-----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, WMq43oF7SQQML7jLW13nbbJRnCGL9v8TcJyEcDfdiqMx1OTJ0YDdIYl1KcQENtA+ OP8t4czW1JKsNrq/wMKIdg== 0000950159-99-000146.txt : 19990518 0000950159-99-000146.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950159-99-000146 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HMG COURTLAND PROPERTIES INC CENTRAL INDEX KEY: 0000311817 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 591914299 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-07865 FILM NUMBER: 99626885 BUSINESS ADDRESS: STREET 1: 2701 S BAYSHORE DR CITY: COCONUT GROVE STATE: FL ZIP: 33133 BUSINESS PHONE: 3058546803 MAIL ADDRESS: STREET 1: 2701 S BAYSHORE DRIVE STREET 2: 2701 S BAYSHORE DRIVE CITY: COCONUT GROVE STATE: FL ZIP: 33133 FORMER COMPANY: FORMER CONFORMED NAME: HMG PROPERTY INVESTORS INC DATE OF NAME CHANGE: 19880215 FORMER COMPANY: FORMER CONFORMED NAME: HOSPITAL MORTGAGE GROUP INC DATE OF NAME CHANGE: 19810818 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended March 31, 1999 -------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 1-7865 HMG/COURTLAND PROPERTIES, INC. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 59-1914299 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2701 S. Bayshore Drive, Coconut Grove, Florida 33133 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 305-854-6803 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the registrant filed all documents and reports required to be filed by Sections 12, 13, or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 1,100,235 Common shares were outstanding as of April 30, 1999. HMG/COURTLAND PROPERTIES, INC. Index PAGE NUMBER PART I. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1999 (Unaudited) and December 31, 1998...................1 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1999 and 1998 (Unaudited).............2 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1999 and 1998 (Unaudited).............3 Notes to Condensed Consolidated Financial Statements (Unaudited)...4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................6 PART II. Other Information Item 6. Reports on Form 8-K........................................8 HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES Part I Financial Information Item I Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) March 31, December 31, 1999 1998 ------------ ------------ ASSETS Investment Properties, net of accumulated depreciation: Commercial and Industrial $ 3,231,491 $ 3,267,582 Hotel and Club Facility 6,361,985 6,521,428 Yacht Slips 1,488,445 1,508,291 Land Held for Development 2,712,337 3,013,272 ------------ ------------ Total investment properties, net 13,794,258 14,310,573 Investments In and Receivables From Unconsolidated Entities 4,924,628 4,603,047 Notes and Advances Due From Related Parties 752,644 719,937 Loans, Notes and Other Receivables 889,331 875,614 Cash and Cash Equivalents 1,603,124 1,834,365 Investments in marketable securities 1,918,727 1,621,488 Other Assets 399,781 402,674 ------------ ------------ TOTAL ASSETS $ 24,282,493 $ 24,367,698 ============ ============ LIABILITIES & STOCKHOLDERS' EQUITY Accounts Payable and Accrued Expenses 1,264,033 1,058,959 Mortgages and Notes payable 9,316,049 9,555,129 Other Liabilities 355,645 349,767 ------------ ------------ TOTAL LIABILITIES 10,935,727 10,963,855 Minority interests 436,858 424,925 ------------ ------------ STOCKHOLDERS' EQUITY Preferred Stock, no par value; 2,000,000 shares authorized; none issued Common Stock, $1 par value; 1,500,000 shares authorized; 1,245,635 shares issued and outstanding 1,245,635 1,245,635 Additional Paid-in Capital 26,283,222 26,283,222 Undistributed Gains From Sales of Real Estate, net of losses 36,869,887 36,670,311 Undistributed Losses From Operations (50,432,635) (50,015,668) Accumulated other comprehensive income 264,936 116,555 ------------ ------------ 14,231,045 14,300,055 Less: Treasury Stock, at cost (145,400 shares) (1,321,137) (1,321,137) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 12,909,908 12,978,918 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,282,493 $ 24,367,698 ============ ============
