-----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, HmJD7wumjaLPUxgRZMPhdXxKs46WN4Tnj6rtse14EjFahkbf2yVMyvUOXrfp91mi d/W1F439FXoAzEvQeXojdg== 0000892569-99-001257.txt : 19990506 0000892569-99-001257.hdr.sgml : 19990506 ACCESSION NUMBER: 0000892569-99-001257 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990505 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: SEC FILE NUMBER: 000-16191 FILM NUMBER: 99611549 BUSINESS ADDRESS: STREET 1: 23041 AVENIDA DE LA CARLOTA, SUITE 400 CITY: LAGUNA HILLS STATE: CA ZIP: 92653 BUSINESS PHONE: 714 462-9300 MAIL ADDRESS: STREET 1: 1800 W KATELLA AVENUE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 FORM 10-Q PERIOD END MARCH 31, 1999 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, MARCH 31, 1999 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. 2-80930 DEL TACO RESTAURANT PROPERTIES I A CALIFORNIA LIMITED PARTNERSHIP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 95-3852699 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 23041 AVENIDA DE LA CARLOTA, LAGUNA HILLS, CALIFORNIA 92653 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(949) 462-9300 (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 I
PART I. FINANCIAL INFORMATION PAGE NUMBER Item 1. Financial Statements and Supplementary Data Balance Sheets at March 31, 1999 (Unaudited) and December 31, 1998 3 Statements of Income for the three months ended March 31, 1999 and 1998 (Unaudited) 4 Statements of Cash Flows for the three months ended March 31, 1999 and 1998 (Unaudited) 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11
-2- 3 DEL TACO RESTAURANT PROPERTIES I BALANCE SHEETS
MARCH 31 December 31 1999 1998 ---------- ---------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash $ 145,388 $ 162,979 Receivable from General Partner (Note 4) 43,422 47,833 Deposits 767 797 ---------- ---------- Total current assets 189,577 211,609 ---------- ---------- PROPERTY AND EQUIPMENT, AT COST: Land and improvements 1,852,482 1,852,482 Buildings and improvements 1,013,134 1,013,134 Machinery and equipment 1,136,026 1,136,026 ---------- ---------- 4,001,642 4,001,642 Less--accumulated depreciation 1,727,030 1,716,087 ---------- ---------- 2,274,612 2,285,555 ---------- ---------- $2,464,189 $2,497,164 ========== ========== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 26,218 $ 24,702 Accounts payable 9,284 5,703 ---------- ---------- Total current liabilities 35,502 30,405 ---------- ---------- PARTNERS' EQUITY: Limited Partners 2,164,272 2,201,963 General Partner-Del Taco, Inc. 264,415 264,796 ---------- ---------- 2,428,687 2,466,759 ---------- ---------- $2,464,189 $2,497,164 ========== ==========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO RESTAURANT PROPERTIES I STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31 1999 1998 -------- -------- REVENUES: Rent (Notes 3 and 4) $125,657 $119,375 Interest 1,157 612 Other 425 449 -------- -------- 127,239 120,436 -------- -------- EXPENSES: General and administrative 21,091 20,647 Depreciation 10,943 10,943 -------- -------- 32,034 31,590 -------- -------- Net income $ 95,205 $ 88,846 ======== ======== Net income per limited partnership unit (Note 2) $ 10.77 $ 10.05 ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO RESTAURANT PROPERTIES I STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31 1999 1998 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 95,205 $ 88,846 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 10,943 10,943 Decrease (increase) in receivable from General Partner 4,411 (745) Decrease in deposits 30 -- Increase (decrease) in accounts payable and payable to limited partners 5,097 (3,430) --------- --------- Net cash provided by operating activities 115,686 95,614 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (133,277) (125,590) --------- --------- Net decrease in cash (17,591) (29,976) Beginning cash balance 162,979 143,280 --------- --------- Ending cash balance $ 145,388 $ 113,304 ========= =========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS MARCH 31, 1999 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, 1998. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the partnership's financial position at March 31, 1999, the results of operations and cash flows for the three month periods ended March 31, 1999 and 1998 have been included. Operating results for the three months ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. NOTE 2 - 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 8,751 in 1999 and 1998. Pursuant to the partnership agreement, annual partnership net income is allocated one percent to the General Partner and 99 percent to the limited partners. A partnership net loss in any year will be allocated 24 percent to the General Partner and 76 percent to the limited partners until the losses so allocated equal income previously allocated. Any additional losses will be 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. Additional gains will be allocated 24 percent to the General Partner and 76 percent to the limited partners. -6- 7 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS - CONTINUED MARCH 31, 1999 NOTE 3 - LEASING ACTIVITIES The partnership leases certain properties for operation of restaurants to Del Taco, Inc. on a triple net basis. 