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FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1998
Commission File Number: 2-67456
SUPER 8 MOTELS NORTHWEST I
Washington 91-1101310
PART 1
Financial Information
Item 1. Financial Statements
See attached unaudited September 30, 1998 Financial Statements and the
partnership's balance sheet for the year ended December 31, 1997. The Statement
of Cash Flows is omitted from the attachment and is presented as follows:
PERIOD ENDED
SEPT. 30, SEPT. 30,
------------ ------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Revenues and other income received in cash $ 1,052,563 $ 1,027,698
Operating expenses paid in cash (629,752) (850,308)
Interest paid (31,576) (31,694)
------------ ------------
Net cash provided by operating activities 391,235 145,696
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (6,491) (270)
------------ ------------
Net cash (used) by investing
activities (6,491) (270)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long term debt (12,250) (10,220)
Proceeds from issuance 196,255 --
Distributions to partners (264,706) (151,518)
------------ ------------
Net cash used by financing activities (80,701) (161,738)
------------ ------------
NET DECREASE IN CASH AND CASH
EQUIVALENTS 304,043 (16,312)
CASH AND CASH EQUIVALENTS, beginning of period 334,941 538,985
============ ============
CASH AND CASH EQUIVALENTS, end of period $ 638,984 $ 522,673
============ ============
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PERIOD ENDED
SEPT. 30, SEPT. 30,
------------ ------------
1998 1997
------------ ------------
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Net income $ 438,941 $ 476,449
------------ ------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 21,996 21,813
Change in assets and liabilities
Accounts receivable (628) (18,827)
Prepaid expenses (3,324) (2,189)
Deposits -- (6,880)
Accounts payable (101,055) 4,298
Accrued management fees -- (355,348)
Accrued expenses 35,305 26,380
------------ ------------
(47,706) (330,753)
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ 391,235 $ 145,696
============ ============
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
See attached Third Quarter 9/30/98 Update from the Issuer delivered to its
limited partners.
PART 2
Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Pursuant to correspondence from the Securities and Exchange
Commission, the partnership's management is currently working
with legal counsel to file delinquent Forms 3, 4 and 5.
Item 6. Exhibits and Reports on Form 8-K.
None.
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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.
SUPER 8 MOTELS NORTHWEST I
a Washington limited partnership
By: _______________________________________
Gerald L. Whitcomb, General Partner
Dated: November 16, 1998
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Super 8 Motel Update
VOL. 18 NO. 3/OCTOBER 31, 1998 SUPER 8 MOTELS NORTHWEST I THIRD QUARTER 1998
NATIONAL NEWS
SUPER 8 MOTELS SET RECORD
Continuing its path of record growth, Super 8 Motels, Inc., posted a new
record for the chain--opening 51 motels in the second quarter of 1998. Super 8
has opened 88 motels since January, 1998. Of the motels opened this year, 55%
are new construction. Super 8 Motels now has more than 1,700 properties in North
America.
PROJECT POWER UP UPDATE
Project Power Up, Super 8's front-desk computerization program, is continuing
installation of its hardware and software in all Super 8 Motels. As of August,
1998, 35 properties are now up and running. Managers of properties that have had
Project Power Up installed are reporting that they are experiencing faster front
desk and back-of-house operations, leaving them more time to bring in new
business.
Peninsula has had Project Power Up installed at its Lacey property and
soon-to-open Roseburg, Oregon motel. Overall, the Lacey manager has been pleased
with the system-once the "bugs" were worked out. She reports it takes less time
to handle the paperwork allowing her more time to greet guests, perform sales
calls, and "run the property."
REGIONAL NEWS
ROSEBURG SUPER 8 MOTEL
The new Roseburg Super 8 Motel is due to open its doors to the public on
Thursday, November 12, 1998. The grand opening will be held on Monday, November
16, 1998, from 4:00 p. m. to 6:00 p.m. Please feel free to join in the
celebrations if you are in the area. The 88-room Roseburg Super 8 will feature
an indoor pool and spa, handicap rooms, elevator, truck parking, and continental
breakfast.
BEAUTIFICATION AWARD
The Ferndale, Washington, Super 8 Motel has won the national 1998 Super 8
Motels Beautification Award for outstanding curb appeal. The Ferndale Super 8
will be featured on the cover of StrEIGHT Talk, Super 8 Motels' industry
newsletter, and on the Super 8 web site, and will receive a plaque to hang in
its lobby for winning this distinctive award.
