<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1996
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ________ to ________
Commission file number 0-8901
CASA MUNRAS HOTEL PARTNERS, L.P.
(Exact name of small business issuer as specified in its charter)
California 95-3235634
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5525 Oakdale Avenue, Suite 300, Woodland Hills, California 91364
(Address of principal executive offices)
(818) 888-6500
(Issuer's telephone number, including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
Transitional Small Business Disclosure Format: Yes No X
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements of Casa Munras
Hotel Partners, L.P. (formerly Western Host Monterey Partners) have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
these statements do not include all of the information and footnotes required by
generally accepted principles for complete financial statements. In the opinion
of the General Partners of the Registrant, all adjustments necessary for a fair
presentation have been included. The financial statements presented herein have
been prepared in accordance with the accounting policies described in the
Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1995
and should be read in connection therewith. The results of operations for the
three and nine month periods ended September 30, 1996 are not necessarily
indicative of the results to be expected for the full year.
1
<PAGE> 3
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $800,354 $213,250
Accounts receivable 177,577 104,739
Food and beverage inventories 19,546 18,215
Prepaid expenses 34,958 21,351
---------- ---------
Total current assets 1,032,435 357,555
---------- ---------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 4,562,255 4,562,255
Hotel furnishings and equipment 1,230,169 1,172,949
Restaurant furnishings and equipment 32,006 23,293
Construction in progress 365,232
Less accumulated depreciation (3,425,201) (3,164,201)
---------- ---------
2,764,461 2,594,296
Land 700,000 700,000
---------- ---------
Land, property and equipment - net 3,464,461 3,294,296
---------- ---------
LIQUOR LICENSE 40,000 40,000
---------- ---------
TOTAL $4,536,896 $3,691,851
========== ==========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $60,177 $41,345
Accounts payable - related parties 25,392 98,917
Accrued incentive management fees - related parties 124,073 15,613
Accrued salaries and wages 57,953 51,998
Accrued room tax and other 59,925 24,707
Distributions payable 315,000 90,000
Short-term borrowing 394,500 4,500
Note payable - affiliate 323,346 300,076
---------- ---------
Total liabilities 1,360,366 627,156
---------- ---------
PARTNERS' EQUITY:
General Partners (45 units issued and outstanding) 31,765 30,648
Limited Partners (4,455 units issued and outstanding) 3,144,765 3,034,047
---------- ---------
Total Partners' equity 3,176,530 3,064,695
---------- ---------
TOTAL $4,536,896 $3,691,851
========== ==========
</TABLE>
2
<PAGE> 4
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Room $1,111,146 $1,009,249 $2,447,704 $2,007,203
Food and beverage 206,280 196,286 549,310 475,593
Lease 21,554 21,941 66,585 64,869
Telephone 20,702 18,172 42,699 45,843
Other 10,667 6,678 20,092 12,060
---------- ---------- ---------- ----------
Total 1,370,349 1,252,326 3,126,390 2,605,568
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Rooms 247,541 229,700 645,852 558,585
Food and beverage 175,939 152,051 472,696 396,354
Depreciation and amortization 87,000 81,833 261,000 248,833
Administrative and general 96,294 90,214 243,787 223,233
Marketing 68,158 63,992 202,394 168,623
Repairs and maintenance 64,908 51,825 180,546 143,067
Energy cost 39,538 40,852 120,090 127,835
Management fee 124,185 113,469 247,200 195,216
Partnership administration
and professional fees 2,033 4,292 45,843 39,157
Property taxes 17,437 18,945 46,199 48,961
Insurance 11,560 12,190 34,426 36,569
Interest 17,780 7,197 48,488 21,065
Telephone 5,806 7,928 16,034 18,377
---------- ---------- ---------- ----------
Total (including reimbursed
costs and payments for
services to related parties
of $156,525 and $138,770
and $575,905 and $368,467
for the three and nine months
ended September 30, 1996
and 1995, respectively) 958,179 874,488 2,564,555 2,225,875
---------- ---------- ---------- ----------
NET INCOME $412,170 $377,838 $561,835 $379,693
========== ========== ========== ==========
</TABLE>
3
<PAGE> 5
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
ALLOCATION OF NET INCOME:
General Partners $4,122 $3,778 $5,618 $3,797
Limited Partners (4,455 Limited
Partnership units outstanding) 408,048 374,060 556,217 375,896
-------- -------- -------- --------
Total $412,170 $377,838 $561,835 $379,693
======== ======== ======== ========
DISTRIBUTION TO PARTNERS $315,000 $225,000 $450,000 $360,000
======== ======== ======== ========
PER UNIT INFORMATION
(based upon 4,500 total
Units outstanding):
Net Income $91.59 $83.96 $124.85 $84.38
======== ======== ======== ========
Distribution $70.00 $50.00 $100.00 $80.00
