FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2054
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OFTHE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2000
Commission file Number 0-24143
RIDGEWOOD ELECTRIC POWER TRUST V
(Exact name of registrant as specified in its charter.)
Delaware 22-3437351
(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)
(201) 447-9000
Registrant's telephone number, including area code:
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 [ ]
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust V
Consolidated Financial Statements
March 31, 2000
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Balance Sheet
- --------------------------------------------------------------------------------
March 31, 2000 December 31,
Assets: (unaudited) 1999
------------ ----------
Cash and cash equivalents .................... $ 11,994,060 $ 14,759,184
Due from affiliates .......................... 576,934 675,185
Other current assets ......................... 371,262 404,351
------------ ----------
Total current assets ................ 12,942,256 15,838,720
Investments:
Maine Hydro Projects ..................... 5,919,022 5,663,505
Maine Biomass Projects ................... 5,755,455 5,825,271
MetaSound Systems ........................ 539,600 921,163
Quantum Conveyor ......................... 2,812,421 2,810,410
Santee River Rubber Project .............. 8,022,760 8,186,456
Egypt Projects ........................... 5,552,540 4,736,093
Mediterranean Fiber Optic Project/GFG .... -- 1,497,670
United Kingdom Landfill Projects ......... 17,307,474 16,916,309
Deferred due diligence costs ................. 10,951 --
------------ ----------
Total assets ........................ $ 58,862,479 $ 62,395,597
------------ ----------
Liabilities and shareholders' equity:
Liabilities:
Accounts payable and accrued expenses ........ $ 73,130 $ 174,857
Due to affiliates ............................ 279,009 449,178
------------ ----------
Total current liabilities ................ 352,139 624,035
------------ ----------
Minority interest ............................ 1,219,746 1,337,769
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (932.8875 investor
shares issued and outstanding) 57,532,654 60,644,421
Subscription receivable ..................... (23,000) (23,000)
------------ ----------
Shareholders' equity, net ................. 57,509,654 60,621,421
Managing shareholder's accumulated deficit (1
management share issued and outstanding) (219,060) (187,628)
------------ ----------
Total shareholders' equity ................ 57,290,594 60,433,793
------------ ----------
Total liabilities and shareholders' equity $ 58,862,479 $ 62,395,597
------------ ----------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, 2000 March 31, 1999
---------- ----------
Revenues:
Interest income ............................ $ 95,216 $ 614,026
Income from Maine Hydro Projects ........... 255,517 537,135
Loss from Maine Biomass Projects ........... (69,816) (168,403)
Loss from MetaSound Systems ................ (381,563) (248,639)
Income (loss) from Quantum Conveyor ........ 2,011 (10,709)
(Loss) income from Santee River Rubber
Project ................................... (163,696) 4,034
Loss from Egypt Projects ................... (49,440) --
Loss from Mediterranean Fiber Optic
Project/GFG ............................... (49,924) --
Income from United Kingdom Landfill Projects 391,165 --
---------- ----------
Total revenue ...................... 29,470 727,444
---------- ----------
Expenses:
Investment fee .............................. -- 6,500
Management fee .............................. 508,189 601,202
Accounting and legal fees ................... 37,424 20,039
Research and development .................... 297,377 201,332
Miscellaneous ............................... 11,586 53,114
Writedown of investment in Mediterranean
Fiber Optic/GFG ............................ 1,447,746 --
---------- ----------
Total expenses ...................... 2,302,322 882,187
---------- ----------
Loss from operations ............... (2,272,852) (154,743)
Minority interest in loss (income) of
consolidated subsidiary 118,023 (1,704)
---------- ----------
Net loss ........................... $(2,154,829) $ (156,447)
---------- ----------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Subscription Managing
Shareholders Receivable Shareholder Total
------------ ----------- ---------- ------------
Shareholders' equity,
December 31, 1999 .. $ 60,644,421 $(23,000) $(187,628) $ 60,433,793
Cash distributions .. (978,486) -- (9,884) (988,370)
Net loss for the year (2,133,281) -- (21,548) (2,154,829)
------------ ----------- ---------- ------------
Shareholders' equity,
March 31, 2000 ..... $ 57,532,654 $(23,000) $(219,060) $ 57,290,594
------------ ----------- ---------- ------------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2000 1999
----------- ----------
Cash flows from operating activities:
Net loss .................................... $ (2,154,829) $ (156,447)
----------- ----------
Adjustments to reconcile net income to ne
cash flows from operating activities
Income from Maine Hydro Projects ........... (255,517) (537,135)
Loss from Maine Biomass Projects ........... 69,816 168,403
Loss from MetaSound Systems ................ 381,563 248,639
(Income) loss from Quantum Conveyor ........ (2,011) 10,709
