<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 June 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. 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 six month
periods ended June 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>
June 30, December 31,
1997 1996
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 371,577 $ 569,371
Accounts receivable 66,224 50,233
Food and beverage inventories 16,540 20,798
Prepaid expenses 42,195 38,458
------------ ------------
Total current assets 496,536 678,860
------------ ------------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 4,793,436 4,691,279
Hotel furnishings and equipment 1,411,322 1,403,594
Restaurant furnishings and equipment 37,479 33,733
Construction in progress 73,874
Less accumulated depreciation (3,682,381) (3,508,381)
------------ ------------
2,633,730 2,620,225
Land 700,000 700,000
------------ ------------
Land, property and equipment - net 3,333,730 3,320,225
------------ ------------
LIQUOR LICENSE 40,000 40,000
------------ ------------
TOTAL $ 3,870,266 $ 4,039,085
============ ============
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 46,725 $ 49,379
Accounts payable - related parties 29,507 16,235
Accrued incentive management fees - related parties 49,687 121,929
Accrued salaries and wages 57,558 59,008
Accrued room tax and other 66,341 29,244
Distributions payable 90,000 171,000
Current portion of long-term debt 49,312 98,625
Note payable - affiliate 348,421 331,497
------------ ------------
Total current liabilities 737,551 876,917
LONG-TERM DEBT 271,219 271,219
------------ ------------
Total liabilities 1,008,770 1,148,136
------------ ------------
PARTNERS' EQUITY:
General Partners (45 units issued and outstanding) 28,615 28,911
Limited Partners (4,455 units issued and outstanding) 2,832,881 2,862,038
------------ ------------
Total Partners' equity 2,861,496 2,890,949
------------ ------------
TOTAL $ 3,870,266 $ 4,039,085
============ ============
</TABLE>
2
<PAGE> 4
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Room $ 835,189 $ 837,485 $1,371,036 $1,336,558
Food and beverage 175,898 192,122 297,741 343,030
Lease 23,084 23,634 42,526 45,031
Telephone 10,174 15,869 19,882 21,997
Other 5,316 4,667 14,154 9,425
---------- ---------- ---------- ----------
Total 1,049,661 1,073,777 1,745,339 1,756,041
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Rooms 225,837 219,912 411,507 398,311
Food and beverage 154,210 162,344 283,291 296,757
Depreciation and amortization 87,000 87,000 174,000 174,000
Administrative and general 90,069 87,327 169,982 147,493
Marketing 66,647 72,407 126,477 134,236
Repairs and maintenance 63,315 64,742 124,997 115,638
Energy cost 37,607 37,446 73,843 80,552
Management fee 82,349 86,181 118,150 123,015
Partnership administration
and professional fees 21,100 13,899 57,183 43,810
Property taxes 16,464 16,311 31,586 28,762
Insurance 13,197 11,433 24,630 22,866
Interest 17,093 17,478 34,278 30,708
Telephone 4,989 5,216 9,868 10,228
---------- ---------- ---------- ----------
Total (including reimbursed
costs and payments for
services to related parties
of $158,890 and $250,897
and $327,704 and $419,380
for the three and six months
ended June 30, 1997 and 1996,
respectively) 879,877 881,696 1,639,792 1,606,376
---------- ---------- ---------- ----------
NET INCOME $ 169,784 $ 192,081 $ 105,547 $ 149,665
========== ========== ========== ==========
</TABLE>
3
<PAGE> 5
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ALLOCATION OF NET INCOME:
General Partners $ 1,698 $ 1,921 $ 1,055 $ 1,497
Limited Partners (4,455 Limited
Partnership units outstanding) 168,086 190,160 104,492 148,168
-------- -------- -------- --------
Total $169,784 $192,081 $105,547 $149,665
======== ======== ======== ========
DISTRIBUTION TO PARTNERS $ 90,000 $ 90,000 $135,000 $135,000
======== ======== ======== ========
PER UNIT INFORMATION
(based upon 4,500
total units outstanding):
Net Income $ 37.73 $ 42.68 $ 23.45 $ 33.26
======== ======== ======== ========
Distribution $ 20.00 $ 20.00 $ 30.00 $ 30.00
======== ======== ======== ========
</TABLE>
4
<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 105,547 $ 149,665
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 174,000 174,000
Change in assets and liabilities:
Accounts receivable (15,991) (187,645)
Food and beverage inventories 4,258 (1,364)
Prepaid expenses (3,737) (15,082)
Account payable an accrued expenses (25,977) 173,789
--------- ---------
Net cash provided by operating activities 238,100 293,363
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (187,505) (348,252)
--------- ---------
FINANCING ACTIVITIES:
Borrowings from affiliates 16,924 15,320
Distributions paid to Partners (216,000) (225,000)
Short-term borrowings 390,000
Payment of long-term debt (49,313)
--------- ---------
Net cash (used in) provided by financing activities (248,389) 180,320
--------- ---------
NET (DECREASE) INCREASE IN CASH (197,794) 125,431
CASH AT BEGINNING OF PERIOD 569,371 213,250
--------- ---------
CASH AT END OF PERIOD $ 371,577 $ 338,681
========= =========
</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 Six Months Ended June 30, 1997 and 1996
For the three and six months ended June 30, 1997 as compared to the same
period of the prior year, occupancy rates at the Registrant's hotel were 72% and
61% versus 76% and 66% and average room rates were $84.12 and $81.29 versus
$79.29 and $73.82, resulting in a (decrease)/ increase in room revenue for the
three and six months ended June 30, 1997 as compared to the comparable periods
in 1996, respectively, totaling $(2,296) and $34,478. Food and beverage revenues
decreased $(16,224) and $(45,289) for the three and six months ended June 30,
1997 as compared to 1996, respectively. The increase in room rates reflects
management's decision to charge more for rooms as a result of the capital
improvements program. The decrease in occupancy is attributed to reduced leisure
travel in the Monterey Peninsula for the first six months of 1997 as compared to
1996. Reduced leisure travel and occupancy at the Registrant's hotel also
impacted food and beverage revenues.
Operating expenses as a percentage of revenues increased to 84% from 82%
and increased to 94% from 91% for the three and six months ended June 30, 1997
as compared to the comparable periods in 1996. The principal reason for the
increase in operating expenses as a percentage of revenue is that as revenues
decrease, operating expenses, particularly room and food and beverage expenses,
increase at a proportionately higher rate, because a substantial proportion of
such expenses are fixed.
Net income decreased $22,297 and $44,118 for the three and six months ended
June 30, 1997 as compared to 1996, respectively, principally due to decreased
revenue during the 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 six months ended June 30 1997, the Registrant generated $238,100
in net cash provided by operating activities. Reductions in long-term debt
totaled $49,313 with distributions paid totaling $216,000 during the six months
ended June 30, 1997.
As of the date of this Report, the General Partners are continuing to
evaluate the possible construction by the Partnership of 14 additional guest
rooms on a small undeveloped portion of the Hotel property. 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.
6
<PAGE> 8
Acquisition of property and equipment (including $73,874 of costs incurred
to date to evaluate the possible construction by the Partnership of the 14
additional guest rooms) during the six months ended June 30, 1997 totaled
$187,505. It is estimated that approximately $75,000 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: August 12, 1997
By RONALD A. YOUNG
---------------------------------
Ronald A. Young
General partner
Dated: August 12, 1997
8
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ------------
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 371,577
<SECURITIES> 0
<RECEIVABLES> 66,224
<ALLOWANCES> 0
<INVENTORY> 16,540
<CURRENT-ASSETS> 496,536
<PP&E> 3,333,730
<DEPRECIATION> 3,682,730
<TOTAL-ASSETS> 3,870,266
<CURRENT-LIABILITIES> 1,008,770
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,861,496
<TOTAL-LIABILITY-AND-EQUITY> 3,870,266
<SALES> 1,073,777
<TOTAL-REVENUES> 1,073,777
<CGS> 0
<TOTAL-COSTS> 881,696
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,478
<INCOME-PRETAX> 192,081
<INCOME-TAX> 0
<INCOME-CONTINUING> 192,081
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192,081
<EPS-PRIMARY> 42.68
<EPS-DILUTED> 0.00
</TABLE>