See notes to condensed consolidated financial statements (1) HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) Three months ended REVENUES March 31, 1999 1998 ----------- ----------- Rentals and related revenue $ 433,089 $ 427,285 Marina revenues 161,833 134,426 Gain from sale of marketable securities 94,892 164,298 Gain from unconsolidated investments 108,117 34,435 Interest from invested cash, dividends and other 52,476 50,030 ---------------------------- Total revenues 850,407 810,474 ---------------------------- EXPENSES Operating expenses: Rental Properties and other 162,140 166,095 Marina 148,356 137,594 Advisor's fee 165,000 165,000 General and administrative 45,974 123,572 Professional fees and expenses 297,520 159,743 Directors' fees and expenses 8,587 6,250 Depreciation and amortization 227,836 250,930 ---------------------------- Total operating expenses 1,055,413 1,009,184 Interest expense 191,956 219,913 Minority partners' interests in operating gains (losses) of consolidated entities 20,005 (2,897) ---------------------------- Total expenses 1,267,374 1,226,200 ---------------------------- Loss before sales of real estate (416,967) (415,726) Gain on sales of real estate, net 199,576 897,565 ---------------------------- Net (Loss) income ($ 217,391) $ 481,839 ============================ Net (Loss) Income Per Common Share, Basic and Diluted (Based on weighted average shares outstanding of 1,100,235 and 1,166,835 for the periods ended March 31, 1999 and 1998 respectively) ($ 0.20) $ 0.41 =========== ===========
See notes to condensed consolidated financial statements (2) HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) Three months ended March 31, 1999 1998 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income ($ 217,391) $ 481,839 Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 227,836 250,930 Gain from unconsolidated investments (108,117) (34,435) Gain on sales of real estate, net (199,576) (897,565) Gain from sales of marketable securities, net (94,892) (164,298) Minority partners' interest in operating gains (losses) 20,005 (2,897) Changes in assets and liabilities: (Increase) decrease in other assets (4,531) 277,184 Increase in due from affiliates (32,707) (19,104) Increase (decrease) in accounts payable and accrued expenses 205,074 (51,345) Increase (decrease) in other liabilities 5,878 (230,856) ----------- ----------- Total adjustments 18,970 (872,386) ----------- ----------- Net cash used in operating activities (198,421) (390,547) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Aquisitions and improvements of properties (5,032) (110,960) Net proceeds from disposals of properties 494,314 2,457,008 Increase in mortgage loans, notes and other loans receivable (31,503) (16,698) Decrease in mortgage loans, notes and other loans receivable 17,786 52,295 Net contributions to unconsolidated investments (213,464) 89,491 Net proceeds from sales and redemptions of securities 273,608 180,412 Increase in investments in securities (327,574) (802,249) ----------- ----------- Net cash provided by investing activities 208,135 1,849,299 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of mortgages and notes payables (239,080) (1,114,406) Additions to mortgages and notes payables 65,408 Net (distributions to) contributions from minority partners (1,875) 4,376 ----------- ----------- Net cash used in financing activities (240,955) (1,044,622) ----------- ----------- Net (decrease) increase in cash and cash equivalents (231,241) 414,130 Cash and cash equivalents at beginning of the period 1,834,365 2,492,059 ----------- ----------- Cash and cash equivalents at end of the period $ 1,603,124 $ 2,906,189 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 131,000 $ 155,000 =========== ===========
See notes to condensed consolidated financial statements (3) HMG/COURTLAND PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company's Annual Report for the year ended December 31, 1998. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of the results to be expected for the full year. 2. GAIN ON SALES OF REAL ESTATE In March 1999, The Grove Towne Center-Texas, Ltd. sold approximately 2.3 acres of vacant land located in Houston, Texas for approximately $557,000. The Company recognized a net gain of approximately $199,000. 3. INVESTMENTS IN MARKETABLE SECURITIES Investments in marketable securities are composed primarily of corporate equity securities. These securities are classified as available-for-sale and carried at fair value, based on quoted market prices. The net unrealized gains or loses on these investments are reported as a separate component of stockholders' equity. Gross unrealized gains on available-for-sale securities as of March 31, 1999 were approximately $329,000. Gross unrealized losses as of March 31, 1999 were approximately $64,000. Gross gains on sales of marketable securities of approximately $96,000 were realized during the three months ended March 31, 1999. Gross losses of approximately $1,000 were realized during the three months ended March 31, 1999. Gross gains and losses are based on the average cost method of determining cost. 4. COMPREHENSIVE INCOME (LOSS) The Company has elected to report comprehensive income (loss) in the condensed consolidated statement of stockholders' equity. Comprehensive income (loss) is the change in equity from transactions and other events from nonowner sources. Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). The components and related activity of accumulated other comprehensive income (loss), resulting from net unrealized loss on available-for-sale investments, are as follows: Accumulated Other Comprehensive Income (Loss) Balance as of January 1, 1999 $116,555 Changes in First Quarter 148,381 -------- Balance as of March 31, 1999 $264,936 ======== ( 4 ) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company reported a net loss of approximately $217,000 (or $.20 per share) for the three months ended March 31, 1999. This is as compared with net income of approximately $482,000 (or $.41 per share) for the three months ended March 31, 1998. Total revenues for the three months ended March 31, 1999, as compared with the same period in 1998, increased by approximately $40,000 (or 5%). Total expenses for the same comparable periods increased by approximately $41,000 (or 3%). Gain on sales of real estate for the three months ended March 31, 1999 was approximately $200,000, as compared with approximately $898,000 for the three months ended March 31, 1998. REVENUES Rentals and related revenues for the three months ended March 31, 1999 were approximately $433,000. This is as compared with approximately $427,000 for the same period in 1998. This increase of approximately $6,000 (or 1%) for the three month comparable periods was not significant. Marina revenues for the three months ended March 31, 1999 were approximately $162,000. This is as compared with approximately $134,000 for the same period in 1998. This increase of approximately $28,000 (or 20%) for the three month comparable periods was primarily attributable to increased marina slip rental revenue. Gain from the sale of marketable securities for the three months ended March 31, 1999 was approximately $95,000. This is as compared with approximately $164,000 for the same comparable period in 1998. This decrease of approximately $69,000 (or 42%) for the three month comparable periods was primarily the result of decreased sales of securities. Gain from unconsolidated investments for the three months ended March 31, 1999 was approximately $108,000. This is as compared with approximately $34,000 for the same comparable period in 1998. This increase of approximately $74,000 (or 214%) for the three month comparable periods was primarily attributable to increased gains from CII's investment in various partnerships whose purpose is to make equity investments in growth-oriented enterprises, and from CII's investment in T.G.I.F. Texas, Inc. EXPENSES Operating expenses of rental properties and other for the three months ended March 31, 1999 were approximately $162,000. This is as compared with approximately $166,000 for the same period in 1998. This decrease of approximately $4,000 (or 2%) for the three month comparable periods was not significant. Marina related expenses for the three months ended March 31, 1999 were approximately $148,000. This is as compared with approximately $138,000 for the same period in 1998. This increase of approximately $10,000 (or 7%) for the three month comparable periods was primarily attributable to higher operating costs due to increased revenues from marina operations. General and administrative expenses for the three months ended March 31, 1999 were approximately $46,000. This is as compared with approximately $124,000 for the same period in 1998. ( 5 ) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) This decrease of approximately $78,000 (or 63%) for the three month comparable periods was attributable to decreased general and administrative expenses of Courtland Investments, Inc. primarily relating to decreased other taxes. Professional fees for the three months ended March 31, 1999 were approximately $298,000. This is as compared with approximately $160,000 for the same period in 1998. This increase of approximately $138,000 (or 86%) for the three month comparable periods was primarily the result of increased legal fees relating to ongoing litigation, as previously reported. Depreciation and amortization expense for the three months ended March 31, 1999 was approximately $228,000. This is as compared with approximately $251,000 for the same period in 1998. This decrease of approximately $23,000 (or 9%) for the three month comparable periods was primarily due to decreased depreciation of furniture and fixtures owned by Grove Isle Club, Inc. ("GICI"). The majority of GICI's fixed assets have reached their useful life and are fully depreciated. Interest expense for the three months ended March 31, 1999 was approximately $192,000. This is as compared with approximately $220,000 for the same period in 1998. This decrease of approximately $28,000 (or 13%) for the three month comparable periods was primarily due to decreased interest expense from Grove Isle Associates, Ltd. as the result of the refinancing of debt as previously reported. Minority partners' interest in operating gains (losses) of consolidated entities for the three months ended March 31, 1999 was approximately $20,000. This is as compared with approximately ($3,000) for the same period in 1998. This