10-Q 1 fjs0610q.txt 10-Q FOR SEPTEMBER 30, 2001 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 September 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 November 8, 2001. FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ INDEX ------------------------------------------------------------------------------ Part I: FINANCIAL INFORMATION Item 1: Financial Statements Balance Sheets as of September 30, 2001 [Unaudited] and December 31, 2000.................................... 1 Statements of Operations for the three and nine months ended September 30, 2001 and 2000 [Unaudited].................. 2 Statement of Partners' Capital (Deficit) for the nine months ended September 30, 2001 [Unaudited]..................... 3 Statements of Cash Flows for the nine months ended September 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 ------------------------------------------------------------------------------ September 30, December 31, ------------- ------------ 2 0 0 1 2 0 0 0 ------- ------- [Unaudited] Assets: Current Assets: Cash and Cash Equivalents $ 123,431 $ 188,122 Cash - Escrow 164,213 64,184 Cash - Security Deposits 139,389 125,015 Tenant Receivables 18,127 13,215 Other Current Assets 56,978 21,446 ----------- ---------- Total Current Assets 502,138 411,982 ----------- ---------- Property Investment: Land 2,296,804 2,296,804 Buildings 6,569,125 6,569,125 Furniture, Fixtures and Improvements 2,981,969 2,758,619 ----------- ---------- Totals - At Cost 11,847,898 11,624,548 Less: Accumulated Depreciation (5,719,464) (5,427,009) ----------- ---------- Property Investment - Net 6,128,434 6,197,539 ----------- ---------- Other Assets 157,718 189,602 ----------- ---------- Total Assets $ 6,788,290 $6,799,123 =========== ========== Liabilities and Partners' Capital (Deficit): Current Liabilities: Accounts Payable $ 54,346 $ 117,747 Accrued Interest 36,477 37,045 Other Accrued Expenses 149,255 7,093 Due to Related Party 4,582 16,704 Tenant Security Deposits Payable 139,389 125,015 Prepaid Rent 5,549 27,597 Mortgage Payable - Current Portion 102,094 94,971 Deferred Income - Current Portion 7,143 7,143 ----------- ---------- Total Current Liabilities 498,835 433,315 ----------- ---------- Long-Term Liabilities: Mortgage Payable - Non-Current Portion 4,388,130 4,465,099 Deferred Income - Non-Current Portion 5,357 10,714 ----------- ---------- Total Long-Term Liabilities 4,393,487 4,475,813 ----------- ---------- Total Liabilities 4,892,322 4,909,128 ----------- ---------- Partners' Capital (deficit): General Partner (1,216,899) (1,216,959) Limited Partners 3,112,867 3,106,954 ----------- ---------- Total Partners' Capital (deficit) 1,895,968 1,889,995 ----------- ---------- Total Liabilities and Partners' Capital (deficit) $ 6,788,290 $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 Nine months ended September 30, September 30, ------------- ------------- 2 0 0 1 2 0 0 0 2 0 0 1 2 0 0 0 ------- ------- ------- ------- Revenue: Rental $ 593,804 $ 600,939 $1,787,908 $1,799,107 Interest 1,005 2,448 4,505 6,897 ----------- ----------- ---------- ---------- Total Revenue 594,809 603,387 1,792,413 1,806,004 ----------- ----------- ---------- ---------- Expenses: Operating 189,300 169,615 527,081 490,512 General and administrative 226,874 178,957 618,000 562,842 Interest 109,627 112,027 330,598 337,625 Depreciation and amortization 104,971 94,163 310,761 277,088 ----------- ----------- ---------- ---------- Total Expenses 630,772 554,762 1,786,440 1,668,067 ----------- ----------- ---------- ---------- Net (Loss) Income (35,963) 48,625 5,973 137,937 ======================= ========== ========== (Loss) Income Per Limited Partnership Unit $ (2.12)$ 2.87 $ 0.35 $ 8.13 ======================= ========== ========== 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 nine months ended September 30, 2001 60 5,913 5,973 ---------- ----------- ---------- Partners' Capital (Deficit) - September 30, 2001 [Unaudited] $(1,216,899) $ 3,112,867 $1,895,968 =========== =========== ========== See Accompanying Notes to These Financial Statements. 