FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from _____________to ____________
For the Quarter ended Commission File No.
March 31, 2004 0-24282
MONMOUTH CAPITAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
New Jersey 21-0740878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Juniper Business Plaza, 3499 Route 9 North,
Suite 3-C, Freehold, NJ 07728
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number,including area code:(732)577-9981
_________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities and 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 ____
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ___ No _X_
The number of shares or other units outstanding of each of the
issuer's classes of securities as of May 1, 2004 was 3,215,816
shares.
MONMOUTH CAPITAL CORPORATION
FOR THE QUARTER ENDED MARCH 31, 2004
CONTENTS
PART I - FINANCIAL INFORMATION PAGE NO.
Item 1 - Financial Statements (Unaudited):
Consolidated Balance Sheets 3-4
Consolidated Statements of Income 5
Consolidated Statements of Cash Flow 6
Notes to Consolidated Financial
Statements 7-9
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10-14
Item 3 - Quantitative and Qualitative
Disclosure About Market Risk
There have been no material changes to
information required regarding quantitative
and qualitative disclosures about market risk
from the end of the preceding year to the
date of this Form 10-Q.
Item 4 - Controls and Procedures 14
PART II- OTHER INFORMATION 15
SIGNATURES 16
2
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
March 31, December 31,
ASSETS 2004 2003
__________ __________
Real Estate Investments:
Land $5,838,603 $5,838,603
Buildings, Improvements and
Equipment, net of
Accumulated depreciation of
$803,424 and 613,750,
respectively 17,059,970 17,249,644
__________ __________
Total Real Estate Investments 22,898,573 23,088,247
Cash and Cash Equivalents 318,477 314,091
Securities Available for
Sale, at Fair Value:
Federal National Mortgage
Association 556,793 546,697
Government National Mortgage
Association 63,809 69,298
Other Securities Available
for Sale 15,075,705 14,827,914
Accounts Receivable 32,585 15,097
Loans Receivable, net of
allowance for losses of
$77,615 and $86,934, at
March 31, 2004 and
December 31,2003,respectively 1,406,736 1,515,625
Inventory 75,233 50,590
Prepaid Expenses and Other
Assets 168,035 111,553
Financing Costs, net of
accumulated amortization of
$59,093 and $42,796,
respectively 632,791 649,088
Leasing costs, net of
accumulated amortization of
$20,467 and $12,277,
respectively 372,618 380,808
____________ __________
TOTAL ASSETS $41,601,355 $41,569,008
========== ==========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
3
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS (CONT'D.)
AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
March 31, December 31,
2004 2003
__________ ___________
LIABILITIES AND SHAREHOLDERS'
EQUITY
Mortgages Payable $15,754,209 $15,889,239
Convertible Subordinated Debentures
5,370,000 5,370,000
Loans Payable 4,417,703 5,576,824
Accounts Payable and Accrued
Expenses 307,949 249,854
Other Liabilities 177,876 197,844
Total Liabilities 26,027,737 27,283,761
Minority Interest 1,899,573 1,914,242
Shareholders' Equity:
Common Stock par value $1.00
per share;
authorized 10,000,000
shares; issued and
outstanding 3,181,384 and
3,081,463
shares respectively 3,181,384 3,081,463
Additional Paid-In Capital 7,953,431 7,266,839
Accumulated Other
Comprehensive Income 1,541,612 1,812,797
Retained Earnings 997,618 209,906
_________ _________
Total Shareholders' Equity 13,674,045 12,371,005
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $41,601,355 $41,569,008
============ ============
-UNAUDITED-
See Notes to the Consolidated Financial Statements
4
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
MARCH 31, 2004 AND 2003
2004 2003
INcome:
Rental Income $635,145 $347,678
Interest and Dividend
Income 270,161 337,007
Sales of Manufactured
Homes 45,041 43,256
Gain on Sales of
Securities 794,910 128,412
Other Income 146 24
_________ _________
Total Income 1,745,403 856,377
_________ _________
Expenses:
Cost of Sales of
Manufactured Homes 30,484 41,995
Real Estate Taxes 30,608 29,053
Salaries and Employee
Benefits 51,702 30,602
Professional Fees 37,363 10,699
Interest Expense 401,402 198,292
Depreciation 189,674 63,358
Other Expenses 118,121 95,522
