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, 1996
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, 1996.
<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, 1996 and December 31, 1995 (Unaudited) .................1
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 1996
and 1995 (Unaudited) ............................................2
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995 (Unaudited) .....3
Investment in Affiliates for the Three and Six Months Ended
June 30, 1996 and 1995 (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 5. Other Information ..........................................7
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,
1996 1995
<S> <C> <C>
ASSETS
Cash $ 10,009 $ 23,639
Land held for sale 17,676 17,676
Investments in and receivables from affiliates 806,176 1,440,705
Notes, mortgage loans and accrued interest receivable 85,011 87,189
Investments in partnerships, other securities and other 17,147 17,567
Deferred income taxes 506,000 419,000
----------- -----------
TOTAL ASSETS 1,442,019 2,005,776
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Loans and notes payable $ 65,000 $ 65,000
Notes and accrued interest payable to affiliates 1,178,556 1,091,231
Dividends payable 320,000 280,000
Accounts payable, accrued expenses and other liabilities 24,900 25,238
----------- -----------
TOTAL LIABILITIES 1,588,456 1,461,469
----------- -----------
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 (5,068,633) (4,377,889)
Treasury stock (21,000 shares at cost) (225,000) (225,000)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY (146,437) 544,307
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,442,019 $ 2,005,776
=========== ===========
</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 June 30, Six Months Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INCOME
Equity in earnings of affiliates ($337,841) ($295,905) ($641,850) ($238,860)
(Loss)gain from partnerships and other investments (277) 1,776
Interest, dividends and other income 4,709 5,004 9,419 9,798
--------- --------- --------- ---------
(333,132) (290,901) (632,708) (227,286)
--------- --------- --------- ---------
EXPENSES
Interest 12,024 10,049 23,234 17,704
Property and other operating expenses 18,538 19,775 27,602 27,617
Fees and salaries to trustees, officers and related parties 27,000 27,000 54,200 54,200
--------- --------- --------- ---------
57,562 56,824 105,036 99,521
--------- --------- --------- ---------
Loss before income taxes (390,694) (347,725) (737,744) (326,807)
Benefit from income taxes (46,000) (40,800) (87,000) (28,200)
--------- --------- --------- ---------
NET LOSS ($344,694) ($306,925) ($650,744) ($298,607)
========= ========= ========= =========
Net loss per share of beneficial interest:
Net loss ($344,694) ($306,925) ($650,744) ($298,607)
Less preferred stock dividends 20,000 20,000 40,000 40,000
--------- --------- --------- ---------
Net loss of beneficial interest ($364,694) ($326,925) ($690,744) ($338,607)
========= ========= ========= =========
Weighted average number of common shares of
beneficial interest outstanding during the period 560,508 560,508 560,508 560,508
========= ========= ========= =========
Net loss per share of beneficial interest ($ 0.65) ($ 0.58) ($ 1.23) ($ 0.60)
========= ========= ========= =========
</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,
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss ($650,744) ($298,607)
--------- ---------
Adjustments to reconcile net loss to net cash used in
operating activities:
Equity in losses of affiliates and partnerships 643,939 238,860
Changes in assets and liabilities:
Increase in deferred income taxes (87,000) (28,200)
Increase in other assets 87 (3,244)
Increase in accrued expenses and other liabilities (9,748) (25,485)
--------- ---------
Total Adjustments 547,278 181,931
--------- ---------
Net cash used in operating activities (103,466) (116,676)
--------- ---------
Cash Flows from Investing Activities:
Distributions from partnerships and affiliates 333 5,065
Payments received on mortgages and notes receivable 2,178 89
Advances from affiliates 87,325 117,879
--------- ---------
Net cash provided by investing activities 89,836 123,033
--------- ---------
Net (decrease) increase in cash (13,630) 6,357
Cash at the beginning of the period 23,639 2,899
--------- ---------
Cash at the end of the period $ 10,009 $ 9,256
========= =========
</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, 1996 includes the Trust's 40.91%
interest in HMG. HMG's Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 1996 and 1995 are presented below:
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED) Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES
Rentals and related revenue $ 316,399 $ 402,993 $ 637,937 $ 1,222,377
Hotel, club and marina revenues 1,519,921 1,007,898 3,556,496 2,139,439
Gain from sale of marketable securities 192,243 279,456 51,086
Interest from invested cash, dividends and other 78,462 376,618 170,377 528,585
----------- ----------- ----------- -----------
Total revenues 2,107,025 1,787,509 4,644,266 3,941,487
----------- ----------- ----------- -----------
EXPENSES
Operating expenses:
Rental Properties and other 220,813 317,675 604,240 741,426
Hotel, club and marina expenses:
Payroll and related expenses 771,192 588,911 1,570,185 1,204,301
Cost of food and beverage 315,913 156,610 674,497 343,493
Administrative and general expenses 699,226 479,753 1,612,913 915,715
Depreciation and amortization 291,780 314,803 571,226 773,901
----------- ----------- ----------- -----------
Total operating expenses 2,298,924 1,857,752 5,033,061 3,978,836
Interest 228,309 239,190 450,135 488,186
Advisor's fee 218,751 218,751 437,502 437,502
General and administrative 153,399 132,278 244,273 248,334
Directors' fees and expenses 19,830 15,350 29,330 31,195
Minority partners' interests in operating
(losses) gains of consolidated entities (20,125) 36,515 (85,463) 120,940
Gains from unconsolidated entities (46,900) (75,578) (89,019) (115,620)
----------- ----------- ----------- -----------
Total expenses 2,852,188 2,424,258 6,019,819 5,189,373
----------- ----------- ----------- -----------
Loss before sales of real estate (745,163) (636,749) (1,375,553) (1,247,886)
(Loss) gain on sales of real estate, net (644) (28,543) (50,210) 787,853
----------- ----------- ----------- -----------
Net Loss ($ 745,806) ($ 665,292) ($1,425,762) ($ 460,033)
=========== =========== =========== ===========
Earnings (Loss) Per Common Share
(Based on 1,166,835 weighted average shares
outstanding) ($0.64) ($0.57) ($1.22) ($0.39)
=========== =========== =========== ===========
</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, 1995. The results of operations for the six months
ended June 30, 1996 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, 1996 the Trust reported net
losses of approximately $345,000 or $.65 per share and $651,000 or $1.23 per
share, respectively. For the three and six months ended June 30, 1995, the Trust
reported net losses of approximately $307,000 or $.55 per share and $299,000 or
$.57 per share, respectively.
Total revenues for the three and six months ended June 30, 1996 were a
deficit of approximately $333,000 and $633,000, respectively. For the three and
six months ended June 30, 1995 total revenues were a deficit of approximately
$291,000 and $227,000, respectively. This increase in deficit was primarily due
to equity in increased losses of its affiliate, HMG/Courtland Properties, Inc.
(HMG).
For the three and six months ended June 30, 1996 HMG reported losses of
approximately $746,000 and $1,426,000, respectively, versus losses of
approximately $665,000 and $460,000 for the three and six months ended June 30,
1995, respectively. (See Part I Financial Information - Investments in
Affiliates - HMG/Courtland Properties, Inc.). HMG's increase in losses for the
six months ended June 30, 1996 is primarily attributable to decreased rental and
related revenues and decreased gain from sales of real estate.
Total expenses for the three and six months ended June 30, 1996 were
approximately $57,000 and $105,000, respectively. Total expenses for the three
and six months ended June 30, 1995 were approximately $57,000 and $100,000
respectively. 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 5. Other Information
(a) The shares of beneficial interest, no par value of Transco Realty
Trust were removed from listing and registration on the Boston Stock Exchange,
effective July 2, 1996.
Item 6. Reports on Form 8-K
(a) There were no reports filed on Form 8-K during the quarter ended
June 30, 1996.
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 14, 1996
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000099235
<NAME> TRANSCO REALTY TRUST
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,009
<SECURITIES> 0
<RECEIVABLES> 85,011
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,442,019
<CURRENT-LIABILITIES> 1,588,456
<BONDS> 0
0
1,000,000
<COMMON> 4,147,196
<OTHER-SE> (5,293,633)
<TOTAL-LIABILITY-AND-EQUITY> 1,442,019
<SALES> (632,708)
<TOTAL-REVENUES> (632,708)
<CGS> 0
<TOTAL-COSTS> 105,036
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,234
<INCOME-PRETAX> 0
<INCOME-TAX> (650,744)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> (1.22)
<EPS-DILUTED> (1.22)
</TABLE>
