-----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, ToGcl75KAXgD+LVJLwEufu89rHX8qEcDbqm3Cfgr62R3B3SSTNK+VA9L6gOpEzYh Y7Isv7Mv1IkWtlDlSwASdQ== 0000931763-98-002155.txt : 19980817 0000931763-98-002155.hdr.sgml : 19980817 ACCESSION NUMBER: 0000931763-98-002155 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: 98687447 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 June 30, 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 Identification Number) Incorporation or Organization) 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 June 30, 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 JUNE 30, 1998 2 CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997, AND THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Condensed Consolidated Balance Sheet (UNAUDITED) June 30, 1998
ASSETS CURRENT ASSETS Cash $ 139,269 ---------- TOTAL CURRENT ASSETS 139,269 ---------- INVESTMENTS AND OTHER ASSETS Land and improvements, at cost 909,135 Property leased to others under operating leases, less accumulated depreciation $952,297 5,028,239 ---------- 5,937,374 ---------- $6,076,643 ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 10,395 Current portion of long-term debt 101,766 Other current liabilities 86,809 ---------- TOTAL CURRENT LIABILITIES 198,970 ---------- LONG-TERM DEBT, LESS CURRENT MATURITIES 3,898,754 ---------- DEFERRED TAXES 43,116 ---------- DEFERRED INCOME 417,013 ---------- STOCKHOLDERS' EQUITY Common stock, at par value 623,761 Paid-in capital 333,766 Retained earnings 661,263 ---------- 1,618,790 Less subscribed shares 100,000 ---------- 1,518,790 $6,076,643 ==========
See notes to the condensed consolidated financial statements. 2 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Condensed Consolidated Statements of Income (UNAUDITED)
Three Nine Three Nine Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 1998 1998 1997 1997 ---------- ---------- --------- ---------- Revenues: Rent earned $ 166,114 $ 507,594 $170,768 $ 538,025 Gain on sale of property - - 232,142 232,142 --------- --------- -------- --------- 166,114 507,594 402,910 770,167 --------- --------- -------- --------- Operating expenses: Payroll and related costs 9,795 31,303 8,767 30,372 Depreciation 33,526 100,578 33,526 102,152 Taxes 14,554 52,969 14,569 43,637 Professional services 5,490 12,652 14,569 19,287 Insurance 3,975 8,434 4,358 11,571 Commissions - - 222 15,822 Other 9,110 36,012 10,897 37,402 --------- --------- -------- --------- 76,450 241,948 77,339 260,243 --------- --------- -------- --------- Operating income 89,664 265,646 325,571 509,924 --------- --------- -------- --------- Nonoperating income (expense): Interest income - 1,025 659 1,407 Interest expense (79,131) (85,705) (249,619) --------- --------- -------- --------- (79,131) (85,046) (248,212) --------- --------- -------- --------- Income before income taxes 10,533 27,699 240,525 261,712 Income taxes 3,614 11,893 23,570 31,803 --------- --------- -------- --------- Net income $ 6,919 $ 15,806 $216,955 $ 229,909 ========= ========= ======== ========= Income per common share $ - $ - $.04 $.04 ========= ========= ======== =========
See notes to the condensed consolidated financial statements. 3
SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED) 1998 1997 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from leases $ 519,054 $ 549,083 Interest received 1,024 1,407 Cash paid to suppliers and employees ( 87,356) (166,356) Interest paid (238,972) (249,619) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 193,712 134,515 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment property - (342,122) Cash received from sale of investment property - 608,184 Funds advanced to acquire investment property - (250,000) --------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES - 16,062 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt ( 81,241) ( 75,570) --------- --------- NET CASH USED IN FINANCING ACTIVITIES ( 81,241) ( 75,570) --------- --------- NET INCREASE IN CASH 112,471 75,007 CASH AT BEGINNING OF PERIOD 26,798 24,097 --------- --------- CASH AT END OF PERIOD $ 139,269 $ 99,104 ========= ========= RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net income $ 15,806 $ 229,909 Depreciation 100,578 102,152 Gain on sale of property - (232,142) Deferred taxes 11,893 31,803 Deferred revenue ( 18,490) ( 18,489) Net change in assets and liabilities 83,925 21,282 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 193,712 $ 134,515 ========= ========= 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 June 30, 1998:
Land $ 512,760 Warehouse and buildings 5,467,776 ---------- 5,980,536 Less accumulated depreciation 952,297 ---------- $5,028,239 ==========
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 June 30, 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. $4,000,520 Less current maturities 101,766 ---------- $3,898,754 ========== 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company's results of operations for the nine month period ended June 30, 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 $507,594 $538,025 $(30,431) (5.66)% Operating expenses 241,948 260,243 (18,295) (7.03) Interest expense 237,947 249,619 (11,672) (4.68)
Revenue from leasing during the nine months ended June 30, 1998 decreased from the nine months ended June 30, 1997 primarily as a result of the sale of leased property during the quarter ended June 30, 1997. The Company sold leased property located in Augusta, Georgia, operated by the tenant as a restaurant. See Form 10-QSB for the quarter ended June 30, 1997 for details of the sale. Leasing revenue from the property was approximately $11,000 per quarter. Leasing revenue from other sources has remained constant from the nine months ended June 30, 1997 to the nine months ended June 30, 1998. On an annualized basis, current revenue from leasing has declined from leasing revenue for the Company's fiscal year ended September 30, 1997, primarily as a result of the sale of the property described above. 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 nine month period primarily as a result of commissions incurred in 1997 from obtaining new tenants for the Company's leased 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 June 30, 1998 was .70. The ratio was 1.57 at June 30, 1997. However, the June 30, 1997 ratio includes approximately $250,000 of funds held by the Company from the sale of real estate. These funds were invested in other real estate after June 30, 1997. Excluding the $250,000, the current ratio was .44% at June 30, 1997. 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 June 30, 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) August 14, 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 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS SEP-30-1998 OCT-01-1997 JUN-30-1998 139,269 0 0 0 0 139,269 5,980,536 952,297 6,076,643 198,970 3,898,754 623,761 0 0 868,779 6,076,643 0 507,594 0 265,646 0 0 238,972 27,699 11,893 15,806 0 0 0 15,806 0 0
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