-----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, PaPKYYV+OjgAaJ8tIJ5eFbnUyELoFFVLNR7COwAjTA74dZmkFwZG8tMkMG3kI7X8 U2PCj9KVsbKnjOoSLzxFUw== 0000055742-98-000032.txt : 19980915 0000055742-98-000032.hdr.sgml : 19980915 ACCESSION NUMBER: 0000055742-98-000032 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19980914 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: 98708494 BUSINESS ADDRESS: STREET 1: 385 COUNTRY CLUB DRIVE CITY: STOCKBRIDGE STATE: GA ZIP: 30281 BUSINESS PHONE: 7703892020 MAIL ADDRESS: STREET 1: 385 COUNTRY CLUB DRIVE 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, 1998 [ ] 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) 385 Country Club Drive 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, 1998 3 Consolidated Condensed Statements of Operations for the Three 4 Months Ended and July 31, 1998 and 1997 Consolidated Statements of Cash Flows for the Three Months 5 Ended July 31, 1998 and 1997 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis or Plan 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 7/31/98 (Unaudited) Cash $ 251,143 Accounts and notes receivable 5,969,006 Land contracts receivable, net 362,368 Real estate held for development and sale 21,659,154 Other property, plant and equipment, net 440,490 Other assets 27,090 __________ TOTAL ASSETS $ 28,709,251 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable & other liabilities $ 1,509,748 Income taxes payable 3,750,009 Debt (including accrued interest) 15,902,136 Deferred liabilities 543,355 Deferred income taxes 2,381,565 Deferred income 914,163 __________ TOTAL LIABILITIES $ 25,000,976 STOCKHOLDERS' EQUITY Common stock - $.10 par value; authorized 6,000,000 shares; 887,412 shares issued and outstanding $ 88,741 Additional paid-in capital 1,942,998 Retained earnings 1,676,536 __________ TOTAL STOCKHOLDERS' EQUITY $ 3,708,275 __________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 28,709,251 ========== The accompanying notes are an integral part of these consolidated financial statements.
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended 7/31/98 7/31/97 (Unaudited) (Unaudited) REVENUES: Net sales of land $6,662,637 $4,123,503 Interest income 59,304 148,123 Commission income 82,676 43,398 Other revenues 1,500 1,500 __________ _________ Total Revenues 6,806,117 4,316,524 COST AND EXPENSES: Cost of land sold 5,579,931 2,737,304 Commissions and selling expenses 393,366 447,572 Interest expense 50,075 161,097 Depreciation 18,373 19,440 Property taxes 59,309 49,057 General and administrative costs 238,134 234,222 _________ _________ TOTAL COST AND EXPENSES 6,339,188 3,648,693 EARNINGS BEFORE INCOME TAXES 466,929 667,831 Income tax 186,772 251,305 _________ _________ NET INCOME $ 280,157 $ 416,526 ========= ========= EARNINGS PER SHARE (basic and diluted) $ .32 $ .47 ========= ========= Weighted average number of common shares 887,412 887,412 DIVIDENDS PER SHARE NONE NONE The accompanying notes are an integral part of these consolidated financial statements.
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended 7/31/98 7/31/97 -------- ------- (Unaudited) (Unaudited) NET CASH FROM OPERATING ACTIVITIES: $ 9,933 $ 431,812 ___________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: -0- -0- ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans 2,055,981 10,946,077 Principal payments on debt (2,160,959) (11,266,080) ___________ ___________ Net used in financing activities (104,978) (320,003) ___________ ___________ NET CHANGE IN CASH (114,911) 111,809 CASH - Beginning of period 366,054 269,194 ___________ ___________ CASH - End of period $ 251,143 $ 381,003 =========== =========== Supplemental Information Cash Paid: Interest, net of amounts capitalized was $58,429 and $5,769 for fiscal 1999 and 1998, respectively. Income taxes were $100,000 and $50,000 in fiscal 1999 and 1998, respectively. The accompanying notes are an integral part of these consolidated financial Statements.
