[X]
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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[]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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New York
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11-1688021
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(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
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Seq.
Page
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||
Form
10-Q Cover
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1
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Index
to Form 10-Q
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2
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PART
I - FINANCIAL INFORMATION
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3
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Item
1. Financial Statements.
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3
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Consolidated
Balance Sheets (unaudited)
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3
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Consolidated
Statements of Operations (unaudited)
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4
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Consolidated
Statements of Cash Flows (unaudited)
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5
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Footnotes
to Consolidated Financial Statements
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6
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
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10
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
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14
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Item
4T. Controls and Procedures.
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14
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PART
II - OTHER INFORMATION
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15
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Item
1. Legal Proceedings.
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15
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Item
6. Exhibits.
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15
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SIGNATURES | 16 | |
EXHIBIT
INDEX
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17
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GYRODYNE
COMPANY OF AMERICA, INC.
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AND
SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
ASSETS
|
June
30,
|
December
31,
|
||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
REAL
ESTATE
|
||||||||
Rental
property:
|
||||||||
Land
|
$ | 5,079,017 | $ | 2,929,017 | ||||
Building
and improvements
|
29,814,792 | 17,887,414 | ||||||
Machinery
and equipment
|
255,742 | 254,352 | ||||||
35,149,551 | 21,070,783 | |||||||
Less
accumulated depreciation
|
3,308,318 | 3,010,709 | ||||||
31,841,233 | 18,060,074 | |||||||
Land
held for development:
|
||||||||
Land
|
558,466 | 558,466 | ||||||
Land
development costs
|
1,292,099 | 1,213,092 | ||||||
1,850,565 | 1,771,558 | |||||||
Total
real estate, net
|
33,691,798 | 19,831,632 | ||||||
Cash
and Cash Equivalents
|
967,908 | 1,205,893 | ||||||
Investment
in Marketable Securities
|
1,340,097 | 8,413,279 | ||||||
Rent
Receivable, net of allowance for doubtful accounts of $30,000
and $35,000, respectively
|
114,116 | 118,076 | ||||||
Interest
Receivable
|
7,780 | 49,678 | ||||||
Prepaid
Expenses and Other Assets
|
876,385 | 571,129 | ||||||
Total
Assets
|
$ | 36,998,084 | $ | 30,189,687 | ||||
LIABILITIES
ANDSTOCKHOLDERS’
EQUITY
|
||||||||
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 341,114 | $ | 379,948 | ||||
Accrued
liabilities
|
211,046 | 118,227 | ||||||
Tenant
security deposits payable
|
467,720 | 393,360 | ||||||
Mortgages
payable
|
18,386,877 | 10,560,486 | ||||||
Deferred
income taxes
|
1,209,000 | 5,336,000 | ||||||
Pension
liability
|
658,457 | 715,365 | ||||||
Total
Liabilities
|
21,274,214 | 17,503,386 | ||||||
Commitments
and Contingencies
|
||||||||
STOCKHOLDERS’
EQUITY:
|
||||||||
Common
stock, $1 par value; authorized 4,000,000 shares;
1,531,086
|
||||||||
shares
issued; 1,289,878 shares outstanding
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1,531,086 | 1,531,086 | ||||||
Additional
paid-in capital
|
7,978,395 | 7,978,395 | ||||||
Accumulated
other comprehensive loss
|
(1,830,098 | ) | (1,731,231 | ) | ||||
Balance
of undistributed income other than gain or loss on sales of
properties
|
9,582,184 | 6,445,748 | ||||||
17,261,567 | 14,223,998 | |||||||
Less
cost of 241,208 shares of common stock held in treasury
|
(1,537,697 | ) | (1,537,697 | ) | ||||
Total
Stockholders’ Equity
|
15,723,870 | 12,686,301 | ||||||
Total
Liabilities and Stockholders’ Equity
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$ | 36,998,084 | $ | 30,189,687 |
GYRODYNE
COMPANY OF AMERICA, INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF
OPERATIONS
|
(UNAUDITED)
|
Six
Months Ended
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Three
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
||||||||||||||||
Rental
Income
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$ | 2,027,867 | $ | 1,424,191 | $ | 1,169,157 | $ | 763,324 | ||||||||
Expenses
|
||||||||||||||||
Rental
expenses
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766,380 | 530,569 | 430,514 | 276,528 | ||||||||||||
General
and administrative expenses
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1,775,105 | 1,171,400 | 923,783 | 609,607 | ||||||||||||
