10-Q 1 fjs10q6.txt 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 -------- FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended June 30, 2001 Commission File Number 0-15755 ------------- ------- FJS PROPERTIES FUND I, L.P. --------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3252067 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 264 Route 537 East Colts Neck, NJ 07722 -------------- ----- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (732) 542-9209 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities and 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 ----- ------ Authorized 100,000 limited partnership interests of which 16,788 have been sold as of August 8, 2001. FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ INDEX ------------------------------------------------------------------------------ Part I: FINANCIAL INFORMATION Item 1: Financial Statements Balance Sheets as of June 30, 2001 [Unaudited] and December 31, 2000.................................... 1 Statements of Operations for the three and six months ended June 30, 2001 and 2000 [Unaudited]....................... 2 Statement of Partners' Capital (Deficit) for the six months ended June 30, 2001 [Unaudited].......................... 3 Statements of Cash Flows for the six months ended June 30, 2001 and 2000 [Unaudited]....................... 4 Notes to Financial Statements [Unaudited]................ 5 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations................................ 6 Part III: OTHER INFORMATION Item 6: Exhibits and Reports on Form 8-K......................... 8 Signature......................................................... 9 PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ BALANCE SHEETS ------------------------------------------------------------------------------ June 30, December 31, -------- ------------ 2 0 0 1 2 0 0 0 ------- ------- [Unaudited] Assets: Current Assets: Cash and Cash Equivalents $ 254,451 $ 188,122 Cash - Escrow 84,429 64,184 Cash - Security Deposits 131,271 125,015 Tenant Receivables 14,903 13,215 Other Current Assets 89,273 21,446 ----------- ---------- Total Current Assets 574,327 411,982 ----------- ---------- Property Investment: Land 2,296,804 2,296,804 Buildings 6,569,125 6,569,125 Furniture, Fixtures and Improvements 2,904,364 2,758,619 ----------- ---------- Totals - At Cost 11,770,293 11,624,548 Less: Accumulated Depreciation (5,620,595) (5,427,009) ----------- ---------- Property Investment - Net 6,149,698 6,197,539 ----------- ---------- Other Assets 148,519 189,602 ----------- ---------- Total Assets $ 6,872,544 $6,799,123 =========== ========== Liabilities and Partners' Capital (Deficit): Current Liabilities: Accounts Payable $ 110,780 $ 117,747 Accrued Interest 36,671 37,045 Other Accrued Expenses 101,830 7,093 Due to Related Party 4,613 16,704 Tenant Security Deposits Payable 131,271 125,015 Prepaid Rent 27,089 27,597 Mortgage Payable - Current Portion 99,662 94,971 Deferred Income - Current Portion 7,143 7,143 ----------- ---------- Total Current Liabilities 519,059 433,315 ----------- ---------- Long-Term Liabilities: Mortgage Payable - Non-Current Portion 4,414,411 4,465,099 Deferred Income - Non-Current Portion 7,143 10,714 ----------- ---------- Total Long-Term Liabilities 4,421,554 4,475,813 ----------- ---------- Partners' Capital (deficit): General Partner (1,216,540) (1,216,959) Limited Partners 3,148,471 3,106,954 ----------- ---------- Total Partners' Capital (deficit) 1,931,931 1,889,995 ----------- ---------- Total Liabilities and Partners' Capital (deficit) $ 6,872,544 $6,799,123 =========== ========== See Accompanying Notes to These Financial Statements. 1 PART 1 - FINANCIAL INFORMATION Item 1: Financial Statements FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ STATEMENTS OF OPERATIONS [UNAUDITED] ------------------------------------------------------------------------------ Three months ended Six months ended June 30, June 30, -------- -------- 2 0 0 1 2 0 0 0 2 0 0 1 2 0 0 0 ------- ------- ------- ------- Revenue: Rental $ 610,645 $ 617,048 $1,194,104 $1,198,168 Interest 1,505 2,000 3,500 4,449 ----------- ----------- ---------- ---------- Total Revenue 612,150 619,048 1,197,604 1,202,617 ----------- ----------- ---------- ---------- Expenses: Operating 192,882 172,005 337,781 320,897 General and administrative 192,196 198,161 391,127 383,885 Interest 110,204 112,546 220,970 225,598 Depreciation and amortization 103,593 92,923 205,790 182,925 ----------- ----------- ---------- ---------- Total Expenses 598,875 575,635 1,155,668 1,113,305 ----------- ----------- ---------- ---------- Net Income 13,275 43,413 41,936 89,312 =========== =========== ========== ========== Income Per Limited Partnership Unit $ 0.78 $ 2.56 $ 2.47 $ 5.27 =========== =========== ========== ========== Distributions Per Limited Partnership Unit. $ 0 $ 0 $ 0 $ 0 Weighted Average Number of Limited Partnership Units Outstanding 16,788 16,788 16,788 16,788 See Accompanying Notes to These Financial Statements. 