-----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, RTDIJzCKGH8CL1Om/VvdgPIn7g5grPYIH9Uq50+mIJm7eYmG8PNRgXkpUxezDWuj b8HtP543kUmgCCR1VyI0Cg== 0000892569-98-001556.txt : 19980518 0000892569-98-001556.hdr.sgml : 19980518 ACCESSION NUMBER: 0000892569-98-001556 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN RETIREMENT VILLAS PROPERTIES III LTD PARTNERSHIP CENTRAL INDEX KEY: 0000853274 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330365417 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-30084 FILM NUMBER: 98625199 BUSINESS ADDRESS: STREET 1: 245 FISCHER AVE STE D 1 CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7147517400 MAIL ADDRESS: STREET 2: 245 FISCHER AVE STE D1 CITY: COSTA MESA STATE: CA ZIP: 92626 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN RETIREMENT VILLAS PROPERTIES III L P DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q FOR PERIOD ENDING MARCH 31, 1998 1 =============================================================================== 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 MARCH 31, 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: 0-26470 AMERICAN RETIREMENT VILLAS PROPERTIES III, L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 33-365417 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 245 FISCHER AVENUE, D-1 92626 COSTA MESA, CA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 751-7400 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 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS American Retirement Villas Properties III, L.P. (a California limited partnership) Balance Sheets (Unaudited) (In thousands)
ASSETS MARCH 31, DECEMBER 31, 1998 1997 ---------- ------------ Properties, at cost: Land $ 4,674 $ 4,674 Buildings and improvements, less accumulated depreciation of $4,387 and $4,122 at March 31, 1998 and December 31, 1997, respectively 24,038 24,126 Furniture, fixtures and equipment, less accumulated depreciation of $408 and $373 at March 31, 1998 and December 31, 1997, respectively 948 760 -------- -------- Net properties 29,660 29,560 Cash 2,259 1,086 Restricted cash 156 153 Loan fees, less accumulated amortization of $183 and $175 at March 31, 1998 and December 31, 1997, respectively 62 70 Amounts receivable from affiliates -- 265 Other assets 243 107 -------- -------- $ 32,380 $ 31,241 ======== ======== LIABILITIES AND PARTNERS' CAPITAL Notes payable to banks $ 16,805 $ 16,086 Notes payable to others 4,790 4,803 Accounts payable 688 974 Accrued expenses 458 328 Amounts payable to affiliate 903 383 Distributions payable to Partners 399 46 -------- -------- Total liabilities 24,043 22,620 -------- -------- Commitments and contingencies Minority interest 79 74 -------- -------- Partners' capital (deficit): General partners' deficit (70) (74) Limited partners' capital, 18,666 units outstanding 8,328 8,621 -------- -------- Total partners' capital 8,258 8,547 -------- -------- $ 32,380 $ 31,241 ======== ========
See accompanying notes to the unaudited financial statements. 3 American Retirement Villas Properties III, L.P. (a California limited partnership) Statements of Operations (unaudited) (In thousands, except unit data)
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------- 1998 1997 ------- ------- Revenues: Rent $ 1,909 $ 1,377 Assisted living 218 137 Interest and other 64 27 ------- ------- Total revenues 2,191 1,541 ------- ------- Costs and expenses: Rental property operations 969 691 Assisted living 87 55 General and administrative 136 111 Depreciation and amortization 334 228 Property taxes 70 65 Advertising 22 9 Interest 474 361 Minority interest in operations 35 22 ------- ------- Total costs and expenses 2,127 1,542 ------- ------- Net income (loss) $ 64 $ (1) ======= ======= Net income (loss) per limited partner unit $ 3.40 $ (.05) ======= =======
See accompanying notes to the unaudited financial statements. 4 American Retirement Villas Properties III, L.P. (a California limited partnership) Statements of Cash Flows (unaudited) (In thousands)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 1997 --------- -------- Cash flows from operating activities: Net income (loss) ............................................................ $ 64 $ (1) Adjustments to reconcile net income to net cash provided by Operating activities: Depreciation and amortization ............................................ 334 228 Interest expense on notes payable to bank added to principal ............. 115 -- Change in assets and liabilities: Increase in restricted cash ........................................... (3) (1) Increase in other assets .............................................. (136) (118) (Decrease) increase in accounts payable and accrued liabilities ....... (156) 353 Increase in amounts payable from affiliates, net ...................... 785 65 Increase in minority interest ......................................... 5 9 ------ ------ Net cash provided by operating activities ........................ 1,008 535 ------ ------ Cash flows used in investing activities: Improvements and building construction ..................................... (176) (915) Additions to furniture, fixtures and equipment, net ........................ (250) (32) ------- ------ Net cash used in investing activities ............................. (426) (947) ------- ------ Cash flows from financing activities: Proceeds from notes payable ................................................ 663 662 Principal repayments on notes payable to banks and others .................. (72) (70) Distributions paid ......................................................... -- -- ------- ------ Net cash provided by financing activities ........................ 591 592 ------- ------ Net increase in cash ........................................................... 1,173 180 Cash at beginning of period .................................................... 1,086 893 ------- ------ Cash at end of period .......................................................... $ 2,259 $1,073 ======= ====== Supplemental disclosure of cash flow information - Cash paid during the period for interest ................................... $ 490 $ 361 ======= ======
