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 September 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 October 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
September 30, 1995 and December 31, 1994 (Unaudited) ..............1
Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30,
1995 and 1994 (Unaudited) ..........................................2
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1995
and 1994 (Unaudited) ...............................................3
Investment in Affiliates for the Three and Nine
Months Ended September 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>
September 30 December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash $48,831 $2,899
Land held for sale 17,676 17,676
Investments in and receivables from affiliates 2,905,242 3,019,621
Notes, mortgage loans and accrued interest receivable 95,058 177,086
Investments in partnerships, other securities and other 18,202 20,515
Deferred income taxes 207,000 201,000
---------- ----------
TOTAL ASSETS 3,292,009 3,438,797
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
Loans and notes payable 65,000 65,000
Notes and accrued interest payable to affiliates 1,087,573 977,910
Dividends payable 260,000 200,000
Accounts payable, accrued expenses and other liabilities 15,936 27,792
---------- ----------
TOTAL LIABILITIES 1,428,509 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 (3,058,696) (2,754,101)
Treasury stock (21,000 shares at cost) (225,000) (225,000)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 1,863,500 2,168,095
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,292,009 $3,438,797
========== ==========
</TABLE>
See notes to condensed consolidated financial statements
1
<PAGE>
Transco Realty Trust and Subsidiaries
(A Massachusetts Business Trust)
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INCOME
Equity in earnings (losses) of affiliates $107,046 ($236,982) ($131,814) ($402,859)
Gains from partnerships and other investments 16,454 352 18,230 2,192
Interest, dividends and other income 4,978 5,265 14,776 14,485
---------- --------- --------- ---------
128,478 (231,365) (98,808) (386,182)
---------- --------- --------- ---------
EXPENSES
Interest 10,491 5,789 28,195 17,364
Property and other operating expenses 14,774 8,241 42,391 35,950
Fees and salaries to trustees, officers and
related parties 27,000 27,000 81,200 81,200
---------- --------- --------- ---------
52,265 41,030 151,786 134,514
---------- --------- --------- ---------
Income (loss) before income taxes 76,213 (272,395) (250,594) (520,696)
Benefit from (provision for) income taxes 22,200 (6,000)
---------- --------- --------- ---------
NET INCOME (LOSS) $54,013 ($272,395) ($244,594) ($520,696)
======= ========= ========= =========
Net income (loss) per share of beneficial interest:
Net income (loss) $54,013 ($272,395) ($244,594) ($520,696)
Less preferred stock dividends 20,000 20,000 60,000 60,000
---------- --------- --------- ---------
Net income (loss) of beneficial interest $34,013 ($292,395) ($304,594) ($580,696)
======= ========= ========= =========
Weighted average number of common shares of
beneficial interest outstanding during the period 560,508 560,508 560,508 560,508
======= ======= ======= =======
Net income (loss) per share of beneficial interest $0.06 ($0.52) ($0.54) ($1.04)
===== ====== ====== ======
</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>
Nine Months Ended September 30
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss ($244,594) ($520,696)
--------- ---------
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in losses of affiliates and
partnerships 131,814 400,667
Changes in assets and liabilities:
Decrease in deferred income taxes (6,000)
Increase in other assets (8) (13,064)
Decrease in accrued expenses and other
liabilities (26,291) (4,502)
--------- ---------
Total Adjustments 99,515 383,101
--------- ---------
Net cash used in operating activities (145,079) (137,595)
--------- ---------
Cash Flows from Investing Activities:
Payments received on mortgages and notes
receivable 82,028 13,253
(Investments in) distributions from
partnerships and affiliates (680) 5,997
Advances from (to) affiliates 109,663 (3,784)
--------- ---------
Net cash provided by investing
activities 191,011 15,466
--------- ---------
Net increase (decrease) in cash 45,932 (122,129)
Cash at the beginning of the period 2,899 128,475
--------- ---------
Cash at the end of the period $ 48,831 $ 6,346
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 28,000 $ 17,000
========= =========
