0000055742-95-000012.txt : 19950925 0000055742-95-000012.hdr.sgml : 19950925 ACCESSION NUMBER: 0000055742-95-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19950914 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KILLEARN PROPERTIES INC CENTRAL INDEX KEY: 0000055742 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95573914 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 July 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 July 31, 1995 3 Consolidated Condensed Statements of Operations for the 4 Three Months Ended July 31, 1995 and 1994 Consolidated Statements of Cash Flows for the Three Months 5 Ended July 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 7/31/95 (Unaudited)* Cash $ 88,657 Cash in improvement trust funds 160,334 Accounts and notes receivable 7,918,426 Land contracts receivable 499,336 Less: Allowance for uncollectibles (279,027) Investments in joint ventures 366,494 Residential real estate held for sale 694,604 Real estate held for development and sale 34,201,025 Property under contract for sale 549,006 Other property , plant and equipment 12,929,918 Less: Allowance for depreciation (3,098,683) Utility deposits 2,000 Other assets 233,426 __________ $ 54,265,516 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable & other accrued expenses $ 3,724,725 Income taxes payable 367,622 Accrued interest 394,546 Customers' deposits 1,307,263 Debt 19,986,864 Deferred improvement revenue 655,724 Deferred income taxes 5,762,720 Deferred Profit 4,304,826 __________ TOTAL LIABILITIES $ 36,504,290 __________ 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 10,771,339 __________ 17,761,226 __________ $ 54,265,516 ========== *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 Unaudited* Unaudited* 7/31/95 7/31/94 Revenues: Net sales of land $ 878,440 $ 6,696,550 Interest income 177,026 313,032 Commission income 47,830 114,186 Revenues from operating golf and country club 866,890 798,766 Income from joint venture 1,729 22,893 Other revenues 83,503 5,918 _________ __________ 2,055,418 7,951,345 _________ __________ Expenses: Cost of land sold 602,466 4,579,272 Commissions and selling expenses 223,493 487,740 Operating costs of golf and country clubs 779,460 799,172 Interest expense 81,519 303,317 Depreciation 182,491 170,971 Property taxes 81,910 63,576 General & Administrative Costs 433,925 425,130 Other Costs & Expenses 21,746 -0- _________ __________ 2,407,010 6,829,178 _________ __________ Income (loss) before income taxes (351,592) 1,122,167 Income tax provision (benefit) (133,590) 448,867 _________ __________ Net income (loss) $ (218,002) $ 673,300 =========== ========== Net income (loss) per share $ (0.15) $ 0.47 =========== ========== Dividends per share 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
Three Months Ended Unaudited* Unaudited* 07/31/95 07/31/94 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (218,002) $ $673,300 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 182,491 170,971 (Increase) decrease in accounts and notes receivable 117,329 (7,385,508) Decrease in residential real estate held for sale 1,500 30,605 Increase in real estate held for development and sale (1,513,652) (1,526,184) Net change in other assets 49,692 (32,696) Increase in accounts payable 20,657 236,967 Increase(Decrease) in interest payable 172,933 (226,720) Increase (Decrease)in customer's deposits 38,431 (136,021) Increase (decrease) in deferred income (190,985) 4,645,735 (Decrease) increase in income taxes payable (133,590) 448,867 Net change in other liabilities 0 52 Income from joint venture (1,729) (22,893) Decrease in residential construction in process and real estate held for development and sale resulting from the sale of such properties 1,013,806 1,787,453 Decrease in property under contract for sale 115,090 14,203,345 ___________ __________ Net cash (used in) provided by operating activities: (346,029) 12,867,273 ___________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment - net (4,873) 29,216 Investment in joint venture 18,407 (19,562) ___________ ___________ Net cash provided by investing activities 13,534 9,654 ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans 526,746 2,023,334 Principal payments on debt (612,871) (14,156,949) ____________ ____________ Net cash used in financing activities (86,125) (12,133,615) ___________ ____________ NET INCREASE (DECREASE) IN CASH (418,620) 743,312 CASH - Beginning of period 507,277 527,528 ___________ ____________ CASH - End of period $ 88,657 $ 1,270,840 =========== ============ Supplemental Information Cash Paid: Interest of 349,669 and $749,342 for 1995 and 1994, respectively. Income tax of $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 July 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 7.5% to 12% at 7/31/95. The aggregate maturities of long-term debt are as follows: For the Year Ended July 31 1996 $13,564,030 1997 4,596,727 1998 704,642 1999 104,873 2000 170,205 Thereafter 846,387 ___________ $19,986,864 =========== 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 $18,280,798 Note 3. Debt (cont'd) 7.5% to 12% payable to individuals and