2 PART 1 - FINANCIAL INFORMATION Item 1: Financial Statements FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ STATEMENT OF PARTNERS' CAPITAL (DEFICIT) [UNAUDITED] ------------------------------------------------------------------------------ Total General Limited Partners' Partner Partners Capital Partners' Capital (Deficit) - December 31, 2000 $(1,216,959) $ 3,106,954 $1,889,995 Net Income for the six months ended June 30, 2001 419 41,517 41,936 ---------- ----------- ---------- Partners' Capital (Deficit) - June 30, 2001 [Unaudited] $(1,216,540) $ 3,148,471 $1,931,931 =========== =========== ========== See Accompanying Notes to These Financial Statements. 3 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ STATEMENTS OF CASH FLOWS [UNAUDITED] ------------------------------------------------------------------------------ Six months ended June 30, 2 0 0 1 2 0 0 0 ------- ------- Operating activities: Net income $ 41,936 $ 89,312 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 193,586 170,721 Amortization 12,204 12,204 Deferred Income (3,571) (3,571) Changes in Assets and Liabilities: (Increase) decrease in escrow (20,245) 2,403 (Increase) in security deposits (6,256) (6,414) (Increase) in tenant receivables (1,688) 0 (Increase) in other current assets (67,827) (34,796) Decrease in other assets 28,879 71,152 Increase in accounts payable and accrued expenses 87,396 54,206 (Decrease) in prepaid rents (508) 0 (Decrease) in due to related party (12,091) (12,135) Increase in tenant security deposits 6,256 6,414 ----------- ---------- Net Cash Provided by Operating Activities 258,071 349,496 ----------- ---------- Investing Activities: Capital Expenditures (145,745) (228,346) ----------- ---------- Net Cash (used in) Investing Activities (145,745) (228,346) ----------- ---------- Financing Activities: Principal Payments on Mortgages (45,997) (41,404) ----------- ---------- Net cash (used in) Financing Activities (45,997) (41,404) ----------- ---------- Net increase in cash and cash equivalents 66,329 79,746 Cash and Cash Equivalents - Beginning of Period 188,122 217,906 ----------- ---------- Cash and Cash Equivalents - End of Period $ 254,451 $ 297,652 =========== ========== Supplemental disclosure of cash flow information: Interest paid $ 221,344 $ 225,937 =========== ========== For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. See Accompanying Notes to These Financial Statements. 4 FJS PROPERTIES FUND I, L.P. NOTES TO FINANCIAL STATEMENTS [UNAUDITED] ------------------------------------------------------------------------------ [A] Significant Accounting Policies Significant accounting policies of FJS Properties Fund I, L.P. are set forth in the Partnership's Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission. [B] Basis of Reporting The balance sheet as of June 30, 2001, the statements of operations for the three and six months ended June 30, 2001 and 2000, the statement of partners' capital (deficit) for the six months ended June 30, 2001, and the statements of cash flows for the six months ended June 30, 2001 and 2000 have been prepared by the Partnership without audit. The accompanying unaudited financial statements have been prepared in accordance with standards generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the managing partner, such statements include all adjustments [consisting only of normal recurring items] which are considered necessary for a fair presentation of the financial position of the Partnership at June 30, 2001, and the results of its operations and cash flows for the six months then ended. It is suggested that these financial statements be read in conjunction with Form S-11 filed with the Securities and Exchange Commission on April 25, 1985 and with the financial statements and notes contained in the Partnership's Form 10-K for the year ended December 31, 2000. 