__________ _________
Total Expenses 859,354 469,521
_________ _________
Income Before Minority
Interest 886,049 386,856
Minority Interest 23,337 10,875
_________ _________
INCOME BEFORE
INCOME TAXES $862,712 $375,981
INCOME TAXES 75,000 -0-
_________ _________
NET INCOME $787,712 $375,981
========= ==========
NET INCOME PER SHARE-BASIC
AND DILUTED
Basic $ .25 $ .25
Diluted $ .22 $ .15
WEIGHTED AVERAGE
SHARES OUTSTANDING:
BASIC 3,112,550 2,471,138
========= =========
DILUTED 4,055,116 2,492,686
========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statement
5
MONMOUTH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE QUARTER ENDED MARCH 31, 2004 AND 2003
2004 2003
________ ________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 787,712 $375,981
Non-Cash Adjustments:
Income Allocated to Minority Interest 23,773 10,875
Depreciation and Amortization 214,161 67,559
Gain on Sale of Securities Available
for Sale (794,910) (128,412)
Changes In Operating Assets and
Liabilities:
Accounts Receivable (17,488) (11,641)
Inventory -0- 21,729
Prepaid Expenses and other assets (56,482) (11,482)
Accounts Payable and Accrued Expenses 58,095 (84,264)
Other Liabilities (19,968) -0-
_________ _________
Net Cash Provided by Operating
Activities 194,893 240,345
_________ ________
CASH FLOWS FROM INVESTING ACTIVITIES:
Collections and Other Decreases in
Loans Receivable 84,246 92,964
Purchase of Securities Available for
Sale (2,882,430) -0-
Proceeds from Sales and Other
Decreases in Securities Available for
Sale 3,153,757 2,113,879
_________ _________
Net Cash Used in Investing Activities 355,573 2,206,843
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Decrease in Loans Payable (1,159,121) (4,201,248)
Principal Payments on Mortgages (135,030) (78,684)
Decrease in Minority Interest (38,442) (21,000)
Proceeds from the Issuance of Common
Stock 786,513 1,808,506
Proceeds from Exercise of Stock
Options -0- 55,000
_________ _________
Net Cash Provided by in Financing
Activities (546,080) (2,437,426)
_________ _________
Net Increase in Cash 4,386 9,762
Cash at Beginning of Period 314,091 174,099
_________ _________
Cash at End of Period $318,477 $183,861
========= =========
-UNAUDITED-
See Notes to the Consolidated Financial Statements
6
MONMOUTH CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
NOTE 1 - ORGANIZATION AND ACCOUNTING POLICY
The interim consolidated financial statements furnished herein
reflect all adjustments which were, in the opinion of management,
necessary to present fairly the financial position, results of
operations, and cash flows at March 31, 2004 and for all periods
presented. All adjustments made in the interim period were of a
normal recurring nature. Certain footnote disclosures which
would substantially duplicate the disclosures contained in the
audited financial statements and notes thereto included in the
annual report of Monmouth Capital Corporation (the Company) for
the year ended December 31, 2003 have been omitted.
The Company has elected to be taxed as a real estate investment
trust (REIT). As a REIT, the Company would not be taxed on the
portion of its income which is distributed to shareholders,
provided it meets certain requirements.
Certain reclassifications have been made to the financial
statements for the prior period to conform to the current period
presentation.
Employee Stock Options
The Company followed APB Opinion No. 25 in accounting for its
stock option plan prior to January 1, 2003, and accordingly no
compensation cost had been recognized for grants made prior to
January 1, 2003. The Company adopted the fair value recognition
provisions of SFAS No. 123, "Accounting for Stock Based
Compensation" on January 1, 2003. Under the prospective method
of adoption selected by the Company under the provisions of SFAS
No. 148, "Accounting for Stock Based Compensation, Transition
and Disclosure", no compensation costs have been recognized in
the three months ended March 31, 2004 and 2003, as the Company
did not grant stock-based employee compensation during the those
periods.
The Company's 1994 Stock Option Plan expired on December 31,
2003, as such, no options were granted during the three months
ended March 31, 2004. During the three months ended March 31,
2004, no participants exercised their stock options, and no stock
options expired. As of March 31, 2004, there were options
outstanding to purchase 80,000 shares under the Plan.