financial institutions, secured by contracts receivable and real estate 1,642,395 Other notes payable - 5.56% to 11.5% due in various installments through 2001 63,671 ___________ $19,986,864 =========== Interest expense for the period ended July 31, 1995 reflects a reduction of $470,483 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 July 31, 1995, approximately $24.8 million of the sale has closed, with the purchaser assuming debt of the Company of approximately $9.2 million, paying approximately $7.5 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 4 years and most of the notes bear interest at 10% per annum. The remaining $900,000 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 July 31, 1995 there remains approximately $6.1 million due. At July 31, 1995 there remains approximately $4.3 million of gross profit to be recognized over the next 4 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 decreased approximately 86.9% ($5.8 million) during the current three months compared to the same three months a year ago. The decrease in net sales of land from the Company's Florida operations was $3.6 million, while sales from the Company's Georgia operations decreased by $2.2 million. The decrease in sales from the Georgia operations was primarily the result of significantly higher fiscal 1995 first quarter sales following the Company's opening of a new residential unit of lots a year ago, while the decrease in sales from Florida operations was the result of the sale by the Company of substantially all of the Florida assets on November 14, 1993. (See note 5 to The Consolidated Condensed Financial Statements.) Interest income, interest expense and commission expense decreased 43%, 73% and 54% respectively, during the current three months compared to the same period a year ago. These decreases in interest income, interest expense and commission expense resulted from the sale of substantially all of the Florida assets a year ago. (See note 5 to The Consolidated Condensed Financial Statements.) Country Club revenues increased 22% in the current quarter compared to the same quarter a year ago primarily due to the flooding of the Club property in July 1994. As a result of the flood, operations were closed for approximately two weeks. In addition, Club revenues continue to increase as the number of members increase. During August 1995 the Company entered into an agreement to sell its Atlanta golf and country club to an independent third party. The Company will retain ownership of the land and other related assets surrounding the golf course. There are no assurances the sale will close. If the 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 At July 31, 1995 the Company had available lines of credit totalling approximately $186,000 with its lenders. Such lines of credit 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 July 19, 1994 the Company modified its loan agreement with a bank, involving its Georgia operations. The modified agreement effectively divided the prior $13.5 million loan into three loans totalling $13.5 million. One of the loans, for $1.5 million is a revolving loan. The modified credit agreement provides for interest to be paid at the bank's prime rate plus 2%. The loans are collateralized by first mortgages on substantially all the undeveloped land in the Company's Georgia project, a golf course and country club and certain contracts receivable. Upon the sale of collateralized property, all of the net proceeds are applied against the loan balances owed to the bank. 70% is applied to the revolving loan,with remaining proceeds applied to the amounts outstanding under the other loans. The amount of such reduction to the revolving loan is then available as a loan to the Company. When secured properties are developed by the Company, the Company can obtain a release of such property by paying a lesser amount. 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 $1.5 million revolving credit loan expires on September 10, 1995, when the remaining balance becomes due on demand. 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. Management 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 July 31, 1995 was approximately $6.1 million of which approximately $902,000 is due in fiscal 1996. Thereafter, $2 million per year is due until maturity on June 30, 1997. The purchaser of the Florida assets assumed this loan. (See note 5 to The Consolidated Condensed Financial Statements.) In addition, the Company has other debt maturing in the amount of approximately $3.5 million in fiscal 1996 and $1.9 million the following fiscal year. These obligations are primarily payable through lot releases. The Company anticipates that these obligations will be paid through normal operations, an 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 July 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 3-MOS APR-30-1996 JUL-31-1995 248,991 0 8,417,762 279,027 35,444,635 44,067,787 12,929,918 3,098,683 54,265,516 1,136,893 27,056,847 143,873 0 0 17,617,353 54,265,516 1,793,160 2,055,418 1,605,419 668,001 0 0 81,910 (351,592) (133,590) (218,002) 0 0 0 (218,002) (.15) (.15)