SUPER 8 MOTELS NORTHWEST I
When reviewing the enclosed unaudited financial statements for Super 8 Motels
Northwest 1, you will note that operational results for the first nine months of
1998 for the partnership show total sales remain ahead of the same period of
1997 by about $83,000. However, about $240,000 was spent for renovations and
expensed during 1998, resulting in net income being down approximately $212,000
compared to the same period in 1997. Nevertheless, the partnership maintains its
strong cash position.
As reflected in the occupancy charts and average daily rate comparisons,
Federal Way Super 8 had an overall increase of about three occupancy points,
while its average daily rate decreased by $.26 when compared to the same quarter
of 1997. Year to date, Federal Way is about even with 1997 in occupancy, while
total revenues are up by about $12,000 for the year. Extensive renovations to
the interior of the Federal Way motel were completed during the third quarter.
Forty-five rooms were completely renovated with new paint, carpets, drapes and
furnishings. The hallways were redone and an extensive redecoration of the front
office and lobby will be completed. A lounge and continental breakfast area was
added. The exterior of the building was powerwashed and the parking lot resealed
and re-striped.
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At the SeaTac Super 8 Motel, 1998 third quarter occupancy trailed 1997 by 1.7
occupancy points, while average daily rate increased by $.71. Year-to-date
revenues are up about $ 71,000 over 1997.
Your third quarter distribution is in the amount of $37.50 per partnership
unit. This brings total distribution for the first three quarters of 1998 to
$112.50 per partnership unit, This represents a 15% annualized return on your
original partnership investment. Pre-audit of the partnership books commences in
November in order to meet our target of February 28, 1999, for the mailing of
your partnership tax information.
During the second quarter 1998, the general partner engaged an investment
banking firm for the purpose of marketing The Peninsula Group, its affiliates
and subsidiaries, including the assets of Super 8 Motels Northwest 1. These
efforts have been terminated at this time. However, the general partners are
exploring alternate avenues to create liquidity for your investment.
Again, it should be noted that there continue to be offers made by various
liquidity funds to purchase units at what appear to be discounted values. While
there can be no assurance as to the actual value which may be realized upon sale
of the assets and/or liquidation of the partnership, each investor should take
note of the efforts being made by the general partner to create liquidity and to
gain maximum value for all investors. If you find a need to dispose of your
units, you are urged to call your NASD registered securities representative or
the investor relations department at the offices of The Peninsula Group so that
you may be assisted in disposing of your units.
Thank you for your continued support of Super 8 Motels Northwest I and
remember-if you plan on traveling over the upcoming holiday season--THINK SUPER
8 and call 1-800-800-8000 for reservations at over l,700 Super 8 Motels
throughout the U. S. and Canada.
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SUPER 8 NORTHWEST I
BALANCE SHEET
SEPTEMBER 30, 1998 AND 1997
(Unaudited)
ASSETS
1998 1997
------------ ------------
CURRENT ASSETS
Cash $ 638,984 $ 522,673
Accounts receivable 17,768 37,457
Inventory 43,931 42,093
Prepaid expenses 9,325 10,038
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TOTAL CURRENT ASSETS 710,008 612,261
PROPERTY AND EQUIPMENT
Land 2,036,057 2,027,074
Land improvements 81,410 79,671
Buildings 2,836,155 2,836,155
Equipment, furniture and fixtures 1,032,110 1,021,107
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Subtotal 5,985,732 5,964,007
Less accumulated depreciation (2,167,415) (2,084,480)
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TOTAL PROPERTY AND EQUIPMENT, NET 3,818,317 3,879,527
OTHER ASSETS
Franchise fees 30,000 30,000
Appraisal fees and loan fees 15,000 15,000
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Subtotal 45,000 45,000
Less accumulated amortization (33,375) (28,875)
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Subtotal 11,625 16,125
Deposits 3,100 45,121
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TOTAL OTHER ASSETS 14,725 61,246
TOTAL ASSETS $ 4,543,050 $ 4,553,034
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LIABILITIES AND PARTNERS' CAPITAL EQUITY
1998 1997
------------ ------------
CURRENT LIABILITIES
Accounts payable - trade $ 49,270 $ 80,304
Accounts payable - affiliates 30,412 47,789