NOTE 2 - NET INCOME PER SHARE AND COMPREHENSIVE INCOME
Basic net income per share is calculated by dividing net income
by the weighted-average number of common shares outstanding
during the period. Diluted net income per share is calculated by
dividing net income plus interest expense related to the
Company's Convertible Subordinated Debentures (the Debentures) by
the weighted-average number of common shares outstanding plus the
weighted-average number of shares that would be issued upon
exercise of stock options pursuant to the treasury stock method,
plus the number of shares resulting from the
7
NOTE 2 - NET INCOME PER SHARE AND COMPREHENSIVE INCOME, (CONT'D.)
possible conversion of the Debentures. Options in the amount of
47,566 and 21,548 are included in the diluted weighted-average
shares outstanding for the three months ended March 31, 2004 and
2003, respectively. Interest expense of $107,400 relating to the
Debentures is added back to net income in the numerator for
diluted net income per share for the three months ended March 31,
2004. Common stock relating to the Company's Debentures totaling
895,000 shares are also included in the diluted weighted-average
shares outstanding for the three months ended March 31, 2004.
The following table sets forth the components of the
Company's comprehensive income:
Three Three
Months Months
3/31/04 3/31/03
_________ ________
Net Income $787,712 $375,981
Change in unrealized
gains(losses)on securities
available for sale (271,185) (296,003)
_________ ________
Comprehensive Income $516,527 $ 79,978
========= ========
NOTE 3 - SECURITIES AVAILABLE FOR SALE AND DERIVATIVE INSTRUMENTS
During the three months ended March 31, 2004, the Company sold or
redeemed $3,153,757 in securities available for sale, recognizing
a gain on sale of $794,910. The Company made additional purchases
of $2,882,430 in securities available for sale.
During the three months ended March 31, 2004, the Company
invested in futures contracts of ten-year treasury notes with a
notional amount of $1,400,000, with the objective of reducing the
exposure of the debt securities portfolio to market rate
fluctuations. Changes in the market value of these derivatives
have been recorded in interest and dividend income with
corresponding amounts recorded in other liabilities on the
balance sheet. The fair value of the derivatives at March 31,
2004 was a liability of $13,867.
NOTE 4 - LOANS PAYABLE
On January 26, 2004, the Company paid off the notes payable to
Two River Community Bank with an outstanding balance of
$1,075,000 at December 31, 2003. The notes were repaid with
proceeds from the Company's margin loan. On April 15, 2004, the
Company closed on a $1,000,000 line of credit with Two River
Community Bank secured by the Company's manufactured home loans.
The interest rate is 5% for the first two years and changes to
the five-year FHLB of NY Regular Fixed Rate plus 300bp for the
remaining five years. The line of credit expires in 2011.
NOTE 5 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
For the three months ended March 31, 2004, the Company received
$786,513 from the Dividend Reinvestment and Stock Purchase Plan
(DRIP). There were 99,921 shares issued, resulting in 3,181,384
shares outstanding.
8
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
On January 14, 2004 the Company declared a dividend of $0.25 per
share to be paid on June 15, 2004 to shareholders of record on
May 17, 2004.
Cash paid for interest and taxes during the three months ended
March 31, 2004 and 2003 was as follows:
2004 2003
_______ _______
Interest $275,811 $198,292
Taxes 87,679 24,027
During the three months ended March 31, 2004 and 2003, the
Company repossessed the collateral for loans receivable of
$24,643 and $-0-, respectively, and placed it into inventory.
NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS
FASB Interpretation No. 46, Consolidation of Variable Interest
Entities "FIN 46" was issued in January 2003 and was reissued
as FASB Interpretation No. 46 (revised December 2003) (FIN
46R). For public entities, FIN 46 or FIN 46R is applicable to
all special-purpose entities (SPEs) in which the entity holds a
variable interest no later than the end of the first reporting
period ending after December 15, 2003, and immediately to all
entities created after January 31, 2003. The effective dates of
FIN 46R vary depending on the type of reporting enterprise and
the type of entity that the enterprise is involved with. FIN 46
and FIN 46R may be applied prospectively with a cumulative-effect
adjustment as of the date on which it is first applied or by
restating previously issued financial statements for one or more
years with a cumulative-effect adjustment as of the beginning of
the first year restated. FIN 46 and FIN 46R provides guidance on
the identification of entities controlled through means other
than voting rights. FIN 46 and FIN 46R specifies how a business
enterprise should evaluate its involvement in a variable interest
entity to determine whether to consolidate that entity. A
variable interest entity must be consolidated by its primary
beneficiary if the entity does not effectively disperse risks
among the parties involved. Conversely, effective dispersion of
risks among the parties involved requires that a company that
previously consolidated a special purpose entity, upon adoption
of FIN 46 or FIN 46R, to deconsolidate such entity. Management
believes that this interpretation will not have a material impact
on the Company's consolidated financial statements
NOTE 8 - SUBSEQUENT EVENTS
On April 14, 2004, the Company closed on a $1,000,000 line of
credit with Two River Community Bank secured by the Company's
manufactured home loans. The interest rate is 5% for the first
two years and changes to the five-year FHLB of NY regular fixed
rate plus 300bp for the remaining five years. The line of credit
expires in 2011.
9
MONMOUTH CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS OF FINANCIAL CONDITION
Overview
The following discussion and analysis of the consolidated financial
condition and results of operations should be read in conjunction
with the Consolidated Financial Statements and notes thereto
elsewhere herein and the Company's December 31, 2003 annual report
on Form 10-K.
The Company operates as a hybrid-diversified REIT. Currently, the
Company's primary business is the ownership of four industrial
properties subject to medium term leases and investing in
marketable securities. These securities include securities of other
REITS and mortgage backed securities. The Company also has loans
receivable and inventory related to the sales of manufactured
homes. Prior to March 31, 2001, the Company was engaged in the
manufactured home sales and finance business.
The Company's revenue primarily consists of rental and related
income from the ownership of the industrial properties, interest
and dividend income, and gain on sale of securities. Sales of
manufactured homes relates to the sale of inventory which had been
repossessed and resold. Rental and occupancy revenue increased
$287,467 for the three months ended March 31, 2004 as compared to
the three months ended March 31, 2003. Gain on sales of securities
available for sale was $794,910 for the three months ended March
31, 2004.
Although the Company currently owns four industrial properties,
management would consider other types of real estate acquisitions.
Management anticipates that the Company will acquire approximately
$40,000,000 in properties during 2004 and 2005. The current
acquisitions environment is competitive and management may not be
able to locate suitable properties for acquisition.
The Company has financed acquisitions through capital raised
through the Company's Dividend Reinvestment and Stock Purchase
Plan, by obtaining mortgages, and from private placement offerings,
including the Convertible Subordinated Debentures. If suitable
acquisitions cannot be found during 2004, the Company may invest
additional capital raised in REIT securities or pay down
outstanding debt. The Company also invests in debt and equity
securities of other REITs for liquidity and additional income. The
Company from time to time may purchase these securities on margin
when there is an adequate yield spread.
See PART I, Item 1. Business of the Company's December 31, 2003
annual report on Form 10-K for a more complete discussion of the
economic and industry-wide factors relevant to the Company, the
Company's lines of business and principal products and services,
and the opportunities, challenges and risks on which the Company is
focused.
10
MATERIAL CHANGES IN RESULTS OF OPERATIONS
At March 31, 2004, the Company owned four industrial properties
with total square footage of approximately 289,000 compared to
three industrial properties with approximately 182,000 square feet
at March 31, 2003.
Rental and occupancy charges increased $287,467 or 83% for the
three month ended March 31, 2004 as compared to the three months
ended March 31, 2003. The increase is related to rent and
occupancy charges of the Wheeling, Illinois property purchased in
August 2003.
Interest and dividend income decreased $66,846 or 20% for the three
month ended March 31, 2004 as compared to the three months ended
March 31, 2003. The decrease is due mainly to a lower average
balance of FNMA and GNMA securities and decreased loans receivable
balances during the three months ended March 31, 2004 as compared
to the three months ended March 31, 2003. The decrease in average
balances is due to returns of principal. The average balance of
the FNMA and GNMA securities portfolio was approximately $618,000
for the three months ended March 31, 2004 as compared to $2,794,000
for the three months ended March 31, 2003. Loans receivable
balances were $1,406,736 and $1,753,876 at March 31, 2004 and 2003,
respectively. This decrease in interest expense was partially
offset by a higher average balance of other securities available
for sale during the three months ended March 31, 2004 as compared
to the three months ended March 31, 2003.