</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 September 30, 1995 includes the Trust's 40.91%
interest in HMG. HMG's Condensed Consolidated Statements of Operations for the
three and nine months ended September 30, 1995 and 1994 are presented below:
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Rentals and related revenue $ 312,308 $ 808,960 $ 1,534,685 $ 2,509,534
Hotel, club and marina revenues 592,368 400,272 2,731,807 1,887,678
Gain from sale of securities 450,431 131,228 501,517 168,503
Interest from invested cash, dividends and other 83,510 84,256 612,095 225,581
--------- --------- --------- ---------
Total revenues 1,438,617 1,424,716 5,380,104 4,791,296
--------- --------- --------- ---------
EXPENSES
Operating expenses:
Rental Properties and other 238,193 319,338 979,619 1,034,604
Hotel, club and marina expenses:
Payroll and related expenses 500,231 479,521 1,704,532 1,651,662
Cost of food and beverage 79,090 86,927 422,583 333,509
Administrative and general expenses 673,559 477,390 1,589,274 1,732,572
Depreciation and amortization 302,247 203,636 1,076,148 654,865
--------- --------- --------- ---------
Total operating expenses 1,793,320 1,566,812 5,772,156 5,407,212
Interest 177,976 159,996 666,162 603,893
Advisor's fee 218,751 218,751 656,253 656,253
General and administrative 125,962 328,619 374,296 1,090,176
Directors' fees and expenses 20,146 23,391 51,341 57,032
Minority partners' interests in operating
(losses) gains of consolidated entities (59,869) 46,177 61,071 68,478
Gains from unconsolidated entities (38,672) (106,867) (154,292) (647,619)
--------- --------- --------- ---------
Total expenses 2,237,614 2,236,879 7,426,987 7,235,425
--------- --------- --------- ---------
Loss before gain on sales of real estate (798,997) (812,163) (2,046,883) (2,444,129)
Gain (loss) on sales of real estate, net 1,159,670 310,660 1,947,523 1,673,149
--------- --------- --------- ---------
NET INCOME (LOSS) $ 360,673 ($ 501,503) ($ 99,360) ($ 770,980)
=========== =========== =========== ===========
Earnings (Loss) Per Common Share
$ 0.31 ($ 0.43) ($ 0.09) ($ 0.66)
=========== =========== =========== ===========
(Based on 1,166,835 weighted average shares outstanding):
</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
nine months ended September 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 nine months ended September 30, 1995 the Trust
reported net income (loss) of $54,000 or $.06 per share and $244,000 or $.54 per
share, respectively. For the three and nine months ended September 30, 1994, the
Trust reported net losses of $272,000 or $.52 per share and $521,000 or $1.04
per share, respectively.
Total revenues (deficit revenues) for the three and nine months ended
September 30, 1995 were $128,000 and a deficit of $291,000, respectively. For
the three and nine months ended September 30, 1994 total revenues were a deficit
of $231,000 and $386,000, 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 nine months ended September 30, 1995 HMG reported net
income (loss) of $361,000 and $99,000, respectively, versus losses of $501,000
and $770,000 for the three and nine months ended September 30, 1994,
respectively. (See Part I Financial Information - Investments in Affiliates -
HMG/Courtland Properties, Inc.). HMG's increased income for the three months
ended September 30, 1995 is primarily attributable to increased gain on sales of
real estate.
The Trust's total expenses for the three and nine months ended
September 30, 1995 were $52,000 and $152,000, respectively. Total expenses for
the three and nine months ended September 30, 1994 were $41,000 and $134,000
respectvely. The increase between the two nine-month periods was primarily the
result of decreased interest expense.
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
September 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)
/s/ Lawrence I. Rothstein
---------------------------
Lawrence I. Rothstein
Vice President
November 15, 1995
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000099235
<NAME> TRANSCO REALTY TRUST
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 48,831
<SECURITIES> 0
<RECEIVABLES> 95,058
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,292,009
<CURRENT-LIABILITIES> 1,428,509
<BONDS> 0
<COMMON> 4,147,196
0
1,000,000
<OTHER-SE> (3,283,696)
<TOTAL-LIABILITY-AND-EQUITY> 3,292,009
<SALES> (98,808)
<TOTAL-REVENUES> (98,808)
<CGS> 0
<TOTAL-COSTS> 151,786
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,195
<INCOME-PRETAX> (250,594)
<INCOME-TAX> (244,594)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (244,594)
<EPS-PRIMARY> (.54)
<EPS-DILUTED> 0
</TABLE>
