Cedar Income Fund, Ltd. - 10-Q Summary (Q1 1995)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 1995, for Cedar Income Fund, Ltd., a real estate investment trust. The company owns and operates commercial real estate properties, including shopping centers and business parks. As of the reporting date, the portfolio maintained a 99% occupancy rate.
Key Financial Metrics
| Metric | Q1 1995 | Q1 1994 |
|---|---|---|
| Total Revenue | $619,893 | $575,151 |
| Rental Revenue | $600,187 | $560,110 |
| Net Earnings | $184,870 | $163,373 |
| Earnings Per Share (EPS) | $0.08 | $0.07 |
| Funds from Operations (FFO) | $293,958 ($0.13/share) | $272,513 ($0.12/share) |
| Net Cash from Operating Activities | $232,605 | $333,228 |
| Cash and Cash Equivalents (End of Period) | $453,478 | $329,171 |
| Total Liabilities | $1,725,331 | $1,786,406 |
| Shareholders' Equity | $15,050,500 | $15,090,171 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased by approximately 7.8% year-over-year, driven primarily by higher rents at Southpoint Parkway Center (Jacksonville, FL) and Broadbent Business Center (Salt Lake City, UT).
- Expense Increases: Total property expenses (excluding depreciation) rose to 39% of rental income from 38% in the prior year. This was largely due to a $38,000 increase in repairs and maintenance for scheduled services at Southpoint.
- Expense Reductions: Real estate taxes decreased by approximately $10,000 due to a partial refund for Germantown Square Shopping Center. Wages and salaries dropped by $7,000 following a reduction in property management personnel at Broadbent.
- Cash Flow: While net earnings increased, net cash provided by operating activities decreased significantly from $333,228 to $232,605, primarily due to a larger increase in rent and other receivables ($78,416 vs. $53,364).
Outlook, Risks, and Management Commentary
- Dividend Declaration: The Board declared a quarterly dividend of $0.10 per share, payable May 22, 1995, to shareholders of record on May 9, 1995.
- Lease Expiration Risk: Hewlett Packard Corporation notified the company it will not renew its lease for 20,400 square feet at Corporate Center East (Bloomington, IL) upon expiration on September 30, 1995. This lease represented 11% of the company's 1994 revenue. Marketing efforts for replacement tenants have begun.
- Liquidity: Management considers current liquidity sufficient to meet obligations, citing cash equivalents of $453,478, a mortgage loan participation of $588,881, and positive operating cash flow.
- Corporate Governance: At the annual meeting on May 4, 1995, all five incumbent directors were re-elected with over 97% of the vote.
Investor Verification Checklist
- Verify the status of leasing efforts for the 20,400 sq. ft. space vacated by Hewlett Packard at Corporate Center East.
- Confirm the impact of the $38,000 maintenance expense at Southpoint on future capital expenditure budgets.
- Monitor the collection of the $78,416 increase in rent receivables to ensure it converts to cash in subsequent periods.
- Review the 1994 Annual Report for audited financial statements as referenced in Note 1.