UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File Number 0-25430
RIDGEWOOD ELECTRIC POWER TRUST IV
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3324608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (201)
447-9000
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 [ ]
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1998 1997
(unaudited)
Assets
Cash and cash
equivalents $ 8,858,191 $ 11,086,281
Accounts receivable,
trade 1,105,278 657,217
Due from affiliates 261,735 164,536
Other assets 429,463 383,810
Total current
assets 10,654,667 12,291,844
Investments:
Investment in Maine
Hydro projects 7,021,356 6,694,826
Investment in Maine
Biomass projects 6,600,005 6,617,862
Electric power
equipment held
for resale 455,182 455,182
Deferred due
diligence costs 50,506 27,159
Plant and
equipment: 15,417,294 14,949,735
Less-accumulated
depreciation (1,173,549) (1,068,812)
Electric power
sales contract 8,338,040 8,338,040
Less-accumulated
amortization (1,083,981) (946,212)
Debt reserve fund 605,198 605,199
Total assets $ 46,884,718 $ 47,964,823
Liabilities and
Shareholders'
Equity
Current maturities
of long-term debt $ 605,620 $ 592,193
Accounts payable
and accrued
expenses 318,911 384,533
Due to affiliates 589,298 658,253
Total current
liabilities 1,513,829 1,634,979
Long-term debt,
less current
portion 4,691,858 4,848,067
Minority interest in
the Providence
Project 6,433,909 6,458,416
Commitments and
contigencies
Shareholders' equity:
Shareholders' equity
(746.8 shares issued
and outstanding) 34,307,738 35,078,194
Managing shareholder's
accumulated deficit (62,616) (54,833)
Total shareholders'
equity 34,245,122 35,023,361
Total liabilities
and shareholders'
equity $ 46,884,718 $ 47,964,823
<FN>
See accompanying notes to the consolidated financial statements
RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31, March 31,
1998 1997
Net sales $ 1,703,472 $ 1,682,179
Sublease income 92,250 92,250
Total revenue 1,795,722 1,774,429
Cost of sales 1,124,104 1,188,235
Gross profit 671,618 586,194
General and administrative
expenses 186,997 103,296
Management fee 280,071 292,980
Project due diligence costs --- 5,479
Other expenses 7,094 7,854
Total other
operating expenses 474,162 409,609
Income from operations 197,456 176,585
Other income (expense):
Interest income 163,397 249,470
Interest expense (129,430) (167,450)
Income from Maine Hydro
Projects 326,530 227,197
Loss from Maine Biomass
Projects (267,857) ---
Net other income 92,640 309,217
Income before minority
interest 290,096 485,802
Minority interest in
the earnings of the
Providence Project (140,882) (129,582)
Net income $ 149,214 $ 356,220
<FN>
See accompanying notes to the consolidated financial statements
RIDGEWOOD ELECTRIC POWER TRUST IV
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)
Managing
Shareholders Shareholder Total
Shareholders' equity,
December 31, 1997 $35,078,194 $(54,833) $35,023,361
Cash distributions (918,178) (9,275) (927,453)
Net income for the period 147,722 1,492 149,214
Shareholders' equity,
March 31, 1998 $34,307,738 $(62,616) $34,245,122
<FN>
See accompanying note to financial statements
RIDGEWOOD ELECTRIC POWER TRUST IV
STATEMENTS OF CASH FLOWS (Unaudited)
Three months ended
March 31, March 31,
1998 1997
Cash flows from
operating activities:
Net income $ 149,214 $ 356,220
Adjustments to reconcile
net income to net cash
(used in) provided by
operating activities:
Depreciation and
amortization 242,506 257,862
Amortization of
prepaid and accrued
royalties- net --- 144,535
Minority interest
in earnings of the
Providence Project 140,882 129,582
Income from
unconsolidated Maine
Hydro Projects (326,530) (227,197)
Loss from unconsolidated
Maine Biomass Projects 267,857 ---
Changes in assets
and liabilities:
(Increase) decrease
in accounts receiv-
able, trade (448,061) 527,525
Decrease in other assets (45,653) (10,121)
Increase (decrease)
in accounts payable
and accrued expenses (65,622) (23,169)
Decrease (increase)
in due from
affiliates, net (166,154) 291,435
Total adjustments (400,775) 1,090,452
Net cash provided
by (used in) operating
activities (251,561) 1,446,672
Cash flows from
investing activities:
Investment in
hydroelectric
projects --- (58,374)
Loans to biomass
projects (250,000) ---
Capital
expenditures (467,559) (966,074)
Deferred due
diligence costs (23,346) (63,272)
Net cash used
in investing
activities (740,905) (1,087,720)
Cash flows from financing
activities:
Cash distributions
to shareholders (927,453) (959,567)
Payments to reduce
long-term debt (142,782) (129,762)
Distribution to
minority interest (165,389) (320,176)
Net cash used in
financing activities (1,235,624) (1,409,505)
Net (decrease) in cash and
cash equivalents (2,228,090) (1,050,553)
Cash and cash
equivalents,
beginning of year 11,086,281 22,685,829
Cash and cash
equivalents,
end of period $8,858,191 $21,635,276
<FN>
See Accompanying Notes to Financial Statements
RIDGEWOOD ELECTRIC POWER TRUST IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. General
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments, which consist of normal recurring
adjustments, necessary for the pair presentation of the results for the
interim periods. Additional footnote disclosure concerning accounting
policies and
other matters are disclosed in Ridgewood Electric Power Trust IV's
financial statements included in the 1997 Annual Report on Form 10-K,
which should be read in conjunction with these financial statements.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
The results of operations for an interim period should not necessarily be
taken as indicative of the results of operations that may be expected for
a twelve month period.
