-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K1vGPqoxeKnleMFoIT2uksLBD/9yPdH7IffWzHg0wPi2+WUQ7CXaER4bnxR/qsvl z6yWepVYF/WOTTOqTMQKeg== 0000892569-95-000597.txt : 19951031 0000892569-95-000597.hdr.sgml : 19951031 ACCESSION NUMBER: 0000892569-95-000597 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951030 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO RESTAURANT PROPERTIES I CENTRAL INDEX KEY: 0000711213 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953852699 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16191 FILM NUMBER: 95585526 BUSINESS ADDRESS: STREET 1: 1800 W KATELLA AVE CITY: ORANGE STATE: CA ZIP: 92667 BUSINESS PHONE: 7147444334 MAIL ADDRESS: STREET 1: 1800 W KATELLA AVENUE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 PROPERTIES III 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 ---------------------------------------------- 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 NO. 33-2462 DEL TACO RESTAURANT PROPERTIES III A CALIFORNIA LIMITED PARTNERSHIP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 33-0139247 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1800 W. KATELLA AVENUE, ORANGE, CALIFORNIA 92667 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (714) 744-4334 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) 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 --- --- ================================================================================ 2 INDEX DEL TACO RESTAURANT PROPERTIES III
PART I. FINANCIAL INFORMATION PAGE NUMBER ------------ Item 1. Financial Statements and Supplementary Data Balance Sheets at September 30, 1995 (Unaudited) and December 31, 1994 3 Statements of Income for the three and nine months ended September 30, 1995 and 1994 (Unaudited) 4 Statements of Cash Flows for the nine months ended September 30, 1995 and 1994 (Unaudited) 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 SIGNATURES 12
-2- 3 DEL TACO RESTAURANT PROPERTIES III BALANCE SHEETS
SEPTEMBER 30 DECEMBER 31 1995 1994 (UNAUDITED) ------------ ----------- ASSETS CURRENT ASSETS: Cash $ 199,383 $ 181,855 Receivable from General Partner (Note 5) 59,883 63,076 Deposits 1,000 1,000 ----------- ----------- Total current assets 260,266 245,931 ----------- ----------- RESTRICTED CASH (NOTE 2) 126,277 132,262 PROPERTY AND EQUIPMENT, AT COST Land and improvements 4,613,613 4,613,613 Buildings and improvements 3,188,900 3,188,900 Machinery and equipment 1,668,310 1,668,310 ----------- ----------- 9,470,823 9,470,823 Less--accumulated depreciation 2,029,004 1,813,937 ----------- ----------- 7,441,819 7,656,886 ----------- ----------- $ 7,828,362 $ 8,035,079 =========== =========== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 3,441 $ 5,743 Accounts Payable 5,155 -- ----------- ----------- Total current liabilities 8,596 5,743 ----------- ----------- OBLIGATION TO GENERAL PARTNER 577,510 577,510 ----------- ----------- PARTNERS' EQUITY Limited Partners 7,268,482 7,476,016 General Partner-Del Taco, Inc. (26,226) (24,190) ----------- ----------- 7,242,256 7,451,826 ----------- ----------- $ 7,828,362 $ 8,035,079 =========== ===========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO RESTAURANT PROPERTIES III STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1995 1994 1995 1994 -------- -------- -------- -------- REVENUES: Rent (Notes 4 and 5) $190,358 $188,949 $543,957 $520,203 Interest 2,027 1,621 6,108 5,289 Other 125 50 675 600 -------- -------- -------- -------- 192,510 190,620 550,740 526,092 -------- -------- -------- -------- EXPENSES: General and administrative 9,515 8,584 44,056 48,012 Depreciation 71,688 71,691 215,067 215,069 -------- -------- -------- -------- 81,203 80,275 259,123 263,081 -------- -------- -------- -------- Net income $111,307 $110,345 $291,617 $263,011 ======== ======== ======== ======== Net income per Limited Partnership Unit (Note 3) $ 2.32 $ 2.29 $ 6.08 $ 5.47 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO RESTAURANT PROPERTIES III STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30 1995 1994 -------- ---------- SOURCE OF CASH: From operations: Net income $291,617 $ 263,011 Depreciation 215,067 215,069 -------- --------- Total cash provided from operations 506,684 478,080 Cash distributions 495,202 696,431 -------- --------- Excess (deficiency) of cash generated over distributions 11,482 (218,351) Decrease in restricted cash 5,985 17,102 Decrease in receivable from General Partner 3,193 -- Increase in accounts payable 5,155 1,436 -------- --------- 25,815 (199,813) -------- --------- USE OF CASH: Increase in receivable from General Partner -- 4,724 Redemption of Limited Partnership Units 5,985 17,102 Decrease in payable to Limited Partners 2,302 194 -------- --------- 8,287 22,020 -------- --------- Increase (decrease) in cash during period 17,528 (221,833) Beginning cash balance 181,855 412,596 -------- --------- Ending cash balance $199,383 $ 190,763 ======== =========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES III NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements, some of which are unaudited, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the Registrant's annual report on Form 10-K for the year ended December 31, 1994. