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Gyrodyne Company of America Inc. Reports Operating Results (10-Q)

November 15, 2010 | About:
10qk

10qk

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Gyrodyne Company of America Inc. (GYRO) filed Quarterly Report for the period ended 2010-09-30.

Gyrodyne Company Of America Inc. has a market cap of $100.67 million; its shares were traded at around $78.035 with and P/S ratio of 20.84. GYRO is in the portfolios of Michael Price of MFP Investors LLC, Michael Price of MFP Investors LLC, Mario Gabelli of GAMCO Investors, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Rental revenues are comprised solely of rental income and amounted to $1,248,784 and $1,150,921 for the three months ended September 30, 2010 and 2009, respectively, an increase of $97,863 or 9%. The increase is primarily comprised of net new and renewed lease rates. The Port Jefferson Medical Center, Cortlandt Manor Medical Center, Fairfax Medical Center and the Flowerfield Industrial Park reflect net new tenants and expansions over the comparable 2009 period, resulting in additional revenue of approximately $22,000, $17,000, $25,000, and $24,000, respectively. Approximately $13,000 of the increase in Cortlandt Manor is attributable to the second quarter acquisition of the additional Cortlandt Manor property.

General and administrative expenses for the three months ended September 30, 2010 and 2009 were $604,672 and $653,171, respectively, a decrease of $48,499 or 7%. The major contributing factors to the decrease in general and administrative expenses were decreases in accounting fees, corporate development fees and asset acquisition fees of approximately $46,000, $42,000, and $57,000, respectively, offset by an increase of approximately $54,000 in legal and consulting fees and approximately $42,000 in compensation and benefits.

Rental revenues are comprised solely of rental income and amounted to $3,650,138 and $3,074,115 for the nine months ended September 30, 2010 and 2009, respectively, an increase of $576,023 or 19%. The increase is primarily comprised of approximately $300,000 attributable to the acquisition of the Fairfax Medical Center on March 31, 2009 and net new and renewed lease rates of approximately $276,000. Approximately $31,000, $129,000 and $19,000 is from six tenants in Fairfax, one tenant in Flowerfield, and three tenants in Port Jefferson, respectively, who are occupying space that was vacant or partially vacant during the comparable prior period. Additionally, $19,000 is from two tenants resulting from the acquisition of the additional Cortlandt Manor property in 2010.

General and Administrative expenses for the nine months ended September 30, 2010 and 2009 were $1,729,943 and $1,970,570, respectively, a decrease of $240,627 or 12%. The major contributing factors to the decrease in general and administrative expenses were a decrease in accounting fees of $37,000, legal and consulting fees of approximately $72,000, a decrease in other outside services of $47,000, a decrease in corporate governance of approximately $82,000, a decrease in asset acquisition fees and other corporate development fees of $84,000, offset by an increase of approximately $85,000 in compensation and benefits.

Net cash used in investing activities was $1,134,404 and $6,391,333 during the nine months ended September 30, 2010 and 2009, respectively. Cash used in investing activities in the current period was primarily due to the purchase of the additional Cortlandt Manor property at a total cost including closing costs of $728,829 and costs associated with property, plant and equipment of $518,379. Additionally, during the nine months ended September 30, 2010, $203,000 in proceeds was realized from the liquidation of a one year interest bearing time deposit and $90,196 was incurred in land development costs. Cash used in investing activities in the prior period primarily consisted of the purchase of the Fairfax Medical Center (“FMC”), including deferred acquisition costs, of $13,022,966 and costs associated with property, plant and equipment of $1,504,469, partially offset by the sale of marketable securities of $8,163,813 and principal payments received on the investment in marketable securities of $295,454. Additionally during the nine months ended September 30, 2009, $202,011 was invested in a one year interest bearing time deposit and $121,154 was incurred in land development costs.

Net cash provided by financing activities was $1,372,234 and $7,749,885 during the nine months ended September 30, 2010 and 2009, respectively. The cash provided by financing activities was primarily the result of the Company borrowing $1,750,000 under its revolving line of credit during the nine months ended September 30, 2010. The Company did not repay any principal on the revolving line of credit. The Company does not have any interest only mortgages, with the exception of the revolving line of credit, and as a result, during the nine months ended September 30, 2010 and 2009, the Company repaid $323,646 and $283,821, respectively, of principal on its total mortgage obligations. Additionally, the Company has incurred $54,120 in loan origination fees, of which approximately $26,000 is a deposit in pursuit of longer term financing. The net cash provided by financing activities in the prior period was primarily the proceeds from the mortgage to purchase the Fairfax Medical Center.

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