-----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, M4AWS5roXlBfTNT1DEPUQL6I05xdwSR4oVmgj3rormU9EWjaK/nS+gOfZ9AbJeuG OKyLVN/6SxTJ3DxU2YKz1w== /in/edgar/work/0001095811-00-004332/0001095811-00-004332.txt : 20001108 0001095811-00-004332.hdr.sgml : 20001108 ACCESSION NUMBER: 0001095811-00-004332 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO RESTAURANT PROPERTIES III CENTRAL INDEX KEY: 0000786360 STANDARD INDUSTRIAL CLASSIFICATION: [6500 ] IRS NUMBER: 330139247 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16851 FILM NUMBER: 754133 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 AVE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 a66766e10-q.txt FORM 10-Q QUARTERLY PERIOD ENDED SEPTEMBER 30,2000 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, 2000. 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 NUMBER) 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 III
PART I. FINANCIAL INFORMATION PAGE NUMBER - ------------------------------ ----------- Item 1. Financial Statements and Supplementary Data Balance Sheets at September 30, 2000 (Unaudited) and December 31, 1999 3 Statements of Income for the three and nine months ended September 30, 2000 and 1999 (Unaudited) 4 Statements of Cash Flows for the nine months ended September 30, 2000 and 1999 (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, 2000 1999 ----------- ----------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash $ 243,937 $ 208,334 Receivable from General Partner 67,450 62,122 Deposits 1,000 1,000 ----------- ----------- Total current assets 312,387 271,456 ----------- ----------- RESTRICTED CASH 97,291 97,291 ----------- ----------- PROPERTY AND EQUIPMENT, AT COST: Land and improvements 4,405,966 4,405,966 Buildings and improvements 2,954,959 2,954,959 Machinery and equipment 1,522,922 1,522,922 ----------- ----------- 8,883,847 8,883,847 Less--accumulated depreciation 2,877,426 2,792,496 ----------- ----------- 6,006,421 6,091,351 ----------- ----------- $ 6,416,099 $ 6,460,098 =========== =========== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 32,478 $ 25,130 Accounts payable 15,537 11,801 ----------- ----------- Total current liabilities 48,015 36,931 ----------- ----------- OBLIGATION TO GENERAL PARTNER 577,510 577,510 ----------- ----------- PARTNERS' EQUITY: Limited Partners 5,828,233 5,882,765 General Partner-Del Taco, Inc. (37,659) (37,108) ----------- ----------- 5,790,574 5,845,657 ----------- ----------- $ 6,416,099 $ 6,460,098 =========== ===========
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, 2000 1999 2000 1999 -------- -------- -------- -------- REVENUES: Rent $204,427 $190,476 $575,391 $542,003 Interest 3,357 2,574 8,717 7,087 Other 800 500 1,883 1,820 -------- -------- -------- -------- 208,584 193,550 585,991 550,910 -------- -------- -------- -------- EXPENSES: General and administrative 9,123 8,914 44,583 44,723 Depreciation 28,310 28,310 84,931 84,931 -------- -------- -------- -------- 37,433 37,224 129,514 129,654 -------- -------- -------- -------- Net income $171,151 $156,326 $456,477 $421,256 ======== ======== ======== ======== Net income per limited partnership unit $ 3.58 $ 3.27 $ 9.55 $ 8.81 ======== ======== ======== ========
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, 2000 1999 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 456,477 $ 421,256 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 84,931 84,931 (Increase) decrease in receivable from General Partner (5,328) 2,524 Decrease in deposits -- 462 Increase (decrease) in accounts payable and payable to limited partners 11,084 (12,831) --------- --------- Net cash provided by operating activities 547,164 496,342 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in restricted cash -- 2,605 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Redemption of limited partnership units -- (2,605) Cash distributions to partners (511,561) (507,612) --------- --------- Net cash used by financing activities (511,561) (510,217) --------- --------- Net increase (decrease) in cash 35,603 (11,270) Beginning cash balance 208,334 219,876 --------- --------- Ending cash balance $ 243,937 $ 208,606 ========= =========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES III NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 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, 1999. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the partnership's financial position at September 30, 2000, the results of operations and cash flows for the nine month periods ended September 30, 2000 and 1999 have been included. Operating results for the three and nine months ended September 30, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. NOTE 2 - RESTRICTED CASH At September 30, 2000 the partnership had a restricted cash balance of $97,291. 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 partnership 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, 2000 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 47,331 in 2000 and 1999. 