Casa Munras Hotel Partners L P 10QSB 2000 Q2 Quarterly report (small business)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[X]       Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2000

[  ]       Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from ________ to ________

Commission file number 0-8901

CASA MUNRAS HOTEL PARTNERS, L.P.
(Exact name of small business issuer as specified in its charter)

California
(State or other jurisdiction of
incorporation or organization) 95-3235634
(I.R.S. Employer
Identification No.)

5525 Oakdale Avenue, Suite 300, Woodland Hills, California 91364
(Address of principal executive offices)

(818) 888-6500
(Issuer’s telephone number, including Area Code)

      Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [  ]

Transitional Small Business Disclosure Format:  Yes  [  ]  No  [X]

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
PART II — OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT INDEX
Financial Data Schedule

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

      The accompanying unaudited financial statements of Casa Munras Hotel Partners, L.P. have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB. Accordingly, these statements 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 General Partner of the Registrant, all adjustments necessary for a fair presentation have been included. The financial statements presented herein have been prepared in accordance with the accounting policies described in the Registrant’s Annual Report on Form 10-KSB for the year ended December 31, 1999 and should be read in connection therewith. The results of operations for the three and six month period ended June 30, 2000 are not necessarily indicative of the results to be expected for the full year.

1

CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

BALANCE SHEETS

			June 30,			December 31,
			2000			1999
			(Unaudited)
ASSETS
CURRENT ASSETS:
	Cash		$	980,361		$	1,265,796
	Accounts receivable			112,367			155,355
	Food and beverage inventories			19,268			14,986
	Prepaid expenses			30,639			84,719
		Total current assets		1,142,635			1,520,856
LAND, PROPERTY AND EQUIPMENT — at cost:
	Building and improvements			5,927,577			5,927,577
	Hotel furnishings and equipment			1,864,179			1,860,239
	Restaurant furnishings and equipment			60,395			58,638
	Less accumulated depreciation			(4,776,597	)		(4,596,597	)
				3,075,554			3,249,857
	Land			700,000			700,000
	Construction in progress			452,098			74,273
		Land, property and equipment — net		4,227,652			4,024,130
OTHER ASSETS:
	Liquor license			40,000			40,000
	Loan commitment fees — net			187,536			199,254
	Escrow impound accounts			194,239			232,306
		Total other assets		421,775			471,560
		TOTAL	$	5,792,062		$	6,016,546
LIABILITIES AND PARTNERS’ DEFICIT
CURRENT LIABILITIES:
	Accounts payable — trade		$	56,305		$	53,637
	Accounts payable — related parties			43,368			29,868
	Accrued incentive management fees — related parties			104,013			170,219
	Accrued salaries and wages			63,219			76,453
	Accrued room tax			98,192			32,961
	Accrued other			13,399			8,117
	Advance deposits			—			308,276
	Distributions payable			67,500			67,500
	Current portion of long-term debt			112,003			107,786
		Total current liabilities		557,999			854,817
LONG-TERM DEBT				6,688,204			6,745,280
		Total liabilities		7,246,203			7,600,097
PARTNERS’ DEFICIT:
	General Partner (45 units issued and outstanding)			(228,047	)		(229,341	)
	Limited Partners (4,455 units issued and outstanding)			(1,226,094	)		(1,354,210	)
		Total Partners’ deficit		(1,454,141	)		(1,583,551	)
		TOTAL	$	5,792,062		$	6,016,546

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)

			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2000		1999		2000		1999
REVENUES:
	Room		$	1,334,426	$	993,626	$	1,965,759	$	1,682,883
	Food and beverage			199,187		211,615		341,744		373,246
	Lease			24,607		23,729		48,703		47,587
	Telephone			12,751		14,377		21,788		27,570
	Other			15,719		13,703		33,586		28,049
		Total		1,586,690		1,257,050		2,411,580		2,159,335
OPERATING EXPENSES:
	Rooms			296,022		287,743		523,822		518,754
	Food and beverage			172,702		163,756		316,090		311,402
	Interest			131,247		133,220		263,001		266,908
	Management fees			152,404		99,692		198,570		155,154
	Depreciation and amortization			95,859		94,902		191,718		189,803
	Administrative and general			95,347		98,466		181,496		190,676
	Marketing			77,090		95,597		147,477		175,033
	Repairs and maintenance			70,712		65,900		137,245		127,640
	Energy cost			38,332		43,514		83,535		96,566
	Partnership administration and professional fees			14,560		14,415		38,624		45,229
	Property taxes			18,528		16,990		37,248		32,759
	Insurance			9,892		7,809		18,730		15,618
	Telephone			5,407		5,417		9,614		10,178
		Total (including reimbursed costs and payments for services to related parties of $268,129 and $130,761 and $465,143 and $348,122 for the three and six months ended June 30, 2000 and 1999, respectively)		1,178,102		1,127,421		2,147,170		2,135,720
NET INCOME			$	408,588	$	129,629	$	264,410	$	23,615

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CHANGES IN PARTNERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)

