<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, 1999
[ ] 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
Partner 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, 1998 and should be read in
connection therewith. The results of operations for the three and nine month
periods ended September 30, 1999 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,
1999 1998
------------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,511,937 $ 1,077,900
Accounts receivable 194,048 42,219
Food and beverage inventories 16,047 17,834
Prepaid expenses 59,864 69,931
----------- -----------
Total current assets 1,781,896 1,207,884
----------- -----------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 5,802,211 5,802,211
Hotel furnishings and equipment 1,724,928 1,697,701
Restaurant furnishings and equipment 54,833 52,266
Less accumulated depreciation (4,482,919) (4,212,919)
----------- -----------
3,099,053 3,339,259
Land 700,000 700,000
Construction in progress 308,889 --
----------- -----------
Land, property and equipment - net 4,107,942 4,039,259
----------- -----------
OTHER ASSETS:
Liquor license 40,000 40,000
Loan commitment fees - net 207,984 222,689
Escrow impound accounts 260,417 211,942
----------- -----------
Total other assets 508,401 474,631
----------- -----------
TOTAL $ 6,398,239 $ 5,721,774
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable - trade $ 65,461 $ 66,260
Accounts payable - related parties 35,982 55,707
Accrued incentive management fees - related parties 165,086 151,812
Accrued salaries and wages 77,429 58,667
Accrued room tax 45,884 32,671
Accrued other 76,076 9,241
Guest advance deposits 308,276 --
Distributions payable 67,500 --
Current portion of long-term debt 105,738 99,823
----------- -----------
Total current liabilities 947,432 474,181
LONG-TERM DEBT 6,773,007 6,853,066
----------- -----------
Total liabilities 7,720,439 7,327,247
----------- -----------
PARTNERS' DEFICIT:
General Partner (45 units issued and outstanding) (226,727) (229,560)
Limited Partners (4,455 units issued and outstanding) (1,095,473) (1,375,913)
----------- -----------
Total Partners' deficit (1,322,200) (1,605,473)
----------- -----------
TOTAL $ 6,398,239 $ 5,721,774
=========== ===========
</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, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Room $1,443,984 $1,302,842 $3,126,867 $2,772,914
Food and beverage 199,949 180,250 573,195 487,558
Lease 23,300 23,006 70,887 68,685
Telephone 15,184 13,637 42,754 37,089
Other 14,365 23,176 42,414 32,772
---------- ---------- ---------- ----------
Total 1,696,782 1,542,911 3,856,117 3,399,018
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Room 322,330 276,851 841,084 725,825
Food and beverage 159,249 158,358 470,651 449,174
Administrative and general 123,154 105,025 313,830 288,629
Management fees 161,356 147,092 316,510 271,118
Depreciation and amortization 94,902 97,902 284,705 258,902
Marketing 93,700 74,742 268,733 226,787
Repairs and maintenance 64,646 69,882 192,286 202,781
Interest 132,739 134,601 399,647 201,680
Energy cost 45,272 38,495 141,838 124,019
Partnership administration
and professional fees 3,397 55,264 48,626 103,766
Property taxes 21,068 20,179 53,827 51,827
Insurance 7,809 7,809 23,427 23,427
Telephone 5,002 6,021 15,180 17,033
---------- ---------- ---------- ----------
Total (including reimbursed costs
and payments for services to
related parties of $226,791
and $394,602 and $574,912 and
$841,767 for the three and
nine months ended September 30,
1999 and 1998, respectively) 1,234,624 1,192,221 3,370,344 2,944,968
---------- ---------- ---------- ----------
NET INCOME $ 462,158 $ 350,690 $ 485,773 $ 454,050
========== ========== ========== ==========
</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, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
ALLOCATION OF NET INCOME:
General Partner $ 4,622 $ 3,507 $ 4,858 $ 4,540
Limited Partners (4,455 Limited
Partnership units outstanding) 457,536 347,183 480,915 449,510
-------- -------- -------- ----------
Total $462,158 $350,690 $485,773 $ 454,050
======== ======== ======== ==========
DISTRIBUTION TO PARTNERS:
Distribution to Partners $ 67,500 -- $202,500 $4,675,500
Special distribution of refinance proceeds -- -- -- 215,664
-------- -------- -------- ----------
Total Distribution to Partners $ 67,500 $ 0 $202,500 $4,891,164
======== ======== ======== ==========
PER UNIT INFORMATION
(based upon 4,500 total
units outstanding):
Net Income $ 102.70 $ 77.93 $ 107.95 $ 100.90
======== ======== ======== ==========
Distribution $ 15.00 $ 0.00 $ 45.00 $ 1,039.00
======== ======== ======== ==========
</TABLE>
4
<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 485,773 $ 454,050
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 284,705 258,902
Change in assets and liabilities:
Accounts receivable (151,829) (101,538)
Food and beverage inventories 1,787 64
Prepaid expenses 10,067 (7,242)
Account payable and accrued expenses 467,336 186,275
---------- -----------
Net cash provided by operating activities 1,097,839 790,511
---------- -----------
INVESTING ACTIVITIES:
Acquisition of property and equipment (338,683) (1,077,996)
---------- -----------
FINANCING ACTIVITIES:
Borrowings from affiliates -- 222,210
Payments on notes from affiliates -- (588,420)
Distributions paid to Partners (202,500) (4,981,164)
Long-term borrowings -- 7,250,000
Payment of long-term debt (74,144) (544,548)
Loan commitment fee -- (23,428)
Impound escrow accounts (48,475) (175,601)
