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 September 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]
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 nine month period ended September 30, 2000 are not necessarily indicative of the results to be expected for the full year.
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
| September 30, | December 31, | |||||||||
| 2000 | 1999 | |||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash | $ | 1,468,742 | $ | 1,265,796 | ||||||
| Accounts receivable | 266,250 | 155,355 | ||||||||
| Food and beverage inventories | 20,213 | 14,986 | ||||||||
| Prepaid expenses | 51,584 | 84,719 | ||||||||
| Total current assets | 1,806,789 | 1,520,856 | ||||||||
| LAND, PROPERTY AND EQUIPMENT — at cost: | ||||||||||
| Building and improvements | 5,927,577 | 5,927,577 | ||||||||
| Hotel furnishings and equipment | 1,875,647 | 1,860,239 | ||||||||
| Restaurant furnishings and equipment | 60,886 | 58,638 | ||||||||
| Less accumulated depreciation | (4,866,597 | ) | (4,596,597 | ) | ||||||
| 2,997,513 | 3,249,857 | |||||||||
| Land | 700,000 | 700,000 | ||||||||
| Construction in progress | 537,533 | 74,273 | ||||||||
| Land, property and equipment — net | 4,235,046 | 4,024,130 | ||||||||
| OTHER ASSETS: | ||||||||||
| Liquor license | 40,000 | 40,000 | ||||||||
| Loan commitment fees — net | 181,677 | 199,254 | ||||||||
| Escrow impound accounts | 207,932 | 232,306 | ||||||||
| Total other assets | 429,609 | 471,560 | ||||||||
| TOTAL | $ | 6,471,444 | $ | 6,016,546 | ||||||
| LIABILITIES AND PARTNERS’ DEFICIT | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Accounts payable — trade | $ | 89,422 | $ | 53,637 | ||||||
| Accounts payable — related parties | 35,925 | 29,868 | ||||||||
| Accrued incentive management fees — related parties | 207,413 | 170,219 | ||||||||
| Accrued salaries and wages | 91,789 | 76,453 | ||||||||
| Accrued room tax | 157,612 | 32,961 | ||||||||
| Accrued other | 30,167 | 8,117 | ||||||||
| Advance deposits | — | 308,276 | ||||||||
| Distributions payable | 112,500 | 67,500 | ||||||||
| Current portion of long-term debt | 114,173 | 107,786 | ||||||||
| Total current liabilities | 839,001 | 854,817 | ||||||||
| LONG-TERM DEBT | 6,658,834 | 6,745,280 | ||||||||
| Total liabilities | 7,497,835 | 7,600,097 | ||||||||
| PARTNERS’ DEFICIT: | ||||||||||
| General Partner (45 units issued and outstanding) | (223,769 | ) | (229,341 | ) | ||||||
| Limited Partners (4,455 units issued and outstanding) | (802,622 | ) | (1,354,210 | ) | ||||||
| Total Partners’ deficit | (1,026,391 | ) | (1,583,551 | ) | ||||||
| TOTAL | $ | 6,471,444 | $ | 6,016,546 | ||||||
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2000 | 1999 | 2000 | 1999 | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Room | $ | 1,568,025 | $ | 1,443,984 | $ | 3,533,784 | $ | 3,126,867 | ||||||||||
| Food and beverage | 195,292 | 199,949 | 537,036 | 573,195 | ||||||||||||||
| Lease | 24,885 | 23,300 | 73,588 | 70,887 | ||||||||||||||
| Telephone | 13,430 | 15,184 | 35,218 | 42,754 | ||||||||||||||
| Other | 17,344 | 14,365 | 50,930 | 42,414 | ||||||||||||||
| Total | 1,818,976 | 1,696,782 | 4,230,556 | 3,856,117 | ||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||
| Rooms | 327,498 | 322,330 | 851,320 | 841,084 | ||||||||||||||
| Food and beverage | 169,159 | 159,249 | 485,249 | 470,651 | ||||||||||||||
| Interest | 130,731 | 132,739 | 393,732 | 399,647 | ||||||||||||||
| Management fees | 175,074 | 161,356 | 373,644 | 316,510 | ||||||||||||||
| Depreciation and amortization | 95,859 | 94,902 | 287,577 | 284,705 | ||||||||||||||
| Administrative and general | 131,910 | 123,154 | 313,406 | 313,830 | ||||||||||||||
| Marketing | 83,879 | 93,700 | 231,356 | 268,733 | ||||||||||||||
| Repairs and maintenance | 68,457 | 64,646 | 205,702 | 192,286 | ||||||||||||||
| Energy cost | 51,012 | 45,272 | 134,547 | 141,838 | ||||||||||||||
| Partnership administration and professional fees | 4,611 | 3,397 | 43,235 | 48,626 | ||||||||||||||
| Property taxes | 23,731 | 21,068 | 60,979 | 53,827 | ||||||||||||||
| Insurance | 12,018 | 7,809 | 30,748 | 23,427 | ||||||||||||||
| Telephone | 4,787 | 5,002 | 14,401 | 15,180 | ||||||||||||||
| Total (including reimbursed costs and payments for services to related parties of $278,499 and $226,791 and $743,642 and $574,912 for the three and nine months ended September 30, 2000 and 1999, respectively) | 1,278,726 | 1,234,624 | 3,425,896 | 3,370,344 | ||||||||||||||
| NET INCOME | $ | 540,250 | $ | 462,158 | $ | 804,660 | $ | 485,773 | ||||||||||
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2000 | 1999 | 2000 | 1999 | |||||||||||||||||
| ALLOCATION OF NET INCOME: | ||||||||||||||||||||
