10QSB 1 d10qsb.txt QUARTERLY REPORT 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, 2001 [ ] Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period of to Commission File Number 0-7865. ------ SECURITY LAND AND DEVELOPMENT CORPORATION ----------------------------------------- (Exact name of small business issuer as specified in its charter) 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) Issuers Telephone Number (706) 736-6334 -------------- ------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Year) 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 April 30, 2001 ----- ----------------------------- Common Stock, $.10 Par Value 5,258,886 shares Transitional Small Business Disclosure Format: YES NO X ------ ------ SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Form 10-QSB Index
Part I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheet as of March 31, 2001 1 Condensed Consolidated Statements of Income for the Six Months Ended March 31, 2001 and 2000, and the Three Months Ended March 31, 2001 and 2000 2 Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2001 and 2000 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis or Plan of Operation 5-6 Part II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 7 SIGNATURES 8 INDEX TO EXHIBITS 9
SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Part I. Financial Information Condensed Consolidated Balance Sheets (Unaudited) March 31, 2001 ASSETS
Current assets Cash $ 70,733 ---------- Total current assets 70,733 ---------- Investments and other assets Land and improvements, at cost 2,186,498 Property leased to others under operating leases, less accumulated depreciation $711,886 4,748,251 ---------- 6,934,749 ---------- $7,005,482 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 3,517 Current portion of long-term debt 160,989 Accrued interest 24,290 Other current liabilities 79,194 ---------- Total current liabilities 267,990 ---------- Long-term debt, less current maturities 3,708,801 ---------- Deferred taxes 213,967 ---------- Deferred income 349,221 ---------- Stockholders' equity Common stock, at par value 623,761 Paid-in capital 333,766 Retained earnings 1,607,976 ---------- 2,565,503 Less subscribed shares 100,000 ---------- 2,465,503 ---------- $7,005,482 ==========
See notes to condensed consolidated financial statements. 1 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)
Three Months Six Three Months Six Ended March 31, Months Ended Ended March 31, Months Ended 2001 March 31, 2001 2000 March 31, 2000 ----------------- ----------------- ----------------- ----------------- Revenues, rent earned $173,770 $ 342,094 $166,136 $ 339,171 ----------------- ----------------- ----------------- ----------------- Operating expenses: Payroll and related costs 18,928 34,635 15,865 28,813 Depreciation 31,848 64,006 33,526 67,052 Property taxes 17,193 38,479 17,726 34,768 Repairs and maintenance 5,416 11,570 5,572 10,072 Professional services 6,779 9,279 13,020 16,020 Insurance 4,629 7,712 2,656 6,325 Other 5,890 15,817 8,787 14,439 ----------------- ----------------- ----------------- ----------------- 90,683 181,498 97,152 177,489 ----------------- ----------------- ----------------- ----------------- Operating income 83,087 160,596 68,984 161,682 ----------------- ----------------- ----------------- ----------------- Nonoperating income and (expense): Gain on sale of property - - 662,094 662,094 Interest income 968 2,198 2,461 4,747 Interest expense (78,347) (153,068) (75,025) (150,532) ----------------- ----------------- ----------------- ----------------- (77,379) (150,870) 589,530 516,309 ----------------- ----------------- ----------------- ----------------- Income before income taxes 5,708 9,726 658,514 677,991 Applicable income taxes 825 2,459 89,051 92,723 ----------------- ----------------- ----------------- ----------------- Net income $ 4,883 $ 7,267 $569,463 $ 585,268 ================= ================= ================= ================= Income per common share $ - $ - $ .11 $ .11 ================= ================= ================= =================
