Casa Munras Hotel Partners L P 10QSB 2001 Q1 Quarterly report (small business)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[X]	Quarterly report under Section 13 of 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2001
[   ]	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	95-3235634
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8885 Rio San Diego Drive, Suite 220, San Diego, California 92108
(Address of principal executive offices)

(610) 297-4040
(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
	BALANCE SHEETS
	STATEMENT OF OPERATIONS
	STATEMENT OF CHANGES IN PARTNERS' DEFICIT
	STATEMENTS OF CASH FLOWS
	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

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, 2000 and should be read in connection therewith. The results of operations for the three-month period ended March 31, 2001 are not necessarily indicative of the results to be expected for the full year.

CASA MUNRAS HOTEL PARTNERS, L.P.
(A Limited Partnership)

BALANCE SHEETS

			March 31,			December 31,
			2001			2000
			(Unaudited)
ASSETS
CURRENT ASSETS:
	Cash		$	1,024,080		$	1,298,650
	Accounts receivable			45,622			144,876
	Food and beverage inventories			17,821			17,009
	Prepaid expenses			100,293			45,263
		Total current assets		1,187,816			1,505,798
LAND, PROPERTY AND EQUIPMENT — at cost:
	Building and improvements			6,132,807			6,132,807
	Hotel furnishings and equipment			2,078,899			2,075,869
	Restaurant furnishings and equipment			89,432			89,432
	Less accumulated depreciation			(5,087,872	)		(4,992,772	)
				3,213,266			3,305,336
	Land			700,000			700,000
	Construction in progress			74,167
		Land, property and equipment — net		3,987,433			4,005,336
OTHER ASSETS:
	Liquor license			40,000			40,000
	Loan commitment fees — net			169,959			175,818
	Escrow impound accounts			296,002			236,775
		Total other assets		505,961			452,593
		TOTAL	$	5,681,210		$	5,963,727
LIABILITIES AND PARTNERS’ DEFICIT
CURRENT LIABILITIES:
	Accounts payable — trade		$	68,424		$	55,370
	Accounts payable — related parties			102,693			41,599
	Accrued incentive management fees — related parties			128,834			212,487
	Accrued salaries and wages			53,175			82,144
	Accrued room tax			30,979			46,356
	Accrued other			21,657			14,161
	Distributions payable			67,500			67,500
	Current portion of long-term debt			118,640			116,385
		Total current liabilities		591,902			636,002
LONG-TERM DEBT				6,598,376			6,628,895
		Total liabilities		7,190,278			7,264,897
PARTNERS’ DEFICIT:
	General Partner (45 units issued and outstanding)			(228,596	)		(226,517	)
	Limited Partners (4,455 units issued and outstanding)			(1,280,472	)		(1,074,653	)
		Total partners’ deficit		(1,509,068	)		(1,301,170	)
		TOTAL	$	5,681,210		$	5,963,727

2

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

STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)

			2001			2000
REVENUES:
	Room		$	696,289		$	631,333
	Food and beverage			162,914			142,557
	Lease			25,519			24,096
	Telephone			8,347			9,037
	Other			18,726			17,867
		Total		911,795			824,890
OPERATING EXPENSES:
	Rooms			232,055			227,800
	Food and beverage			143,041			143,388
	Interest			129,666			131,754
	Administrative and general			112,740			86,149
	Depreciation and amortization			100,959			95,859
	Energy cost			75,516			45,203
	Marketing			65,766			70,387
	Repairs and maintenance			64,529			66,533
	Management fees			51,924			46,166
	Partnership administration and professional fees			33,273			24,064
	Insurance			19,956			8,838
	Property taxes			18,856			18,720
	Telephone			3,912			4,207
		Total (including reimbursed costs and payments for services to related parties of $284,186 and $197,014 for the three months ended March 31, 2001 and 2000, respectively)		1,052,193			969,068
NET LOSS			$	(140,398	)	$	(144,178	)

3

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

STATEMENT OF CHANGES IN PARTNERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)

				2001			2000
ALLOCATION OF NET LOSS:
	General Partner (45 units outstanding)				(1,404	)		(1,442	)
	Limited Partners (4,455 units outstanding)				(138,994	)		(142,736	)
			Total	$	(140,398	)	$	(144,178	)
DISTRIBUTION TO PARTNERS				$	67,500		$	67,500
PER UNIT INFORMATION:
	(based upon 4,500 total units outstanding):
		Net loss		$	(31.20	)	$	(32.04	)
		Distribution		$	15.00		$	15.00

4

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

STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)

				2001			2000
OPERATING ACTIVITIES:
	Net loss			$	(140,398	)	$	(144,178	)
	Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
		Depreciation and amortization			100,959			95,859
		Change in assets and liabilities:
			Accounts receivable		99,254			126,521
			Food and beverage inventories		(812	)		(1,624	)
			Prepaid expenses		(55,030	)		29,175
			Accounts payable and accrued expenses		(46,355	)		111,430
			Net cash (used in) provided by operating activities		(42,382	)		217,183
INVESTING ACTIVITIES:
	Acquisition of property and equipment				(77,197	)		(290,125	)
FINANCING ACTIVITIES:
	Payment of long-term debt				(28,264	)		(26,176	)
	Distributions paid to Partners				(67,500	)		(67,500	)
	Impound escrow accounts				(59,227	)		(58,882	)
			Net cash used in financing activities		(154,991	)		(152,558	)
NET DECREASE IN CASH					(274,570	)		(225,500	)
CASH AT BEGINNING OF PERIOD					1,298,650			1,265,796
CASH AT END OF PERIOD				$	1,024,080		$	1,040,296
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION -
	Cash paid during the period for interest			$	129,666		$	131,754

5

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

Results of Operations for the Three Months Ended March 31, 2001 and 2000

      For the three months ended March 31, 2001 as compared to the same period of the prior year, occupancy rates at the Registrant’s hotel were 43% versus 44% and average room rates were $107.83 versus $94.34, resulting in an increase in room revenue totaling $64,956 for the three months ended March 31, 2001 as compared to the comparable period in 2000. Food and beverage revenues increased $20,357 for the three months ended March 31, 2001 as compared to the first quarter of 2000. The increase in room rates reflects management’s decision to aggressively pursue room rate increases due to substantial renovations completed at the Registrant’s hotel over the past several years. The reason for increased food and beverage revenues in the first quarter 2001 as compared to the similar quarter in 2000 is primarily due to changes in the menu and increases in menu prices.

      Operating expenses totaled $1,052,193 and $969,068 for the three months ended March 31, 2001 and 2000, respectively. The principal reasons for the increase in operating expenses in 2001 as compared to 2000 are increased energy costs due to the California and national energy shortages and increased administrative expenses due to salary increases for management personnel.

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 three months ended March 31, 2001, the Registrant used $42,382 in net cash flow for operating activities. Reductions in long-term debt totaled $28,264 and impound escrow accounts increased $59,227 during the first quarter of 2001.

      Acquisition of property and equipment during the three months ended March 31, 2001 totaled $77,197. It is estimated that approximately $500,000 more will be expended in the remainder of calendar 2001 for ongoing renovations of existing assets.

      Distributions totaling $67,500 were accrued in the first quarter and paid in the second quarter of 2001 and distributions totaling $67,500 were accrued in the fourth quarter 2000 and paid in the first quarter 2001.

      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.

6

PART II — OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits:

                  None

      (b) Reports on Form 8-K:

                  None

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: May 15, 2001