10QSB 1 mrp4_10q2qtr02.txt MAXUS REAL PROPERTY INVESTORS-FOUR, L.P., QTR 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ------ For the quarter period ended May 31, 2002 -------------------- OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from To ------------------ ------------------- Commission file number 000-11023 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. (Exact name of small business issuer as specified in its charter) Missouri 43-1250566 ----------------- -------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 104 Armour Road, North Kansas City, Missouri 64116 -------------------------------------------- ------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (816) 303-4500 ------------------ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ------- ------- 1 INDEX Page PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: Balance Sheets 3 Statements of Operations 4 Statements of Cash Flows 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS 7 PART II - OTHER INFORMATION 8 ITEM 1. LEGAL PROCEEDINGS 8 ITEM 2. CHANGES IN SECURITIES 8 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 8 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 8 ITEM 5. OTHER INFORMATION 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9 SIGNATURES 10 EXHIBIT INDEX 11 2 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MAXUS REAL PROPERTY INVESTORS - FOUR, L.P. (A LIMITED PARTNERSHIP) BALANCE SHEETS May 31, November 30, 2002 2001 (Unaudited) ASSETS: Investment property Land $ 1,014,000 1,014,000 Buildings and improvements 15,758,000 15,615,000 ------------ ----------- 16,772,000 16,629,000 Less accumulated depreciation 10,143,000 9,844,000 ------------ ----------- Total investment property 6,629,000 6,785,000 Cash 1,073,000 1,048,000 Accounts receivable, less allowance for doubtful accounts --- 30,000 Prepaid expenses 27,000 48,000 Deferred expenses, less accumulated amortization 88,000 93,000 Income tax deposit 18,000 109,000 ------------ ----------- Total assets $ 7,835,000 8,113,000 ============ =========== LIABILITIES AND PARTNERS' DEFICIT: Liabilities: Mortgage notes payable $ 9,900,000 9,900,000 Accounts payable and accrued expenses 171,000 216,000 Real estate taxes payable 57,000 125,000 Refundable tenant deposits 88,000 94,000 ------------ ----------- Total liabilities 10,216,000 10,335,000 Partners' deficit (2,381,000) (2,222,000) ------------ ----------- Total liabilities and partners' deficit $ 7,835,000 8,113,000 ============ ===========
3 MAXUS REAL PROPERTY INVESTORS - FOUR, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Six Months Ended May 31, May 31, May 31 May 31 2002 2001 2002 2001 Revenues: Rental $ 668,000 669,000 1,324,000 1,318,000 Other 71,000 57,000 142,000 113,000 -------- -------- --------- --------- Total revenues 739,000 726,000 1,466,000 1,431,000 -------- -------- --------- --------- Expenses: Depreciation and amortization 154,000 152,000 304,000 287,000 Repairs and maintenance, including common area maintenance 82,000 72,000 168,000 152,000 Real estate taxes 34,000 34,000 69,000 68,000 Interest 184,000 185,000 369,000 369,000 Professional fees 29,000 58,000 96,000 88,000 General and administrative 57,000 49,000 115,000 103,000 Utilities 33,000 33,000 60,000 69,000 Property management fees - related parties 43,000 43,000 87,000 85,000 Other 59,000 64,000 114,000 120,000 -------- -------- --------- --------- Total expenses 675,000 690,000 1,382,000 1,341,000 -------- -------- --------- --------- Net Income $ 64,000 36,000 84,000 90,000 ======== ======== ========= ========= Net income allocation: General partners $ 1,000 2,000 2,000 2,000 Limited partners 63,000 34,000 82,000 88,000 -------- -------- --------- --------- $ 64,000 36,000 84,000 90,000 ======== ======== ========= ========= Limited partners' data: Net income per unit $ 5.18 2.51 6.74 6.50 ======== ======== ========= ========= Weighted average limited partnership units outstanding 12,173 13,529 12,173 13,529 ======== ======== ========= =========
4 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended May 31, May 31, 2002 2001 Cash flows from operating activities: Net income $ 84,000 90,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 304,000 287,000 Changes in accounts affecting operations: Accounts receivable 30,000 (89,000) Prepaid expenses 21,000 (6,000) Accounts payable and accrued expenses (45,000) 175,000 Real estate taxes payable (68,000) --- Refundable tenant deposits (6,000) 3,000 Deferred expenses --- (10,000) Income tax deposit 91,000 --- ---------- ---------- Net cash provided by operating activities 411,000 450,000 ---------- ---------- Cash flows from investing activities - capital expenditures (143,000) (106,000) ---------- ---------- Cash flows from financing activities - distributions (243,000) --- ---------- ---------- Net increase in cash 25,000 344,000 Cash, beginning of period 1,048,000 1,186,000 ---------- ---------- Cash, end of period $ 1,073,000 1,530,000 ========== ========== Supplemental disclosure of cash flow information - cash paid during the period for interest $ 369,000 307,000 ========== ==========
