<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, 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 month period ended
March 31, 1999 are not necessarily indicative of the results to be expected for
the full year.
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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 987,131 $ 1,077,900
Accounts receivable 46,126 42,219
Food and beverage inventories 15,636 17,834
Prepaid expenses 50,288 69,931
------------ ------------
Total current assets 1,099,181 1,207,884
------------ ------------
LAND, PROPERTY AND EQUIPMENT - at cost:
Building and improvements 5,802,211 5,802,211
Hotel furnishings and equipment 1,700,076 1,697,701
Restaurant furnishings and equipment 54,834 52,266
Construction in progress 65,368 --
Less accumulated depreciation (4,302,919) (4,212,919)
------------ ------------
3,319,570 3,339,259
Land 700,000 700,000
------------ ------------
Land, property and equipment - net 4,019,570 4,039,259
------------ ------------
OTHER ASSETS:
Liquor license 40,000 40,000
Loan commitment fees - net 217,788 222,689
Escrow impound accounts 180,440 211,942
------------ ------------
Total other assets 438,228 474,631
------------ ------------
TOTAL $ 5,556,979 $ 5,721,774
============ ============
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable - trade $ 61,268 $ 66,260
Accounts payable - related parties 53,736 55,707
Accrued incentive management fees - related parties 122,159 151,812
Accrued salaries and wages 55,879 58,667
Accrued room tax 24,514 32,671
Accrued other 22,263 9,241
Current portion of long-term debt 98,625 99,823
------------ ------------
Total current liabilities 438,444 474,181
LONG-TERM DEBT 6,830,022 6,853,066
------------ ------------
Total liabilities 7,268,466 7,327,247
------------ ------------
PARTNERS' DEFICIT:
General Partners (45 units issued and outstanding) (230,620) (229,560)
Limited Partners (4,455 units issued and outstanding) (1,480,867) (1,375,913)
------------ ------------
Total Partners' deficit (1,711,487) (1,605,473)
------------ ------------
TOTAL $ 5,556,979 $ 5,721,774
============ ============
</TABLE>
2
<PAGE> 4
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------ ----------
<S> <C> <C>
REVENUES:
Room $ 689,257 $ 544,843
Food and beverage 161,631 126,492
Lease 23,858 23,093
Telephone 13,193 11,095
Other 14,346 4,361
------------ ----------
Total 902,285 709,884
------------ ----------
OPERATING EXPENSES:
Rooms 231,011 208,819
Food and beverage 147,646 133,642
Interest 133,688 15,793
Administrative and general 92,210 83,993
Depreciation and amortization 94,901 78,000
Management fee 55,462 32,315
Marketing 79,436 71,183
Repairs and maintenance 61,740 68,175
Energy cost 53,052 43,763
Partnership administration and professional fees 30,814 31,822
Property taxes 15,769 15,855
Insurance 7,809 7,809
Telephone 4,761 4,307
------------ ----------
Total (including reimbursed costs and payments for services to related
parties of $130,761 and $186,422 for the three months ended
March 31, 1999 and 1998, respectively) 1,008,299 795,476
------------ ----------
NET LOSS $ (106,014) $ (85,592)
============ ==========
</TABLE>
3
<PAGE> 5
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---------- --------
<S> <C> <C>
ALLOCATION OF NET LOSS:
General Partners $ (1,060) $ (856)
Limited Partners (4,455 Limited
Partnership units outstanding) (104,954) (84,736)
---------- --------
Total $ (106,014) $(85,592)
========== ========
DISTRIBUTION TO PARTNERS -- --
========== ========
PER UNIT INFORMATION (based upon 4,500 total units outstanding):
Net Loss $ (23.56) $ (19.02)
========== ========
Distribution -- --
========== ========
</TABLE>
4
<PAGE> 6
CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------ ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (106,014) $ (85,592)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 94,901 78,000
Change in assets and liabilities:
Accounts receivable (3,907) 24,049
Food and beverage inventories 2,198 180
Prepaid expenses 19,643 (1,803)
Account payable and accrued expenses (34,539) 61,644
------------ ----------
Net cash (used in) provided by operating activities (27,718) 76,478