Gain on sale of securities increased $666,498 for the three months
ended March 31, 2004 as compared to the three months ended March
31, 2003. The Company sold more securities available for sale
than in prior year due to the unrealized gains existing in the
portfolio in the third and fourth quarter of 2003 and the first
quarter of 2004. Management does not expect to recognize the same
level of realized gains on sale of securities in future quarters
due to the decrease in market value of the securities occurring
after the first quarter of 2004.
Salaries and benefits increased $21,100 or 69% for the three months
ended March 31, 2004 as compared to the three months ended March
31, 2003. The increase is due to an increase in employees as well
as salary increases. The Company added 2 full-time employees after
March 31, 2003. The Company has been expanding its operations.
Professional fees increased $26,664 or 249% for the three months
ended March 31, 2004 as compared to the three months ended March
31, 2003. The increase is due to an increase in personnel costs
allocated from the Company's affiliates as well as increased
accounting fees.
Interest expense increased $203,110 for the three months ended
March 31, 2004 as compared to the three months ended March 31,
2003. The increase in interest expense is due mainly to the
interest on the 8% Debentures issued in October 2003 ($107,400) and
the mortgage related to the property acquisition in Wheeling,
Illinois in August 2003 ($107,742). The increase was partially
offset by the decrease in the interest rates on the Company's
margin loan. The interest rate on the Company's margin loan was
2.75% and 3.0% at March 31, 2004 and 2003, respectively.
11
MATERIAL CHANGES IN RESULTS OF OPERATONS, (CONT'D.)
Depreciation expense increased $126,316 or 199% for the three
months ended March 31, 2004 as compared to the three months ended
March 31, 2003. The increase is due to the property acquisition in
Wheeling, Illinois in August 2003.
Other expenses increased $22,599 or 24% for the three months ended
March 31, 2004 as compared to the three months ended March 31,
2003. The increase is due to the property acquisition in Wheeling
Illinois and expanded operations.
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company operates as a hybrid-diversified real estate investment
trust (REIT) and invests in real estate, mortgages, mortgage-backed
securities and other REIT securities. The Company generated net
cash provided by operating activities for the three months ended
March 31, 2004 of $194,893. In addition, the Company raised
$786,513 from the issuance of shares of common stock through its
Dividend Reinvestment and Stock Purchase Plan (DRIP) for the three
months ended March 31, 2004.
Securities available for sale increased $252,398 from December 31,
2003 to March 31, 2004 due to mainly to purchases of other
securities available for sale of $2,882,430. The Company sold
$3,153,757 in securities available for sale recorded a realized
gain on sale of securities available for sale of $794,910. The
Company may purchase additional securities on margin from time to
time if the Company can earn an adequate yield spread on the
securities. However, if suitable real properties are identified by
management, the Company may decrease its securities portfolio and
invest in additional real property. The Company anticipates
additional property acquisitions of approximately $40,000,000 in
2004 and 2005.
During the three months ended March 31, 2004, the Company invested
in futures contracts of ten-year treasury notes with a notional
amount of $1,400,000, with the objective of reducing the exposure
of the debt securities portfolio to market rate fluctuations.
Changes in the market value of these derivatives have been recorded
in interest and dividend income with corresponding amounts recorded
in other liabilities on the balance sheet. The fair value of the
derivatives at March 31, 2004 was a liability of $13,867.
In January 2004, the Company paid off the notes payable to Two
River Community Bank with an outstanding balance of $1,075,000 at
December 31, 2003. The notes were repaid with proceeds from the
Company's margin loan. In April 2004, the Company closed on a
$1,000,000 line of credit with Two River Community Bank secured by
the Company's manufactured home loans. The interest rate is 5% for
the first two years and changes to the FHLB of NY Regular Fixed
Rate plus 300bp for the remaining five years. The line of credit
expires in 2011.
