_______________________________________________________________________________
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
______________________________________________
Date of Report (Date of earliest event reported): April 1, 1997
ROBERTS REALTY INVESTORS, INC.
(Exact name of Registrant as specified in charter)
GEORGIA 0-28048 56-2122873
(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
8010 ROSWELL ROAD, SUITE 120, ATLANTA, GEORGIA 30350
(Address of principal executive offices) (Zip Code)
(770) 394-6000
(Registrant's Telephone Number, including Area Code)
_______________________________________________________________________________
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The registrant hereby amends its report on Form 8-K filed on April 16,
1997 by deleting the text under Item 2 and replacing it with the following:
On April 1, 1997, Roberts Realty Investors, Inc. (the "Company") acquired
Roberts Properties Management, L.L.C. ("Roberts Management"), the property
management company that has managed the Company's multifamily apartment
communities since the Company's inception. The Company presently owns 11
multifamily apartment communities containing a total of 2,194 apartment homes,
231 of which are under construction or development. The Company's independent
Directors (Messrs. James M. Goodrich, George W. Wray, Jr., Wm. Jarell Jones and
Dennis H. James) determined that it was in the best long-term interests of the
Company to manage its own communities. Because Roberts Management had provided
high quality property management services to the Company, the independent
Directors negotiated with Mr. Roberts to purchase Roberts Management. The
Company now internally manages its properties using Roberts Management's
property management expertise and systems, and the 45 property management
personnel formerly employed by Roberts Management. The Company no longer has
to pay 5% of gross property revenues to Roberts Management for property
management services.
Roberts Properties Residential, L.P. (the "Operating Partnership") issued
a total of 590,000 units of limited partnership interest ("Units") valued at
$10.00 per Unit or $5,900,000 to purchase Roberts Management. The purchase
price was negotiated between Mr. Roberts (for Roberts Management) and the
Company's independent Directors. The independent Directors took into account,
among other factors:
- the cash flow savings to the Company of approximately $140,000 per
year, which will increase over time as more Communities are added to
the Company's portfolio;
- a valuation of Roberts Management by an independent valuation firm;
- the high quality of management services historically provided by
Roberts Management;
- the value of continuity in those services; and
- advice from investment banking firms that the Company should become
internally managed before the Company's Common Stock is listed on an
exchange.
The $10.00 per Unit value, which is the highest price paid to date for the
Company's securities, was determined by the independent Directors. The
independent Directors considered the following factors, among others:
- their belief that the Company's liquidation value was equal to $10.34
per Unit;
2
- the Company's historical practice of issuing securities at a discount
to current liquidation value; and
- the Company's historical practice of issuing securities at
increasingly higher prices as the liquidation value has increased.
The acquisition was structured as a merger of Roberts Management into the
Operating Partnership, the limited partnership through which the Company owns
its properties and conducts its business. (The Company now owns a 55.4%
interest in the Operating Partnership and is its sole general partner.) Of the
590,000 Units issued in the merger, Mr. Roberts received 551,650 Units, and
twelve other employees of Roberts Management received 38,350 Units that are
subject to certain repurchase options held by Mr. Roberts which are exercisable
upon the holder's cessation of employment by the Operating Partnership (which
has subordinate repurchase options that are exercisable if Mr. Roberts fails to
exercise his option in any instance). The number of Units subject to such
options gradually declines to zero over a seven year period from the date each
holder acquired his or her member interest in Roberts Management. No cash or
consideration other than Units was paid in connection with the merger.
In April 1995, Roberts Properties Management, Inc. was selected as the
Property Management Company of the Year by the National Association of Home
Builders' National Council of the Multifamily Industry.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The registrant hereby amends its report on Form 8-K filed on April 16,
1997 by deleting the text under Item 7 and replacing it with the following:
(a) Financial Statements of Businesses Acquired
As stated in Item 2, the Company acquired Roberts Management on April 1,
1997, through a merger of Roberts Management into the Operating
Partnership, the limited partnership through which the Company owns and
operates its properties. In connection with the transaction, the
Operating Partnership issued 590,000 Units valued at $5,900,000 to the
former owners of Roberts Management.