See notes to condensed consolidated financial statements. 2 SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows For the Six Months Ended March 31, 2001 and 2000 (Unaudited) 2001 2000 -------------------- -------------------- Cash flows from operating activities Cash received from leases $ 363,943 $ 360,736 Interest received 2,198 4,747 Cash paid to suppliers and employees (141,050) (143,327) Interest paid (128,778) (125,386) -------------------- -------------------- Net cash provided by operating activities 96,313 96,770 -------------------- -------------------- Cash flows from investing activities Purchase of land and improvements (277,160) (91,832) -------------------- -------------------- Net cash used in investing activities (277,160) (91,832) -------------------- -------------------- Cash flows from financing activites Property acquisition debt 250,000 - Principal payments on long-term debt (91,936) (52,278) -------------------- -------------------- Net cash provided by (used in) financing activities 158,064 (52,278) -------------------- -------------------- Net decrease in cash (22,783) (47,340) Cash at beginning of period 93,516 155,916 -------------------- -------------------- Cash at end of period $ 70,733 $ 108,576 ==================== ==================== Reconciliation of net income to net cash provided by operating activities: Net income $ 7,267 $ 585,268 Deferred income taxes 1,459 91,973 Gain on sale of property - (662,094) Adjustments to reconcile net income to net cash provided by operating activities Depreciation 64,006 67,052 Changes in assets and liabilities Decrease in receivables 34,175 34,031 Decrease in accounts payable, accrued expenses and deferrals (10,594) (19,460) -------------------- -------------------- Net cash provided by operating Activities $ 96,313 $ 96,770 ==================== ====================
See notes to condensed consolidated financial statements. 3 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, 2000 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, 2001: Land $ 375,796 Warehouse and buildings 5,084,341 ---------- 5,460,137 Less accumulated depreciation 711,886 ---------- $4,748,251 ========== Refer to the Company's Form 10-KSB for the year ended September 30, 2000 for further information on operating lease agreements and terms. Note 3 - Long-term debt Long-term debt consisted of the following at March 31, 2001: 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. $3,655,137 9.500% note payable to financial institution due in monthly payments of $3,250, including interest, through November 2003, with a balloon payment of approximately $200,000 due at that time, interest adjusted based on changes in the prime rate, secured by real estate. 214,653 ---------- 3,869,790 Less current maturities 160,989 ---------- $3,708,801 ==========
4 Item 2. Management's Discussion and Analysis of Plan or Operation The Company's results of operations for the six month period ended March 31, 2001, and a comparative analysis of the same period for the 2000 year are presented below:
Increase (Decrease) 2001 Compared to 2000 --------------------------------------- 2001 2000 Amount Percent ----------------- ----------------- ----------------- ----------------- Leasing revenue $342,094 $339,171 $2,923 0.9% Operating expenses 181,498 177,489 4,009 2.2% Interest expense 153,068 150,532 2,536 1.7%
Revenue from leasing consists of revenue from the Company's strip center on Washington Road in Augusta, Georgia. Revenue from leasing has remained relatively constant from 2000 to 2001. On an annualized basis, current revenue from leasing remains constant from leasing revenue for the Company's fiscal year ended September 30, 2000. Refer to the Company's Form 10-KSB for the year ended September 30, 2000 for further information regarding the properties owned and lease terms. Operating expenses for the six months ended March 31, 2001 are comparable to the six months ended March 31, 2000 and, on an annualized basis, are comparable to the Company's operating expenses for the fiscal year ended September 30, 2000. Management of the Company expects operating expenses for the remainder of the current fiscal year to be comparable to the present six month period. Interest expense for the current period is comparable to 2000 and, on an annualized basis, is comparable to the Company's interest expense for the fiscal year ended September 30, 2000. The Company's ratio of current assets to current liabilities at March 31, 2001 was .26. The ratio was .49 at March 31, 2000. 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. Cautionary Note Regarding Forward-Looking Statements: 5 Item 2. Management's Discussion and Analysis of Plan of Operation (Continued) 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. 6 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibit No. Description ----------- ----------- None. (b) No reports on Form 8-K were filed during the three months ended March 31, 2001. 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 AND DEVELOPMENT CORPORATION (Registrant) By: /s/ T. Greenlee Flanagin May 8, 2001 ------------------------ ----------- T. Greenlee Flanagin Date President Chief Executive Officer 8 INDEX TO EXHIBITS
Exhibit Number Description Sequential Page Number None.
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