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. For the three months ended March 31, 1999, the five restaurants operated by Del Taco, for which the partnership is the lessor, had combined, unaudited sales of $873,209 and net income of $46,137 as compared to $836,260 and $30,700 respectively, for the corresponding period in 1998. Net income by restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense. For the three months ended March 31, 1999, the one restaurant operated by a Del Taco franchisee, for which the partnership is the lessor, had unaudited sales of $173,933 as compared with $158,530 during the same period in 1998. For the three months ended March 31, 1999, the Elkhorn Boulevard restaurant in Sacramento, California reported a net loss of $1,765 as compared to a net loss of $4,124 for the corresponding period in 1998. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from General Partner consists primarily of rent accrued for the month of March. The March rent receivable was collected on April 10, 1999. Del Taco, Inc. serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and three other 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 5 with respect to certain distributions to the General Partner. NOTE 5 - DISTRIBUTIONS On April 8, 1999, a distribution to the limited partners of $113,028, or approximately $12.91 per limited partnership unit, was approved. Such distribution was paid on April 24, 1999. The General Partner also received a distribution of $1,142 with respect to its 1% partnership interest. -7- 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The partnership offered limited partnership units for sale between March 1983 and March 1984. 15% of the $4.375 million raised through sale of limited partnership units was used to pay commissions to brokers and to reimburse the General Partner for offering costs incurred. Approximately $4 million of the remaining funds were used to acquire sites and build six restaurants. The six restaurants leased to Del Taco make up almost all of the income producing assets of the partnership. Therefore, the business of the partnership is almost entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The success of the restaurants is dependent on a large variety of factors, including, but not limited to, consumer demand and preference for fast food, in general, and for Mexican-American food in particular. Results of Operations The partnership owns six properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has subleased two of the restaurants to Del Taco franchisees, one of which is affiliated with Del Taco). The following table sets forth rental revenue earned by restaurant for the year:
THREE MONTHS ENDED MARCH 31 1999 1998 -------- -------- Riverside Avenue, Rialto, CA $ 20,157 $ 19,456 Elden Avenue, Moreno Valley, CA 19,112 17,948 Foothill Boulevard, La Verne, CA 26,863 25,806 Baseline & Archibald, Rancho Cucamonga, CA 20,872 19,024 Elkhorn Boulevard, Sacramento, CA 13,837 12,014 Haven Avenue, Rancho Cucamonga, CA 24,816 25,127 -------- -------- Total $125,657 $119,375 ======== ========
The partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The partnership earned rental revenue of $125,657 during the three month period ended March 31, 1999, which represents an increase of $6,282 from 1998. The increase in rental revenue was caused by an increase in sales at the restaurants under lease. -8- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED The following table breaks down general and administrative expenses by type of expense:
Percentage of Total General & Administrative Expense -------------------------------- Three Months Ended March 31 1999 1998 ------- ------- Accounting fees 70.18% 69.26% Distribution of information to Limited Partners 29.82 30.74 ------- ------- 100.00% 100.00% ======= =======
General and administrative costs increased from 1998 to 1999 due to increased costs for accounting and income tax return preparation. Net income increased by $6,359 from 1998 to 1999 due to the increase in revenues of $6,803 offset by the $444 increase in general and administrative expenses. The General Partner does not believe the operations of the partnership will be significantly impacted by the year 2000 software issue and does not believe the year 2000 software issue will materially effect the partnerships operations, financial position or cash flows. -9- 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the three months ended March 31, 1999. -10- 11 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 I (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: April 30, 1999 /s/ Robert J. Terrano ---------------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer Date: April 30, 1999 /s/ C. Douglas Mitchell ---------------------------- C. Douglas Mitchell Vice President and Corporate Controller -11- 12 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 145,388 767 43,422 0 0 189,577 4,001,642 1,727,030 2,464,189 35,502 0 0 0 0 2,428,687 2,464,189 0 127,239 0 32,034 0 0 0 95,205 0 95,205 0 0 0 95,205 10.77 10.77
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