Because Roberts Management, a related party, managed only the properties
belonging to the Company and had no third party management contracts, the
Company will account for the transaction as, in substance, the settlement
of a contract. Accordingly, the Company will expense the entire
$5,900,000 payment in the second quarter of 1997.
Because this transaction does not represent a business combination
accounted for as either a purchase or a pooling of interests and because
no significant assets have been acquired, the Company is not required
under Item 310(c) of Regulation S-B to furnish financial statements of
Roberts Management.
3<PAGE>
(b) Pro Forma Financial Statements
Although not required under Item 310(d) of Regulation S-B, the Company
believes that the following information would be useful to investors.
Upon the Company's acquisition of Roberts Management on April 1, 1997, the
existing management contracts were terminated and the Company began
managing its properties internally. Assumption of internal property
management responsibilities will result in the elimination of property
management fee expenses and the assumption of various direct property
management expenses, principally general and administrative expenses. The
salaries of on-site property management personnel were already paid by the
Company and included in the historical financial statements.
As stated in Item 7(a), the transaction resulted in a non-recurring charge
of $5,900,000 to be reported in the Company's financial statements for the
quarter ended June 30, 1997. This charge is not reflected in the
accompanying pro forma statements of operations but is reflected in the
accompanying pro forma balance sheet as an increase in accumulated deficit
and corresponding increases in minority interest and additional paid in
capital based upon the pro forma ratio of total Units and shares of Common
Stock outstanding at March 31, 1997.
The pro forma financial statements include a balance sheet as of March 31,
1997 and statements of operations for the three months ended March 31,
1997 and for the year ended December 31, 1996.
4
<PAGE>
ROBERTS REALTY INVESTORS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(Unaudited)
- - ------------------------------------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Roberts
Properties
Management The Company
The Company L.L.C. Pro Forma Pro Forma
Historical Historical Adjustments Consolidated
----------- ---------- ----------- ------------
(A) (B)
<S> <C> <C> <C> <C>
ASSETS
Net real estate assets$ 113,120 $ 5 $ (5)(C) $ 113,120
Cash & equivalents 5,952 5,952
Restricted cash 622 622
Other assets - Net 1,067 113 (74)(D) 1,106
--------- -------- -------- ---------
$ 120,761 $ 118 $ (79) $ 120,800
LIABILITIES & SHAREHOLDERS'
EQUITY
Mortgage notes payable$ 69,545 $ 69,545
Other liabilities 3,861 $ 23 3,884
--------- -------- -------- ---------
73,406 23 73,429
Minority Interest 18,847 $ 2,280 (G) 21,127
Shareholders' Equity:
Common stock 42 42
Additional paid-in capital 29,379 (147) 3,767 (E),(G) 32,999
Accumulated deficit (913) 242 (6,126)(F) (6,797)
--------- -------- -------- ---------
28,508 95 (2,359) 26,244
--------- -------- -------- ---------
$ 120,761 $ 118 $ (79) $ 120,800
</TABLE>
5<PAGE>
ROBERTS REALTY INVESTORS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
- - ------------------------------------------------------------------------------
A) Reflects the consolidated balance sheet of Roberts Realty Investors, Inc.
as of March 31, 1997.
B) Reflects the balance sheet of Roberts Properties Management, L.L.C.
(Roberts Management) as of March 31, 1997.
C) Reflects the elimination of the depreciable net assets of Roberts
Management which were deemed to have no value.
D) Reflects the elimination of the unamortized balance of Roberts
Management's management contracts which were canceled as a result of the
transaction.
E) Reflects the elimination of the historical deficit in additional paid-in
capital of Roberts Management of $147.000.