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the partnership's financial position at September 30, 1995, the results of operations and cash flows for the nine month periods ended September 30, 1995 and 1994 have been included. Operating results for the three and nine months ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. NOTE 2 - RESTRICTED CASH At September 30, 1995 the partnership had a restricted cash balance of $126,277. The restricted cash is a death and disability redemption fund. Such fund is maintained in an interest bearing account at a major commercial bank. A Limited Partner has the right, under certain circumstances involving such Limited Partner's death or disability, to tender to the Registrant for redemption all of the Units owned of record by such Limited Partner. The redemption price will be equal to the partners capital account balance as of the redemption date. The death and disability fund was established in 1987. The fund was limited to two percent of the gross proceeds from sale of the limited partnership units. Requests for redemption made after the funds in the death and disability fund are depleted will not be accepted. -6- 7 DEL TACO RESTAURANT PROPERTIES III NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1995 NOTE 3 - NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per Limited Partnership Unit is based upon the weighted average number of Units outstanding during the periods presented which amounted to 47,518 in 1995 and 47,528 in 1994. Such decrease is due to the redemption of 30 units during the period ended September 30, 1995. Pursuant to the Partnership agreement, annual partnership income or loss is allocated one percent to the General Partner and 99 percent to the Limited Partners. Partnership gains from any sale or refinancing will be allocated one percent to the General Partner and 99 percent to the Limited Partners until allocated gains and profits equal losses, distributions and syndication costs, and until each class of Limited Partners receive their priority return as defined in the Partnership Agreement. Additional gains will be allocated 15 percent to the General Partner and 85 percent to the Limited Partners. NOTE 4 - LEASING ACTIVITIES The Registrant leases (the "Leases") certain properties (the "Properties") for operation of restaurants to Del Taco, Inc. ("General Partner") on a triple net basis. The Registrant had a total of ten Properties leased to Del Taco as of September 30, 1995 (Del Taco, in turn, has subleased two of the restaurants). The Leases are for terms of 35 years commencing with the completion of the restaurant facility located on each Property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. There is no minimum rental under any of the Leases, except for the restaurant location in Twentynine Palms, California. In accordance with an agreement entered into November 30, 1993, effective February 1, 1994, the Del Taco restaurant in Twentynine Palms, California ceased operation as a Del Taco and reopened on February 3, 1994 under the trade name of Bobby Lyle's Incredible Edibles. In connection with the agreement, the lease agreement has been amended to reflect a base rent of $3,333.33 per month and overage rent of 12% of sales for annual sales greater than $333,333. In September 1994, the restaurant located in Twentynine Palms, California (Bobby Lyle's Incredible Edibles) ceased operation. The subleasee continues to pay rent of $3,333.33 per month to Del Taco, Inc. which was, in turn, paid to the Registrant. On March 14, 1995, the subleasee re-opened the Twentynine Palms restaurant. -7- 8 DEL TACO RESTAURANT PROPERTIES III NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1995 NOTE 5 - TRANSACTIONS WITH DEL TACO The receivable from General Partner consists primarily of rent accrued for the month of September. The September rent was collected on October 20, 1995. Del Taco, Inc. serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and four partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco, Inc. for operation under the Del Taco trade name. In addition, see Note 6 with respect to certain distributions to the General Partner. NOTE 6 - DISTRIBUTIONS On October 10, 1995, a distribution to the Limited Partners of $183,531, or approximately $3.86 per Limited Partnership Unit, was approved. Such distribution was paid on October 16, 1995. The General Partner also received a distribution of $1,854 with respect to its 1% partnership interest. -8- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Registrant commenced offering of Limited Partnership Units on February 21, 1986. By June 1, 1987, the sale of such Units provided a total capitalization for the Registrant of $12,001,000 including $1,000 attributable to the Original Limited Partner. 14.7 percent of the cash received from the sale of Limited Partnership Units was used to pay commissions to brokers and to reimburse the General Partner for offering costs incurred. Approximately $9,500,000 of the remaining funds were expended for the acquisition of sites and construction of ten restaurants. During 1987, the first three restaurants opened for business. Four additional restaurants opened in 1988, two additional restaurants opened in 1989, and the tenth restaurant opened in 1990. In February 1992, the Registrant distributed to Limited Partners of record on December 31, 1991 $280,553 of net proceeds not utilized as reserves and not invested in Properties. Since the ten restaurants owned by the Registrant opened, cash flow from Lease payments received from Del Taco, the Registrant's General Partner, which leases all ten restaurants (two of which have been subleased), have provided adequate liquidity for operation of the Registrant. However, the Registrant's overwhelmingly predominant source of income to meet its expenses and fund distributions to its Limited Partners is payments from Del Taco under the Leases, comprising primarily rent calculated on the basis of the gross sales of the restaurants