FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
For the transition period.........to.........
Commission file number 0-9704
ANGELES PARTNERS IX
(Exact name of small business issuer as specified in its charter)
California 95-3417137
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS IX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 810
Restricted--tenant security deposits 124
Accounts receivable (net of allowance for $11,000) 52
Escrow for taxes 178
Restricted escrows 609
Other assets 594
Investment properties:
Land $ 3,083
Buildings and related personal property 33,090
36,173
Less accumulated depreciation (21,338) 14,835
$ 17,202
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 130
Tenant security deposits 125
Accrued taxes 155
Other liabilities 169
Mortgage notes payable 19,924
Partners' Deficit
General partner $ (208)
Limited partners (19,975 units issued
and outstanding) (3,093) (3,301)
$ 17,202
See Accompanying Notes to Consolidated Financial Statements
b) ANGELES PARTNERS IX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $ 1,785 $ 1,722
Other income 98 98
Total revenues 1,883 1,820
Expenses:
Operating 692 644
General and administrative 66 54
Maintenance 245 307
Depreciation 443 411
Interest 437 457
Property taxes 110 115
Bad debt 11 --
Total expenses 2,004 1,988
Net loss $ (121) $ (168)
Net loss allocated to general
partner (1%) $ (1) $ (2)
Net loss allocated to limited
partners (99%) (120) (166)
Net loss $ (121) $ (168)
Net loss per limited partnership unit $ (6.01) $ (8.31)
See Accompanying Notes to Consolidated Financial Statements
c) ANGELES PARTNERS IX
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 20,000 $ 1 $ 20,000 $ 20,001
Partners' deficit at
December 31, 1996 19,975 $ (207) $ (2,973) $ (3,180)
Net loss for the three months
ended March 31, 1997 -- (1) (120) (121)
Partners' deficit at
March 31, 1997 19,975 $ (208) $ (3,093) $ (3,301)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) ANGELES PARTNERS IX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (121) $ (168)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 443 411
Amortization of loan costs and discounts 28 36
Bad debt expense 11 --
Change in accounts:
Restricted cash 3 14
Accounts receivable (7) (27)
Escrows for taxes 120 55
Other assets (4) --
Accounts payable (120) 100
Tenant security deposit liabilities (4) (13)
Accrued taxes (174) (77)
Other liabilities (29) (27)
Net cash provided by operating activities 146 304
Cash flows from investing activities:
Property improvements and replacements (120) (183)
Deposits to restricted escrows (29) --
Net cash used in investing activities (149) (183)
Cash flows from financing activities:
Payments on mortgage notes payable (55) (62)
Loan costs (9) (4)
Net cash used in financing activities (64) (66)
Net (decrease) increase in cash (67) 55
Cash and cash equivalents at beginning of period 877 451
Cash and cash equivalents at end of period $ 810 $ 506
Supplemental disclosure of cash flow information:
Cash paid for interest $ 410 $ 422
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) ANGELES PARTNERS IX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Angeles Realty Corporation (the
"General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1997, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in Angeles Partner IX's (the "Partnership")
annual report on Form 10-KSB for the fiscal year ended December 31, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.
NOTE B - TRANSACTION WITH AFFILIATES
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for payments to affiliates for services and
as reimbursement of certain expenses incurred by affiliates on behalf of the
Partnership.
The following amounts were paid to the General Partner and affiliates for the
three months ended March 31, 1997 and 1996:
1997 1996
(in thousands)
Property management fees $ 93 $ 91
Reimbursement of services
of affiliates 55 61
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner, who receives
payments on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligations is not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of five apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 1997 and 1996:
Average Occupancy
Property 1997 1996
Pines of Northwest Crossing Apartments 92% 90%
Houston, Texas
Panorama Terrace Apartments (1) 90% 94%
Birmingham, Alabama
Forest River Apartments (2) 89% 95%
Gadsden, Alabama
Village Green Apartments 93% 92%
Montgomery, Alabama
Rosemont Crossing Apartments (3) 94% 88%
San Antonio, Texas
(1)Occupancy at Panorama Terrace Apartments decreased due to 1600 new units
built in the Birmingham area, which has softened the rental market.
(2)Occupancy at Forest River Apartments has decreased due to the attractive
incentives that Gadsden area finance companies are offering to first time
home buyers. Additionally, 20% of renters in this market are students who
did not move in until mid first-quarter.
(3)Occupancy at Rosemont Crossing has increased due to a stronger rental market
and attractive move-in specials.
