<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, 1997
[ ] 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 or 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. (the "Registrant") 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
accounting 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, 1996
and should be read in connection therewith. The results of operations for the
three and nine month periods ended September 30, 1997 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
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 683,250 $ 569,371
Accounts receivable 164,646 50,233
Food and beverage inventories 15,530 20,798
Prepaid expenses 35,250 38,458
----------- -----------
Total current assets 898,676 678,860
----------- -----------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 4,793,436 4,691,279
Hotel furnishings and equipment 1,457,227 1,403,594
Restaurant furnishings and equipment 37,479 33,733
Construction in progress 114,588
Less accumulated depreciation (3,769,381) (3,508,381)
----------- -----------
2,633,349 2,620,225
Land 700,000 700,000
----------- -----------
Land, property and equipment - net 3,333,349 3,320,225
----------- -----------
OTHER ASSETS:
Liquor license 40,000 40,000
Loan fees 17,000
----------- -----------
Total other assets 57,000 40,000
----------- -----------
TOTAL $ 4,289,025 $ 4,039,085
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 48,443 $ 49,379
Accounts payable - related parties 31,730 16,235
Accrued incentive management fees - related parties 124,557 121,929
Accrued salaries and wages 61,537 59,008
Accrued room tax and other 67,474 29,244
Distributions payable 315,000 171,000
Current portion of long-term debt 98,625 98,625
Note payable - affiliate 357,205 331,497
----------- -----------
Total current liabilities 1,104,571 876,917
LONG-TERM DEBT 197,250 271,219
----------- -----------
Total liabilities 1,301,821 1,148,136
----------- -----------
PARTNERS' EQUITY:
General Partners (45 units issued and outstanding) 29,872 28,911
Limited Partners (4,455 units issued and outstanding) 2,957,332 2,862,038
----------- -----------
Total Partners' equity 2,987,204 2,890,949
----------- -----------
TOTAL $ 4,289,025 $ 4,039,085
=========== ===========
</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, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Room $1,174,146 $1,111,146 $2,545,182 $2,447,704
Food and beverage 173,823 206,280 471,564 549,310
Lease 24,060 21,554 66,586 66,585
Telephone 13,817 20,702 33,699 42,699
Other 6,690 10,667 20,844 20,092
---------- ---------- ---------- ----------
Total 1,392,536 1,370,349 3,137,875 3,126,390
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Rooms 254,651 247,541 666,158 645,852
Food and beverage 142,976 175,939 426,267 472,696
Administrative and general 99,220 96,294 269,202 243,787
Depreciation and amortization 87,000 87,000 261,000 261,000
Management fee 129,861 124,185 248,011 247,200
Marketing 73,730 68,158 200,207 202,394
Repairs and maintenance 61,759 64,908 186,756 180,546
Energy cost 39,011 39,538 112,854 120,090
Partnership administration
and professional fees 7,371 2,033 64,554 45,843
Interest 16,783 17,780 51,061 48,488
Property taxes 19,430 17,437 51,016 46,199
Insurance 12,315 11,560 36,945 34,426
Telephone 7,721 5,806 17,589 16,034
---------- ---------- ---------- ----------
Total (including reimbursed
costs and payments for
services to related parties
of $204,100 and $156,525
and $538,908 and $575,905
for the three and nine months
ended September 30, 1997 and
1996, respectively) 951,828 958,179 2,591,620 2,564,555
---------- ---------- ---------- ----------
NET INCOME $ 440,708 $ 412,170 $ 546,255 $ 561,835
========== ========== ========== ==========
</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, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ALLOCATION OF NET INCOME:
General Partners $ 4,407 $ 4,122 $ 5,463 $ 5,618
Limited Partners (4,455 units
outstanding) 436,301 408,048 540,792 556,217
-------- -------- -------- --------
Total $440,708 $412,170 $546,255 $561,835
======== ======== ======== ========
DISTRIBUTION TO PARTNERS $315,000 $315,000 $450,000 $450,000
======== ======== ======== ========
PER UNIT INFORMATION
(based upon 4,500 total
units outstanding):
Net Income $ 97.94 $ 91.59 $ 121.39 $ 124.85
======== ======== ======== ========
Distribution $ 70.00 $ 70.00 $ 100.00 $ 100.00
======== ======== ======== ========
</TABLE>
4
<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 546,255 $ 561,835
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 261,000 261,000
Change in assets and liabilities:
Accounts receivable (114,413) (72,838)
Food and beverage inventories 5,268 (1,331)
Prepaid expenses 3,208 (13,607)
Accounts payable and accrued expenses 57,946 94,940
--------- ---------