3 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ STATEMENTS OF CASH FLOWS [UNAUDITED] ------------------------------------------------------------------------------ Nine months ended September 30, 2 0 0 1 2 0 0 0 ------- ------- Operating activities: Net income $ 5,973 $ 137,937 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 292,455 258,782 Amortization 18,306 18,306 Deferred Income (5,357) 37,590 Changes in Assets and Liabilities: (Increase) in escrow (100,029) (62,570) (Increase) in security deposits (14,374) (5,727) (Increase) in tenant receivables (4,912) 0 (Increase) in other current assets (35,532) (21,610) Decrease in other assets 13,578 51,770 Increase in accounts payable and accrued expenses 78,193 59,006 (Decrease) in prepaid rents (22,048) 0 (Decrease) in due to related party (12,122) (12,059) Increase in tenant security deposits 14,374 5,727 ----------- ---------- Net Cash Provided by Operating Activities 228,505 467,152 ----------- ---------- Investing Activities: Capital Expenditures (223,350) (304,415) ------------ ----------- Net Cash (used in) Investing Activities (223,350) (304,415) ------------ ----------- Financing Activities: Principal Payments on Mortgages (69,846) (62,872) ------------ ----------- Net cash (used in) Financing Activities (69,846) (62,872) ------------ ----------- Net (decrease) increase in cash and cash equivalents (64,691) 99,865 Cash and Cash Equivalents - Beginning of Period 188,122 217,906 ----------- ---------- Cash and Cash Equivalents - End of Period $ 123,431 $ 317,771 =========== ========== Supplemental disclosure of cash flow information: Interest paid $ 331,165 $ 338,140 =========== ========== 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 [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 September 30, 2001, the statements of operations for the three and nine months ended September 30, 2001 and 2000, the statement of partners' capital (deficit) for the nine months ended September 30, 2001, and the statements of cash flows for the nine months ended September 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 September 30, 2001, and the results of its operations and cash flows for the nine 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 agreed to the withdrawal of $60,000 from an escrow account held by the first mortgagee. These funds were intended to be utilized for capital improvements at the Pavilion Apartments, in particular, among other items, for roof repairs 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 low 90% range for the third quarter of 2001. Physical occupancy stands at 91.0% as of October 25, 2001. Of the 28 vacant apartments (excluding the one vacant model apartment) 19 are available for rent with the remaining 9 apartments pre leased for October occupancy. Rental revenues decreased slightly to $593,804 from $600,939 and to $1,787,908 from $1,799,107 for the three and nine month periods ended September 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 $189,300 from $169,615 and to $527,081 from $490,512 for the comparable three and nine month periods of 2001 and 2000 respectively. The increases resulted primarily from increased repairs and maintenance during the three and nine month periods, as well as replacement costs for the third quarter. The higher utility charges for water and sewer and sanitation during the first two quarters of the year were offset by a reduction in such costs for the third quarter of 2001. In addition both the three and nine month figures reflect increased real estate taxes for the current year. 6 FJS PROPERTIES FUND I, L.P. ------------------------------------------------------------------------------ Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------------------------------------ During the third quarter of 2001 the following sums were expended on capitalizable replacements. Item Amount spent Stoves/Refrigerators/Dishwashers $12,128 Carpeting $24,922 Tile Replacement $ 761 Roofs $ 3,860 Misc. Interior Improvements $ 8,964 Counter Tops $13,225 A/C Replacement $13,745 ------- Total: $77,605 ======= General and administrative expenses increased to $226,874 from $178,957 and increased to $618,000 from $562,842 for the comparable three and nine month periods of the prior year respectively. This result reflects increases in payroll and court costs and eviction expenses during the periods. Payroll increased as a result of the hiring of an additional maintenance employee at the Pavilion, which was necessary to handle the increased maintenance requirements at the property. The increase in court costs and eviction expenses resulted from an increase in tenant delinquencies at the Pavilion. In addition, while the first quarter general and administrative expenses showed only a small increase in insurance expense as compared to 2000, 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 and third quarters reflects this insurance increase. 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: November 8, 2001 By: /s/ Andrew C. Alson ---------------------------------- Andrew C. Alson (President and Chief Financial Officer) FJS Properties, Inc. General Partner 9