Loss (income) from Santee River Rubber
Project ................................... 163,696 (4,034)
Loss from Egypt Projects ................... 49,440 --
Loss from Mediterranean Fiber Optic
Project/GFG ............................... 49,924 --
Income from United Kingdom Landfill Projects (391,165) --
Minority interest in (loss) income of
consolidated subsidiary ................... (118,023) 1,704
Writedown of investment in Mediterranean
Fiber Optic/GFG ........................... 1,447,746 --
Changes in assets and liabilities:
Decrease (increase) in other current assets 33,089 (89,484)
(Decrease) increase in accounts payable and
accrued expenses (101,727) 2,282
Decrease in due to affiliate, net ......... (71,918) (607,356)
----------- ----------
Total adjustments ......................... 1,254,913 (806,272)
----------- ----------
Net cash used in operating activities ..... (899,916) (962,719)
----------- ----------
Cash flows from investing activities:
Loans to Maine Biomass Projects ............. -- (100,250)
Investment in MetaSound Systems ............. -- (6,151)
Investment in Egypt Projects ................ (865,887) --
Distributions from Santee River Rubber ...... -- 214,254
Deferred due diligence costs ................ (10,951) (262,653)
----------- ----------
Net cash used in investing activities ..... (876,838) (154,800)
----------- ----------
Cash flows from financing activities:
Proceeds from shareholders' contributions ... -- 130,500
Selling commissions and offering costs paid . -- (35,700)
Cash distributions to shareholders .......... (988,370) (997,319)
----------- ----------
Net cash provided by financing activities . (988,370) (902,519)
----------- ----------
Net decrease in cash and cash equivalents .... (2,765,124) (2,020,038)
Cash and cash equivalents, beginning of year . 14,759,184 42,832,241
----------- ----------
Cash and cash equivalents, end of period ..... $ 11,994,060 $ 40,812,203
----------- ----------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Notes to Consolidated Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. General
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments which consist of normal recurring
adjustments, necessary for the fair presentation of the results for the interim
periods. Additional footnote disclosure concerning accounting policies and other
matters are disclosed in Ridgewood Electric Power Trust V's (the "Trust")
consolidated financial statements included in the 1999 Annual Report on Form
10-K, which should be read in conjunction with these financial statements.
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. Writedown of investment in Mediterranean Fiber Optic Project/GFG
In September 1999, the Trust and The Ridgewood Power Growth Fund (the "Growth
Fund") made a joint investment of $3,000,000 in Global Fiber Group ("GFG"),
which was in the process of developing an underwater fiber optic cable in the
Western Mediterranean (the "Mediterranean Fiber Optic Project"). The investment,
which was funded equally by the Growth Fund and the Trust, provided for a 25%
ownership interest in GFG and the right to invest in projects developed by GFG.
In the first quarter of 2000, the Trust determined that GFG would probably not
be able to develop the Mediterranean Fiber Optic Project or any other project.
As a result, the Trust determined that it would be unlikely to recover its
investment in GFG. As a result, the trust recorded a writedown of $1,447,746 in
the first quarter of 2000 to reduce the estimated fair value of the investment
to zero.
3. Subsequent Event - Synergics, Inc. Acquisition
Beginning in late 1999, Ridgewood Power LLC, the Managing Shareholder of the
Trust, began negotiations to buy nine existing hydroelectric generating plants
from Synergics, Inc. In the course of negotiations and due diligence, Ridgewood
Power learned that one of Synergics' lenders had declared a payment default
against Synergics and that the lender had agreed to discharge the debt at a
substantial discount from the face amount if payment were made by the end of
April 2000. In order to preserve the benefit of the lender's offer and to allow
completion of the acquisition on favorable terms, the Trust and the Growth Fund,
through a joint venture, acquired the debt from the lender on April 28, 2000 for
a payment of $17 million to the lender. The debt remains in default but the
joint venture is not exercising its remedies against Synergics or the Synergics
subsidiaries pending the proposed acquisition described below.
The joint venture intends to acquire the Synergics hydroelectric generation
business by forgiving the $17 million of outstanding debt and paying an
additional $1 million to the shareholders of Synergics and paying up to an
additional $1.7 million of Synergics' tax liabilities that might be incurred as
a result of the sale of its assets. In addition, if a project lease for
Synergics' Box Canyon, California hydroelectric plant is extended beyond the
year 2010, the joint venture will pay the Synergics shareholders the lesser of
$500,000 or one-half of the agreed present value derived from the lease
extension. The structuring and closing of the acquisition is to be determined
after a review of certain financial, contractual and tax considerations and
termination of the Hart-Scott-Rodino Act antitrust waiting period.