FUNDS FROM OPERATIONS
Funds from operations (FFO), is defined as net income, excluding
gains (or losses) from sales of depreciable assets, plus
depreciation. FFO should be considered as a supplemental measure
of operating performance used by real estate investment trusts
(REITs).
12
FUNDS FROM OPERATIONS, (CONT'D.)
FFO excludes historical cost depreciation as an expense and may
facilitate the comparison of REITs which have different cost bases.
The items excluded from FFO are significant components in
understanding and assessing the Company's financial performance.
FFO (1) does not represent cash flow from operations as defined by
generally accepted accounting principles; (2) should not be
considered as an alternative to net income as a measure of
operating performance or cash flows from operating, investing and
financing activities; and (3) is not an alternative to cash flow as
a measure of liquidity. FFO, as calculated by the Company, may not
be comparable to similarly entitled measures reported by other
REITs.
The Company's FFO for the three months ended March 31, 2004 and
2003 is calculated as follows:
Three Months
2004 2003
Net Income $787,712 $375,981
Depreciation
Expense 189,674 63,358
________ ________
FFO $977,386 $439,339
________ ________
The following are the cash flows provided (used) by operating,
investing and financing activities for the three months ended March
31, 2004 and 2003:
2004 2003
Operating Activities $194,893 $ 240,345
Investing Activities 355,573 2,206,84
Financing Activities (546,080 (2,437,426)
LIQUIDITY AND CAPITAL RESOURCES
The Company's ability to generate cash adequate to meet its needs
is dependent primarily on income from its real estate investments
and its securities portfolio, the sale of real estate investments
and securities, refinancing of mortgage debt, leveraging of real
estate investments, availability of bank borrowings, proceeds from
the Dividend Reinvestment and Stock Purchase
Plan, and access to the capital markets. Purchases of new
properties, purchases of securities, payments of expenses related
to real estate operations, capital improvements programs, debt
service, management and professional fees, and dividend
requirements place demands on the Company's liquidity.
13
SAFE HARBOR STATEMENT
This Form 10-Q contains various "forward-looking statements" within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, and the Company intends that such forward-
looking statements be subject to the safe harbors created thereby.
The words "may", "will", "expect", "believe", "anticipate",
"should", "estimate", and similar expressions identify forward-
looking statements. These forward-looking statements reflect the
Company's current views with respect to future events and finance
performance, but are based upon current assumptions regarding the
Company's operations, future results and prospects, and are subject
to many uncertainties and factors relating to the Company's
operations and business environment which may cause the actual
results of the Company to be materially different from any future
results expressed or implied by such forward-looking statements.
Such factors include, but are not limited to, the following: (i)
changes in the general economic climate, including interest rates;
(ii) increased competition in the geographic areas in which the
Company operates; and (iii) changes in government laws. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements whether as a result of new information,
future events, or otherwise.
CONTROLS AND PROCEDURES
The Company's President and Chief Executive Officer and Chief
Financial Officer, with the assistance of other members of the
Company's management, have evaluated the effectiveness of the
Company's disclosure controls and procedures as of the end of the
period covered by this Quarterly Report on Form 10-Q. Based on
such evaluation, the Company's President and Chief Executive
Officer and Chief Financial Officer have concluded that the
Company's disclosure controls and procedures are effective.
The Company's President and Chief Executive Officer and Chief
Financial Officer have also concluded that there have not been any
changes in the Company's internal control over financial reporting
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
14
MONMOUTH CAPITAL CORPORATION
PART II - OTHER INFORMATION
FOR THE QUARTER ENDED MARCH 31, 2004
Item 1 - Legal Proceedings - None
Item 2 - Changes in Securities - None
Item 3 - Defaults Upon Senior Securities - None
Item 4 - Submission of Matters to a Vote of Security
Holders-None
Item 5 - Other Information - None
Item 6 - Exhibits and Reports on Form 8-K -
(a) Exhibits
31.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
31.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(b) Reports on Form 8-K - None
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its Behalf by the undersigned thereunto duly authorized.
MONMOUTH CAPITAL CORPORATION
Date: May 12, 2004 /s/ Eugene W. Landy
EUGENE W. LANDY
President and Chief Executive Officer
Date: May 12, 2004 /s/ Anna T. Chew
ANNA T. CHEW
Chief Financial Officer
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