The Partnership's net loss for the three months ended March 31, 1997, was
$121,000 verses $168,000 for the three months ended March 31, 1996. The
decreased net loss is the result of increased rental revenues.
The increase in rental revenues for the three months ended March 31, 1997, is a
result of increases in occupancy at Rosemont Crossing Apartments, The Pines of
Northwest Crossing Apartments and Village Green Apartments. This was partially
offset by a decrease in occupancy at Panorama Terrace Apartments and Forest
River Apartments. In addition, rental revenues increased as a result of
increased rental rates at all of the Partnership's investment properties.
Operating expenses increased due to increased rental incentives and advertising
in an effort to boost occupancy at the Partnership's investment properties.
Additionally, operating expenses increased due to increased utility expenses.
Maintenance expenses decreased as a result of a decrease in non-recurring
repairs at Panorama Terrace Apartments, Village Green Apartments and the Pines
of Northwest Crossing Apartments. During the first quarter of 1996, Village
Green Apartments underwent major landscaping and Panorama Terrace Apartments and
the Pines of Northwest Crossing Apartments underwent non-recurring work on the
exterior of the buildings.
Included in maintenance expense for the three months ended March 31, 1997, is
$36,000 of major repairs and maintenance comprised of exterior painting and
major landscaping. Included in maintenance expense for the three months ended
March 31, 1996, is $14,000 of major repairs and maintenance comprised of
exterior and interior building improvements.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
At March 31, 1997, the Partnership had unrestricted cash of $810,000 versus
$506,000 at March 31, 1996. Net cash provided by operating activities decreased
primarily due to a decrease in accounts payable and accrued taxes, which is due
to the timing of such payments. This was partially offset by a decrease in
escrows for taxes, as such tax payments were funded by amounts held in escrow.
Net cash used in investing activities decreased due to a decrease in property
improvements and replacements. Net cash used in financing activities decreased
as a result of a reduction in payments on mortgage notes due to the refinancing
of the mortgage note secured by Village Green Apartments in 1996.
The Partnership's primary source of cash is from the operations of its
properties and from financing placed on such properties. Cash for these sources
is utilized for property operations, capital improvements, and/or repayment of
debt. The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets and other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $19,924,000, net of discount, is amortized over
varying periods with required balloon payments of $18,258,000 from August 2002
to November 2003, at which time the properties will either be refinanced or
sold. In November 1996, the Partnership refinanced the mortgage debt secured by
Village Green Apartments. The new loan has a principal amount of $4,900,000 and
has a maturity date of November 1, 2003. This note carries an interest rate of
7.33% per annum. Future cash distributions will depend on the levels of cash
generated from operations, property sales and the availability of cash reserves.
No cash distributions were paid during the three months ended March 31, 1997, or
the three months ended March 31, 1996.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On March 4, 1994, an employee at The Pines of Northwest Crossing Apartments
("Plaintiff") allegedly sustained personal injuries during the ordinary
course of business. The Plaintiff remained out of work until March 24, 1994.
The Plaintiff alleges that upon his return back to work, he was terminated in
retaliation for having filed a worker's compensation claim. The Plaintiff
seeks actual damages, exemplary damages, attorney's fees and court costs.
The General Partner can not predict the outcome of this proceeding or the
range of settlement for the Plaintiff, if settled in favor of the Plaintiff;
however the General Partner believes that this claim is without merit and
intends to vigorously defend it.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature. The General Partner believes that all such pending
or outstanding litigation will be resolved without a material adverse effect
upon the business, financial condition, or operations of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits: Exhibit 27, Financial Data Schedule, is filed as and exhibit
to this report.
(b)No reports on Form 8-K were filed during the three months ended March
31, 1997.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS IX
By: Angeles Realty Corporation
General Partner
By: /s/ Carroll D. Vinson
Carroll D. Vinson
President
By: /s/ Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: May 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners IX 1997 First Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000313499
<NAME> ANGELES PARTNERS IX
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 810
<SECURITIES> 0
<RECEIVABLES> 52
<ALLOWANCES> 11
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 36,173
<DEPRECIATION> 21,338
<TOTAL-ASSETS> 17,202
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 19,924
0
0
<COMMON> 0
<OTHER-SE> (3,301)
<TOTAL-LIABILITY-AND-EQUITY> 17,202
<SALES> 0
<TOTAL-REVENUES> 1,883
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,004
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 437
<INCOME-PRETAX> (121)
<INCOME-TAX> 0
<INCOME-CONTINUING> (121)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (121)
<EPS-PRIMARY> (6.01)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