Depreciation
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297,608 | 140,247 | 183,708 | 77,875 | ||||||||||||
Total
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2,839,093 | 1,842,216 | 1,538,005 | 964,010 | ||||||||||||
Other
Income (Expense):
|
||||||||||||||||
Interest
income
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114,105 | 295,163 | 19,211 | 134,374 | ||||||||||||
Realized
gain on marketable securities
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123,849 | 15,532 | 407 | 7,630 | ||||||||||||
Interest
expense
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(417,292 | ) | (177,606 | ) | (255,922 | ) | (98,607 | ) | ||||||||
Total
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(179,338 | ) | 133,089 | (236,304 | ) | 43,397 | ||||||||||
Loss
Before Benefit for Income Taxes
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(990,564 | ) | (284,936 | ) | (605,152 | ) | (157,289 | ) | ||||||||
Benefit
for Income Taxes
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(4,127,000 | ) | (2,800,000 | ) | - | (2,800,000 | ) | |||||||||
Net
Income (Loss)
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$ | 3,136,436 | $ | 2,515,064 | $ | (605,152 | ) | $ | 2,642,711 | |||||||
Net
Income (Loss) Per Common Share:
|
||||||||||||||||
Basic
and Diluted
|
$ | 2.43 | $ | 1.95 | $ | (0.47 | ) | $ | 2.05 | |||||||
Weighted
Average Number Of Common Shares Outstanding:
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||||||||||||||||
Basic
and Diluted
|
1,289,878 | 1,289,878 | 1,289,878 | 1,289,878 |
GYRODYNE
COMPANY OF AMERICA, INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF
CASH
FLOWS
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(UNAUDITED)
|
Six
Months Ended
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||||||||
June 30,
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||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
income
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$ | 3,136,436 | $ | 2,515,064 | ||||
Adjustments
to reconcile net income to net cash
used in operating activities:
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||||||||
Depreciation
and amortization
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314,770 | 147,272 | ||||||
Bad
debt expense
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12,000 | 32,000 | ||||||
Net
periodic pension benefit cost
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143,092 | 6,058 | ||||||
Realized
gain on marketable securities
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(123,849 | ) | (15,532 | ) | ||||
Changes
in operating assets and liabilities:
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||||||||
(Increase)
decrease in assets:
|
||||||||
Land
development costs
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(79,007 | ) | (144,283 | ) | ||||
Accounts
receivable
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(8,040 | ) | (60,813 | ) | ||||
Interest
receivable
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41,898 | 13,508 | ||||||
Prepaid
expenses and other assets
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(191,031 | ) | (304,823 | ) | ||||
(Decrease)
increase in liabilities:
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||||||||
Accounts
payable
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(38,834 | ) | (393,210 | ) | ||||
Accrued
liabilities
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92,819 | 36,042 | ||||||
Deferred
income taxes
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(4,127,000 | ) | (2,800,000 | ) | ||||
Pension
liability
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(200,000 | ) | - | |||||
Tenant
security deposits
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74,360 | 128,747 | ||||||
Total
adjustments
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(4,088,822 | ) | (3,355,034 | ) | ||||
Net
cash used in operating activities
|
(952,386 | ) | (839,970 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase
of medical office buildings
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(13,022,966 | ) | (7,014,362 | ) | ||||
Costs
associated with property, plant and equipment
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(1,058,064 | ) | (343,529 | ) | ||||
Proceeds
from sale of marketable securities
|
6,805,800 | - | ||||||
Principal
repayments on investment in marketable securities
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292,364 | 2,128,927 | ||||||
Net
cash used in investment activities
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(6,982,866 | ) | (5,228,964 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from mortgage
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8,000,000 | 5,250,000 | ||||||
Principal
payments on mortgages
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(173,609 | ) | (42,944 | ) | ||||
Loan
origination fees
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(129,124 | ) | (128,855 | ) | ||||
Net
cash provided by financing activities
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7,697,267 | 5,078,201 | ||||||
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||||||||
Net
decrease in cash and cash equivalents
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(237,985 | ) | (990,733 | ) | ||||
Cash
and cash equivalents at beginning of period
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1,205,893 | 3,455,141 | ||||||
Cash
and cash equivalents at end of period
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$ | 967,908 | $ | 2,464,408 | ||||
Supplemental
cash flow information:
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||||||||
Interest
paid
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$ | 417,292 | $ | 177,606 |
1.