5 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------------------------------------ LIQUIDITY AND CAPITAL RESOURCES As of the present date, the Partnership owns and operates one Property, the Pavilion Apartments, and does not intend to acquire any other property. Cash flow from Pavilion should be sufficient to permit the Partnership to make the constant monthly payments due prior to maturity on the first mortgage and to meet its monthly operating expenses. However, should there be a significant decrease in Pavilion's occupancy or rental rates, there can be no assurance that the Partnership would be able to obtain sufficient funds to make such payments. The holder of the first mortgage on the Pavilion Apartments has agreed to the withdrawal of $60,000 from an escrow account held by the first mortgagee. These funds are intended to be utilized for capital improvements at the Pavilion Apartments, in particular, among other items, for roof repairs that are needed at the property. $60,000 was disbursed from the escrow account to the Partnership on June 13, 2001. The Partnership will replenish the escrow account with payments of $5,000 per month commencing June 2001 and continuing monthly for twelve months. It is anticipated that cash flow from the Pavilion Apartments will be sufficient to make such payments. A similar withdrawal of $59,675 was made by the Partnership on May 22, 2000. The Partnership replenished this account with payments of $5,000 per month from June 2000, through May 2001. OPERATIONS The Partnership has operated the Pavilion Apartments, located in West Palm Beach, Florida since January 1985. The project operated with occupancies in the mid-to-low 90% range for the second quarter of 2001. Physical occupancy stands at 92.9% as of August 8, 2001. Of the 21 vacant apartments (excluding the one vacant model apartment) 5 are available for rent with the remaining 16 apartments pre leased for August occupancy. Rental revenues decreased slightly to $610,645 from $617,048 and to $1,194,104 from $1,198,168 for the three and six month periods ended June 30, 2001, as compared to the comparable periods of the prior year. These decreases resulted from increased vacancies at the Pavilion Apartments which more than offset the increases in rental rates at the project. Operating expenses, consisting mainly of real estate taxes, repairs and maintenance and utilities increased to $192,882 from $172,005 and to $337,781 from $320,897 for the comparable three and six month periods of 2001 and 2000 respectively. The increases resulted primarily from increased replacement costs and substantially increased utility charges for water and sewer and sanitation. In addition they reflect increased real estate taxes for the current year. These were offset to some extent by decreased spending for repairs and maintenance. During the second quarter of 2001 the following sums were expended on capitalizable replacements. Item Amount spent Stoves/Refrigerators/Dishwashers $ 9,055 Carpeting $ 25,377 Tile Replacement $ 600 Roofs $ 27,521 Misc. Interior Improvements $ 1,277 ----------- Total $ 63,830 =========== 6 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------------------------------------ General and administrative expenses decreased to $192,196 from $198,161 and increased to $391,127 from $383,885 for the comparable three and six month periods of the prior year respectively. This result reflects increases in payroll and court costs and eviction expenses during the periods. In addition, while the first quarter general and administrative expenses showed only a small increase in insurance expense as compared to 2000, the Partnership has received notice that the renewal premium for the period from April 1, 2001 through March 31, 2002, has increased substantially from $66,690 to $118,766. The increase in general and administrative expenses for the second quarter reflects this insurance increase. Our managing agent is in the process of seeking alternatives for this coverage. We are unable to predict at this time whether a lower cost alternative can be found. INFLATION As of the present date, inflation has not had a major impact on the operations of the Partnership. 7 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ PART II - OTHER INFORMATION ------------------------------------------------------------------------------ Item 6. Exhibits and Reports on Form 8-K [a] Exhibits as required by Item 601 of Regulation S-K: None Required [b] Reports on Form 8-K: None filed during the quarter for which this report is submitted. 8 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ SIGNATURE ------------------------------------------------------------------------------ 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. FJS PROPERTIES FUND I, L.P. Date: August 8, 2001 By: /s/ Andrew C. Alson ---------------------------------- Andrew C. Alson (President and Chief Financial Officer) FJS Properties, Inc. General Partner 9