-----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, QdxU+99efSddTJ9pwsyiYACLmlFfXDlgAnwUFmDZi5rCfV9MhdJsRRcT5VCN+Hwc Ob/9TiVo0SVr3dRqD659sg== 0000808460-98-000010.txt : 19981116 0000808460-98-000010.hdr.sgml : 19981116 ACCESSION NUMBER: 0000808460-98-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCORD MILESTONE PLUS L P CENTRAL INDEX KEY: 0000808460 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 521494615 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16757 FILM NUMBER: 98749080 BUSINESS ADDRESS: STREET 1: 5200 TOWN CENTER CIR STREET 2: 4TH FLOOR CITY: BOCA RATON STATE: FL ZIP: 33486 BUSINESS PHONE: 4073949260 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-Q (mark one) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 1998 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 number 000-16757 CONCORD MILESTONE PLUS, L.P. (Exact Name of Registrant as Specified in its Charter) Delaware 52-1494615 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 150 EAST PALMETTO PARK ROAD 4TH FLOOR BOCA RATON, FLORIDA 33432 (Address of Principal Executive Offices) (Zip Code) (561) 394-9260 Registrant's Telephone Number, Including Area Code Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report 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 for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) BALANCE SHEETS SEPTEMBER 30, 1998 (Unaudited) AND DECEMBER 31, 1997
ASSETS September 30, 1998 December 31, 1997 Property, at cost Building and improvements .......................................................$ 15,519,996 $ 15,453,945 Less: accumulated depreciation .................................................. 5,871,806 5,413,087 -------------- -------------- Building and improvements, net .................................................. 9,648,190 10,040,858 Land ............................................................................ 10,987,034 10,987,034 -------------- -------------- Total property .................................................................. 20,635,224 21,027,892 Cash and cash equivalents ........................................................... 389,623 257,905 Accounts receivable ................................................................. 197,198 123,152 Restricted cash ..................................................................... 320,510 269,895 Prepaid expenses and other assets, net .............................................. 96,182 67,516 Debt financing costs, net ........................................................... 282,003 305,504 -------------- -------------- Total assets ..................................................................$ 21,920,740 $ 22,051,864 ============== ============== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage loans payable ..............................................................$ 16,557,283 $ 16,683,574 Accrued interest .................................................................... 112,669 117,308 Accrued expenses and other liabilities .............................................. 359,358 341,263 Accrued expenses payable to affiliates .............................................. 22,759 73,935 -------------- -------------- Total liabilities ............................................................... 17,052,069 17,216,080 -------------- -------------- Partners' capital: General partner ..................................................................... (73,878) (74,207) Limited partners: Class A Interests, 1,518,800 .................................................... 4,942,549 4,909,991 -------------- -------------- Total partners' capital ......................................................... 4,868,671 4,835,784 -------------- -------------- Total liabilities and partners' capital .........................................$ 21,920,740 $ 22,051,864 ============== ==============
See Accompanying Notes to Financial Statements -2- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF REVENUES AND EXPENSES (Unaudited) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
September 30, 1998 September 30, 1997 Revenues: Rent ...............................................................................$ 657,883 $ 661,118 Reimbursed expenses ................................................................ 140,716 129,401 Interest and other income .......................................................... 1,802 7,835 --------------- --------------- Total revenues ................................................................. 800,401 798,354 Expenses: Interest expense ................................................................... 345,777 430,341 Depreciation and amortization ...................................................... 158,370 141,063 Management and property expenses ................................................... 199,035 221,148 Administrative and management fees to related party ............................................................... 32,087 28,195 Professional fees and other expenses ............................................... 25,795 29,035 --------------- --------------- Total expenses ................................................................. 761,064 849,782 --------------- --------------- Net income (loss) ..................................................................$ 39,337 $ (51,428) =============== =============== Net income (loss) attributable to: Limited partners ...............................................................$ 38,944 $ (50,914) General partner ................................................................ 393 (514) --------------- --------------- Net income (loss) ..................................................................$ 39,337 $ (51,428) =============== =============== Income (loss) per weighted average Limited Partnership 100 Class A Interests outstanding ..............................................................$ 2.59 $ (3.39) =============== =============== Weighted average number of 100 Class A interests outstanding ...................................................... 15,188 15,188 =============== ===============