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Basis
of Quarterly Presentations:
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2.
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Principle of
Consolidation:
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3.
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Investment
in Marketable Securities:
|
4.
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Earnings per
Share:
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5.
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Income
Taxes:
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6.
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Mortgages
Payable:
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June
30,
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December
31,
|
||||||||
2009
|
2008
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||||||||
(Unaudited)
|
|||||||||
Mortgage
payable - Port Jefferson Professional Park.
(a)
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$ | 5,370,008 | $ | 5,415,486 | |||||
Mortgage
payable - Cortlandt Medical Center. (b)
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5,040,000 | 5,145,000 | |||||||
Mortgage
payable - Virginia Healthcare Center. (c)
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7,976,869 | - | |||||||
Total
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$ | 18,386,877 | $ | 10,560,486 |
7.
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Retirement
Plans:
|
Six
Months Ended
|
Three
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Pension
Benefits
|
||||||||||||||||
Service
Cost
|
$ | 68,568 | $ | 46,629 | $ | 34,284 | $ | 23,315 | ||||||||
Interest
Cost
|
74,436 | 66,987 | 37,218 | 33,494 | ||||||||||||
Expected
Return on Plan Assets
|
(58,608 | ) | (111,120 | ) | (29,304 | ) | (55,560 | ) | ||||||||
Amortization
of Actuarial Loss
|
58,696 | 3,563 | 29,348 | 1,781 | ||||||||||||
Net
Periodic Benefit Cost After Curtailments and Settlements
|
$ | 143,092 | $ | 6,059 | $ | 71,546 | $ | 3,030 |
8.
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Commitments
and Contingencies:
|
Twelve
Months Ending June 30,
|
Amount
|
|||
2010
|
$ | 3,899,000 | ||
2011
|
2,635,000 | |||
2012
|
1,486,000 | |||
2013
|
1,064,000 | |||
2014
|
730,000 | |||
Thereafter
|
1,682,000 | |||
$ | 11,496,000 |
9.
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Revolving Credit
Note:
|
10.
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Fair
Value of Financial
Instruments:
|
•
|
Level
1: Valuations based on unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to
access. Since valuations are based on quoted prices that are readily and
regularly available in an active market, valuation of these products does
not entail a significant degree of
judgment.
|
•
|
Level
2: Valuations based on quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in markets
that are not active or for which all significant inputs are observable,
either directly or indirectly.
|
•
|
Level
3: Inputs are unobservable inputs for the asset or liability, and include
situations where there is little, if any, market activity for the asset or
liability. In certain cases, the inputs used to measure fair value may
fall into different levels of the fair value hierarchy. In such cases, the
level in the fair value hierarchy within which the fair value measurement
in its entirety falls has been determined based on the lowest level input
that is significant to the fair value measurement in its entirety. Our
assessment of the significance of a particular input to the fair value
measurement in its entirety requires judgment, and considers factors
specific to the asset or liability.