5 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. (A LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS SIX MONTHS ENDED MAY 31, 2002 AND MAY 31, 2001 (1) Summary of Significant Accounting Policies Refer to the financial statements of Maxus Real Property Investors - Four, L.P., formerly known as Nooney Real Property Investors - Four, L.P. (the "Partnership" or the "Registrant"), for the year ended November 30, 2001, which are contained in the Partnership's Annual Report on Form 10-KSB, for a description of the accounting policies which have been continued without change. Also, refer to the footnotes to those statements for additional details of the Partnership's financial condition. The details in those notes have not changed except as a result of normal transactions in the interim. In the opinion of the general partner, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at May 31, 2002 and for all periods presented have been made. The results for the three and six-month periods ended May 31, 2002 are not necessarily indicative of the results which may be expected for the entire year. Certain reclassifications have been made to the prior period amounts to conform to the current period presentation. (a) Description of Business The Partnership is a limited partnership organized under the laws of the State of Missouri on February 9, 1982. The Partnership was organized to invest primarily in income-producing real properties such as shopping centers, office buildings and other commercial properties, apartment buildings, warehouses, and light industrial properties. The Partnership's portfolio is comprised of an apartment building located in West St. Louis County, Missouri (Woodhollow Apartments). (b) Basis of Accounting The financial statements include only those assets, liabilities, and results of operations of the partners which relate to the business of Maxus Real Property Investors-Four, L.P. The statements do not include assets, liabilities, revenues or expenses attributable to the partners' individual activities. No provision has been made for federal and state income taxes since these taxes are the responsibility of the partners. (The remainder of this page left blank intentionally.) 6 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS This 10-QSB contains forward-looking information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk and uncertainty, including trends in the real estate investment market, projected leasing and sales, and future prospects for the Partnership. Actual results could differ materially from those contemplated by such statements. CRITICAL ACCOUNTING POLICIES Refer to the Financial Statements of the Partnership for the year ended November 30, 2001, which are contained in the Partnership's Annual Report in Form 10-KSB, for a description of the accounting policies which have been continued without change, unless otherwise noted herein. Liquidity and Capital Resources Cash as of May 31, 2002 was $1,073,000, an increase of $25,000 from November 30, 2001. Cash provided from operating activities for the six months ended May 31, 2002 was $411,000. The decrease in cash provided by operating activities was due primarily to payment of 2001 real estate taxes in December 2001, along with a decrease in accounts payable and accrued expenses, offset by a decrease in income tax deposit and accounts receivable. Investing activities used $143,000 due to property and equipment purchases. Distributions of $10 per limited partner unit were paid in January and April of 2002. Results of Operations For the three and six month periods ended May 31, 2002, the Partnership's revenues were $739,000 and $1,466,000, respectively. Revenues increased by $13,000 (1.8%) and $35,000 (2.4%) for the three and six month periods ended May 31, 2002 as compared to the same periods ended May 31, 2001. This increase was primarily due to an increase in miscellaneous income (primarily laundry income) of $14,000 and $29,000 for the three and six months ended May 31, 2002, respectively. For the three and six month periods