UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- ---- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 000-16757
CONCORD MILESTONE PLUS, L.P.
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(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 52-1494615
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
200 CONGRESS PARK DRIVE
SUITE 103
DELRAY BEACH, FLORIDA 33445
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(Address of Principal Executive Offices) (Zip Code)
(561) 394-9260
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Issuer's Telephone Number
As of April 30, 2004, 1,518,800 Class A interests and 2,111,072 Class B
interests were outstanding.
Check whether the issuer (1) has filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months, and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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Transitional small business disclosure format.
Yes No X
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 2004 (UNAUDITED) AND DECEMBER 31, 2003
March 31, 2004 December 31,2003
---------------- ----------------
Assets:
Property:
Building and improvements, at cost $ 16,809,690 $ 16,773,290
Less: accumulated depreciation 9,287,825 9,107,354
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Building and improvements, net 7,521,865 7,665,936
Land, at cost 10,987,034 10,987,034
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Property, net 18,508,899 18,652,970
Cash and cash equivalents 993,650 907,136
Accounts receivable 173,981 139,885
Restricted cash 322,513 240,166
Debt financing costs, net 109,668 117,502
Prepaid expenses and other assets, net 31,550 49,941
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Total assets $ 20,140,261 $ 20,107,600
================ ================
Liabilities:
Mortgage loans payable $ 15,350,393 $ 15,418,851
Accrued interest 105,942 106,487
Deposits 118,179 114,445
Accrued expenses and other liabilities 288,285 270,155
Accrued expenses payable to affiliates 4,810 1,296
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Total liabilities 15,867,609 15,911,234
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Commitments and Contingencies
Partners' capital:
General partner (79,839) (80,601)
Limited partners:
Class A Interests, 1,518,800 4,352,491 4,276,967
Class B Interests, 2,111,072 - -
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Total partners' capital 4,272,652 4,196,366
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Total liabilities and partners' capital $ 20,140,261 $ 20,107,600
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See Accompanying Notes to Financial Statements
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CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF REVENUES AND EXPENSES
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
March 31, 2004 March 31, 2003
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Revenues:
Rent $ 714,567 $ 650,862
Reimbursed expenses 163,243 141,480
Interest and other income 15,680 4,314
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Total revenues 893,490 796,656
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Expenses:
Interest expense 317,316 319,185
Depreciation and amortization 189,860 169,397
Management and property expenses 238,084 251,321
Administrative and management fees to related party 55,931 51,035
Professional fees and other expenses 16,013 18,129
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Total expenses 817,204 809,067
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Net income (loss) $ 76,286 $ (12,411)
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Net income (loss) attributable to:
Limited partners $ 75,524 $ (12,287)
General partner 762 (124)
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Net income (loss) $ 76,286 $ (12,411)
================ ================
Income (loss) per weighted average
Limited Partnership 100 Class A
Interests outstanding, basic & diluted $ 5.02 $ (0.82)
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Weighted average number of 100
Class A interests outstanding 15,188 15,188
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See Accompanying Notes to Financial Statements
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CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004
General Class A Class B
Total Partner Interests Interests
------------- ------------- ------------- -------------
PARTNERS' CAPITAL (DEFICIT)
January 1, 2004 $ 4,196,366 $ (80,601) $ 4,276,967 $ 0
Net income (loss) 76,286 762 75,524 0
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PARTNERS' CAPITAL (DEFICIT)
March 31, 2004 $ 4,272,652 $ (79,839) $ 4,352,491 $ 0
============= ============= ============= =============
See Accompanying Notes to Financial Statements
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CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
March 31, 2004 March 31, 2003
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 76,286 $ (12,411)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 189,861 169,397
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (34,096) 50,496
Decrease in prepaid expenses and other assets, net 16,835 9,409
Decrease in accrued interest (545) (468)
Increase (decrease) in accrued expenses, deposits,
and other liabilities 21,864 (2,546)
Increase in accrued expenses payable to affiliates 3,514 5,417
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Net cash provided by operating activities 273,719 219,294
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements (36,400) (63,538)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash (82,347) (31,488)
Principal repayments on mortgage loans payable (68,458) (66,667)
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Net cash used in financing activities (150,805) (98,155)
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NET INCREASE
CASH AND CASH EQUIVALENTS 86,514 57,601
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 907,136 1,005,152
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 993,650 $1,062,753
============== ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $ 317,861 $ 319,653
============== ==============
See Accompanying Notes to Financial Statements
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors of CM Plus Corporation,
General Partner of Concord Milestone Plus, L.P.