operated on the Properties, as to which, except for the restaurant located in Twentynine Palms, there are no contractually specified minimum or guaranteed amounts. Thus, the adequacy of the Registrant's liquidity and capital resources in the future will depend primarily upon the gross revenues of such restaurants as well as upon Del Taco's financial condition and results of operations generally. The September 30, 1995 restricted cash balance is a death and disability redemption fund totaling $126,227. Such fund is maintained in an interest bearing account at a major commercial bank. A Limited Partner has the right, under certain circumstances involving such Limited Partner's death or disability, to tender to the Registrant for redemption all of the Units owned of record by such Limited Partner. The redemption price will be equal to the partners capital account balance as of the redemption date. The death and disability fund was established in 1987. The fund was limited to two percent of the gross proceeds from sale of the limited partnership units. Requests for redemption made after the funds in the death and disability fund are -9- 10 depleted will not be accepted. All questions regarding the eligibility of a Limited Partner or the estate of a deceased Limited Partner to participate in the redemption fund are determined by the Special Limited Partner. Results of Operations The Registrant owns ten Properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has subleased two of the restaurants). In accordance with an agreement entered into November 30, 1993, effective February 1, 1994, the Del Taco restaurant in Twentynine Palms, California ceased operation as a Del Taco franchise and reopened February 3, 1994 under the trade name of Bobby Lyle's Incredible Edibles. In September 1994, the restaurant located in Twentynine Palms, California (Bobby Lyle's Incredible Edibles) ceased operation. The subleasee continues to pay rent of $3,333.33 per month to Del Taco, Inc. which was, in turn, paid to the Registrant. On March 14, 1995 the subleasee re-opened the Twentynine Palms restaurant. The Registrant receives rental revenues equal to 12 percent of restaurant sales. The Registrant had rental revenue of $190,358 for the three months ended September 30, 1995, representing an increase from the rental revenues of $188,949 during the same period in 1994. The Registrant had rental revenue of $543,957 for the nine months ended September 30, 1995, representing an increase from the rental revenues of $520,203 during the same period in 1994. Such increase is directly attributable to increased sales at the restaurants. The following table sets forth the percentage relationship to total general and administrative expenses of items included in the Registrant's Statements of Income: PERCENTAGE OF TOTAL GENERAL & ADMINISTRATIVE EXPENSE --------------------------------
NINE MONTHS ENDED SEPTEMBER 30 1995 1994 ------- ------- Accounting fees 35.01% 40.13% Distribution of information to Limited Partners 61.69 56.69 Other 3.30 3.18 ------ ------ 100.00% 100.00% ====== ======
-10- 11 Operating expenses include general and administrative expenses which consist primarily of accounting fees and costs of distribution of information to the Limited Partners. For the three months ended September 30, general and administrative expenses increased from $8,584 in 1994 to $9,515 in 1995. For the nine months ended September 30, general and administrative expenses decreased from $48,012 in 1994 to $44,056 in 1995. The Registrant incurred depreciation expense in the amount of $71,688 and $71,691 for the three months ended September 30, 1995 and 1994 respectively. The Registrant incurred depreciation expense in the amount of $215,067 and $215,069 for the nine months ended September 30, 1995 and 1994 respectively. As a result of the increase in revenues totaling $1,890 for the three months ended September 30, 1995 as compared to the corresponding period in 1994, and the increase in general and administrative expenses totaling $928, the Registrant's net income increased from $110,345 for the three months ended September 30, 1994 to $111,307 for the corresponding period in 1995. As a result of the increase in revenues totaling $24,648 for the nine months ended September 30, 1995 as compared to the corresponding period in 1994, and the decrease in general and administrative expenses totaling $3,958, the Registrant's net income increased from $263,011 for the nine months ended September 30, 1994 to $291,617 for the corresponding period in 1995. For the reasons stated under "Liquidity and Capital Resources" above, the Registrant's results of operations in the future will depend primarily upon the gross revenues of the restaurants located on the Properties leased to Del Taco as well as upon Del Taco's financial condition and results of operations generally. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the nine months ended September 30, 1995. (C) Exhibit 27 - Financial Data Schedule -11- 12 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. DEL TACO RESTAURANT PROPERTIES III (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: October 24, 1995 /s/ Robert J. Terrano ---------------------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer (duly authorized to sign on behalf of the Registrant) -12- EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1994 JAN-01-1995 SEP-30-1995 199,383 0 59,883 0 0 260,266 9,470,823 2,029,004 7,828,362 8,596 0 0 0 0 7,242,256 7,828,362 0 550,740 0 259,123 0 0 0 291,617 0 291,617 0 0 0 291,617 6.08 6.08
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