GYRODYNE CO AMERICA manages its real estate operation and is a passive investor as a limited partner in the Callery Judge Grove in Palm Beach County FL. Gyrodyne Company of America Inc. has a market cap of $37.4 million; its shares were traded at around $29 .
Highlight of Business Operations:Revenues from rental income totaled $858,710 for the current quarter, an increase of $197,843 over the prior year quarterly results of $660,867. For the most part, the increase is the result of the 2008 acquisition of the Cortlandt Medical Center which accounted for $249,117 in rental income during the first quarter of 2009 while the Flowerfield and the Port Jefferson Professional Park facilities both experienced decreases totaling $35,356 and $19,277, respectively. In both cases, the temporary decline in revenues has effectively been addressed with the execution of new leases.
Total expenses amounted to $1,301,088 for the current reporting period, an increase of $422,881 over the prior year total of $878,207. Rental expenses accounted for $81,825 of the increase, amounting to $335,866. Here again, the Cortlandt Medical Center acquisition was the major contributing factor, accounting for $79,780 of the increase.
General and administrative expenses, which totaled $851,322 accounted for $289,529 of the increased expenses for the quarter. The major contributing factor to this increase was condemnation litigation expenses which totaled $222,909, an increase of $135,843 over the prior year. This increase is directly attributable to the submission of appraisal reports to the Court of Claims and preparation for a trial date in August 2009. Additionally, pension plan expenses increased by $68,517 over the prior year, amounting to $71,546; legal and consulting fees increased by $60,475, totaling $85,927; Directors fees and expenses increased by $18,655, amounting to $66,149; and salaries and benefits increased by $16,326, amounting to $190,989.
Interest income amounted to $94,893 and reflects a decrease of $65,896 when compared to the prior year. This reduction is primarily due to reduced investments in REIT qualified securities between the two reporting periods where funds were reallocated to fund real estate acquisitions. The Company realized a gain of $123,442 primarily on the sale of the aforementioned securities during the current quarter and $7,901 as a result of prepayments in REIT qualified securities during the same period last year, an increase of $115,541.
Net cash used in operating activities was $198,764 and $533,728 during the three months ended March 31, 2009 and 2008, respectively. The cash used in operating activities in the current period was primarily related to a pension plan contribution of $100,000, increased land development costs of $54,109 and the prepayment of expenses and other assets of $32,598. The cash used in operating activities in the prior period was primarily related to increased payments to vendors of $399,522, the prepayment of expenses and other assets of $56,742 and increased land development costs of $33,683.
Net cash (used in) provided by investing activities were $(6,809,398) and $708,446 during the three months ended March 31, 2009 and 2008, respectively. Cash used in investing activities in the current period primarily consisted of the purchase of the Fairfax Medical Center, including deferred acquisition costs, of $13,022,966 partially offset by the sale of marketable securities of $6,805,800. The cash provided by investing activities in the prior period was essentially in connection with principal repayments of marketable securities of $864,618.
Read the The complete ReportGYRO is in the portfolios of Michael Price of MFP Investors LLC, Bruce Berkowitz of Fairholme Capital Managment, Bruce Berkowitz of Fairholme Capital Managment.