| General Partner | $ | 5,402 | $ | 4,622 | $ | 8,047 | $ | 4,858 | ||||||||||||
| Limited Partners (4,455 Limited Partnership units outstanding) | 534,848 | 457,536 | 796,613 | 480,915 | ||||||||||||||||
| Total | $ | 540,250 | $ | 462,158 | $ | 804,660 | $ | 485,773 | ||||||||||||
| DISTRIBUTION TO PARTNERS: | $ | 112,500 | $ | 67,500 | $ | 247,500 | $ | 202,500 | ||||||||||||
| PER UNIT INFORMATION | ||||||||||||||||||||
| (based upon 4,500 total units outstanding): | ||||||||||||||||||||
| Net Income | $ | 120.06 | $ | 102.70 | $ | 178.81 | $ | 107.95 | ||||||||||||
| Distribution | $ | 25.00 | $ | 15.00 | $ | 55.00 | $ | 45.00 | ||||||||||||
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
| 2000 | 1999 | ||||||||||
| OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 804,660 | $ | 485,773 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 287,577 | 284,705 | |||||||||
| Change in assets and liabilities: | |||||||||||
| Accounts receivable | (110,895 | ) | (151,829 | ) | |||||||
| Food and beverage inventories | (5,227 | ) | 1,787 | ||||||||
| Prepaid expenses | 33,135 | 10,067 | |||||||||
| Account payable and accrued expenses | (67,203 | ) | 467,336 | ||||||||
| Net cash provided by operating activities | 942,047 | 1,097,839 | |||||||||
| INVESTING ACTIVITIES: | |||||||||||
| Acquisition of property and equipment | (480,916 | ) | (338,683 | ) | |||||||
| FINANCING ACTIVITIES: | |||||||||||
| Payment of long-term debt | (80,059 | ) | (74,144 | ) | |||||||
| Distributions paid to Partners | (202,500 | ) | (202,500 | ) | |||||||
| Impound escrow accounts | 24,374 | (48,475 | ) | ||||||||
| Net cash used in financing activities | (258,185 | ) | (325,119 | ) | |||||||
| NET INCREASE IN CASH | 202,946 | 434,037 | |||||||||
| CASH AT BEGINNING OF PERIOD | 1,265,796 | 1,077,900 | |||||||||
| CASH AT END OF PERIOD | $ | 1,468,742 | $ | 1,511,937 | |||||||
| SUPPLEMENTAL DISCLOSURE OF | |||||||||||
| CASH FLOW INFORMATION - | |||||||||||
| Cash paid during the period for interest | $ | 393,732 | $ | 399,647 | |||||||
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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 Nine Months Ended September 30, 2000 and 1999
For the three and nine months ended September 30, 2000 as compared to the same period of the prior year, occupancy rates at the Registrant’s hotel were 79% and 64% versus 82% and 70% and average room rates were $130.76 and $121.46 versus $115.68 and $99.24, resulting in an increase in room revenue totaling $124,041 and $406,917 for the three and nine months ended September 30, 2000 as compared to the comparable period in 1999, respectively. The increase in room rates for the three and nine months ended September 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 $4,657 and $36,159 for the three and nine months ended September 30, 2000 as compared to 1999, respectively. Occupancy decreased 3% and 6% for the three and nine months ended September 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 $1,278,726 and $3,425,896 for the three and nine months ended September 30, 2000 as compared to $1,234,624 and $3,370,344 for the three and nine months ended September 30, 1999. Management fees increased $13,718 and $57,134 for the three and nine months ended September 30, 2000 as compared to 1999 due to increased revenues and net income on which management fees are calculated. Operating expenses in total, for the three and nine months ended September 30, 2000 and 1999 were approximately equal, due to the minimal change in occupancy of the hotel.
Net income increased $78,092 and $318,887 to $540,250 and $804,660 for the three and nine months ended September 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 operating 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 nine months ended September 30, 2000, the Registrant generated $942,047 in
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net cash flow provided by operating activities. Reductions in long-term debt totaled $80,059 and impound escrow accounts decreased $24,374 during the first nine months of 2000.
Acquisition of property and equipment during the nine months ended September 30, 2000 totaled $480,916. It is estimated that approximately $300,000 more will be expended in the remainder of calendar 2000 for ongoing renovations of existing assets.
Distributions totaling $247,500 were declared during the nine month period ended September 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: November 13, 2000
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EXHIBIT INDEX
| Sequentially | |||||||
| Exhibit | Numbered | ||||||
| Number | Description | Page | |||||
| 27 | Financial Data Schedule | ||||||