ended May 31, 2002, the Partnership's expenses were $675,000 and $1,382,000, respectively. Expenses decreased by $15,000 (2.2%) for the three month period ended May 31, 2002 as compared to the same period ended May 31, 2001. The decrease in expenses was primarily due to a decrease in professional fees of $29,000 and other expenses of $5,000, offset by an increase in repairs and maintenance expenses of $10,000 and general and administrative expenses of $8,000. Expenses increased $41,000 (3.1%) for the six month period ended May 31, 2002 as compared to the same period ended May 31, 2001. The increase in expenses was primarily due to an increase in depreciation and amortization expense of $17,000, repairs and maintenance expenses of $16,000, professional fees of $8,000 and general and administrative expenses of $12,000, offset by a decrease in utilities of $9,000. (The remainder of this page left blank intentionally.) 7 PART II. OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS O. Bruce Mills v. Maxus Capital Corp. and Maxus Real Property Investors - Four, L.P., Case No. 01CC-004237, Circuit Court of St. Louis County, Missouri. On December 11, 2001, Mills filed suit against the Registrant and Maxus Capital Corp. in St. Louis County, Missouri alleging that the Registrant and Maxus Capital Corp. had refused to recognize Mills as the owner of units that were tendered to him and had converted distributions allegedly owed to Mills. Mills also brought a claim for injunctive relief. On December 19, 2001, a hearing was held on Mills' request for injunctive relief in which Mills sought an order from the court recording him on the books and records of the Registrant as the owner for units that were tendered to him during his tender offer and seeking the escrow of any distributions made by the Registrant for the units tendered to Mills. The Court refused to exempt Mills from complying with the transfer requirements to have units transferred on the books and records of the Registrant, but the Court did require that the Registrant escrow any distributions made for units tendered to Mills until such time as the Court can determine who should receive the distributions. Mills was required to post a $7,000 bond as security for the relief granted by the Court. On or about February 26, 2002, the Registrant and Maxus Capital Corp. filed a pleading responding to the claims brought by Mills. The Registrant believes these claims are meritless. The case is currently in discovery and is expected to go to trial in the Fall of this year. ITEM 2. CHANGES IN SECURITIES The Partnership commenced an odd-lot offer to purchase the units of holders of nine units or less on May 24, 2002. This offer expired on June 24, 2002 and the Partnership purchased 156 units at $425 per unit. As a result, there are now 12,017 outstanding units. An additional 89 units were received by the Partnership, which the Partnership intends to purchase when the transfer document deficiencies related to these units are cured. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION The Board of Directors of the Partnership's general partner (Maxus Capital Corp.) declared a cash distribution of $10 per limited partnership unit that was paid on April 10, 2002 to holders of record as of April 1, 2002, and declared a cash distribution of $10 per limited partnership unit that was paid on July 10, 2002 to holders of record as of July 1, 2002. The Partnership has recently commenced payment of quarterly cash distributions of $10 per Unit to limited partners and anticipates continuing such quarterly distributions, at least in the near future. 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See Exhibit Index on Page 11 (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the second quarter of 2002. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: July 10, 2002 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. By: MAXUS CAPITAL CORP. General Partner By: /s/ John W. Alvey ----------------- John W. Alvey Director, Vice President Treasurer (Principal Financial and Accounting Officer) 10 EXHIBIT INDEX Exhibit Number Description 3.1 Amended and Restated Agreement and Certificate of Limited Partnership dated April 7, 1982 is incorporated by reference to the Form 10-K for the year ended November 30, 1999 filed by the Registrant under the Securities Act of 1933 (File No. 000-11023) 3.2 Amendment of Certificate of Limited Partnership date December 21, 1999 is incorporated by reference to the Form 8-K filed by the Registrant on January 21, 2000 under the Securities Act of 1933 (File No. 000-11023) 11