-----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, DQMoncBPTrsfmMk2/1ZeemmYVd4l/oXrLIeHHJulEETg5sv2ECX6s2ST0ijVQGr3 LOgUMt1Do7mRqumjEg/AoA== 0000055742-97-000013.txt : 19970918 0000055742-97-000013.hdr.sgml : 19970918 ACCESSION NUMBER: 0000055742-97-000013 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970915 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: SEC FILE NUMBER: 001-06762 FILM NUMBER: 97680576 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, 1997 [ ] 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 of (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: 887,412. Transitional Small Business Disclosure Format: No [X]. KILLEARN PROPERTIES, INC. AND SUBSIDIARIES INDEX Part I. Financial Information Item 1. Consolidated Condensed Financial Statements (Unaudited): Consolidated Condensed Balance Sheet as of July 31, 1997 3 Consolidated Condensed Statements of Operations for the Three 4 Months Ended and July 31, 1997 and 1996 Consolidated Statements of Cash Flows for the Three Months 5 Ended July 31, 1997 and 1996 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition 7 and Results of Operations Part II Other Information Item 1. Legal Proceedings 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 10 Exhibit Index 11 PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS 7/31/97 (Unaudited) Cash $ 381,003 Accounts and notes receivable 5,926,128 Land contracts receivable, net 420,654 Real estate held for development and sale 25,434,265 Property under contract for sale 141,196 Other property, plant and equipment, net 520,630 Other assets 18,131 __________ TOTAL ASSETS $ 32,842,007 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable & other liabilities $ 2,106,148 Income taxes payable 2,840,652 Mortgages & notes payable 19,628,361 Deferred improvement revenue 200,475 Deferred income taxes 3,313,236 Deferred profit 1,209,547 __________ TOTAL LIABILITIES $ 29,298,419 STOCKHOLDERS' EQUITY Common stock - par value $.10 per share; authorized 6,000,000 shares; issued 887,412 shares $ 88,741 Additional paid-in capital 1,942,998 Retained earnings 1,511,849 __________ TOTAL STOCKHOLDERS' EQUITY $ 3,543,589 __________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,842,007 ========== See Notes to Consolidated Condensed Financial Statements
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended 7/31/97 7/31/96 (Unaudited) (Unaudited) INCOME: Net sales of land $4,123,503 $2,793,984 Sales of residential construction - 155,000 Interest income 148,123 146,381 Commission income 43,398 54,171 Other revenues 1,500 21,016 __________ _________ Total 4,316,524 3,170,552 EXPENSES: Cost of land sold 2,737,304 1,873,560 Cost of residential construction - 178,954 Commissions and selling expenses 447,572 395,167 Interest expense 161,097 123,444 Depreciation 19,440 31,083 Property taxes 49,057 31,771 General & administrative costs 234,223 300,455 _________ _________ TOTAL EXPENSES 3,648,693 2,934,434 NET INCOME BEFORE INCOME TAXES 667,831 236,118 Income tax provision 251,305 78,160 _________ _________ NET INCOME $ 416,526 $ 157,958 ========== ========== NET INCOME (LOSS) PER SHARE $ .47 $ .18 ========== ========== Weighted average shares outstanding 887,412 887,412 DIVIDENDS PER SHARE NONE NONE See Notes to Consolidated Condensed Financial Statements
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended 7/31/97 7/31/96 -------- -------- (Unaudited)(Unaudited) NET CASH FROM OPERATING ACTIVITIES: 431,812 562,445 ___________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Net cash from investing activities - - ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans 10,946,077 2,518,080 Principal payments on debt (11,266,080) (2,883,865) ___________ ___________ Net cash from financing activities (320,003) (365,785) ___________ ___________ NET INCREASE IN CASH 111,809 196,660 CASH - Beginning of period 269,194 186,994 ___________ ___________ CASH - End of period $ 381,003 $ 383,654 =========== =========== Supplemental Information Cash Paid: Interest paid was $5,769 and $91,687 for fiscal 1998 and 1997, respectively. Income taxes paid were $50,000 and $330,000 in fiscal 1998 and 1997, respectively. See Notes to Consolidated Condensed Financial Statements
PART I. KILLEARN PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS JULY 31, 1997 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 for a fair statement of the results for the interim period covered. For further information, refer to the complete consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended April 30, 1997. NOTE 2. Transfer of Assets On August 1, 1996, the Company entered into an agreement, subject to shareholder approval, pursuant to which it agreed to transfer certain of its assets and liabilities to J.T. Williams, Jr., the Company's former Chairman of the Board and Chief Executive Officer, in exchange for the 551,321 shares of common stock he held in the Company and the cancellation of his option to purchase an additional 100,000 shares of common stock. The net assets identified in the agreement consisted principally of the Eagle's Landing Golf Course and Country Club, the Inn at Eagle's Landing, a note for approximately $2 million and approximately 250 acres of commercial and industrial real estate, and certain mortgages and other liabilities, as more fully described in the Company's proxy statement filed on August 26, 1996 Such transfer, once approved, was agreed to be effective as of May 1, 1996. Accordingly, the net cash flows related to the transferred assets from the effective date (May 1, 1996) until the closing date would be transferred to or funded by J.T. Williams, Jr. On September 30, 1996, the shareholders of the Company (excluding J.T. Williams, Jr.) voted on and approved the transfer agreement, and the transfer closed on November 16, 1996. The net assets transferred had a historical cost basis of approximately $17,136,000 which has been reflected as a reduction to shareholders' equity in the accompanying balance sheet. The net operating results of the transferred assets have been removed from the statement of operations retroactively to the effective date and have not been considered in the determination of net income of the Company. NOTE 3 Earnings per share Earnings per share reflect the weighted average shares outstanding during