-----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, RuAFLD63hl/2oscMJ4j/nguHf3oTTuhPhNLftCHKYY/GHPdp3g6eznKoXB67ZNlj VeOFxJajdZDJBD+kPCh1VA== 0000931763-98-001229.txt : 19980508 0000931763-98-001229.hdr.sgml : 19980508 ACCESSION NUMBER: 0000931763-98-001229 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980507 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURITY LAND & DEVELOPMENT CORP CENTRAL INDEX KEY: 0000088572 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 581088232 STATE OF INCORPORATION: GA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-07865 FILM NUMBER: 98612143 BUSINESS ADDRESS: STREET 1: 512 B WHEELER EXECUTIVE CENTER CITY: AUGUSTA STATE: GA ZIP: 30909 BUSINESS PHONE: 7067366334 MAIL ADDRESS: STREET 1: 2816 WASHINGTON ROAD #103 CITY: AUGUSTA STATE: GA ZIP: 30909 10QSB 1 FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 March 31, 1998 [_] Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________________ to _________________ Commission File Number 0-7865. ------ SECURITY LAND AND DEVELOPMENT CORPORATION ----------------------------------------- GEORGIA 58-1088232 ------- ---------- (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 2816 Washington Road, #103, Augusta, Georgia 30909 - -------------------------------------------- ----- (Address of Principal Executive Offices) Zip Code Issuers Telephone Number (706) 736-6334 -------------- __________________________________________________________________ (Former Name, Address & fiscal year, if changed from last report.) Check whether the Issuer (1) 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 NO _______ ------ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding at March 31, 1998 - ---------------------------- ----------------------------- Common Stock, $.10 Par Value 5,237,607 shares Transitional Small Business Disclosure Format: Yes ___________ No X ---------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following condensed consolidated financial statements of Security Land and Development Corporation and Subsidiary are included herein:
Page ---- CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1998 2 CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED MARCH 31, 1998 AND 1997, AND THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 1998 AND 1997 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5
1 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) MARCH 31, 1998 ASSETS
CURRENT ASSETS Cash $ 105,303 Other current assets 1,339 ----------- TOTAL CURRENT ASSETS 106,642 ----------- INVESTMENTS AND OTHER ASSETS Land and improvements, at cost 909,135 Property leased to others under operating leases, less accumulated depreciation $918,771 5,061,766 ----------- 5,970,901 ----------- $ 6,077,543 =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,517 Current portion of long-term debt 101,766 Other current liabilities 71,229 ----------- TOTAL CURRENT LIABILITIES 176,512 ----------- LONG-TERM DEBT, LESS CURRENT MATURITIES 3,926,538 ----------- DEFERRED TAXES 39,502 ----------- DEFERRED INCOME 423,177 ----------- STOCKHOLDERS' EQUITY Common stock, at par value 623,761 Paid-in capital 333,766 Retained earnings 654,287 ----------- 1,611,814 Less subscribed shares 100,000 ----------- 1,511,814 ----------- $ 6,077,543 ===========
See notes to the condensed consolidated financial statements. 2 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Six Three Six Months Months Months Months Ended Ended Ended Ended March 31, March 31, March 31, March 31, 1998 1998 1997 1997 ---------- ---------- ---------- ---------- Revenues, rent earned $ 167,310 $ 341,480 $ 171,836 $ 367,257 --------- --------- --------- ---------- Operating expenses: Payroll and related costs 10,876 21,509 13,094 21,605 Depreciation 33,526 67,052 34,313 68,626 Taxes 14,780 38,415 14,534 29,068 Professional services 4,120 7,162 10,837 14,287 Insurance 2,242 4,459 3,942 7,213 Commissions - - 2,600 15,600 Other 16,089 27,699 17,096 26,383 --------- --------- --------- ---------- 81,633 166,296 96,416 182,782 --------- --------- --------- ---------- Operating income 85,677 175,184 75,420 184,475 --------- --------- --------- ---------- Financial income (expense): Interest income 1,177 1,822 452 748 Interest expense (79,656) (159,841) (81,712) (163,914) --------- --------- --------- ---------- (78,479) (158,019) (81,260) (163,166) --------- --------- --------- ---------- Income (loss) before income taxes 7,198 17,165 (5,840) 21,309 Applicable income taxes 4,730 8,279 3,499 8,355 --------- --------- --------- ---------- Net income $ 2,468 $ 8,886 $ (9,339) $ 12,954 ========= ========= ========= ========== Income (loss) per common share $ - $ - $ - $ - ========= ========= ========= ==========
See notes to the condensed consolidated financial statements. 3 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)
1998 1997 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from leases $ 359,103 $ 384,337 Interest received 483 748 Cash paid to suppliers and employees ( 67,498) (142,498) Interest paid (159,841) (163,914) Income taxes paid - - --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 131,962 78,673 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of assets - (42,121) --------- --------- NET CASH USED IN INVESTING ACTIVITIES - (42,121) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (53,457) (49,884) --------- --------- NET CASH USED IN FINANCING ACTIVITIES (53,457) (49,884) --------- --------- NET INCREASE (DECREASE) IN CASH 78,505 (13,332) CASH AT BEGINNING OF PERIOD 26,798 24,097 --------- --------- CASH AT END OF PERIOD $ 105,303 $ 10,765 ========= ========= RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net income $ 8,886 $ 12,954 Deferred income taxes 7,529 8,355 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 67,052 68,626 Changes in assets and liabilities Increase (decrease) in other assets 28,610 16,692 (Decrease) in accounts payable, accrued expenses and deferrals 19,885 (27,954) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 131,962 $ 78,673 ========= ========= SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Debt incurred to purchase land investment $ 250,000 $ 300,000 ========= =========