See Accompanying Notes to Financial Statements -3- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF REVENUES AND EXPENSES (Unaudited) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
September 30, 1998 September 30, 1997 Revenues: Rent ...............................................................................$ 1,960,276 $ 1,930,091 Reimbursed expenses ................................................................ 346,137 368,632 Interest and other income .......................................................... 7,941 23,307 --------------- --------------- Total revenues ................................................................. 2,314,354 2,322,030 --------------- --------------- Expenses: Interest expense ................................................................... 1,028,029 1,252,941 Depreciation and amortization ...................................................... 490,609 426,113 Management and property expenses ................................................... 589,560 598,139 Administrative and management fees to related party ............................................................... 100,853 100,447 Professional fees and other expenses ............................................... 72,416 150,887 --------------- --------------- Total expenses ................................................................. 2,281,467 2,528,527 --------------- --------------- Net income (loss) ..................................................................$ 32,887 $ (206,497) =============== =============== Net income (loss) attributable to: Limited partners ...............................................................$ 32,558 $ (204,432) General partner ................................................................ 329 (2,065) --------------- --------------- Net income (loss) ..................................................................$ 32,887 $ (206,497) =============== =============== Income (loss) per weighted average Limited Partnership 100 Class A Interests outstanding ..............................................................$ 2.17 $ (13.60) =============== =============== Weighted average number of 100 Class A interests outstanding ...................................................... 15,188 $ 15,188 =============== ===============
See Accompanying Notes to Financial Statements -4- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
General Class A Total Partner Interests PARTNERS' CAPITAL (DEFICIT) January 1, 1998 $4,835,784 $(74,207) $4,909,991 Distributions ----- ----- ----- Net income 32,887 329 32,558 ----------- --------- ----------- PARTNERS' CAPITAL (DEFICIT) September 30, 1998 $4,868,671 $(73,878) $4,942,549 ========= ======= =========
See Accompanying Notes to Financial Statements -5- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF CASH FLOWS (Unaudited) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
September 30, 1998 September 30, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ..................................................................$ 32,887 $ (206,497) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization .............................................. 490,609 426,113 Change in operating assets and liabilities: (Increase) decrease in accounts receivable ................................. (74,046) 29,451 Increase in prepaid expenses and other assets, net ......................... (37,056) (68,626) Decrease in accrued interest ............................................... (4,639) (137,100) Increase in accrued expenses and other liabilities ......................... 18,095 301,842 (Decrease) increase in accrued expenses payable to affiliate .......................................................... (51,176) 68,015 --------------- --------------- Net cash provided by operating activities .......................................... 374,674 413,198 --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Property improvements ...................................................... (66,050) (90,621) --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Redemption on bonds payable ................................................ 0 (16,452,000) Proceeds from mortgages payable ............................................ 0 16,710,000 Debt financing costs ....................................................... 0 (308,228) Increase in restricted cash ................................................ (50,615) (401,835) Principal repayments on mortgage loans payable ............................. (126,291) 0 Cash distributions to partners ............................................. 0 (101,740) --------------- --------------- Net cash used in financing activities .............................................. (176,906) (553,803) --------------- --------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................................................................ 131,718 (231,226) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ........................................................ 257,905 326,120 --------------- --------------- CASH AND CASH EQUIVALENTS, END OF PERIOD ..............................................................$ 389,623 $ 94,894 =============== =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest ...........................................$ 1,032,668 $ 1,386,252 =============== ===============