					Three Months Ended				Six Months Ended
					June 30,				June 30,
					2000		1999		2000		1999
ALLOCATION OF NET INCOME:
		General Partner			$	4,086	$	1,296	$	2,644	$	236
		Limited Partners (4,455 Limited Partnership units outstanding)				404,502		128,333		261,766		23,379
				Total	$	408,588	$	129,629	$	264,410	$	23,615
DISTRIBUTION TO PARTNERS:					$	67,500	$	135,000	$	135,000	$	135,000
PER UNIT INFORMATION
	(based upon 4,500 total units outstanding):
			Net Income		$	90.80	$	28.81	$	58.76	$	5.25
			Distribution		$	15.00	$	30.00	$	30.00	$	30.00

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)

				2000			1999
OPERATING ACTIVITIES:
	Net income			$	264,410		$	23,615
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			191,718			189,803
		Change in assets and liabilities:
			Accounts receivable		42,988			(101,063	)
			Food and beverage inventories		(4,282	)		2,641
			Prepaid expenses		54,080			4,908
			Account payable and accrued expenses		(301,035	)		242,348
			Net cash provided by operating activities		247,879			362,252
INVESTING ACTIVITIES:
	Acquisition of property and equipment				(383,522	)		(258,378	)
FINANCING ACTIVITIES:
	Payment of long-term debt				(52,859	)		(48,954	)
	Distributions paid to Partners				(135,000	)		(135,000	)
	Impound escrow accounts				38,067			(24,100	)
			Net cash used in financing activities		(149,792	)		(208,054	)
NET DECREASE IN CASH					(285,435	)		(104,180	)
CASH AT BEGINNING OF PERIOD					1,265,796			1,077,900
CASH AT END OF PERIOD				$	980,361		$	973,720
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION -
	Cash paid during the period for interest			$	263,001		$	266,908

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations for the Three and Six Months Ended June 30, 2000 and 1999

      For the three and six months ended June 30, 2000 as compared to the same period of the prior year, occupancy rates at the Registrant’s hotel were 69% and 57% versus 72% and 63% and average room rates were $128.19 and $114.94 versus $91.21 and $88.45, resulting in an increase in room revenue totaling $340,800 and $282,876 for the three and six months ended June 30, 2000 as compared to the comparable period in 1999, respectively. The increase in room rates for the three and six months ended June 30, 2000 as compared to the same period of the prior year reflects management’s decision to charge more for rooms as a result of the capital improvements program and a one time increase in room rates in June 2000 as a result of the United States Open Golf Tournament held at Pebble Beach on the Monterey Peninsula. Food and beverage revenues decreased $12,428 and $31,502 for the three and six months ended June 30, 2000 as compared to 1999, respectively. Occupancy decreased 3% and 7% for the three and six months ended June 30, 2000 as compared to 1999, respectively. The decrease in occupancy is attributed to reduced group business at the property in 2000 as compared to 1999. Food and beverage revenues have decreased in 2000 over the comparable 1999 period primarily due to decreased patrons in the restaurant which number of patrons is impacted by occupancy of the hotel.

      Operating expenses totaled $1,178,102 and $2,147,170 for the three and six months ended June 30, 2000 as compared to $1,127,421 and $2,135,720 for the three and six months ended June 30, 1999. Operating expenses for the three and six months ended June 30, 2000 and 1999 were approximately equal, due to the minimal change in occupancy of the hotel. Management fees increased $52,712 and $43,416 for the three and six months ended June 30, 2000 as compared to 1999 due to increased revenues and net income on which management fees are calculated.

      Net income increased $278,959 and $240,795 to $408,588 and $264,410 for the three and six months ended June 30, 2000 as compared to 1999, respectively. The increase in the net income is principally attributed to increased revenue due to increased room rates while expenses have remained approximately equal to the prior period.

Liquidity and Capital Resources

      The Registrant’s primary source of cash is revenues from the operation and leasing of the hotel facility. The Registrant’s primary uses of cash are to fund hotel operating expenses, payments on the first mortgage, renovations and to pay distributions to Partners.

      During the six months ended June 30, 2000, the Registrant generated $247,879 in net cash flow from operating activities. Reductions in long-term debt totaled $52,859 and impound

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escrow accounts decreased $38,067 during the first six months of 2000.

      Acquisition of property and equipment during the six months ended June 30, 2000 totaled $383,522. It is estimated that approximately $300,000 more will be expended in 2000 for ongoing renovations of existing assets.

      Distributions totaling $135,000 were paid during the six month period ended June 30, 2000.

      The General Partner intends, to the extent cash from operations is available and such distributions are permitted under the first mortgage payable, to continue making cash distributions to the Partners at amounts approximating the Registrant’s net income.

PART II — OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits:

27 Financial Data Schedule

      (b) Reports on Form 8-K:

None.

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SIGNATURE

      In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CASA MUNRAS HOTEL PARTNERS, L.P.

CASA MUNRAS GP, LLC
General Partner

By /s/ JOHN F. ROTHMAN
    John F. Rothman, Managing Member

Dated: August 10, 2000

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EXHIBIT INDEX

Exhibit
Number	Description
27	Financial Data Schedule