See notes to the condensed consolidated financial statements. 4 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are presented in accordance with the requirements of Form 10-QSB and consequently do not include all of the disclosures normally required by generally accepted accounting principles or those normally made in the Company's annual Form 10-KSB filing. Accordingly, the reader of this Form 10-QSB may wish to refer to the Company's Form 10-KSB for the year ended September 30, 1997 for further information. The financial information has been prepared in accordance with the Company's customary accounting practices and has not been audited. In the opinion of management, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. NOTE 2 - INVESTMENT IN LEASES AND PROPERTY UNDER OPERATING LEASES Property leased or held for lease to others under operating leases consists of the following at March 31, 1998: Land $ 512,760 Warehouse and buildings 5,467,777 ---------- 5,980,537 Less accumulated depreciation 918,771 ---------- $5,061,766 ==========
Refer to the Company's Form 10-KSB for the year ended September 30, 1997 for further information on operating lease agreements and terms. NOTE 3 - LONG-TERM DEBT Long-term debt consisted of the following at March 31, 1998: 7.875% note payable to an insurance company due in monthly payments of $35,633, including interest, through June 2015, collateralized by real estate and assignment of lease payments from the property. $4,028,304 ========== Less current maturities 101,766 ---------- $3,926,538 ========== 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company's results of operations for the six month period ended March 31, 1998, and a comparative analysis of the same period for the 1997 year are presented below:
Increase (Decrease) 1998 Compared to 1997 ------------------- 1998 1997 Amount Percent -------- -------- ------ ------- Leasing revenue $341,480 $367,257 $(25,777) (7.02)% Operating expenses 166,296 182,782 (16,486) (9.02) Interest expense 159,841 163,914 ( 4,073) (2.48)
Revenue from leasing has decreased from 1997 primarily as a result of the following: a. During the quarter ended June 30, 1997, the Company sold leased property located in Augusta, Georgia, operated by the tenant as a restaurant. Leasing revenue from the property was approximately $11,000 per quarter. See Form 10-QSB for the quarter ended June 30, 1997 for details of the sale. b. A payment of additional common area maintenance fees received during the comparable 1997 quarter from several tenants at the retail strip center located on Washington Road in Augusta, Georgia. These additional payments were non-recurring and the Company did not expect to receive additional payments of this nature in 1998. On an annualized basis, current revenue from leasing has decreased from leasing revenue for the Company's fiscal year ended September 30, 1997. Refer to the Company's Form 10-KSB for the year ended September 30, 1997 for further information regarding the properties owned and lease terms. Operating expenses have declined from the comparable 1997 six month period primarily as a result of commissions incurred in 1997 from obtaining new tenants for the strip center. Other operating expenses for the current quarter are comparable to the previous quarter and prior year and, on an annualized basis, are comparable to the Company's operating expenses for the fiscal year ended September 30, 1997. Management of the Company expects quarterly operating expenses for the remainder of the fiscal year to be comparable to the current quarter. Interest expense for the current quarter is comparable to 1997 and, on an annualized basis, is comparable to the Company's interest expense for the fiscal year ended September 30, 1997. The Company's ratio of current assets to current liabilities at March 31, 1998 was .60. The ratio was .03 at March 31, 1998. During the current quarter the Company satisfied liquidity needs through operating revenues. Management of the Company continues to expect future liquidity needs to be met from operating revenues of the Company. The Company does not expect any significant change in the number of employees. 6 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule (b) The Company did not file any reports on Form 8-K during the three months ended March 31, 1998. 7 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SECURITY LAND & DEVELOPMENT CORPORATION --------------------------------------- (Registrant) April 15, 1998 By: /s/ T. Greenlee Flanagin ---------------------------- T. GREENLEE FLANAGIN President Chief Executive Officer 8 INDEX TO EXHIBITS ----------------- Exhibit Number Description Sequential Page Number 27 Financial Data Schedule 10 - 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS SEP-30-1998 OCT-01-1997 MAR-31-1998 105,303 0 1,339 0 0 106,642 5,980,537 918,771 6,077,543 176,512 3,926,538 623,761 0 0 654,287 6,077,543 0 341,480 0 0 166,296 0 159,841 17,165 8,279 8,886 0 0 0 8,886 0 0
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