<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 March 31, 1998
[ ] 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, 1997 and should be read in
connection therewith. The results of operations for the three month period ended
March 31, 1998 are not necessarily indicative of the results to be expected for
the full year.
1
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
March 31,
1998 December 31,
(Unaudited) 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 105,973 $ 367,327
Accounts receivable 31,102 55,151
Food and beverage inventories 15,728 15,908
Prepaid expenses 35,369 33,566
----------- -----------
Total current assets 188,172 471,952
----------- -----------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 4,793,731 4,793,731
Hotel furnishings and equipment 1,504,885 1,480,980
Restaurant furnishings and equipment 37,479 37,479
Construction in progress 306,515 143,435
Less accumulated depreciation (3,927,939) (3,849,939)
----------- -----------
2,714,671 2,605,686
Land 700,000 700,000
----------- -----------
Land, property and equipment - net 3,414,671 3,305,686
----------- -----------
OTHER ASSETS:
Liquor license 40,000 40,000
Deposits 218,089 172,667
----------- -----------
Total other assets 258,089 212,667
----------- -----------
TOTAL $ 3,860,932 $ 3,990,305
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 56,968 $ 58,592
Accounts payable - related parties 84,683 34,712
Accrued incentive management fees - related parties 148,625 144,190
Accrued salaries and wages 49,715 45,923
Accrued room tax and other 38,007 32,937
Distributions payable 90,000
Current portion of long-term debt 98,625 98,625
Note payable - affiliate 375,441 366,210
----------- -----------
Total current liabilities 852,064 871,189
LONG-TERM DEBT 147,938 172,594
----------- -----------
Total liabilities 1,000,002 1,043,783
----------- -----------
PARTNERS' EQUITY:
General Partners (45 units issued and outstanding) 28,609 29,467
Limited Partners (4,455 units issued and outstanding) 2,832,321 2,917,055
----------- -----------
Total Partners' equity 2,860,930 2,946,522
----------- -----------
TOTAL $ 3,860,932 $ 3,990,305
=========== ===========
</TABLE>
2
<PAGE> 4
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
REVENUES:
Room $ 544,843 $ 535,847
Food and beverage 126,492 121,843
Lease 23,093 19,442
Telephone 11,095 9,708
Other 4,361 8,838
--------- ---------
Total 709,884 695,678
--------- ---------
OPERATING EXPENSES:
Rooms 208,819 185,670
Food and beverage 133,642 129,081
Administrative and general 83,993 79,913
Depreciation and amortization 78,000 87,000
Marketing 71,183 59,830
Repairs and maintenance 68,175 61,682
Energy cost 43,763 36,236
Management fee 32,315 35,801
Partnership administration and professional fees 31,822 36,083
Property taxes 15,855 15,122
Interest 15,793 17,185
Insurance 7,809 11,433
Telephone 4,307 4,879
--------- ---------
Total (including reimbursed costs and payments
for services to related parties of $186,422
and $168,814 for the three months ended
March 31, 1998 and 1997, respectively) 795,476 759,915
--------- ---------
NET LOSS ($ 85,592) ($ 64,237)
========= =========
</TABLE>
3
<PAGE> 5
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
ALLOCATION OF NET LOSS:
General Partners $ (856) $ (642)
Limited Partners (4,455 Limited
Partnership units outstanding) (84,736) (63,595)
-------- --------
Total $(85,592) $(64,237)
======== ========
DISTRIBUTION TO PARTNERS -- $ 45,000
======== ========
PER UNIT INFORMATION
(based upon 4,500 total
units outstanding):
Net Loss $ (19.02) $ (14.27)
======== ========
Distribution -- $ 10.00
======== ========
</TABLE>
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<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1998 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (85,592) $ (64,237)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 78,000 87,000
Change in assets and liabilities:
Accounts receivable 24,049 6,440
Food and beverage inventories 180 3,090
Prepaid expenses (1,803) (5,906)
Account payable and accrued expenses 61,644 (59,233)
--------- ---------
Net cash provided by (used in) operating activities 76,478 (32,846)
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (186,985) (143,873)
--------- ---------
FINANCING ACTIVITIES:
Borrowings from affiliates 9,231 8,357
Payment of long-term debt (24,656) (24,656)
Deposits and loan commitment fees (45,422)
Distributions paid to Partners (90,000) (171,000)
--------- ---------
Net cash used in financing activities (150,847) (187,299)
--------- ---------
DECREASE IN CASH (261,354) (364,018)
CASH AT BEGINNING OF PERIOD 367,327 569,371
--------- ---------
CASH AT END OF PERIOD $ 105,973 $ 205,353
========= =========
</TABLE>
5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations for the Three Months Ended March 31, 1998 and 1997
For the three months ended March 31, 1998 as compared to the same period
of the prior year, occupancy rates at the Registrant's hotel were 50% versus 51%
and average room rates were $81.94 versus $77.22, resulting in an increase in
room revenue totaling $8,996 for the three months ended March 31, 1998 as
compared to the comparable period in 1997. Food and beverage revenues increased
$4,649 for the three months ended March 31, 1998 as compared to the first
quarter of 1997. 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 due to weather
conditions in the Monterey Peninsula in the first quarter of 1998 as compared to
1997.
