August 15, 2001
Gentlemen -
We are transmitting herewith Form 10 - QSB for the quarter ended
June 30, 2001 for Diversified Realty, Inc.
Diversified Realty, Inc.
S/Lori Olson
Lori Olson,
Accountant
U.S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from to________.
Commission file number
0-2864 DIVERSIFIED REALTY, INC.
(Exact name of small business issuer as specified in its charter)
Montana 81-0268110
(State or other jurisdiction of
(IRS Employer Identification No.)
incorporation or organization)
128 Second Street South, Great Falls, Montana 59405
(Address of principal executive offices)
(406) 727-2600
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
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
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 Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan confirmed
by a 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:
Class Outstanding at June 30, 2001
$.10 Par Value Common Stock 5,370,518 Shares
Transitional Small Business Disclosure Format (Check One): Yes ; No X .
DIVERSIFIED REALTY, INC.
INDEX
JUNE 30, 2001
Page Number
PART I
Condensed Financial Statements:
Balance Sheet
June 30, 2001 2
Statements of Income -
Six Months and Three Months
Ended June 30, 2001 and 2000 3
Statements of Cash Flows -
Six Months Ended June 30,
2001 and 2000 4
Notes to Financial Statements 5
Management's Discussion
and Analysis
of the Statements of Income 6
PART II
Other Information 7
Signatures 8
1
DIVERSIFIED REALTY, INC.
BALANCE SHEET
AS OF JUNE 30, 2001
ASSETS
Current Assets
Cash
$
2,302,168
Due From Parent Company
85,668
Total Current Assets
2,387,836
Property, Plant and Equipment, Net
206,643
Total Assets
$
2,594,479
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities
$
31,525
Income Taxes Payable
7,268
Total Current Liabilities
38,793
Stockholders' Equity
Common Stock, $.10 Par Value,
11,000,000 shares authorized,
5,375,000 shares issued
537,500
Additional Paid-In-Capital
1,929,408
Retained Earnings
90,204
Cost of Common Stock in Treasury
(1,426)
Total Stockholders' Equity
2,555,686
Total Liabilities and Stockholders' Equity
$
2,594,479
See Notes to Financial Statements.
2
DIVERSIFIED REALTY, INC.
STATEMENTS OF INCOME
For The Three Months
For The Six Months
Ended
Ended
June 30,
June 30,
2001
2000
2001
2000
Operating Revenues
$
33,764
$
48,563
82,669
$
101,642
Operating Expenses
14,941
19,339
33,063
37,449
18,823
29,224
49,606
64,193
Income Tax Expense
(7,600)
(12,500)
(20,300)
(27,000)
Net Income
$
11,223
$
16,724
29,306
$
37,193
See Notes to Financial Statements.
3
DIVERSIFIED REALTY, INC.
STATEMENTS OF CASH FLOWS
For The Six Months
Ended
June 30,
2001
2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash From Operations
$
59,303
$
73,189
Income Taxes Paid in Cash
(10,000)
- -
Net Cash Provided By
Operating Activities
49,303
73,189
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Purchases of Treasury Stock
(195)
(7)
Net Cash Advances
From (To) Parent Company
(8,800)
(54,909)
Net Cash Provided (Used) By
Financing Activities
(8,995)
(54,916)
NET INCREASE (DECREASE) IN CASH
40,308
18,273
CASH - BEGINNING OF PERIOD
2,261,860
2,220,920
CASH - END OF PERIOD
$
2,302,168
$
2,239,193
See Notes to Financial Statements.
4
DIVERSIFIED REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
In the opinion of management, all adjustments necessary (consisting
of only normal recurring accruals)
have been made to the unaudited financial statements to present fairly
the financial position as of June 30, 2001
and the results of the Company's operations for the six months and three
months ended June 30, 2001 and 2000
and cash flows for the six months ended June 30, 2001 and 2000.
The results of operations for the six months and three months ended
June 30, 2001 and 2000 are not
necessarily indicative of the results to be expected for the full year.
Parent -
M Corp, Great Falls, Montana owns approximately 95% of the outstanding
shares of the Company.
5
DIVERSIFIED REALTY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE INCOME STATEMENT
June 30, 2001
A summary of the period-to-period changes in items included
in the statements of income is shown
below.
COMPARISON OF
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
2001 AND 2000 2001 AND 2000
Revenues $ (14,799) (30.5%) $ (18,973) (18.7%)
Expenses (4,399) (22.8%) (4,387) (11.7%)
Net Income (5,500) (32.9%) (7,886) (21.2%)
Revenues decreased $18,973 (18.7%) in the first six
months of 2001 as compared with the first six
months of 2000 due primarily to a decrease in interest revenues
of $17,179 (28%). Interest revenues decreased
primarily due to a decrease in interest rates earned by the
company. Operating expenses decreased $4,387
(22.8%) in the first six months of 2001 as compared with the
first six months of 2000. The provision for
income tax expense decreased $6,700 (39.2%) in the first six
months of 2001 as compared with the first six
months of 2000 due primarily to the decrease in pretax income.
6
DIVERSIFIED REALTY, INC.
PART II
OTHER INFORMATION
JUNE 30, 2001
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
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
None
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.
DIVERSIFIED REALTY, INC.
Registrant
Date: August 13, 2001 s/A. Dompier
A. Dompier,
Assistant Secretary-Treasurer
Date: August 13, 2001
s/Lori Olson
Lori Olson,
Accountant
8