See Accompanying Notes to Financial Statements -6- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 The accompanying financial statements have been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements as of and for the period ended September 30, 1998 and 1997 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the fiscal year. Certain information for 1997 has been reclassified to conform to the 1998 presentation. These financial statements should be read in conjunction with the financial statements and footnotes included thereto in the Concord Milestone Plus, L.P. (the "Partnership") financial statements filed on form 10-K for the year ended December 31, 1997. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General Certain statements made in this report constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements include statements regarding the intent, belief or current expectations of the Partnership and its management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the following: general economic and business conditions, which will, among other things, affect the demand for retail space or retail goods, availability and creditworthiness of prospective tenants, lease rents and the terms and availability of financing; adverse changes in the real estate markets including, among other things, competition with other retail commercial landlords; governmental actions and initiatives; and environment/safety requirements. -7- Organization and Capitalization The Partnership was formed on December 12, 1986, for the purpose of investing in existing income-producing commercial and industrial real estate. The Partnership began operations on August 20, 1987, and currently owns and operates three shopping centers located in Searcy, Arkansas; Valencia, California; and Green Valley, Arizona. The Partnership commenced a public offering on April 8, 1987 in order to fund the Partnership's real property acquisitions. The Partnership terminated its public offering on April 2, 1988 and was fully subscribed to with a total of 16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of $1,000 principal amount of Bonds and 36 Class B Interests. Each Equity Unit consists of 100 Class A Interests and 100 Class B Interests. Capital contributions to the Partnership consisted of $15,187,840 from the sale of the Equity Units and $592,272 which represent the Class B Interests from the sale of the Bond Units. The Bonds were redeemed during September 1997. Recent Developments On October 28, 1998, the Partnership dismissed the accounting firm of Deloitte & Touche LLP as the Partnership's independent auditor to audit the Partnership's financial statements. The dismissal of Deloitte & Touche LLP was not the result of any disagreements between the Partnership and Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. On November 2, 1998, the Partnership retained the accounting firm of Ahearn, Jasco + Company, P.A. as its new independent auditor to audit the Partnership's financial statements for the fiscal year ending December 31, 1998. The decision to change accounting firms as the Partnership's independent auditor to audit the Partnership's financial statements was approved by the Audit Committee of the Board of Directors of CM Plus Corporation, General Partner of the Partnership, and reported on the Partnership's Form 8-K dated October 28, 1998. Year 2000 Issues Year 2000 compliance programs and information systems modifications were initiated by the Partnership in early 1998 in an attempt to ensure that these systems and key processes will remain functional. This objective is expected to be achieved either by modifying present systems using existing internal and external programming resources or by installing new systems, and by monitoring supplier and other third-party interfaces. Review of the systems affecting the Partnership and its properties is progressing. The costs of Year 2000 program to date have not been material, and the Partnership does not anticipate that the costs of any required modifications to its information technology or embedded technology systems will have a material effect on its financial position, results of operations or liquidity. -8- In the event that the Partnership or material third parties fail to complete their Year 2000 compliance programs successfully and on time, the Partnership's ability to operate its properties or to bill or collect its revenues in a timely manner could be adversely affected. Management does not expect that any such failure would have a material adverse effect on the financial position, results of operations or liquidity of the Partnership. The Partnership has day-to-day operational contingency plans, and management is in the process of updating these plans for possible Year 2000 specific operational requirements. Results of Operations Comparison of Three Months Ended September 30, 1998 to Three Months Ended September 30, 1997 The Partnership recognized a net income of $39,337 for the three months ended September 30, 1998 as compared to a net loss of $51,428 for the same period in 1997 due to the following factors. Revenues increased by $2,047, or 0.3%, to $800,401 for the three months ended September 30, 1998 as compared to $798,354 for the three months ended September 30, 1997 primarily due to an increase in reimbursed expenses resulting from an increase in billable property expenses. Interest expense decreased by $84,564, or 19.7%, to $345,777 for the three months ended September 30, 1998 as compared to $430,341 for the three months ended September 30, 1997 due to a decrease of approximately 2% in the interest rate on the Partnership's mortgage loans in 1998 compared to the interest rate on the bonds payable in 1997. The Partnership consummated three new fixed rate first mortgage loans in September 1997, the proceeds of which were used to redeem all of the then outstanding bonds payable. Depreciation and amortization expense increased by $17,307, or 12.3%, to $158,370 for the three months ended September 30, 1998 as compared to $141,063 for the three months ended September 30, 1997 primarily due to: (1) an increase in depreciation expense caused by property improvement expenditures throughout 1997 and 1998, and (2) an increase in amortization expense due to debt financing costs associated with the 1997 bond refinancing. Management and property expenses decreased by $22,113, or 10.0%, to $199,035 for the three months ended September 30, 1998 as compared to $221,148 for the three months ended September 30, 1997 primarily due to: (1) a decrease in common area expenses due to cost savings efforts by management, and (2) the effects of real estate tax expense on the three months ended September 30, 1998. -9- Results of Operations Comparison of Nine Months Ended September 30, 1998 to Nine Months Ended September 30, 1997 The Partnership recognized net income of $32,887 for the nine months ended September 30, 1998 as compared to a net loss of $206,497 for the same period in 1997 due to the following factors. Revenues