======== ======== ======== ========
</TABLE>
4
<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $561,835 $379,693
Adjustments to reconcile net cash provided
by operating activities:
Depreciation and amortization 261,000 248,833
Change in assets and liabilities:
Accounts receivable (72,838) (95,777)
Food and beverage inventories (1,331) (2,714)
Prepaid expenses (13,607) 10,333
Account payable an accrued expenses 94,940 92,712
-------- --------
Net cash provided by operating activities 829,999 633,080
-------- --------
INVESTING ACTIVITIES:
Acquisition of property and equipment (431,165) (22,888)
-------- --------
FINANCING ACTIVITIES:
Note payable - affiliate 23,270 21,065
Short-term borrowings 390,000
Distributions paid to Partners (225,000) (225,000)
-------- --------
Net cash provided by (used in) financing activities 188,270 (203,935)
-------- --------
NET INCREASE IN CASH 587,104 406,257
CASH AT BEGINNING OF PERIOD 213,250 287,907
-------- --------
CASH AT END OF PERIOD $800,354 $694,164
======== ========
</TABLE>
5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations for the Three and Nine Months Ended September 30, 1996 and
1995
For the three and nine months ended September 30, 1996 as compared to
the same periods of the prior year, occupancy rates at the Registrant's hotel
were 82% and 71% versus 90% and 65% and average room rates were $97.04 and
$82.82 versus $82.13 and $74.65, resulting in an increased room revenue for the
three and nine months ended September 30, 1996 as compared to 1995,
respectively. Food and beverage revenues increased $9,994 and $73,717, or 5% and
16%, for the three and nine months ended September 30, 1996 as compared to 1995,
respectively. The increases in room revenue and food and beverage revenues are
attributed to the recently completed capital improvement program.
Operating expenses as a percentage of revenues totaled 70% for each of
the three month periods ended September 30, 1996 and 1995 and 82% for the nine
month period ended September 30, 1996 as compared to 85% for the same period in
1995. The principal reason for the year to date decrease in operating expenses
as a percentage of revenue is that as revenues increase, operating expenses,
particularly room and food and beverage expenses, increase at a proportionately
lower rate, because a substantial portion of such expenses are fixed.
Net income increased $34,332, or 9%, to $412,170 and $182,142, or 48%,
to $561,835 for the three and nine months ended September 1996 as compared to
1995, respectively. The increase in net income was primarily a result of higher
income generated by an increase in average room rates while the cost per room
rented remained approximately the same.
Liquidity and Capital Resources
The Registrant's primary source of cash is revenues from the
operation and leasing of the hotel facility. The Registrant's primary uses of
cash are to fund hotel operating expenses and renovations and to pay
distributions to Partners.
During the nine months ended September 30, 1996, the
Registrant generated $829,999 in net cash flow from operating activities.
Short-term borrowings under the Registrant's Multiple Disbursement Note for the
nine months ended September 30, 1996 totaled $390,000. For the first nine months
of calendar 1996, the Registrant distributed $225,000 to Partners in respect of
earnings for the quarters ended December 31, 1995, March 31, 1996 and June 30,
1996. In September 1996, the General Partners declared a distribution to
Partners totaling $315,000, which amount was paid in October 1996.
Acquisition of property and equipment during the nine months
ended September 30, 1996 totaled $431,165. It is estimated that approximately
$100,000 more will be expended in
6
<PAGE> 8
1996 to continue the renovation of the hotel. Such renovations of property and
equipment were, substantially, funded from borrowings under the Multiple
Disbursement Note, described in the Form 10-KSB, Item 1, under the heading
"Borrowings".
The General Partners intend, to the extent cash is available,
to continue making cash distributions to the Partners at amounts approximating
the Registrant's net income.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
7
<PAGE> 9
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CASA MUNRAS HOTEL PARTNERS, L.P.
By JOHN F. ROTHMAN
--------------------------------------
John F. Rothman
General Partner
Dated: November 13, 1996
8
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 800,354
<SECURITIES> 0
<RECEIVABLES> 177,577
<ALLOWANCES> 0
<INVENTORY> 19,546
<CURRENT-ASSETS> 1,032,435
<PP&E> 2,764,461
<DEPRECIATION> 3,425,201
<TOTAL-ASSETS> 4,536,896
<CURRENT-LIABILITIES> 1,360,366
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,176,530
<TOTAL-LIABILITY-AND-EQUITY> 4,536,896
<SALES> 3,126,390
<TOTAL-REVENUES> 3,126,390
<CGS> 0
<TOTAL-COSTS> 2,564,555
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,488
<INCOME-PRETAX> 561,835
<INCOME-TAX> 0
<INCOME-CONTINUING> 561,835
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 561,835
<EPS-PRIMARY> $124.85
<EPS-DILUTED> 0
</TABLE>