Accrued expenses 95,686 109,109
Current portion of long-term debt 127,919 46,489
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TOTAL CURRENT LIABILITIES 303,287 283,691
NONCURRENT LIABILITIES
Long-term debt, net of current portion shown above 1,306,202 1,296,066
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TOTAL NONCURRENT LIABILITIES 1,306,202 1,296,066
PARTNERS' CAPITAL EQUITY
General partner 457,929 463,886
Limited partners 2,475,632 2,509,391
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TOTAL PARTNERS' CAPITAL EQUITY 2,933,561 2,973,277
------------ ------------
$ 4,543,050 $ 4,553,034
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SUPER 8 NORTHWEST I
STATEMENT OF INCOME
FOR THE QUARTER ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
------------ ------------
SALES
Rooms 1,017,831 $ 1,004,160
Other 29,382 31,133
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TOTAL SALES 1,047,213 1,035,293
DIRECT OPERATING EXPENSES
Payroll and related expenses 170,211 170,815
Supplies and maintenance 90,459 35,821
Utilities 47,713 44,700
Other 12,513 8,501
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TOTAL DIRECT OPERATING EXPENSES 320,896 259,837
INDIRECT OPERATING EXPENSES
Advertising and promotion 22,590 21,709
Bank and credit card charges 17,597 16,430
Insurance 6,610 6,557
Property and business taxes 33,768 34,861
Other 4,237 7,621
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TOTAL INDIRECT OPERATING EXPENSES 84,802 87,178
ADMINISTRATIVE AND GENERAL EXPENSES
Administrative service fees 36,210 40,196
Franchise fees 40,713 40,166
Property management fees 52,358 51,765
Professional services 8,304 8,421
Other 7,317 18,927
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TOTAL ADMINISTRATIVE AND GENERAL
EXPENSES 144,902 159,475
FIXED CHARGES
Amortization 1,125 1,125
Depreciation 20,870 20,688
Interest 31,576 31,694
Lease expense 10,079 10,079
------------ ------------
TOTAL FIXED CHARGES 63,650 63,586
------------ ------------
INCOME FROM OPERATIONS 432,963 465,217
OTHER INCOME
Interest income 3,378 4,682
Rental income 2,600 6,550
------------ ------------
TOTAL OTHER INCOME 5,978 11,232
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NET INCOME (LOSS) 438,941 $ 476,449
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SUPER 8 NORTHWEST I
BALANCE SHEET
ASSETS
DECEMBER 31,
-----------------------------
1997 1996
----------- -----------
CURRENT ASSETS
Cash $ 463,238 $ 544,684
Accounts receivable, trade 10,623 21,518
Accounts receivable, affiliates 5,932 --
Inventory 43,931 42,093
Prepaid expenses 5,157 7,212
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Total current assets 528,881 615,507
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PROPERTY AND EQUIPMENT, at cost
Land 2,036,056 2,053,409
Land improvements 79,671 79,671
Buildings 2,836,155 2,836,155
Equipment, furniture and fixtures 1,021,108 1,021,108
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5,972,990 5,990,343
Less accumulated depreciation (2,105,168) (2,022,417)
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Total property and equipment 3,867,822 3,967,926
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OTHER ASSETS
Loan fees 15,000 15,000
Franchise fees 30,000 30,000
----------- -----------
45,000 45,000
Less accumulated amortization (30,000) (25,500)
----------- -----------
15,000 19,500
Deposits 38,093 34,343
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Total other assets 53,093 53,843
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$ 4,449,796 $ 4,637,276
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SUPER 8 NORTHWEST I
BALANCE SHEET
LIABILITIES AND PARTNERS' EQUITY
DECEMBER 31,
--------------------------
1997 1996
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CURRENT LIABILITIES
Accounts payable, trade $ 34,373 $ 37,503
Accounts payable, affiliates 36,432 29,609
Accounts payable, partners 88,221 88,307
Current portion of long-term debt 49,000 46,000
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Total current liabilities 208,026 201,419
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LONG-TERM DEBT, net of current portion
shown above 1,284,675 1,331,791
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ACCRUED PROPERTY MANAGEMENT FEES -- 605,348
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COMMITMENTS (Notes 7 and 9)
PARTNERS' EQUITY
General partner's equity 461,460 329,065
Limited partners' equity (authorized, issued and
outstanding 6,000 units) 2,495,635 2,169,653
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2,957,095 2,498,718
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$4,449,796 $4,637,276
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