-----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, DIYAIbeNfQ0mX0NxIOWIazoJlgb7QKQeeA6HVRU5vytqyblg3fjBbhxb1XDJ5p73 1nP3o0ivGYladYAEOKEr8Q== 0001095811-00-001409.txt : 20000515 0001095811-00-001409.hdr.sgml : 20000515 ACCESSION NUMBER: 0001095811-00-001409 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO INCOME PROPERTIES IV CENTRAL INDEX KEY: 0000812630 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330241855 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-13437 FILM NUMBER: 628381 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 FORM 10-Q PERIOD END MARCH 31, 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 MARCH 31, 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. 33-13437 DEL TACO INCOME PROPERTIES IV A CALIFORNIA LIMITED PARTNERSHIP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 33-0241855 (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 INCOME PROPERTIES IV Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements and Supplementary Data Balance Sheets at March 31, 2000 (Unaudited) and December 31, 1999 3 Statements of Income for the three months ended March 31, 2000 and 1999 (Unaudited) 4 Statements of Cash Flows for the three months ended March 31, 2000 and 1999 (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 INCOME PROPERTIES IV BALANCE SHEETS
MARCH 31, December 31, 2000 1999 ----------- ------------ (Unaudited) ASSETS CURRENT ASSETS: Cash $ 172,448 $ 100,224 Receivable from General Partner 27,286 111,622 Deposits 400 400 ----------- ----------- Total current assets 200,134 212,246 ----------- ----------- PROPERTY AND EQUIPMENT, AT COST: Land and improvements 1,236,700 1,236,700 Buildings and improvements 1,289,860 1,289,860 Machinery and equipment 484,789 484,789 ----------- ----------- 3,011,349 3,011,349 Less -- accumulated depreciation 1,042,709 1,024,675 ----------- ----------- 1,968,640 1,986,674 ----------- ----------- $ 2,168,774 $ 2,198,920 =========== =========== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 17,510 $ 19,309 Accounts payable 12,660 7,362 ----------- ----------- Total current liabilities 30,170 26,671 ----------- ----------- OBLIGATION TO GENERAL PARTNER 137,953 137,953 ----------- ----------- PARTNERS' EQUITY: Limited Partners 2,011,778 2,045,087 General Partner-Dela Taco, Inc. (11,127) (10,791) ----------- ----------- 2,000,651 2,034,296 ----------- ----------- $ 2,168,774 $ 2,198,920 =========== ===========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO INCOME PROPERTIES IV STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, --------------------- 2000 1999 ------- ------- REVENUES: Rent $78,143 $77,014 Interest 1,300 1,312 Other 325 225 ------- ------- 79,768 78,551 ------- ------- EXPENSES: General and administrative 19,465 19,441 Depreciation 18,034 25,937 ------- ------- 37,499 45,378 ------- ------- Net income $42,269 $33,173 ======= ======= Net income per limited partnership unit $ 0.25 $ 0.20 ======= =======
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO INCOME PROPERTIES IV STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, -------------------------- 2000 1999 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 42,269 $ 33,173 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 18,034 25,937 Decrease in receivable from General Partner 84,336 80,025 Decrease in deposits -- 27 Increase in accounts payable and payable to limited partners 3,499 3,300 --------- --------- Net cash provided by operating activities 148,138 142,462 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (75,914) (77,718) --------- --------- Net increase in cash 72,224 64,744 Beginning cash balance 100,224 101,404 --------- --------- Ending cash balance $ 172,448 $ 166,148 ========= =========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS MARCH 31, 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 partnership'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 March 31, 2000, the results of operations and cash flows for the three month periods ended March 31, 2000 and 1999 have been included. Operating results for the three months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. 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 165,375 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 12 percent to the General Partner and 88 percent to the limited partners. -6- 7 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS - CONTINUED MARCH 31, 2000 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 32 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, 2000, the two restaurants operated by Del Taco, for which the partnership is the lessor, had combined, unaudited sales of $417,104 and net income of $24,203 as compared to $409,568 and $26,937 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 (1999 combined, unaudited net income has been changed to measure net income on a consistent basis with the year 2000 presentation). For the three months ended March 31, 2000, the one restaurant operated by a Del Taco franchisee, for which the partnership is the lessor, had unaudited sales of $234,092 as compared with $232,214 during the same period in 1999. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from the General Partner consists primarily of rent accrued for the month of March. The March rent was collected on April 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 5 with respect to certain distributions to the General Partner. NOTE 5 - DISTRIBUTIONS On April 13, 2000, a distribution to the limited partners of $148,439 or approximately $.90 per limited partnership unit, was approved. Such distribution was paid April 19, 2000. The General Partner also received a distribution of $1,499 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 June 1987 and June 1988. 14.5% of the $4.135 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 $3 million of the remaining funds were used to acquire sites and build three restaurants. In February of 1992, approximately $442,000 raised during the offering but not required to acquire sites and build restaurants was distributed to the limited partners. The three 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 three properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has sub-leased one of the restaurants to a Del Taco franchisee). The following table sets forth rental revenue earned by restaurant:
THREE MONTHS ENDED MARCH 31, --------------------- 2000 1999 ------- ------- Orangethorpe Ave., Placentia, CA $33,703 $33,638 Lakeshore Drive, Lake Elsinore, CA 28,091 27,866 Highland Ave., San Bernardino, CA 16,349 15,510 ------- ------- Total $78,143 $77,014 ======= =======
The partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The partnership earned rental revenue of $78,143 during the three month period ended March 31, 2000, which represents an increase of $1,129 from 1999. 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 and Administrative Expense ---------------------- Three Months Ended March 31, --------------------- 2000 1999 ------ ------ Accounting fees 77.32% 76.13% Distribution of information to limited partners 22.68 23.87 ------ ------ 100.00% 100.00% ====== ======
General and administrative costs increased from 1999 to 2000 due to increased costs for accounting and income tax return preparation. Depreciation decreased because certain machinery and equipment became fully depreciated in the first quarter of 2000. For the three months ended March 31, 2000, net income increased by $9,096 from 1999 to 2000 due to the increase in revenues of $1,217 and a decrease in depreciation expense of $7,903, which was offset partially by the $24 increase in general and administrative expenses. -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, 2000. -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 INCOME PROPERTIES IV (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: May 1, 2000 /s/ Robert J. Terrano ----------------------------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer Date: May 1, 2000 /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-31-2000 JAN-01-2000 MAR-31-2000 172,448 400 27,286 0 0 200,134 3,011,349 1,042,709 2,168,774 30,170 0 0 0 0 2,000,651 2,168,774 0 79,768 0 37,499 0 0 0 42,269 0 42,269 0 0 0 42,269 0.25 0.25
-----END PRIVACY-ENHANCED MESSAGE-----