------------ ----------
INVESTING ACTIVITIES:
Acquisition of property and equipment (70,311) (186,985)
------------ ----------
FINANCING ACTIVITIES:
Borrowings from affiliates -- 9,231
Payment of long-term debt (24,242) (24,656)
Loan commitment fees -- (45,422)
Impound escrow accounts 31,502 --
Distributions paid to Partners -- (90,000)
------------ ----------
Net cash provided by (used in) financing activities 7,260 (150,847)
------------ ----------
DECREASE IN CASH (90,769) (261,354)
CASH AT BEGINNING OF PERIOD 1,077,900 367,327
------------ ----------
CASH AT END OF PERIOD $ 987,131 $ 105,973
============ ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION -
Cash paid during the period for interest $ 133,688 $ 15,793
============ ==========
</TABLE>
5
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations for the Three Months Ended March 31, 1999 and 1998
For the three months ended March 31, 1999 as compared to the same period
of the prior year, occupancy rates at the Registrant's hotel were 54% versus 50%
and average room rates were $84.76 versus $81.94, resulting in an increase in
room revenue totaling $144,414 for the three months ended March 31, 1999 as
compared to the comparable period in 1998. Food and beverage revenues increased
$35,139 for the three months ended March 31, 1999 as compared to the first
quarter of 1998. The increase in room rates reflects management's decision to
charge more for rooms as a result of the capital improvements program and as a
result of the new room addition. The increase in occupancy is attributed to
increased leisure travel in the first quarter of 1999 as compared to 1998.
Operating expenses totaled $1,008,299 and $795,476 for the three months
ended March 31, 1999 and 1998, respectively. The principal reasons for the
increase in operating expenses in 1999 as compared to 1998 were increased
interest expense due to the new first mortgage and increased depreciation and
room expenses due to the new room addition and increased occupancy.
Net loss increased $20,422 to $106,014 for the three months ended March
31, 1999 as compared to the three months ended March 31, 1998. The increase in
the net loss in the first quarter of 1999 as compared to 1998 is primarily a
result of increased interest expense partially offset by increased revenues.
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, renovations and to pay
distributions to Partners.
During the three months ended March 31, 1999, the Registrant used $27,718
in net cash flow for operating activities. Reductions in long-term debt totaled
$24,242 while impound escrow accounts decreased $31,502 during the first quarter
1999.
Acquisition of property and equipment during the three months ended March
31, 1999 totaled $70,311. It is estimated that approximately $650,000 more will
be expended in 1999 for ongoing renovations of existing assets.
The General Partner intends, to the extent cash from operations is
available and such distributions are permitted under the first mortgage payable,
to continue making cash
6
<PAGE> 8
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 200 Compliance issue. As the year
2000 approaches, such systems may be unable to accurately process certain
date-based information.
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.
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 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 any given year.
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: May 12, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 987,131
<SECURITIES> 0
<RECEIVABLES> 46,126
<ALLOWANCES> 0
<INVENTORY> 15,636
<CURRENT-ASSETS> 1,099,181
<PP&E> 8,322,489
<DEPRECIATION> (4,302,919)
<TOTAL-ASSETS> 5,556,979
<CURRENT-LIABILITIES> 438,444
<BONDS> 6,830,022
0
0
<COMMON> 0
<OTHER-SE> (1,711,487)
<TOTAL-LIABILITY-AND-EQUITY> 5,556,979
<SALES> 902,285
<TOTAL-REVENUES> 902,285
<CGS> 0
<TOTAL-COSTS> 1,008,299
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 133,688
<INCOME-PRETAX> (106,014)
<INCOME-TAX> 0
<INCOME-CONTINUING> (106,104)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (106,104)
<EPS-PRIMARY> (23.56)
<EPS-DILUTED> (23.56)
</TABLE>