F) Reflects the non-recurring charge of $5,900,000 resulting directly from
the transaction and the elimination of the historical retained earnings of
Roberts Management of $242,000 less a $16,000 credit for certain net
assets acquired.
G) Reflects the adjustment to minority interest ($2,280,000) and additional
paid-in capital ($3,620,000) resulting from the issuance of 590,000
additional units valued at $5,900,000.
6<PAGE>
ROBERTS REALTY INVESTORS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
- - ------------------------------------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Roberts
Properties
Management,
The CompanyL.L.C. Pro Forma The Company
HistoricalHistoricalAdjustments Pro Forma
--------------------------------- -----------
(A) (B)
<S> <C> <C> <C> <C>
OPERATING REVENUES: $ 15,197$ 874$ (874) (C),(D)$ 15,197
--------------------------------- ---------
OPERATING EXPENSES:
Personnel 1,365 1,365
Utilities 932 932
Repairs, maintenance, and landscaping 956 956
Real estate taxes 1,149 1,149
Management fees to related party 760 (760) (C)
Marketing, insurance & other 689 689
General and administrative expenses 926 491 1,417
Depreciation of real estate taxes 4,974 2 (2) (E) 4,974
--------------------------------- ----------
Total operating expenses 11,751 493 (762) 11,482
--------------------------------- ----------
INCOME FROM OPERATIONS 3,446 381 (112) 3,715
--------------------------------- ----------
OTHER INCOME (EXPENSES):
Interest income 353 3 356
Interest expense (3,724) (3,724)
Amortization expense (208) (19) 19 (F) (208)
--------------------------------- ----------
Total other income (expenses) (3,579) (16) 19 (3,576)
INCOME (LOSS) BEFORE MINORITY
INTEREST (133) 365 (93) 139
MINORITY INTEREST 52 (114) (G) (62)
--------------------------------- ----------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (81) 365 (207) 77
EXTRAORDINARY ITEM (99) 8 (91)
--------------------------------- ----------
NET INCOME (LOSS) $ (180)$ 365$ (199)$ (14)
7<PAGE>
PER SHARE DATA (H):
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM $ (0.02) $ 0.02
NET LOSS $ (0.05) $ 0.00
Weighed average common shares 3,799,567 3,799,567
</TABLE>
8<PAGE>
ROBERTS REALTY INVESTORS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
- - ------------------------------------------------------------------------------
A) Reflects the Company's historical consolidated statement of operations for
the year ended December 31, 1996.
B) Reflects the historical statement of operations for the year ended
December 31, 1996 of Roberts Properties Management, L.L.C. (Roberts
Management).
C) Reflects the elimination of $760,000 of management fees paid to Roberts
Management by Roberts Properties Residential, L.P. (the Operating
Partnership).
D) Reflects the elimination of $114,000 of management fees paid to Roberts
Management on certain properties prior to their inclusion in the Operating
Partnership.
E) Reflects the elimination of depreciation expense on certain assets held by
Roberts Management deemed to have no future value.
F) Reflects the elimination of amortization expense resulting from the
cancellation and write-off of Roberts Management's unamortized management
contracts.
G) Reflects the adjustment to reflect the 44.4% minority interest that would
exist had the purchase of Roberts Management occurred on January 1, 1996.
H) Based on 3,799,567 weighted average shares of Common Stock outstanding.
Earnings per share is unaffected by partners who receive units in the
Operating Partnership instead of shares of Common Stock of the Company
because unitholders and shareholders effectively share equally in the net
income or loss of the Operating Partnership.
