787
Depreciation and amortization 314,803 209,326 773,901 451,229
--------- --------- --------- ---------
Total operating expenses 1,857,752 1,952,089 3,978,836 3,840,400
Interest 239,190 228,408 488,186 443,897
Advisor's fee 218,751 218,751 437,502 437,502
General and administrative 132,278 528,552 248,334 761,557
Directors' fees and expenses 15,350 21,641 31,195 33,641
Minority partners' interests in operating
gains of consolidated entities 36,515 4,930 120,940 22,301
Gains from unconsolidated entities (75,578) (30,291) (115,620) (540,752)
--------- --------- --------- ---------
Total expenses 2,424,258 2,897,080 5,189,373 4,998,546
--------- --------- --------- ---------
Loss before gain on sales of real estate (636,749) (1,362,640) (1,247,886) (1,631,966)
Gain (loss) on sales of real estate, net (28,543) 172,987 787,853 1,362,489
--------- --------- --------- ---------
NET LOSS ($665,292) ($1,189,653) ($460,033) ($269,477)
========= =========== ========= =========
Earnings (Loss) Per Common Share
(Based on 1,166,835 weighted average shares
outstanding): ($0.57) ($1.02) ($0.39) ($0.23)
====== ====== ====== ======
</TABLE>
4
<PAGE>
TRANSCO REALTY TRUST AND SUBSIDIARIES
(A MASSACHUSETTS BUSINESS TRUST)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of the Trust, the accompanying unaudited condensed
financial statements include all adjustments (consisting only of normal
recurring accruals) which are necessary for a fair presentation of the results
for the periods. Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the Trust's Annual
Report for the year ended December 31, 1994. The results of operations for the
six months ended June 30, 1995 are not necessarily indicative of the results to
be expected for the full year.
5
<PAGE>
Part I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the three and six months ended June 30, 1995 the Trust reported net
losses of $307,000 or $.55 per share and $299,000 or $.57 per share,
respectively. For the three and six months ended June 30, 1994, the Trust
reported net losses of $578,000 or $1.07 per share and $248,000 or $.51 per
share, respectively.
Total revenues for the three and six months ended June 30, 1995 were a
deficit of $291,000 and $227,000, respectively. For the three and six months
ended June 30, 1994 total revenues were a deficit of $527,000 and $155,000,
respectively. This decrease in deficit was primarily due to equity in increased
earnings of its affiliate, HMG/Courtland Properties, Inc. (HMG).
For the three and six months ended June 30, 1995 HMG reported losses of
$665,000 and $460,000, respectively, versus losses of $1,190,000 and $269,000
for the three and six months ended June 30, 1994, respectively. (See Part I
Financial Information - Investments in Affiliates - HMG/Courtland Properties,
Inc.). HMG's decrease in losses for the three months ended June 30, 1995 is
primarily attributable to increased revenues from the operations of the hotel,
club, and marina property acquired in September 1993.
Total expenses for the three and six months ended June 30, 1995 were
$57,000 and $100,000, respectively. Total expenses for the three and six months
ended June 30, 1994 were $51,000 and $93,000 respectvely. These increases were
not significant.
LIQUIDITY AND CAPITAL RESOURCES
The Trust's ability to maintain liquidity and obtain capital resources
largely depends on the results of its affiliate HMG and on HMG's ability to
generate sufficient operating income to allow for the payment of dividends.
Until such dividends are paid or TRT can successfully sell the remaining land in
North Carolina, the Trust's current obligations will be met by financing
provided through traditional sources and by affiliates.
6
<PAGE>
Part II OTHER INFORMATION
Item 6. Reports on Form 8-K
(a) There were no reports filed on Form 8-K during the quarter ended
June 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSCO REALTY TRUST
(Registrant)
Lawrence I. Rothstein
Vice President
August 15, 1995
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000099235
<NAME> TRANSCO REALTY TRUST
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 9,256
<SECURITIES> 3,424
<RECEIVABLES> 172,021
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,242,226
<CURRENT-LIABILITIES> 1,412,699
<BONDS> 0
<COMMON> 4,147,196
0
0
<OTHER-SE> (2,317,669)
<TOTAL-LIABILITY-AND-EQUITY> (3,242,226)
<SALES> (227,286)
<TOTAL-REVENUES> (227,286)
<CGS> 0
<TOTAL-COSTS> 99,521
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,704
<INCOME-PRETAX> (326,807)
<INCOME-TAX> (298,607)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (298,607)
<EPS-PRIMARY> (.57)
<EPS-DILUTED> 0
</TABLE>