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 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 September 30, 2000, the nine restaurants operated by Del Taco, for which the partnership is the lessor, had combined, unaudited sales of $1,703,554 and net income of $72,235, as compared to $1,587,297 and $72,043 respectively, for the corresponding period in 1999. Net income by restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense. For the nine months ended September 30, 2000, the nine restaurants operated by Del Taco, for which the partnership is the lessor, had combined, unaudited sales of $4,794,929 and net income of $172,761, as compared to $4,516,692 and $155,485 respectively, for the corresponding period in 1999. -7- 8 DEL TACO RESTAURANT PROPERTIES III NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2000 NOTE 4 - LEASING ACTIVITIES - CONTINUED For the three months and nine months ended September 30, 2000, the East Valley Blvd. restaurant in Walnut, California reported net losses of $1,950 and $4,780 as compared to net losses of $1,203 and $4,717 for the corresponding period in 1999. For the three months and nine months ended September 30, 2000, the East Gale Blvd. restaurant in Puente Hills, California reported net losses of $1,971 and $8,500 as compared to net losses of $2,377 and $6,300 for the corresponding period in 1999. For the three months and nine months ended September 30, 2000, the West Sepulveda Blvd. restaurant in Los Angeles, California reported net losses of $2,629 and $11,832 as compared to net income of $120 and a net loss of $13,535 for the corresponding period in 1999. 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 13, 2000. 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 6 with respect to certain distributions to the General Partner. NOTE 6 - DISTRIBUTIONS On October 13, 2000, a distribution to the limited partners of $204,662, or approximately $4.32 per limited partnership unit, was approved. Such distribution was paid on October 18, 2000. The General Partner also received a distribution of $2,067 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 partnership offered limited partnership units for sale between February 1986 and June 1987. 14.7% of the $12 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 $9.5 million of the remaining funds were used to acquire sites and build ten restaurants. In February of 1992, approximately $281,000 raised during the offering but not required to acquire sites and build restaurants was distributed to the limited partners. One restaurant was sold in November 1997. The nine 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. As described in Note 2 to the Notes to the Financial Statements, the partnership has a death and disability redemption fund totaling $97,291 at September 30, 2000. Investors should contact the General Partner with all questions regarding the eligibility of a limited partner or the estate of a deceased limited partner to participate in the redemption fund. Results of Operations The partnership owns nine properties that are under long-term lease to Del Taco for restaurant operations. The following table sets forth rental revenue earned by restaurant for the year:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2000 1999 2000 1999 -------- -------- -------- -------- Rancho California Plaza, Rancho California, CA $ 32,275 $ 30,563 $ 92,679 $ 86,917 East Vista Way, Vista, CA 20,513 16,911 58,205 47,805 Plaza at Puente Hills, Industry, CA 13,705 12,936 37,698 38,896 4th Street, Perris, CA 28,073 24,754 78,727 74,294 Foothill Blvd., Upland, CA 25,834 24,632 71,731 66,743 East Valley Blvd., Walnut, CA 12,618 11,686 35,656 33,502 Lassen Street, Chatsworth, CA 30,020 27,753 83,021 79,697 Hesperia Road, Victorville, CA 24,816 23,709 71,916 68,225 W. Sepulveda Blvd., Los Angeles, CA 16,573 17,532 45,758 45,924 -------- -------- -------- -------- Total $204,427 $190,476 $575,391 $542,003 ======== ======== ======== ========
-9- 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED The partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The partnership earned rental revenue of $204,427 during the three month period ended September 30, 2000, which represents an increase of $13,951 from 1999. The partnership earned rental revenue of $575,391 during the nine month period ended September 30, 2000, which represents an increase of $33,388 from 1999. The changes in rental revenue between 2000 and 1999 are directly attributable to increases in sales levels at the restaurants under lease. The following table breaks down general and administrative expenses by type of expense:
Percentage of Total General & Administrative Expense -------------------------------- Nine Months Ended September 30, 2000 1999 ------- ------ Accounting fees 53.74% 52.15% Distribution of information to limited partners 46.26 47.85 ------ ------ 100.00% 100.00% ====== ======
For the three month period ended September 30, 2000 net income increased by $14,825 from 1999 to 2000 due the increase in revenues of $15,034 which was partially offset by the increase in general and administrative expenses of $209. For the nine month period ended September 30, 2000 net income increased by $35,221 from 1999 to 2000 due to the increase in revenues of $35,081 and the decrease in general and administrative expenses of $140. -10- 11 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, 2000. -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 31, 2000 /s/ Robert J. Terrano --------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer Date: October 31, 2000 /s/ C. Douglas Mitchell ----------------------- C. Douglas Mitchell Vice President and Corporate Controller -12- 13 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 a66766ex27.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 243,937 1,000 67,450 0 0 312,387 8,883,847 2,877,426 6,416,999 48,015 0 0 0 0 5,790,574 6,416,099 0 585,991 0 129,514 0 0 0 456,477 0 456,477 0 0 0 456,477 9.55 9.55
-----END PRIVACY-ENHANCED MESSAGE-----