2. Loans to Biomass Project
In the first quarter of 1998, the Trust loaned $250,000 to Indeck Maine
Energy, L.L.C. ("Maine Biomass Projects"). The loan is in the form of
two demand notes that bear interest at 5% per annum. Ridgewood Electric
Power Trust V, which owns an identical preferred membership interest in
the Maine Biomass Projects, also made identical loans to the Maine
Biomass Projects. The other Maine Biomass Project members also loaned
$500,000 to the Maine Biomass Projects with the same terms.
3. Subsequent Event
In May 1998, the Trust sold the electric power generating equipment to
Ridgewood Electric Power Trust III ("Trust III") for $681,984. The Trust
recorded a gain of $226,802 on the sale. Trust III is also managed by
the Managing Shareholder and is the minority owner of the Providence
Project. Trust III intends to use the equipment in an on-site
cogeneration project under development that will be located in New
Jersey.
RIDGEWOOD ELECTRIC POWER TRUST IV
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q, like some other statements made by
the Trust from time to time, has forward-looking statements. These
statements discuss business trends and other matters relating to the
Trust's future results and the business climate. In order to make these
statements, the Trust has had to make assumptions as to the future. It
has also had to make estimates in some cases about events that have
already happened, and to rely on data that may be found to be inaccurate
at a later time.
Because these forward-looking statements are based on assumptions,
estimates and changeable data, and because any attempt to predict the
future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's forward-looking
statements.
The Trust therefore warns readers of this document that they should not
rely on these forward-looking statements without considering all of the
things that could make them inaccurate. The Trust's other filings with
the Securities and Exchange Commission discuss many (but not all) of the
risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal
or state regulatory structures, government taxation, spending and
budgetary policies, government mandates, demand for electricity and
thermal energy, the ability of customers to pay for energy received,
supplies of fuel and prices of fuels, operational status of plant,
mechanical breakdowns, availability of labor and the willingness of
electric utilities to perform existing power purchase agreements in good
faith.
By making these statements now, the Trust is not making any commitment
to revise these forward-looking statements to reflect events that happen
after the date of this document or to reflect unanticipated future
events.
Dollar amounts in this discussion are generally rounded to the nearest
$1,000.
Introduction
The financial statements include only the accounts of the Trust. The
Trust uses the equity method of accounting for its investments in the
Maine Hydro Projects and the Indeck Maine Biomass Projects, which are
owned 50% or less by the Trust.
Results of Operations
Quarter ended March 31, 1998 compared to quarter ended March 31, 1997.
In the first quarter of 1998, the Trust had total revenue of $1,796,000,
which is comparable with total revenue of $1,774,000 in the same period
in 1997. Cost of sales of $1,124,000 in the first quarter of 1998 were
also comparable with the cost of sales of $1,188,000 in the first quarter
of 1997.
General and administrative expenses increased by $84,000 from $103,000 in
the first quarter of 1997 to $187,000 in the same period of 1998
primarily because none of Ridgewood Power Management Corporation's
("RPMC") allocated costs were capitalized by the Providence Project in
1998. In 1997, a ninth engine was installed at the Providence Project
and certain allocated administrative costs related to the installation
were capitalized. Other operating expenses in the first quarter of 1997
and 1998 were comparable.
Interest income declined by $86,000 from $249,000 in the first quarter of
1997 to $163,000 in the first quarter of 1997 due to lower average cash
balances. Interest expense was reduced by $38,000 from $167,000 in the
first quarter of 1997 to $129,000 in the first quarter of 1997 due to
lower borrowings outstanding of the Providence project.
Equity income from the Maine Hydro Projects increased $100,000 from
$227,000 in the first quarter of 1997 to $327,000 in the same period in
1998 due to the improved results of the Maine Hydro Projects which is
primarily a result of higher production because of above-average river
flows. The Trust recorded an equity loss of $268,000 in the first quarter
of 1998 from the temporarily shut-down Maine Biomass Projects. These
projects were acquired in July 1997.
Liquidity and Capital Resources
In 1997, the Trust and Fleet Bank, N.A. (the "Bank") entered into a
revolving line of credit agreement, whereby the Bank provides a three
year committed line of credit facility of $1,150,000. Outstanding
borrowings bear interest at the Bank's prime rate or, at the Trust's
choice, at LIBOR plus 2.5%. The credit agreement requires the Trust to
maintain a ratio of total debt to tangible net worth of no more than 1 to
1 and a minimum debt service coverage ratio of 2 to 1. The credit
facility was obtained in order to allow the Trust to operate using a
minimum amount of cash, maximize the amount invested in Projects and
maximize cash distributions to shareholders. There have been no
borrowings under the line of credit in 1998.
Other than investments of available cash in power generation Projects,
obligations of the Trust are generally limited to payment of Project
operating expenses, payment of a management fee to the Managing
Shareholder, payments for certain accounting and legal services to third
persons and distributions to shareholders of available operating cash
flow generated by the Trust's investments. The Trust's policy is to
distribute as much cash as is prudent to shareholders. Accordingly, the
Trust has not found it necessary to retain a material amount of working
capital. The amount of working capital retained is further reduced by
the availability of the line of credit facility.
The Trust anticipates that, during 1998, its cash flow from operations,
unexpended offering proceeds and line of credit facility will be adequate
to fund its obligations.
PART II - OTHER INFORMATION
Item #6 Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly cause this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST IV
Registrant
Date: May 14, 1998 By /s/ Martin V. Quinn
Martin V. Quinn
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)