9<PAGE>
ROBERTS REALTY INVESTORS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
- - ------------------------------------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Roberts
Properties
Management,
The CompanyL.L.C. Pro Forma The Company
HistoricalHistoricalAdjustmentsPro Forma
------------------------------------------
(A) (B)
<S> <C> <C> <C> <C>
OPERATING REVENUES: $ 4,251$ 211$ (211)(C)$ 4,251
---------------------------------------------
OPERATING EXPENSES:
Personnel 439 439
Utilities 275 275
Repairs, maintenance, and landscaping 277 277
Real estate taxes 365 365
Management fees to related party 211 (211)(D)
Marketing, insurance & other 244 244
General and administrative expenses 248 183 431
Depreciation of real estate taxes 1,414 1,414
---------------------------------------------
Total operating expenses 3,473 183 (211) 3,445
---------------------------------------------
INCOME FROM OPERATIONS 778 28 806
---------------------------------------------
OTHER INCOME (EXPENSES):
Interest income 74 74
Interest expense (1,141) (1,141)
Amortization expense (35) (7) 7(E) (35)
---------------------------------------------
Total other income (expenses) (1,102) (7) 7 (1,102)
---------------------------------------------
INCOME (LOSS) BEFORE MINORITY
INTEREST (324) 21 7 (296)
MINORITY INTEREST 129 3(F) 132
---------------------------------------------
NET INCOME (LOSS) $ (195)$ 21$ 10$ (164)
---------------------------------------------
PER SHARE DATA (G):
NET LOSS $ (0.05) $ (0.04)
----------- -----------
Weighed average common shares 4,186,329 4,186,329
</TABLE>
10<PAGE>
ROBERTS REALTY INVESTORS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
- - ------------------------------------------------------------------------------
A) Reflects the Company's historical consolidated statement of operations for
the three months ended March 31, 1997.
B) Reflects historical statement of operations for the three months ended
March 31, 1997 of Roberts Properties Management, L.L.C. (Roberts
Management).
C) Reflects the reduction in management fee income received as a result of
the elimination upon the merger of management fees paid to Roberts
Management by Roberts Properties Residential, L.P. (the Operating
Partnership).
D) Reflects the elimination of management fees paid to Roberts Management
upon the merger.
E) Reflects the elimination of amortization expense resulting from the write-
off of Roberts Management's unamortized management contracts.
F) Reflects the adjustment to reflect the 44.6% minority interest that would
exist had the purchase of Roberts Management occurred on January 1, 1997.
G) Based on 4,186,329 weighted average shares of Common Stock outstanding.
Earnings per share is unaffected by partners who receive units in the
Operating Partnership instead of shares of Common Stock of the Company
because unitholders and shareholders effectively share equally in the net
income or loss of the Operating Partnership.
11<PAGE>
(c) Exhibits
The following exhibits are incorporated by reference from the Company's
initial filing on Form 8-K on April 16, 1997.
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger by and between Roberts Properties
Residential, L.P. and Roberts Properties Management, L.L.C.,
dated April 1, 1997.
[The following schedules and attachments to the foregoing
Agreement and Plan of Merger are omitted from this report
pursuant to Item 601 of Regulation S-B.]
Exhibit A Certificate and Articles of Merger (filed as
Exhibit 4.2.7 as noted below)
Exhibit B Repurchase Option Agreement by and among Charles
S. Roberts, the Members with Article 6A
Interests, and Roberts Properties Residential,
L.P.
Exhibit C Articles of Organization of Roberts Properties
Management, L.L.C.
Exhibit D Operating Agreement of Roberts Properties
Management, L.L.C.
Schedule 2.5 Certain Financial Statements of Roberts
Properties Management, L.L.C.
Schedule 2.8 Headquarters and Other Locations
Schedule 2.10 Certificate of Insurance
Schedule 2.17 List of Manager Contracts
4.2.7 Certificate and Articles of Merger filed with the Georgia
Secretary of State merging Roberts Properties Management, L.L.C.
with and into Roberts Properties Residential, L.P.
12<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be filed on its behalf by the
undersigned hereunto duly authorized.
ROBERTS REALTY INVESTORS, INC.
Dated: June 16, 1997 By: /s/ Charles S. Roberts
Charles S. Roberts
Chairman of the Board, Chief Executive
Officer and President
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