We have reviewed the accompanying balance sheet of Concord Milestone Plus, L.P.
(the "Partnership") as of March 31, 2004, and the related statements of revenues
and expenses, changes in partners' capital, and cash flows for the three month
periods ended March 31, 2004 and March 31, 2003. These financial statements are
the responsibility of the management of the Partnership.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying interim financial statements referred to above for
them to be in conformity with accounting principles generally accepted in the
United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of the Partnership
as of December 31, 2003, and the related statements of revenues and expenses,
changes in partners' capital, and cash flows for the year then ended (not
presented herein); and in our report dated February 21, 2004, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of December 31, 2003
is fairly stated, in all material respects, in relation to the balance sheet
from which it has been derived.
/s/ Ahearn, Jasco + Company, P.A.
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
May 4, 2004
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CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
financial statements as of and for the periods ended March 31, 2004 and 2003 are
unaudited. The financial statements for the periods ended March 31, 2004 and
2003 have been reviewed by an independent public accountant pursuant to Item
310(b) of Regulation S-B and following applicable standards for conducting such
reviews, and the report of the accountant is included as part of this filing.
The results of operations for the interim periods shown in this report are not
necessarily indicative of the results of operations for the fiscal year. Certain
information for 2003 has been reclassified to conform to the 2004 presentation.
These interim financial statements should be read in conjunction with the annual
financial statements and footnotes included in the Partnership's financial
statements filed on Form 10-KSB for the year ended December 31, 2003.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
This Form 10-QSB and the documents incorporated herein by reference, if
any, contain forward-looking statements that have been made within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements are
based on current expectations, estimates and projections about the Partnership's
(as defined below) industry, management beliefs, and certain assumptions made by
the Partnership's management and involve known and unknown risks, uncertainties
and other factors. Such factors include the following: general economic and
business conditions, which will, among other things, affect the demand for
retail space or retail goods, availability and creditworthiness of prospective
tenants, lease rents and the terms and availability of financing; risks of real
estate development and acquisition; governmental actions and initiatives; and
environmental and safety requirements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements.
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ORGANIZATION AND CAPITALIZATION
Concord Milestone Plus, L.P., a Delaware limited partnership (the
"Partnership"), was formed on December 12, 1986, for the purpose of investing in
existing income-producing commercial and industrial real estate. The general
partner is CM Plus Corporation. The Partnership began operations on August 20,
1987, and currently owns and operates three shopping centers located in Searcy,
Arkansas; Valencia, California; and Green Valley, Arizona.
The Partnership commenced a public offering on April 8, 1987 in order to
fund the Partnership's real property acquisitions. The Partnership terminated
its public offering on April 2, 1988 and was fully subscribed to with a total of
16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of
$1,000 principal amount of Bonds and 36 Class B Interests. The Partnership
redeemed all of the outstanding Bonds as of September 30, 1997 with the proceeds
of three new fixed rate mortgage loans. Each Equity Unit consists of 100 Class A
Interests and 100 Class B Interests. Capital contributions to the Partnership
consisted of $15,187,840 from the sale of the Equity Units and $592,272 which
represent the Class B Interests from the sale of the Bond Units.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2004 TO THREE MONTHS ENDED
MARCH 31, 2003
The Partnership recognized a net income of $76,286 for the three months
ended March 31, 2004 as compared to a net loss of $12,411 for the same period in
2003.The change is primarily due to the following factors:
(i) An increase in revenue of $96,834 or 12.16% to $893,490 for the three
months ended March 31, 2004 as compared to $796,656 for the three months ended
March 31, 2003. The net increase is due to the following a) an increase in base
rent collected by the Partnership of $63,705 due to the decrease in vacancy at
the Green Valley and Valencia properties and b) an increase of $21,763 in
reimbursed expenses due to higher expenses incurred at the Green Valley Property
in 2003 as compared to 2002. Such 2003 expenses were billed out to tenants and
revenue recognized in the first quarter of 2004.