PART I. KILLEARN PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JULY 31, 1998 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, 1998. 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 acquire the 551,321 shares of common stock in the Company held by J.T. Williams, Jr., the Company's former Chairman of the Board and Chief Executive Officer, and the cancellation of his option to purchase an additional 100,000 shares of common stock through the transfer of certain of its assets and liabilities. 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, subject to certain mortgages and other liabilities. The agreement provided that subject to shareholder approval, the redemption would 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 approved the redemption, and the transaction closed on November 16, 1996. The historical cost basis of approximately $17,191,000 of the net assets transferred has been reflected as retired treasury stock in the accompanying balance sheet and statement of changes in stockholders' equity. 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 for the year ended April 30. 1997. NOTE 3 Earnings per share Effective April 30, 1998, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("FAS 128") which replaces the presentation of primary earnings per share with basic earnings per share and which requires dual presentation of basic and diluted earnings per share on the Consolidated Statements of Operations. FAS 128 requires restatement of all prior-period earnings per share data presented. Basic net earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period, and diluted net earnings per share includes the effect of unexercised stock options using the treasury stock method. The treasury stock method assumes that common stock was purchased at the average market price during the period. Because there were no stock options outstanding for the years July 31, 1998 and 1997, both basic and diluted earnings per share were the same. NOTE 4 Financing The Company obtained additional credit facilities during the three month period ending July 31, 1998. The facility of approximately $2.8 million is being used for the development 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 1/2 points. In May 1998, the Company borrowed $1,588,900 from a new lender of which the Company used $1 million to reduce debt and used $588,900 to pay development cost. In addition, the Company had available $1,273,440 to draw from the new lender for additional development cost. The agreement provides for interest to be paid at the bank's prime rates plus 1.0% per annum, and matures on May 18, 2000. The loan is collateralized by a first mortgage on 62.9 acres. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales of land increased $2.5 million (61.58%) during the current three month period when compared to the same period a year ago. The primary reason for the increase was the sale of approximately $4.4 million to Proactive Technologies, Inc. This sale was consummated pursuant to a settlement agreement entered into in January 1998 after the Company had made demand on Proactive Technologies, Inc. to pay notes which were in default. Cost of land sold, as a percentage of net sales of land, was 83.75% for the current three month period. This was a result of the $4.4 million dollar sale to Proactive Technologies, Inc. at a price slightly above book value. The Company anticipates cost of lots sold as a percentage of land sales during the remainder of the year to be relatively consistent with the prior year. Interest income decreased $88,819 during the current three month period when compared to the same period a year ago, primarily due to the Company not recognizing accrued but unpaid interest on the $3.4 million receivable from International Realty Development Partners, LTD., L.L.C. which filed for Chapter 11 Bankruptcy in March 1998. Commission income increased $39,278 in the current three month period as compared to the same period a year ago. Additionally, commission and selling expenses decreased $54,206 in the current three month period. These overall changes resulted from the Company's change in its method of marketing homes in its Georgia developments in the first quarter of fiscal 1999. At this time, the Company is using Company-employed salespersons rather than independent brokers used last year. Interest expense, when compared to the same period a year ago, decreased approximately $111,000 for the current three month period. This decrease is due to the capitalization of a portion of the interest expense incurred by the Company, in accordance with Financial Accounting Standard 34, and a reduction of Company debt in the current year by approximately $5.5 million. General and administrative expenses remained constant in the current three month period when compared to the same period a year ago. 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, 1998 the Company had available lines of credit of approximately $1.4 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. In May 1998, the Company borrowed $1,588,900 from a new lender of which the Company used $1 million to reduce debt and $588,900 to pay development costs. In addition, the Company had available $1,273,440 to draw from the new lender for additional development cost. The agreement provides for interest to be paid at the bank's prime rates plus 1.0% per annum, and matures on May 18, 2000. The loan is collateralized by a first mortgage on 62.9 acres. In addition, the Company has other debt maturing in the amount of approximately $13.5 million in fiscal 1999 and $2.4 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. Other The company is presently reviewing the potential impact of Year 2000 compliance issues on its information systems and business operations, and has preliminarily determined that any cost, problems or uncertainties associated with the potential consequences of the Year 2000 issues will not have a material impact on its future operations or financial condition. 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 14, 1998 /s/ David K. Williams _________________________ DAVID K. WILLIAMS President & CEO EXHIBIT INDEX Exhibit No. Description Page No. ----------- ----------- -------- 27 Financial Data Schedule 12 EX-27 2
5 3-MOS APR-30-1999 JUL-31-1998 251,143 0 5,969,007 0 21,659,153 28,268,761 1,040,367 599,877 28,709,251 5,259,757 19,741,219 88,741 0 0 3,619,534 28,709,251 6,662,637 6,806,117 5,579,931 6,339,188 0 0 50,075 466,929 186,772 280,157 0 0 0 280,157 .32 .32
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