Until the acquisition closes, Synergics has agreed to retain all working capital
for the account of the joint venture and to allow the joint venture to approve
all operational decisions and expenditures. Synergics is cooperating closely
with the joint venture in making operational decisions. However, although the
joint venture currently intends to acquire the Synergics hydroelectric
generation business as promptly as possible, neither the joint venture nor the
Trust and the Growth Fund are obligated to acquire Synergics or any of its
assets. Wayne L. Rogers, the president of Synergics, Inc., agreed to vote the
stock of Synergics, Inc. beneficially owned by him (approximately 69% of the
voting stock) in favor of a merger or other corporate reorganization as
specified by the Trust and the Growth Fund that materially complies with the
provisions outlined above.
Although the joint venture now owns $17 million of the senior debt of Synergics,
there is approximately $11.725 million of debt owed to Fleet Bank, N.A. The
Trust and the Growth Fund are in discussions with Fleet Bank concerning the
assumption of the Fleet debt in connection with the acquisition.
The Trust supplied $5 million of the capital used by the joint venture to
acquire the debt and the Growth Fund supplied the remaining $12 million. Any
additional capital needed for the acquisition will be supplied to the joint
venture by the Growth Fund. The Trust and the Growth Fund will own the joint
venture in proportion to the capital each supplies and neither will have
preferred rights over the other.
4. Summary Results of Operations for Selected Investments
Summary results of operations for the Maine Hydro projects, which are accounted
for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $1,346,000 $1,861,000
Depreciation and amortization 280,000 274,000
Net income .................. 511,000 1,074,000
Summary results of operations for the Maine Biomass projects, which are
accounted for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $ 582,000 $ 166,000
Depreciation and amortization 13,000 13,000
Net loss .................... (140,000) (348,000)
Summary results of operations for the Santee River Rubber project, which is
accounted for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $ 242,000 --
Depreciation and amortization -- --
Net loss .................... (1,387,000) (494,000)
Summary results of operations for MetaSound Systems, which is accounted for
under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue .. $ 263,000 100,000
Net loss ....... (1,387,000) (1,041,000)
Summary results of operations for the Egypt projects, which is accounted for
under the equity method, were as follows:
Three Months Ended March 31,
2000
Total revenue ............... $ --
Depreciation and amortization --
Net loss .................... (97,000)
Summary results of operations for the UK Landfill Gas projects, which are
accounted for under the equity method, were as follows:
Three Months Ended March 31,
2000
Total revenue ............... $1,531,000
Depreciation and amortization 387,000
Net income .................. 391,000
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are generally rounded to the nearest $1,000.
Introduction
The consolidated financial statements include only the accounts of the Trust and
its majority owned subsidiary, Ridgewood WaterPure Corporation. The Trust uses
the equity method of accounting for its investments in the Maine Hydro Projects,
the Maine Biomass Projects, the United Kingdom Landfill Projects, Egypt
Projects, Mediterranean Fiber Optic Project/GFG, the Santee River Rubber
Project, Quantum Conveyors and MetaSound Systems, which are owned 50% or less by
the Trust.
Results of Operations
Quarter ended March 31, 2000 compared to quarter ended March 31, 1999
In the first quarter of 2000, the Trust had total revenue of $29,000, a decline
of $698,000 from total revenue of $727,000 in the same period in 1999. Interest
income declined by $519,000 from $614,000 in the first quarter of 1999 to
$95,000 in the first quarter of 2000 due to lower average cash balances. Equity
income from the Maine Hydro Projects decreased $281,000 from $537,000 in the
first quarter of 1999 to $256,000 in the same period in 2000 due to lower
production because the above-average river flows in 1999 did not recur in 2000.
The equity loss from the shut-down Maine Biomass Projects decreased from
$168,000 in the first quarter of 1999 to $70,000 in the same period in 2000 due
to cost reductions and sales of installed capacity at the plants. The Trust's
share of losses from MetaSound Systems increased due to the increased marketing
expenditures by MetaSound as it attempts to rapidly grow its business. The
equity interest in the Santee River Rubber project changed from income of $4,000
in the first quarter of 1999 to a loss of $164,000 in the first quarter of 2000
due to the cost of staffing the project for the current testing and modification
stage of the project. The Trust also recorded income of $391,000 from its United
Kingdom Landfill Projects which were acquired in June 1999.