(ii) An increase in expenses of $8,137 or 1.01% to $817,204 for the three
months ended March 31, 2004 as compared to $809,067 for the three months ended
March 31, 2003. The net increase is primarily due to the following: a) an
increase in depreciation expense of $20,463 due to capital expenditures incurred
during 2003 and 2004 for roof replacement and tenant improvements at the
Valencia and Green Valley properties and b) a decrease of $13,237 in management
and property expenses mainly due to decrease in insurance premium at all
properties.
LIQUIDITY AND CAPITAL RESOURCES
The General Partner believes that the Partnership's expected revenue and
working capital is sufficient to meet the Partnership's current and reasonable
future operating requirements for the next 12 months. Nevertheless, because the
cash revenues and expenses of the Partnership will depend on future facts and
circumstances relating to the Partnership's properties, as well as market and
other conditions beyond the control of the Partnership, a possibility exists
that cash flow deficiencies may occur.
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Abco, the former principal anchor tenant at the Green Valley Property
vacated its space in May, 1999. This space represents about 20% of the Green
Valley Property's leaseable area. The Partnership has retained a succession of
several regional real estate brokerage firms to help market the space. A new
Safeway Supermarket near the Green Valley Property that was built in 2002 has
effectively negated the potential of a supermarket as a replacement tenant for
the former Abco tenant. In March 2003, a lease was executed with Family Dollar,
Inc. for 9,571 of the 38,983 total square footage, formerly leased by Abco. In
conjunction with the work performed in preparing the building to be subdivided
and to accommodate Family Dollar, an approximate 3,528 square foot area was
reconfigured since it restricted the visibility of the remaining vacant space.
This amount of square footage is no longer leaseable. The Partnership has not
identified a potential tenant for the remaining 25,884 square feet, and the
Partnership does not know what effect, if any, that this continuing vacant space
will have on the Green Valley Property, the other tenants, or the ability of the
Partnership to lease other vacant space at the Green Valley Property. The
Partnership delivered the premises to Family Dollar in June 2003 and the lease
was effective beginning August 2003. Rent payments of $3,982.50 per month will
commence in August 2004 and continue through December 2008 with four 5 years
options to renew unless the lease is breached or otherwise terminated. In
accordance with applicable accounting principles, the Partnership is recognizing
rent income over the full term of the lease, including the "free-rent" period
from August 2003 through July 2004.
Currently, approximately $150,000 of the Partnership's working capital is
being held in escrow in connection with the refinancing by the holder of the
first mortgage on the Green Valley Property pending the resolution of the Abco
vacancy. The Partnership has made a request to release this $150,000 and to date
the request is still pending.
The Partnership has made distributions to its partners in the past.
Distributions were suspended after the second quarter of 1999 following the
departure of Abco from the Green Valley Property. Additionally, several capital
projects were undertaken and completed at the Properties. The Partnership will
evaluate the amount of future distributions, if any, on a quarter by quarter
basis. No assurances can be given as to the timing or amount of any future
distributions by the Partnership.
Management is not aware of any other significant trends, events,
commitments or uncertainties that will or are likely to materially impact the
Partnership's liquidity.
The cash on hand at March 31, 2004 may be used to fund (a) costs associated
with releasing the Abco space should the costs of releasing exceed the $150,000
already held in escrow by the Lender for this purpose and (b) other general
Partnership purposes.