---------- -----------
Net cash (used in) provided by financing activities (325,119) 1,159,049
---------- -----------
NET INCREASE IN CASH 434,037 871,564
CASH AT BEGINNING OF PERIOD 1,077,900 367,327
---------- -----------
CASH AT END OF PERIOD $1,511,937 $ 1,238,891
========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION -
Cash paid during the period for interest $ 399,647 $ 335,829
========== ===========
</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, 1999 and
1998
For the three and nine months ended September 30, 1999 as compared to
the same period of the prior year, occupancy rates at the Registrant's hotel
were 82% and 70% versus 83% and 70% and average room rates were $115.68 and
$99.24 versus $103.38 and $92.74, resulting in an increase in room revenue
totaling $141,142 and $353,953 for the three and nine months ended September 30,
1999 as compared to the comparable periods in 1998, respectively. Food and
beverage revenues increased $19,699 and $85,637 for the three and nine months
ended September 30, 1999 as compared to 1998, respectively. The increase in room
rates reflects management's decision to charge more for rooms as a result of the
capital improvements program. Occupancy rates have remained approximately the
same for the comparable nine month period even though more rooms were rented
during the first two quarters of 1999 as compared to 1998. The increase in rooms
rented is due to the new rooms addition, which was completed by the end of the
second quarter in 1998, assisted by increased leisure travel in the first part
of 1999 as compared to 1998.
Operating expenses totaled $1,234,624 and $3,370,344 for the for the
three and nine months ended September 30, 1999 as compared to $1,192,221 and
$2,944,968 for the three and nine months ended September 30, 1998. The principal
reasons for the increase in operating expenses in 1999 as compared to 1998 were
increased interest expense do to the new first mortgage and increased
depreciation and room expenses due to the new rooms added and increased rooms
rented.
Net income increased $111,468 and $31,723 to $462,158 and $485,773 for
the three and nine months ended September 30, 1999 as compared to 1998,
respectively, principally due to increased room revenue due to improved room
rates and an increase in the number of rooms available.
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, payments on the first mortgage, maintaining
escrow impound accounts, and to pay distributions to Partners.
During the nine months ended September 30 1999, the Registrant generated
$1,097,839 in net cash provided by operating activities. Reductions in long-term
debt totaled $74,144, impound escrow accounts increased $48,475 and
distributions to partners totaled $202,500 during the nine month period ended
September 30, 1999.
6
<PAGE> 8
Acquisition of property and equipment during the nine months ended
September 30, 1999 totaled $338,683. It is estimated that approximately $500,000
more will be expended in 1999 for ongoing renovations of existing assets.
The General Partner intends, to the extent cash is available and such
distributions are permitted under the first mortgage payable, to continue making
cash distributions to the Partners at amounts approximating the Registrant's net
income.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process date fields containing a 2
digit year is commonly referred to as the Year 2000 Compliance issue. As the
year 2000 approaches, such systems may be unable to accurately process certain
date-based information.
Many of the Partnership's systems include packaged software recently
updated from large vendors who have represented that these systems are already
Year 2000 Compliant. The Partnership has communicated with others with whom it
does significant business to determine their Year 2000 Compliance readiness and
the extent to which the Partnership is vulnerable to any third party Year 2000
issues. Based on these communications, the Partnership does not expect that
their business will be significantly impacted by the Year 2000. However, there
can be no guarantee that the systems of other companies on which the
Partnership's systems rely will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Partnership's systems, would not have a material adverse effect on the
Partnership. The Partnership is prepared to utilize manual procedures in the
event of certain automated system failures.
The total cost to the Partnership of these Year 2000 Compliance
activities has not been and is not anticipated to be material to its financial
position or results of operations in fiscal years 1999 or 2000.
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.
CASA MUNRAS GP, LLC
General Partner
By JOHN F. ROTHMAN
---------------------------------
John F. Rothman, Managing Member
Dated: November 4, 1999
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,511,937
<SECURITIES> 0
<RECEIVABLES> 194,048
<ALLOWANCES> 0
<INVENTORY> 16,047
<CURRENT-ASSETS> 1,781,896
<PP&E> 8,590,861
<DEPRECIATION> (4,482,919)
<TOTAL-ASSETS> 6,398,239
<CURRENT-LIABILITIES> 947,432
<BONDS> 6,878,745
0
0
<COMMON> 0
<OTHER-SE> (1,322,200)
<TOTAL-LIABILITY-AND-EQUITY> 6,398,239
<SALES> 3,856,117
<TOTAL-REVENUES> 3,856,117
<CGS> 0
<TOTAL-COSTS> 3,370,344
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 399,647
<INCOME-PRETAX> 485,773
<INCOME-TAX> 0
<INCOME-CONTINUING> 485,773
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 485,773
<EPS-BASIC> 107.95
<EPS-DILUTED> 107.95
</TABLE>