As discussed in Note 2 to the March 31, 2000 financial statements, the Trust
recorded a $1,447,746 writedown of its investment in Mediterranean Fiber Optic
Project/GFG in the first quarter of 2000.
In the first quarter of 2000, the most significant expense was the management
fee of $508,000, which is less than the $601,000 charged in the first quarter of
1999.
In the first quarter of 2000, the Trust's Ridgewood WaterPure subsidiary
incurred $297,000 of research and development costs related to its water
distillation technology, an increase of $96,000 from the $201,000 incurred in
the first quarter of 1999.
Quarter ended March 31, 1999 compared to quarter ended March 31, 1998.
In the first quarter of 1999, the Trust had total revenue of $727,000, a decline
of $157,000 from total revenue of $884,000 in the same period in 1998. Interest
income declined by $211,000 from $825,000 in the first quarter of 1998 to
$614,000 in the first quarter of 1999 due to lower average cash balances. Equity
income from the Maine Hydro Projects increased $210,000 from $327,000 in the
first quarter of 1998 to $537,000 in the same period in 1999 due to higher
production because of above-average river flows. The equity loss from the
shut-down Maine Biomass Projects decreased from $268,000 in the first quarter of
1998 to $168,000 in the same period in 1999 due to cost reductions and installed
electric capacity at the plants. The Trust recorded a loss of $249,000 in the
first quarter of 1999 equal to its share of losses incurred at MetaSound
Systems. The Trust acquired a minority interest in that company in December
1998.
The investment fee declined from $261,000 in the first quarter of 1998 to $7,000
in the first quarter of 1999 as a result of the closing of the Trust's offering
in April 1998. In the first quarter of 1999, the most significant expense was
the management fee of $601,000 (2.5% annually of capital contributions), which
began to be charged at the termination of the offering in April 1998. This fee
supersedes reimbursements for project management services (computed at cost or
the allocable amount of certain overhead expenses) provided by the Managing
Shareholder, which totaled $138,000 in the first quarter of 1998.
In the first quarter of 1999, the Trust's Ridgewood WaterPure subsidiary
incurred $201,000 of research and development costs related to its water
distillation technology.
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 2000.
As disclosed in the Trust's Annual Report on Form 10-K for the year 1999, the
Santee River Project has experienced material design and performance
inadequacies that will require additional sequential alterations and additional
work to be paid for by the Contractor. The Contractor is continuing to make
repairs and modifications at its own cost, but the Project requires additional
capital in order for it to remain open and available to the Contractor for this
work. The Trust and Environmental Processing Services, Inc., the developer, are
discussing potential financing alternatives but no agreement has been reached
and there is no assurance that agreement will be reached before the Project
exhausts its working capital.
The Contractor is currently defraying debt service on the construction debt for
the Project and is obligated to do so until August 9, 2000, when letters of
credit securing the debt will become available
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 2000, its cash flow from operations,
unexpended offering proceeds and line of credit facility will be adequate to
fund its obligations.
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with 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 and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. 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 statements here.
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 and its Confidential Memorandum 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. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
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.
<PAGE>
PART II - OTHER INFORMATION
None.
<PAGE>
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.
RIDGEWOOD ELECTRIC POWER TRUST V
Registrant
May 15, 2000 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's unaudited interim financial statements for the nine month period
ended March 31, 2000 and is qualified in its entirety by reference to those
financial statements.
</LEGEND>
<CIK>0001060755
<NAME> RIDGEWOOD ELECTRIC POWER TRUST V
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 11,994,060
<SECURITIES> 45,909,272<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,942,256<F2>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,862,479
<CURRENT-LIABILITIES> 352,139<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 57,290,594<F4>
<TOTAL-LIABILITY-AND-EQUITY> 58,862,479
<SALES> 0
<TOTAL-REVENUES> 29,470
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,302,322
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,154,829)<F5>
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,154,829)<F5>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,154,829)<F5>
<EPS-BASIC> (2,310)
<EPS-DILUTED> (2,310)
<FN>
<F1>Investment in power project partnership and limited liability company
accounted for on equity basis.
<F2>Includes $576,934 due from affiliates.
<F3>Includes $279,009 due to affiliates.
<F4>Shareholders' equity of $57,509,654 less managing share-
holders' accumulated deficit of $219,060.
<F5>After addition of minority interest in Ridgewood WaterPure Corporation
loss of $118,023.
</FN>
</TABLE>