See accompanying notes to the unaudited financial statements. 5 American Retirement Villas Properties III, L.P. (a California limited partnership) Notes to Financial Statements (Unaudited) March 31, 1998 (1) SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING All adjustments, consisting only of recurring accruals, have been made that are necessary to present fairly the financial position and results of operations for the periods covered by this report. The results of operations for the three months ended March 31, 1998, are not necessarily indicative of the operating results for the full year. Pursuant to Regulation S-X Rule 10-1(5), American Retirement Villas Properties III, L.P.'s (the "Partnership") significant accounting policies are described in the Partnership's December 31, 1997 Form 10-K filed with the Securities and Exchange Commission. The Partnership follows the same accounting policies for interim reporting purposes. This quarterly report should be read in conjunction with such financial statements. Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. (2) TRANSACTIONS WITH AFFILIATES The Partnership has an agreement with ARV Assisted Living, the Partnership's Managing General Partner, providing for a property management fee of 5 percent of gross revenues and a partnership management fee of 10 percent of cash flow before distribution, as defined in the Partnership Agreement. Property management fees and partnership administration fees were $110,000 and $51,000 for the three months ended March 31, 1998, respectively. 6 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS REVENUE Revenue includes rental income, assisted living income, interest earned on cash balances and other revenue. Revenue increased $650,000 for the three-month period ended March 31, 1998, respectively, compared with the corresponding period in 1997. The increase resulted primarily from the operations of Villa Las Posas, which opened in December 1997, and by additional residents using assisted living services during 1998. COSTS AND EXPENSES Total costs and expenses includes rental property operations (consisting of, but not limited to, property management costs, payroll related expenses, utilities, food, and maintenance expenses), assisted living expenses, general and administrative (comprised of, but not limited to, costs for accounting, partnership administration, bad debt, data processing, investor relations, insurance and professional services), facilities rent, depreciation and amortization, property taxes, advertising and interest. Costs and expenses increased $585,000 for the three-month period ended March 31, 1998, compared with the corresponding period in 1997. The increase resulted primarily from the operations of Villa Las Posas which commenced operations in December 1997. LIQUIDITY AND CAPITAL RESOURCES The General Partners expect that the cash to be generated from operations of all the Partnership's properties will be adequate to pay operating expenses, make necessary capital improvements, make required principal reductions of debt and make quarterly distributions. On a long-term basis, the Partnership's liquidity is sustained primarily from cash flow provided by operating activities. During the three-month period ended March 31, 1998, cash provided by operating activities increased to $1.0 million compared to $535,000 for the corresponding period in 1997. During the three-month period ended March 31, 1998, the Partnership's net cash used in investing activities decreased to $426,000 compared to net cash used in investing activities of $947,000 for the corresponding period in 1997. The Partnership's investing activities consisted of capital improvements made on its operating properties and remaining construction expenditures related to Villa Las Posas. During the three-month period ended March 31, 1998, the Partnership's net cash provided by financing activities was $591,000 compared to net cash provided by financing activities of $592,000 for the corresponding period in 1997. The Partnership's financing activities consisted of borrowings from its construction loan and principal reduction on its notes payable to banks and others. The General Partners are not aware of any trends, other than national economic conditions which have had, or which may be reasonably expected to have, a material favorable or unfavorable impact on the revenues or income from the operations or sale of properties. The General Partners believe that if the inflation rate increases they will be able to pass the subsequent increase in operating expenses onto the residents of the facilities by way of higher rental and assisted living rates. On March 12, 1997, ARVP III obtained a $7.7 construction loan from Bank United of Texas for financing the construction of the Villa Las Posas. The terms of the construction loan provide for the interest rate to be equal to 30 day LIBOR rate plus 2.75 percent. As of March 31, 1998, the Partnership had $6.0 million outstanding under this construction loan. In addition, the Partnership has long-term notes payable to banks and others of $15.6 million as of March 31, 1998. 7 The Partnership contemplates spending approximately $800,000 for capital expenditures during 1998 for physical improvements at its communities, which are expected to be available from operations. There are no known material trends, favorable or unfavorable, in the Partnership's capital resources, and there is no expected change in the mix of such resources. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibit 27 - Financial Data Schedule B. None 8 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. AMERICAN RETIREMENT VILLAS PROPERTIES III A CALIFORNIA LIMITED PARTNERSHIP By: ARV Assisted Living, Inc. a Delaware Corporation (Managing General Partner) By: /s/ Howard G. Phanstiel ----------------------------- Howard G. Phanstiel Chief Executive Officer and Chairman the Board Date: May 15, 1998 By: /s/ Graham P. Espley-Jones ----------------------------- Graham P. Espley-Jones Chief Financial Officer Date: May 15, 1998 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 2,259 0 0 0 0 0 34,455 4,795 32,380 0 0 0 0 0 8,258 32,380 0 2,191 0 1,653 0 0 474 64 0 64 0 0 0 64 3.40 3.40
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