Net cash provided by operating activities of $273,719 for the three months
ended March 31, 2004 included (i) a net income of $76,286, (ii) non-cash
adjustments of $189,861 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $7,572.
Net cash provided by operating activities of $219,294 for the three months
ended March 31, 2003 included (i) a net loss of $12,411, (ii) non-cash
adjustments of $169,397 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $62,308.
Net cash used in investing activities of $36,400 for the three months ended
March 31, 2004 was for capital expenditure for property improvements.
Net cash used in investing activities of $63,538 for the three months ended
March 31, 2003 was for capital expenditure for property improvements.
Net cash used in financing activities of $150,805 for the three months
ended March 31, 2004 include (i) principal repayments on mortgage loans payable
of $68,458 and (ii) an increase in restricted cash of $82,347.
Net cash used in financing activities of $98,155 for the three months ended
March 31, 2003 include (i) principal repayments on mortgage loans payable of
$66,667 and (ii) an increase in restricted cash of $31,488.
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OFF-BALANCE SHEET ARRANGEMENTS
The Partnership has no off-balance sheet arrangements as contemplated by
Item 303(c) of Rule S-B.
ITEM 3. CONTROLS AND PROCEDURES.
The President and Treasurer of the Partnership's General Partner have
concluded, based on their evaluation as of March 31, 2004, that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports we file or submit under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms.
Our management, including the President and Treasurer of the Partnership's
General Partner, does not expect that our disclosure controls and procedures or
internal control over financial reporting will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the system are met
and cannot detect all deviations. Because of the inherent limitations in all
control systems, no evaluation of control can provide absolute assurance that
all control issues and instances of fraud or deviations, if any, within the
Partnership have been detected. While we believe that our disclosure controls
and procedures and our internal control over financial reporting have been
effective, in light of the foregoing, we intend to continue to examine and
refine our disclosure controls and procedures and our internal control over
financial reporting to monitor ongoing developments in this area.
There were no significant changes in our internal control over financial
reporting subsequent to our evaluation of the Partnership's internal control
over financial reporting that could materially affect or are reasonably likely
to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBIT:
Number Description of Document
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3.1 Amended and Restated Agreement of Limited Partnership of Concord
Milestone Plus, L.P. Incorporated herein by reference to Exhibit
A to the Registrant's Prospectus included as Part I of the
Registrant's Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form S-11 (the "Registration
Statement") which was declared effective on April 3, 1987.
3.2 Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P., included as Exhibit
3.2 to Registrant's Form 10-K for the fiscal year ended December
31, 1987 ("1987 Form 10-K"), which is incorporated herein by
reference.
3.3 Amendment No. 2 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit
3.3 to the 1987 form 10-K, which is incorporated herein by
reference.
3.4 Amendment No. 3 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit
3.4 to the 1987 Form 10-K, which is incorporated herein by
reference.
3.5 Amendment No. 4 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit
3.5 to the 1987 Form 10-K, which is incorporated herein by
reference.
-10-
3.6 Amendment No. 5 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit
3.6 to Registrant's Form 10-K for the fiscal year ended December
31, 1988, which is incorporated herein by reference.
31.1 Certification by the principal executive officer, pursuant to
Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of
1934, as amended.
31.2 Certification by the principal financial officer, pursuant to
Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of
1934, as amended.
32.1 Certifications by the principal executive officer, pursuant to 18
U.S.C. 1350.
32.2 Certifications by the principal financial officer, pursuant to 18
U.S.C. 1350.
(B) REPORTS:
No reports on form 8-K were filed during the quarter covered by this
Report.
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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.
DATE: May 7, 2004 CONCORD MILESTONE PLUS, L.P.
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(Registrant)
BY: CM PLUS CORPORATION
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General Partner
By: /S/ Leonard Mandor
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Leonard Mandor
President
By: /S/ Patrick Kirse
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Patrick Kirse
Treasurer and Controller
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