-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RTPqp/UPqGmFbXIsoyXXnk1EDGH33qX/BJAECQ4fuqFMmT6ntSqK6hFOoEqeQnh9 MkNEjBtQdLePuIJCDmXhYQ== 0000055742-95-000016.txt : 19951215 0000055742-95-000016.hdr.sgml : 19951215 ACCESSION NUMBER: 0000055742-95-000016 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951214 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KILLEARN PROPERTIES INC CENTRAL INDEX KEY: 0000055742 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 591095497 STATE OF INCORPORATION: FL FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-06762 FILM NUMBER: 95601758 BUSINESS ADDRESS: STREET 1: 100 EAGLES LANDING WAY CITY: STOCKBRIDGE STATE: GA ZIP: 30281 BUSINESS PHONE: 4043892020 MAIL ADDRESS: STREET 1: 100 EAGLES LANDING WAY CITY: STOCKBRIDGE STATE: GA ZIP: 30281 FORMER COMPANY: FORMER CONFORMED NAME: KILLEARN ESTATES INC DATE OF NAME CHANGE: 19730911 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 or 15[d] OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1995 [ ] TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE EXCHANGE ACT For the transition period from to Commission file number 1-6762 KILLEARN PROPERTIES, INC. (Exact name of small business issuer as specified in its charter ) Florida 59-1095497 (State or other jurisdiction (I.R.S. Employer Identification No.) incorporation or organization) 100 Eagle's Landing Way Stockbridge, GA 30281 (Address of principal executive offices) Issuer's telephone number (770)389-2020 Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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].. State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date: 1,438,733. Transitional Small Business Disclosure Format: No [X]. KILLEARN PROPERTIES, INC. AND SUBSIDIARIES INDEX Part I. Consolidated Condensed Financial Statements (Unaudited): Consolidated Condensed Balance Sheet as of October 31, 1995 3 Consolidated Condensed Statements of Operations for the 4 Three Months and Six Months Ended October 31, 1995 and 1994 Consolidated Statements of Cash Flows for the Six Months 5 Ended October 31, 1995 and 1994 Notes to Consolidated Condensed Financial Statements 6 - 7 Management's Discussion and Analysis of Financial Condition 8 - 9 And Results of Operations Part II Other Information 10 Signatures 10 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS 10/31/95 (Unaudited)* Cash $ 106,040 Cash in improvement trust funds 161,668 Accounts and notes receivable 8,162,939 Land contracts receivable 466,538 Less: Allowance for uncollectibles (229,550) Investments in joint ventures 291,936 Residential real estate held for sale 158,081 Real estate held for development and sale 34,456,620 Property under contract for sale 457,932 Other property, plant and equipment 12,938,598 Less: Allowance for depreciation (3,270,316) Utility deposits 22,076 Other assets 189,389 __________ $ 53,911,951 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable & other accrued expenses $ 3,481,472 Income taxes payable 1,224,296 Accrued interest 236,692 Customers' deposits 1,336,414 Debt 19,631,684 Deferred improvement revenue 926,559 Deferred income taxes 5,612,425 Deferred profit 2,533,809 __________ TOTAL LIABILITIES $ 34,983,351 STOCKHOLDERS' EQUITY Common stock - par value $.10 a share authorized 6,000,000 shares; issued 1,438,733 shares 143,873 Additional paid-in capital 6,846,014 Retained earnings 11,938,713 __________ TOTAL STOCKHOLDERS' EQUITY 18,928,600 __________ $ 53,911,951 ========== *Subject to year-end audit adjustments See notes to Consolidated Condensed Financial Statements
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended Unaudited* Unaudited* Unaudited* Unaudited* 10/31/95 10/31/94 10/31/95 10/31/94 Revenues: Net sales of land $ 8,297,860 1,902,913 9,176,300 8,599,462 Sales of residential construction 45,500 0 45,500 0 Interest income 273,310 42,097 450,336 355,129 Commission income 74,592 162,011 122,423 276,197 Revenues from operating golf and country club 769,396 723,392 1,636,286 1,522,157 Other revenues 443,654 54,942 528,885 83,754 __________ _________ __________ __________ Total 9,904,312 2,885,355 11,959,730 10,836,699 Expenses: Cost of land sold 6,389,553 1,001,164 6,992,019 5,580,436 Cost of residential construction 41,713 0 42,063 0 Commissions and selling expenses 241,517 301,480 465,009 789,220 Operating costs of golf and country clubs 724,884 736,191 1,504,344 1,535,363 Interest expense 73,230 73,882 154,749 377,199 Depreciation 183,102 169,517 365,593 340,487 Property taxes 53,221 78,685 135,131 142,262 General & Administrative Costs 323,339 382,558 778,661 807,687 _________ _________ __________ __________ Total Expenses 8,030,559 2,743,477 10,437,569 9,572,654 Net income before income taxes 1,873,753 141,878 1,522,161 1,264,045 Income tax provision 706,380 56,751 572,789 505,618 _________ _________ __________ _________ Net income $1,167,373 85,127 949,372 758,427 ========== ========== ========== ========= Net income per share $ 0.81 0.06 0.66 0.53 ========== ========== ========= ======== Dividends per share NONE NONE NONE NONE *Subject to year-end audit adjustments. See notes to Consolidated Condensed Financial Statements