change of approximately $23,000 for the three month comparable periods was primarily due to decreased losses from The Grove Towne Center-Texas, Ltd. All other expenses for the three months ended March 31, 1999 as compared with the same period in 1998 remained consistent or were immaterial. LIQUIDITY AND CAPITAL RESOURCES The Company's material commitments primarily consist of maturities of debt obligations. The funds necessary to meet these obligations are expected from the proceeds of sales of properties, refinancing, distributions from investments and available cash. In addition, the Company intends to continue to seek opportunities for investment in income producing properties. MATERIAL COMPONENTS OF CASH FLOWS For the three months ended March 31, 1999, net cash provided by investing activities was approximately $208,000. This consisted primarily of net proceeds from disposal of properties of approximately $494,000 and net proceeds from the sales and redemptions of securities of approximately $274,000. These increases were partially offset by uses of cash resulting from increased investments in marketable securities of approximately $327,000 and increased contributions to unconsolidated investments of approximately $213,000. For the three months ended March 31, 1999, net cash used in financing activities was approximately $241,000. This consisted primarily of repayment of mortgages payable of $239,000. ( 6 ) YEAR 2000 Background In the past, many computer software programs were written using two digits rather than four to define the applicable year. As a result, date-sensitive computer software may recognize a date using "00" as the year 1900 rather than the year 2000. This is generally referred to as the Year 2000 issue. If this situation occurs, the potential exists for computer system failures or miscalculations by computer programs, which could disrupt operations. State of Readiness, Costs and Risks The Company has completed the conversion of its computer system to use 4-digit year fields and is therefore believed to be "Year 2000" compliant. The cost of such conversion was not material to the Company's financial condition or results of operations, nor did the Company experience any material disruption in its operations with respect thereto. The Company's computer system is small, consisting of only six personal computers connected via one local area network server located in one facility. The Company utilizes its computer system to perform accounting and word processing functions only. The Company has no other operations which rely on computers or other equipment that would be affected by the Year 2000 issue. The Company is exposed to the risk that one or more of its tenants could experience Year 2000 problems that impact their ability to meet lease obligations to the Company. To date, the Company is not aware of any tenant Year 2000 issue that would have a material adverse impact on the Company's operations. The Company has received an interim status report from its primary tenant at its Grove Isle property in Florida that this tenant is addressing its Year 2000 readiness. The Company has no means of ensuring that this or any other tenant will be Year 2000 ready. The inability of tenants to complete their Year 2000 resolution process in a timely fashion could have an adverse impact on the Company. The effect of non-compliance by tenants is not determinable at this time. The Company's Year 2000 risks are considered minimal and no continency plans are believed to be necessary. Widespread disruptions in the national or international economy, including disruptions affecting the financial markets, resulting from Year 2000 issues, or in certain industries, such as commercial or investment banks, could also have an adverse impact on the Company. The likelihood and effect of such disruptions is not determinable at this time Readers are cautioned that forward-looking statements contained in the Year 2000 discussion should be read in conjunction with the Company's disclosures regarding forward-looking statements contained in its Form 10-KSB. ( 7 ) PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) There were no reports on Form 8-K filed for the quarter ended March 31, 1999. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HMG/COURTLAND PROPERTIES, INC. /s/ Lawrence Rothstein Dated: May 13, 1999 --------------------------------------- Lawrence Rothstein Director, President, Treasurer & Secretary /s/ Carlos Camarotti Dated: May 13, 1999 --------------------------------------- Carlos Camarotti Vice President - Finance and Controller ( 8 ) EX-27 2
5 0000311817 HMG/COURTLAND PROPERTIES, INC. 3-MOS DEC-31-1999 MAR-31-1999 1,603,124 1,918,727 1,641,975 0 0 0 19,538,145 5,743,887 24,282,493 0 0 1,245,635 0 0 11,664,273 24,282,493 850,407 850,407 0 0 1,075,418 0 191,956 (217,391) 0 0 0 0 0 (217,391) (0.20) 0
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