-----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, TbfQi/M8Bwn3kjW9dRkGiSR3dumPBxz1PvKUcOhnUPP1R9ggz1ZzL2YR7RbarGkL KU0yjxPPxyYbiUfJwfUtNg== 0000931763-99-000430.txt : 19990217 0000931763-99-000430.hdr.sgml : 19990217 ACCESSION NUMBER: 0000931763-99-000430 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990216 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: 99539424 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 December 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 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 December 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 DECEMBER 31, 1998 2 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5 - 7
SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) DECEMBER 31, 1998 ASSETS CURRENT ASSETS Cash $ 111,012 Other current assets 31,082 ---------- TOTAL CURRENT ASSETS 142,094 ---------- INVESTMENTS AND OTHER ASSETS Land and improvements, at cost 909,135 Property leased to others under operating leases, less accumulated depreciation $1,019,349 4,961,046 ---------- 5,870,181 ---------- $6,012,275 ==========
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES $ 3,517 Accounts payable 119,064 Current portion of long-term debt 39,221 Other current liabilities ---------- 161,802 TOTAL CURRENT LIABILITIES ---------- 3,824,351 LONG-TERM DEBT, LESS CURRENT MATURITIES ---------- 46,442 DEFERRED TAXES ---------- 404,688 DEFERRED INCOME ---------- STOCKHOLDERS' EQUITY 623,761 Common stock, at par value 333,766 Paid-in capital 717,465 Retained earnings ---------- 1,674,992 100,000 Less subscribed shares ---------- 1,574,992 ---------- $6,012,275 ==========
See notes to the condensed consolidated financial statements. 2 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED)
1998 1997 ---------- ---------- Revenues, rent earned $166,358 $174,170 -------- -------- Operating expenses: Payroll and related costs 10,721 10,633 Depreciation 33,526 33,526 Taxes 15,386 23,635 Professional services 11,600 3,042 Insurance 4,325 2,217 Other 14,445 11,610 -------- -------- 90,003 84,663 -------- -------- Operating income 76,355 89,507 -------- -------- Nonoperating income: Interest income 1,455 645 Interest (expense) (78,127) (80,185) -------- -------- (76,672) (79,540) -------- -------- Income (loss) before income taxes ( 317) 9,967 Applicable income taxes 2,964 3,549 -------- -------- Net income (loss) $( 3,281) $ 6,418 ======== ======== 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 THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED)
1998 1997 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Cash received from leases $ 166,417 $ 197,955 Interest received 1,455 645 Cash paid to suppliers and employees (107,711) (35,462) Interest paid ( 78,127) (80,185) --------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ( 17,966) 82,953 --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt ( 28,270) (26,214) --------- ---------- NET CASH (USED IN) FINANCING ACTIVITIES ( 28,270) (26,214) --------- ---------- NET (DECREASE) INCREASE IN CASH ( 46,236) 56,739 CASH AT BEGINNING OF PERIOD 157,248 26,798 --------- ---------- CASH AT END OF PERIOD $ 111,012 $ 83,537 ========= ========== RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net income (loss) $( 3,281) $ 6,418 Deferred income taxes 2,964 3,549 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 33,528 33,526 Changes in assets and liabilities (Increase) decrease in other assets 59 ( 3,694) Increase (decrease) in accounts payable, accrued expenses, and deferrals ( 51,236) 43,154 --------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $( 17,966) $ 82,953 ========= ==========
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, 1998 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 December 31, 1998: Land $ 512,760 Warehouse and buildings 5,467,635 ---------- 5,980,395 Less accumulated depreciation 1,019,349 ---------- $4,961,046 ==========
Refer to the Company's Form 10-KSB for the year ended September 30, 1998 for further information on operating lease agreements and terms. NOTE 3 - LONG-TERM DEBT Long-term debt consisted of the following at December 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. $3,943,415 ---------- Less current maturities 119,064 ---------- $3,824,351 ========== 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company's results of operations for the three month period ended December 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 $166,358 $174,170 $(8,352) (4.8)% Operating expenses 90,003 84,663 5,340 6.3 Interest expense 78,127 80,185 (2,058) (2.6)
Revenue from leasing has declined from 1997 primarily as a result of decreased common area maintenance fees from leased property and from a tenant vacancy at the Company's retail strip center located on Washington Road in Augusta, Georgia. The vacancy was not related to the strip center's anchor tenant. On an annualized basis, current revenue from leasing has decreased from leasing revenue for the Company's fiscal year ended September 30, 1998. Refer to the Company's Form 10-KSB for the year ended September 30, 1998 for further information regarding the properties owned and lease terms. Operating expenses for 1998 include professional fees paid to a developer to assist the Company in identifying real estate opportunities in the Company's market area. The Company did not incur expenses of this nature during 1997. Except for this professional expense, operating expenses for the current quarter are comparable to 1997 and, on an annualized basis, are comparable to the Company's operating expenses for the fiscal year ended September 30, 1998. 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, 1998. The Company's ratio of current assets to current liabilities at December 31, 1998 was .88. The ratio was .50 at December 31, 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 Year 2000 Management believes internally there are no material Year 2000 issues associated with the Company's simple EDP system. The Company is considering Year 2000 exposure related to a material concentration of business with the Company's tenant Publix Supermarkets at the retail strip center. At this time management cannot predict if there will be a material cost associated with Year 2000 compliance for this major customer and material concentration of business. Cautionary Note Regarding Forward-Looking Statements The Company may, from time to time, make written or oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission (the "Commission") and its reports to stockholders. Such forward-looking statements are made based on management's belief as well as assumptions made by, and information currently available to, management pursuant to "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, but not limited to, competition from other real estate companies, the ability of the Company to obtain financing for projects, and the continuing operations of tenants. 7 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 December 31, 1998. 8 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) February 8, 1999 By: /s/ T. Greenlee Flanagin ---------------------------- T. GREENLEE FLANAGIN President Chief Executive Officer 9 INDEX TO EXHIBITS ----------------- Exhibit Number Description Sequential Page Number 27 Financial Data Schedule 11 - 12 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS SEP-30-1999 OCT-01-1998 DEC-31-1998 111,012 0 31,082 0 0 142,094 6,859,530 1,019,349 6,012,275 161,802 3,824,351 0 0 623,761 717,465 1,574,992 0 166,358 0 0 90,003 0 78,127 (317) 2,964 (3,281) 0 0 0 (3,281) 0 0
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