|
11.
|
Acquisition of
Properties:
|
Land
|
$ | 2,150,000 | ||
Buildings
|
$ | 10,872,966 | ||
Mortgage
payable
|
$ | (8,000,000 | ) | |
Cash
|
$ | 5,022,966 |
Six
Months Ended
|
Three
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
$ | 2,348,867 | $ | 2,096,691 | $ | 1,169,157 | $ | 1,099,574 | ||||||||
Loss
Before Benefit for Income Taxes
|
$ | 947,564 | $ | 220,436 | $ | 605,152 | $ | 125,039 | ||||||||
Benefit
for Income Taxes
|
$ | (4,127,000 | ) | $ | (2,800,000 | ) | - | $ | (2,800,000 | ) | ||||||
Net
Income (Loss)
|
$ | 3,179,436 | $ | 2,579,564 | $ | (605,152 | ) | $ | 2,674,961 | |||||||
Net
Income (Loss) Per Common Share:
|
$ | 2.46 | $ | 2.00 | $ | (0.47 | ) | $ | 2.07 |
12.
|
Recent
Accounting Pronouncements:
|
13.
|
Reclassifications:
|
3.1
|
Restated
Certificate of Incorporation of Gyrodyne Company of America, Inc.
(1)
|
3.2
|
Amended
and Restated Bylaws of Gyrodyne Company of America, Inc.
(2)
|
4.1
|
Form
of Stock Certificate of Gyrodyne Company of America, Inc.
(4)
|
4.2
|
Rights
Agreement, dated as of August 10, 2004, by and between Gyrodyne Company of
America, Inc. and Registrar and Transfer Company, as Rights Agent,
including as Exhibit B the forms of Rights Certificate and of Election to
Purchase. (3)
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification.
(5)
|
32.1
|
CEO/CFO
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
(5)
|
(1)
|
Incorporated
herein by reference to the Annual Report on Form 10-KSB/A, filed with the
Securities and Exchange Commission on September 5, 2001.
|
(2)
|
Incorporated
herein by reference to Form 8-K, filed with the Securities and Exchange
Commission on June 18, 2008.
|
(3)
|
Incorporated
herein by reference to Form 8-K, filed with the Securities and Exchange
Commission on August 13, 2004.
|
(4)
|
Incorporated
herein by reference to the Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission
on November 13, 2008.
|
(5)
|
Filed
as part of this report.
|
Date:
August 7, 2009
|
/s/ Stephen V. Maroney
|
By
Stephen V. Maroney
|
|
President,
Chief Executive Officer and
Treasurer
|
Date:
August 7, 2009
|
/s/ Frank D’Alessandro
|
By
Frank D’Alessandro
|
|
Controller
|
3.1
|
Restated
Certificate of Incorporation of Gyrodyne Company of America, Inc.
(1)
|
3.2
|
Amended
and Restated Bylaws of Gyrodyne Company of America, Inc.
(2)
|
4.1
|
Form
of Stock Certificate of Gyrodyne Company of America, Inc.
(4)
|
4.2
|
Rights
Agreement, dated as of August 10, 2004, by and between Gyrodyne Company of
America, Inc. and Registrar and Transfer Company, as Rights Agent,
including as Exhibit B the forms of Rights Certificate and of Election to
Purchase. (3)
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification.
(5)
|
32.1
|
CEO/CFO
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
(5)
|
(1)
|
Incorporated
herein by reference to the Annual Report on Form 10-KSB/A, filed with the
Securities and Exchange Commission on September 5, 2001.
|
(2)
|
Incorporated
herein by reference to Form 8-K, filed with the Securities and Exchange
Commission on June 18, 2008.
|
(3)
|
Incorporated
herein by reference to Form 8-K, filed with the Securities and Exchange
Commission on August 13, 2004.
|
(4)
|
Incorporated
herein by reference to the Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission
on November 13, 2008.
|
(5)
|
Filed
as part of this report.
|