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended Unaudited* Unaudited* 10/31/95 10/31/94 _________ _________ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 949,372 $ 758,427 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 365,593 340,488 Increase in accounts and notes receivable (127,184) (7,100,271) Decrease in residential construction in process 538,023 5,221 Increase in real estate held for development and sale (2,401,029) (5,158,460) (Increase) decrease in other assets 60,848 (171,812) Increase (decrease) in accounts payable (222,596) 438,632 Increase (decrease) in interest payable 15,079 (181,711) Increase (decrease) in deferred income (1,771,018) 5,044,391 Increase in income taxes payable 572,789 347,694 Increase (decrease) in other liabilities 147,432 (102,534) Income from joint venture (530,370) (33,956) Decrease in residential construction in process and real estate held for development and sale resulting from the sale of such properties 1,628,911 3,899,818 Decrease in property under contract for sale 206,165 14,318,938 ___________ __________ Net cash (used in) provided by operating activities: (567,985) 12,404,865 ___________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment - net (13,553) 50,698 Provided by (investment in) joint ventures 621,605 (524,197) ___________ ___________ Net cash provided by (used in) investing activities 608,052 (473,449) ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans 2,095,528 4,242,187 Principal payments on debt (2,536,832) (15,962,147) ____________ ___________ Net cash used in financing activities (441,304) (11,719,960) ___________ ___________ NET INCREASE (DECREASE) IN CASH (401,237) 211,406 CASH - Beginning of period 507,277 527,527 ___________ ___________ CASH - End of period $ 106,040 $ 738,933 =========== =========== Supplemental Information Cash Paid: Interest paid was $1,039,627 and $1,191,453 for 1995 and 1994, respectively. Income taxes paid were $30,000 in 1994. *Subject to year-end adjustments See notes to Consolidated Condensed Financial Statements
PART I. FINANCIAL INFORMATION Notes to Consolidated Condensed Financial Statements October 31, 1995 NOTE 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions for Form 10-QSB, and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and changes in financial position in conformity with generally accepted accounting principles. The information furnished reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period covered, including appropriate estimated provision for bonus and profit sharing arrangements normally determined or settled at year end. NOTE 2. Accounting Change During the first quarter of fiscal 1995, the Company adopted Statement of Financial Accounting Standards No. 114, "Accounting for Creditors for Impairment of a Loan" ("SFAS No. 114"), as required by such Statement. Given the relatively low level of delinquencies and foreclosures experienced by the Company, the adoption of SFAS No. 114 by the Company did not have a material effect on its financial statements. NOTE 3. Debt Interest rates on mortgages and notes payable ranged from 9.00% to 11.5% at 10/31/95. The aggregate maturities of long-term debt are as follows: For the Year Ended October 31 1996 $12,691,623 1997 5,814,899 1998 361,987 1999 85,190 2000 85,703 Thereafter 592,282 ___________ $19,631,684 =========== Substantially all of the Company's assets are mortgaged or pledged as collateral for its indebtedness. Further information with respect to debt follows: Notes payable secured by contracts receivable and real estate Credit lines - prime plus 1% to prime plus 2% payable to financial institutions, secured by contracts receivable and real estate $18,475,738 NOTE 3. Debt (cont'd) 9.00% to 11.5% payable to individuals and financial institutions, secured by contracts receivable and real estate $ 1,085,051 Other notes payable - 9.57% to 11.5% due in various installments through 1997 70,895 ___________ $19,631,684 =========== Interest expense for the three and six months ended October 31, 1995 reflects a reduction of $458,935 and $924,418, respectively, for interest capitalized in accordance with FASB 34. NOTE 4. Earnings Per Share Primary and fully diluted earnings per share are calculated based on the following number of weighted average shares of stock outstanding including stock options as common stock equivalent. The number of shares outstanding for all periods presented was 1,438,733. NOTE 5 - Sale of Florida Assets On November 14, 1993, the Company entered into two agreements to sell substantially all of its Florida assets to an unrelated purchaser for approximately $25.7 million. As of October 31, 1995, approximately $25.0 million of the sale has closed, with the purchaser assuming debt of the Company of approximately $9.2 million, paying approximately $7.7 million in cash and issuing notes to the Company, secured by second mortgage on most of the assets purchased totalling approximately $8.1 million. The notes are payable over the next 3 years and most of the notes bear interest at 10% per annum. The remaining $700,000 of the sale is scheduled to be closed during the remainder of fiscal 1996, for cash. Of the $9.2 million of debt assumed, at October 31, 1995 there remains approximately $2.6 million due. At October 31, 1995 there remains approximately $2.5 million of gross profit to be recognized over the next 3 years as the cash is collected. Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations Net sales of land increased approximately $6,400,000 (336%) during the current three month period and $577,000 (6.7%) during the current six month period compared to the same periods a year ago. The primary reason for the in- crease for the three months was a result of the recognition of income related to the sale of substantially all of the Florida assets on November 14, 1993. (See note 5 to The Consolidated Condensed Financial Statements.) In addition, the Company had an increase in other revenues from joint ventures of $530,370 as a result of the sale of a joint venture. Cost of land sold, as a percentage of net sales of land, increased to 77.0% for the current three month period compared to 52.6% for the same period a year ago. The cost of land sold for the current six month period increased to 76.2% compared to 64.9% for the same period a year ago. The increase in cost of land sold for the current three month period resulted primarily from the discounted sales price for the volume which was sold in connection with the Florida operations. In addition, in both the three months and six months ended October 31, 1995, more lot sales were in Georgia than in Florida. In Georgia, utility costs to the Company are higher than such costs in Florida. Interest income increased approximately $231,000 during the current three month period compared to the same period a year ago and increased approximately $95,000 for the current six month period compared to the same period a year ago. The increases relate primarily to the interest on notes receivable from the sale of substantially all the Florida assets. The Company is reporting interest on such sale as money is received. The interest from the sale is due every six months and therefore, the interest income from the sale varies on a quarter by quarter basis. Commission income decreased $87,000 in the current quarter and $154,000 for the current six month period due to a change in marketing the homes in some of the Company's Georgia developments by using independent brokers. Commissions and sales expenses decreased $60,000 in the current quarter, and $324,000 for the current six month period due partially to the change in marketing and due to the sale of substantially all the Florida assets a year ago. (See Note 5 to the Consolidated Condensed Financial Statements.) During August 1995, the Company entered into an agreement to sell its Atlanta golf and country club to an independent third party under which the Company would retain ownership of the land and other related assets surrounding the golf course. That contract was terminated in November 1995 when the Company refused to extend the time to close. The Company continues to discuss such sale with that party and certain others. If a sale does close, future revenues and costs of operating the country club will be eliminated, and certain debt encumbering the sold property will be retired with proceeds. The operating statement for the current three months is not necessarily indicative of the results expected for the year. Financial Condition and Liquidity On November 3, 1995 the Company had available lines of credit of $670,000 which may be drawn as needed for the development of the Company's property and other working capital for Corporate needs. The Company continues to look for other sources of lines of credit and financing alternatives. On November 13, 1995, the Company executed a letter of intent to modify its loan agreements with a bank, involving its Georgia operations. The modified agreement effectively combined a $1.5 million revolving loan with a loan with a balance of $6.4 million. The agreement provides for interest to be paid at the bank's prime rate plus 1 1/2%, and would extend the due date for a period of one year from the date of Closing. The loans are collateralized by first mortgages on substantially all the undeveloped land in the Company's Georgia project, and certain contracts receivable. Upon the sale of collateralized property, approximately 30% of the net proceeds are applied against the loan balances owed to the bank. The Company has been able to secure development loans from other lenders in an amount sufficient to pay the release price and all development costs. The failure of this lender to extend the Company's loans, or the failure of the Company to obtain replacement financing, could have a material adverse affect on the Company's financial condition. Manage- ment knows of no reason the debt will not be extended, as it has been in the past. On July 20, 1994, the Company modified its loan agreement with a bank, involving its Florida operations. The balance due the bank at October 31, 1995 was approximately $2.6 million which is due on June 30, 1997. The pur- chaser of the Florida assets assumed this loan. (See note 5 to The Consoli- dated Condensed Financial Statements.) In addition, the Company has other debt maturing in the amount of approxi- mately $1.8 million in fiscal 1996 and $2.9 million the following fiscal year. The Company anticipates that these obligations will be paid with the proceeds of land sales from normal operations, extension of debt or new borrowings. The Company continues to seek lines of credit to satisfy new borrowings needed by the Company. There were no other material changes in the Company's financial condition from April 30, 1995 to October 31, 1995. PART II - OTHER INFORMATION None SIGNATURES Pursuant to the requirement 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. KILLEARN PROPERTIES, INC. (Registrant) Date:_____________________________ _________________________________ J. T. Williams, Jr. President Date:_____________________________ ______________________________ David K. Williams Chief Financial Officer EX-27 2
5 6-MOS APR-30-1996 OCT-31-1995 267,708 0 8,629,477 222,550 35,072,633 43,951,733 12,938,598 3,270,316 53,911,951 4,942,460 26,580,523 143,873 0 0 18,784,727 53,911,951 11,509,394 11,959,730 9,003,435 1,434,134 0 0 154,749 1,522,161 572,789 949,372 0 0 0 949,372 .66 .66
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