Net cash provided by operating activities 759,264 829,999
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (274,124) (431,165)
--------- ---------
FINANCING ACTIVITIES:
Borrowings from affiliates 25,708 23,270
Distributions paid to Partners (306,000) (225,000)
Payment of long-term debt (73,969)
Loan fees (17,000)
Short-term borrowings 390,000
--------- ---------
Net cash (used in) provided by financing activities (371,261) 188,270
--------- ---------
NET INCREASE IN CASH 113,879 587,104
CASH AT BEGINNING OF PERIOD 569,371 213,250
--------- ---------
CASH AT END OF PERIOD $ 683,250 $ 800,354
========= =========
</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, 1997 and
1996
For the three and nine months ended September 30, 1997 as compared to
the same period of the prior year, occupancy rates at the Registrant's hotel
were 85% and 69% versus 82% and 71% and average room rates were $98.49 and
$88.41 versus $97.04 and $82.82, resulting in an increase in room revenue for
the three and nine months ended September 30, 1997 as compared to the comparable
periods in 1996 totaling $63,000 and $97,478, respectively. Food and beverage
revenues decreased $32,457 and $77,746 for the three and nine months ended
September 30, 1997 as compared to 1996, respectively. The increase in room
revenues reflects management's decision to continue to pursue increases in room
rates that will, initially, negatively impact occupancy. The decrease in
occupancy also reflects reduced leisure travel in the Monterey Peninsula for the
first nine months of 1997 as compared to the comparable 1996 periods. Reduced
occupancy at the Registrant's hotel are the primary reason for reduced food and
beverage revenues.
Operating expenses as a percentage of revenues decreased to 68% from 70%
and increased to 83% from 82% for the three and nine months ended September 30,
1997 as compared to the comparable periods in 1996. The principal reason for the
decrease in operating expenses for the three months ended September 30, 1997 as
a percentage of revenue and the increase in operating expenses as a percentage
of revenue for the nine months ended September 30, 1997 is that as revenues
increase, operating expenses, particularly room and food and beverage expenses,
decrease at a proportionately higher rate, because a substantial proportion of
such expenses are fixed.
Net income increased $28,538 and decreased $15,580 for the three and
nine months ended September 30, 1997 as compared to comparable 1996 periods,
respectively. The minor fluctuation in net income is a result of approximately
equal levels of revenues and expenses for the three and nine months ended
September 30, 1997 as compared to comparable 1996 periods.
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, 1997, the Registrant
generated $759,264 in net cash provided by operating activities. Reductions in
long-term debt totaled $73,969 with distributions paid totaling $306,000 during
the nine months ended September 30, 1997.
6
<PAGE> 8
As of the date of this Report, the General Partners are continuing to
evaluate the possible construction by the Registrant of 14 additional guest
rooms on a small undeveloped portion of the hotel property. Limited expenditures
have been made to date and general contract bidding has been initiated. Final
construction of the additional rooms would be financed with additional long-term
borrowings and would be subject to, among other conditions, approval of the
Limited Partners.
Acquisition of property and equipment (including $114,588 of costs
incurred to date to evaluate the possible construction by the Registrant of the
14 additional guest rooms) during the nine months ended September 30, 1997
totaled $274,124. It is estimated that approximately $30,000 more will be
expended in 1997 for ongoing renovations of existing assets. The General
Partners have not yet determined what the costs would be to construct the 14
additional guest rooms.
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 5, 1997
By RONALD A. YOUNG
--------------------------------------
Ronald A. Young
General partner
Dated: November 5, 1997
8
<PAGE> 10
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ------------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 683,250
<SECURITIES> 0
<RECEIVABLES> 164,646
<ALLOWANCES> 0
<INVENTORY> 15,530
<CURRENT-ASSETS> 898,676
<PP&E> 3,333,349
<DEPRECIATION> 3,769,381
<TOTAL-ASSETS> 4,289,025
<CURRENT-LIABILITIES> 1,301,821
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,987,204
<TOTAL-LIABILITY-AND-EQUITY> 4,289,025
<SALES> 3,137,875
<TOTAL-REVENUES> 3,137,875
<CGS> 0
<TOTAL-COSTS> 2,591,620
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,061
<INCOME-PRETAX> 546,255
<INCOME-TAX> 0
<INCOME-CONTINUING> 546,255
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 546,255
<EPS-PRIMARY> 121.39
<EPS-DILUTED> 0
</TABLE>