each of the periods presented as reflected on the face of the income statement. As discussed in Note 2, the Company entered into an agreement to transfer certain net assets in exchange for 551,321 shares and the cancellation of an option to purchase 100,000 shares of the the Company's common stock. Based on the effective date of that agreement, earnings per share are computed based on the number of shares outstanding during the period as if such shares were transferred on the effective date. NOTE 4 Financing The Company obtained various additional credit facilities during the three month period ending July 31, 1997. One such facility of approximately $2.5 million is being used for the acquisition and development of 93 acres of land in the Henry County area. Additional borrowings were for the financing of development costs under various development loans. These loans generally mature as the related lots are sold and bear interest rates at prime rate plus 1 to 1 1/4 points. Additionally, on July 10, 1997, the Company modified its loan agreement with a bank involving its Georgia operations. The agreement provides for interest to be paid at the bank's prime rate plus 1.25% per annum, and matures on July 9, 1998. The loan is collateralized by first mortgages on substantially all the undeveloped land in the Company's Georgia property. Upon the sale of collateralized property, release prices, which vary with the development, are applied against the loan balance owed to the bank. The Company historically secures development loans from other lenders in an amount sufficient to pay the release price and all development costs, which are ultimately satisfied with proceeds from the sale of the properties. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales of land increased approximately $1,329,519 (67.76%) during the current three month period when compared to the same period a year ago. The primary reason for the increase was a result of the Company initiating a modified sales program intended to expand its marketing efforts, and the recognition of income in the Florida operations related to the sale of substantially all of the Florida assets in November 1993. During the second quarter of fiscal 1996, the Company began utilizing independent brokers, rather than Company employed salespersons, to market its property, which has resulted in increased sales. Cost of land sold, as a percentage of net sales of land, was 66.38% for the current three month period which was relatively consistent with the prior year percentage of 67.1%. Interest income increased approximately $1,700 during the current three month period when compared to the same period a year ago Commission income decreased approximately $11,000 in the current three month period compared to the same period a year ago. Additionally, the commission and selling expenses increased approximately $52,400 in the current three month period. These overall changes resulted from the Company's change in its method of marketing homes in some of the Georgia developments in the second quarter of fiscal 1996 in net sales. At that time, the Company began using independent brokers rather than Company-employed salespersons. Interest expense, when compared to the same period a year ago, increased approximately $38,000 for the current three month period. This increase is due to some interest expense incurred by the Company no longer being eligible for capitalization in accordance with Financial Accounting Standard 34. General and administrative expenses decreased approximately $66,000 in the current three month period when compared to the same period a year ago. This decrease is due to reduction of life insurance benefits and salaries to the Company's former Chief Executive Officer and other employees as a result of the transaction described in Note 2 to the Company's financial statements. The operating statements for the current three month period are not necessarily indicative of the results expected for the year. Liquidity and Capital Resources The Company finances its operations with operating cash flow and bank borrowings. On July 31, 1997 the Company had available lines of credit of approximately $1.7 million which may be drawn as needed for the development of the Company's property and other working capital needs. The Company continues to look for additional sources of lines of credit and other financing alternatives and believes that such sources are available on acceptable terms when the need for additional financing arise. On July 10, 1997, the Company modified its loan agreement with a bank involving its Georgia operations. The agreement provides for interest to be paid at the bank's prime rate plus 1.25% per annum, and matures on July 9, 1998. The loan is collateralized by first mortgages on substantially all the undeveloped land in the Company's Georgia property. Upon the sale of collateralized property, release prices, which vary with the development, are applied against the loan balance owed to the bank. The Company historically secures development loans from other lenders in an amount sufficient to pay the release price and all development costs, which are ultimately satisfied with proceeds from the sale of the properties. In addition, the Company has other debt maturing in the amount of approxi- mately $11.5 million in fiscal 1998 and $3.6 million in 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. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE ITEM 5. OTHER INFORMATION NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following exhibit is being filed with this report: Exhibit No. Description ----------- ----------- 27 Financial Data Schedule (b) Reports on Form 8-K NONE SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KILLEARN PROPERTIES, INC. (Registrant) Date: September __, 1997 /s/ David K. Williams _________________________ DAVID K. WILLIAMS Chief Financial Officer Vice President EXHIBIT INDEX Exhibit No. Description Page No. ----------- ----------- -------- 27 Financial Data Schedule 12 10 9 EX-27 2
5 3-MOS APR-30-1998 JUL-31-1997 381,003 0 5,926,128 0 25,575,461 32,321,377 1,063,727 543,097 32,842,007 4,946,801 24,351,618 88,741 0 0 3,454,588 32,842,007 4,123,503 4,316,524 2,737,304 3,648,693 0 0 161,097 667,831 251,305 416,526 0 0 0 416,526 .47 .47
-----END PRIVACY-ENHANCED MESSAGE-----