Operating expenses totaled $795,476 and $759,915 for the three months
ended March 31, 1998 and 1997, respectively. The principal reason for the
increase in operating expenses in 1998 as compared to 1997 were increased
marketing expenses and increased repair and maintenance costs due primarily to
maintenance costs related to the construction of additional rooms.
Net loss increased $21,355 to a loss of $85,592 for the three months
ended March 31, 1998 as compared to a $64,237 net loss for the three months
ended March 31, 1997. The increase in the net loss is primarily a result of
increased operating expenses.
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 three months ended March 31, 1998, the Registrant generated
$76,478 in net cash flow from operating activities. Reductions in long-term debt
totaled $24,656 with distributions paid totaling $90,000 during the first
quarter 1998.
The Partnership has obtained the approval of the Limited Partners to
complete construction of the 14 additional guest rooms at an approximate cost of
$1,000,000. As of March 31, 1998 the Partnership has contractual commitments of
$840,013, of which $155,550 has been paid, related to this construction.
Acquisition of property and equipment (including $163,080 of costs
incurred to date for construction by the Partnership of the 14 additional guest
rooms) during the three months ended March 31, 1998 totaled $186,985. It is
estimated that approximately $1,000,000 more will
6
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be expended in 1998 for ongoing renovations of existing assets and construction
of the 14 additional guest rooms.
In January 1998, the Partnership obtained a Term Loan Commitment for up
to $7,000,000 at 7.7% interest, secured by the Casa Munras, with a ten year term
subject to certain conditions; the principal may be amortizable for 25 years.
The terms and conditions of the loan include the requirement that certain
amounts be held in escrow for repairs. The Term Loan Commitment, with
extensions, expires on May 15, 1998.
It is the General Partners intentions, to the extent cash is available
upon completion of the 14 additional guest rooms and upon repayment of current
long-term debt outstanding, to distribute remaining cash obtained under the Term
Loan Commitment to the Limited and General Partners in accordance with the
Partnership Agreement.
Further, the General Partners intend, to the extent cash is available
from operating activities, 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: May 13, 1998
By RONALD A. YOUNG
---------------------------------
Ronald A. Young
General partner
Dated: May 13, 1998
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 105,973
<SECURITIES> 0
<RECEIVABLES> 31,102
<ALLOWANCES> 0
<INVENTORY> 15,728
<CURRENT-ASSETS> 188,172
<PP&E> 3,414,671
<DEPRECIATION> (3,927,939)
<TOTAL-ASSETS> 3,860,932
<CURRENT-LIABILITIES> 852,064
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,860,930
<TOTAL-LIABILITY-AND-EQUITY> 3,860,932
<SALES> 709,884
<TOTAL-REVENUES> 709,884
<CGS> 0
<TOTAL-COSTS> 795,476
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,793
<INCOME-PRETAX> (85,592)
<INCOME-TAX> 0
<INCOME-CONTINUING> (85,592)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (85,592)
<EPS-PRIMARY> ($19.02)
<EPS-DILUTED> 0
</TABLE>