decreased by $7,676, or 0.3%, to $2,314,354 for the nine months ended September 30, 1998 as compared to $2,322,030 for the nine months ended September 30, 1997 due to the net effect of the following: (1) an increase in base rent revenue from two new tenants, and an increase in percentage rent revenue for one major tenant, both at the Green Valley Mall and (2) a decrease in reimbursed expenses due to a decrease in management and property expenses in 1998. Interest expense decreased by $224,912, or 17.9%, to $1,028,029 for the nine months ended September 30, 1998 as compared to $1,252,941 for the nine months ended September 30, 1997 due to a decrease of approximately 2% in the interest rate on the mortgage loans in 1998 compared to the interest rate on the bonds payable in 1997 which were retired with the proceeds of the mortgage loans. Depreciation and amortization expense increased by $64,496, or 15.1%, to $490,609 for the nine months ended September 30, 1998 as compared to $426,113 for the nine months ended September 30,1997 primarily due to: (1) an increase in depreciation expense resulting from property improvement expenditures throughout 1997 and 1998, and (2) an increase in amortization expense due to debt financing costs associated with the 1997 bond refinancing. Management and property expenses decreased by $8,579, or 1.4%, to $589,560 for the nine months ended September 30, 1998 as compared to $598,139 for the nine months ended September 30, 1997 primarily due to a decrease in common area expenses due to cost savings efforts by management. Professional fees and other expenses decreased by $78,471, or 52.0%, to $72,416 for the nine months ended September 30, 1998 as compared to $150,887 for the nine months ended September 30, 1997 due to: (1) environmental expenses incurred during the second quarter of 1997 for a risk-based closure at a site at the Old Orchard Shopping Center and (2) the termination of trustee fees in 1998 relating to the bonds payable which were refinanced during September 1997. -10- Liquidity and Capital Resources The General Partner believes that the Partnership's expected revenue and working capital is sufficient to meet the Partnership's current operating requirements for the next twelve months. Nevertheless, because the cash revenues and expenses of the Partnership will depend on future facts and circumstances relating to the Partnership's properties, as well as market and other conditions beyond the control of the Partnership, a possibility exists that cash flow deficiencies may occur. Currently, a significant amount (approximately $320,000) of the Partnership's working capital is still in the control of the holder of the first mortgage as funds held in escrow for real estate taxes, and pending resolution of certain circumstances. Additionally, the Partnership is in the process of completing various property and tenant improvements which are expected to cost approximately $130,000 and be paid during the fourth quarter of 1998. The Partnership suspended making distributions subsequent to the first quarter of 1997 due to the cost of addressing an environmental issue identified at the Valencia Property and payment of certain expenses relative to the refinancing. Additionally, during 1998, the Partnership is incurring significant capital costs relating to parking lot repairs, HVAC, tenant improvements and leasing costs. The Partnership is anticipating resuming distributions as soon as the Partnership's unrestricted working capital levels are adequate. Management is not aware of any other trends, events, commitments or uncertainties that will or are likely to materially impact the Partnership's liquidity. Net cash provided by operating activities of $374,674 for the nine months ended September 30, 1998 included (i) a net income of $32,887 (ii) non-cash adjustments of $490,609 for depreciation and amortization expense and (iii) a net change in operating assets and liabilities of $148,822. Net cash provided by operating activities of $413,198 for the nine months ended September 30, 1997 included (i) net loss of $206,497, (ii) non-cash adjustments of $426,113 for depreciation and amortization expense and (iii) a net change in operating assets and liabilities of $193,582. Net cash used in investing activities of $66,050 for the nine months ended September 30, 1998 was for capital expenditures for property improvements. Net cash used in investing activities of $90,621 for the nine months ended September 30, 1997 was for capital expenditures for property improvements. -11- Net cash used in financing activities of $176,906 for the nine months ended September 30, 1998 included (i) principal repayments on mortgage loans payable of $126,291 and (ii) an increase in restricted cash of $50,615. Net cash used in financing activities of $553,803 for the nine months ended September 30, 1997 included (i) redemption of Bonds payable of $16,452,000, (ii) funds held in escrow of $401,835, (iii) debt financing costs of $308,228, (iv) proceeds from mortgages payable of $16,710,000 and (v) cash distributions to partners of $101,740. Item 6. Exhibits and Reports on Form 8-K (a) The following exhibit is included herein: Exhibit 27 - Financial Data Schedule Article 5 included for Electronic Data Gathering, Analysis, and Retrieval (EDGAR) purposes only. This Schedule contains summary financial information extracted from the balance sheets and statements of revenues and expenses of the Partnership as of and for the nine month period ended September 30, 1998, and is qualified in its entirety by reference to such financial statements. -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. DATE: November 13, 1998 CONCORD MILESTONE PLUS, L.P. (Registrant) BY: CM PLUS CORPORATION General Partner By: /S/ Robert Mandor Robert Mandor Director and Vice President By: /S/ Patrick Kirse Patrick Kirse Treasurer and Controller -13- EX-27 2 FDS
5 1 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 389,623 0 197,198 0 0 0 26,507,030 5,871,806 21,920,740 0 16,557,283 0 0 0 4,868,671 21,920,740 0 2,314,354 0 1,253,438 0 0 1,028,029 32,887 0 0 0 0 0 32,887 2.17 0
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