<PAGE> 1
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997 Commission File #0-9305
REEVES TELECOM LIMITED PARTNERSHIP
(name changed from Reeves Telecom Associates)
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South Carolina 57-0700063
- ------------------------ -----------------------------
(State of Incorporation) (I.R.S. Employer I.D. Number)
c/o Grace Property Management Inc.
P. O. Box 163
55 Brookville Road
Glen Head, New York 11545
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(Address of General Partner) (Zip Code)
Registrants telephone number (516) 686-2201
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ( )
<PAGE> 2
PART 1. FINANCIAL INFORMATION
REEVES TELECOM LIMITED PARTNERSHIP
BALANCE SHEET
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March 31, December 31,
ASSETS 1997 1996
(UNAUDITED) (AUDITED)
----------- ---------
Current Assets:
Cash and cash equivalents $ 113,577 $ 133,919
Land held for development or sale
and related buildings and
equipment, net 1,022,789 1,037,678
--------- ---------
$1,136,366 $1,171,597
========== ==========
Liabilities and Partners' Capital
- ---------------------------------
Current Liabilities:
Accounts payable and
accrued expenses $ 922,294 $ 900,937
Notes payable - Current
portion 96,631 96,631
---------- ----------
$1,018,925 $ 997,568
Notes payable - Non-Current
portion 138,940 153,641
---------- ----------
Total Liabilities $1,157,865 $1,151,209
Partners' capital (21,499) $ 20,388
----------- ----------
$1,136,366 $1,171,597
========== ==========
<PAGE> 3
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS AND PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
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1997 1996
---- ----
Operating revenues:
Land sales $ 61,288 $ 142,157
Fox Squirrel income 84,699 84,892
Interest income 624 246
Other income and sale of timber 1,106 5,062
--------- ---------
$ 147,717 $ 232,357
--------- ---------
Operating Costs and Expenses:
Administrative 169,258 184,620
Direct cost of land sold 5,321 65,464
Depreciation 15,025 14,184
------- -------
189,604 264,268
------- -------
Net Income or (Loss) ( 41,887) ( 31,911)
Partners' capital at beginning
of period 20,388 280,832
Partners' capital at end of ---------- ----------
period $( 21,499) $ 248,921
========== ==========
Income or (Loss) per partnership
unit (1,828,248 and 1,828,258
units outstanding as of March 31,
1997 and 1996 respectively.) $ ( 0.023) $ ( 0.017)
========= ==========
<PAGE> 4
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
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1997 1996
---- ----
CASH PROVIDED BY OPERATIONS:
Net Income or (Loss) $( 41,887) $( 31,911)
Deduct Items Not Using Cash:
Depreciation 15,025 14,184
---------- ----------
TOTAL ( 26,862) ( 17,727)
--------- ---------
CHANGES IN OPERATING ASSETS AND LIABILITIES
INCREASING OR (DECREASING) CASH:
(Increase) in other assets - ( 17,999)
Decrease in Land held for
development or sale 5,321 65,464
Increase or (decrease) in accounts
payable and accrued expenses 21,357 ( 1,510)
(Decrease) in notes payable ( 14,701) ( 2,372)
--------- --------
NET CASH PROVIDED OR (USED) BY
OPERATIONS 11,977 43,583
--------- --------
CASH (USED) BY INVESTING ACTIVITIES:
$( 14,885) $ 25,856
Additions to Fixed Assets
( 5,457) ( 88,637)
CASH FROM FINANCING ACTIVITIES:
Equipment note payable - 82,213
--------- --------
NET INCREASE OR (DECREASE) IN CASH $( 20,342) $ 19,432
========= ========
CASH BALANCE - BEGINNING $ 133,919 $ 73,860
NET INCREASE OR (DECREASE) IN CASH,
AS ABOVE ( 20,342) 19,432
--------- --------
CASH BALANCE - ENDING $ 113,577 $ 93,292
========= ========
<PAGE> 5
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1997
(Unaudited)
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ITEM 2. Management Discussion and Analysis of Financial Condition and
Results of Operations.
The Partnership is a liquidating partnership and as such, quarter to
quarter comparisons and analysis are not meaningful.
For the three months ended March 31, 1997 and 1996, the Partnership
generated revenues from land sales of $ 61,288 and $142,157,
respectively. Revenues in 1996 included the sale of a tract of
approximately 430 acres for $85,000. Excluding such sale, the
Partnership sold 8 individual lots, generating aggregate revenues of
$61,288 in the first quarter of 1997 compared to 11 lots and $57,157
in land sale revenues for the same period one year ago. Management
attributes the increase largely to somewhat improved economic
conditions locally and to the relative mix of lots sold as to location
and asking price. Individual lots adjacent to or near the golf course,
for example, generally command a higher asking price than lots which
are not so situated.
Revenues at Fox Squirrel Country Club ("Fox Squirrel") for the three
months ended March 31, 1997 and 1996 were $84,699 and $84,892
respectively. Higher greens fees and cart rental income reflect more
rounds played in the first quarter of 1997 than one year ago, in part
due to somewhat better weather conditions this year than last.
Revenues from membership dues fell approximately 33% despite an
increase in average dues per member. Management attributes the decline
principally to a delay in collections, as some dues which were
expected to be collected in March, 1997 were received after the close
of the first quarter, and to a slightly smaller club membership.
Direct operating expenses at Fox Squirrel for the three months ended
March 31, 1997 and 1996 were $64,807 and $76,004 respectively. The
principal changes in individual expense items were in equipment rental
and maintenance expense. Equipment rental expense was higher in 1997
than in 1996 since certain new equipment was leased to replace old
equipment owned by Fox Squirrel. Maintenance expense was lower this
year than last since Fox Squirrel incurred numerous expenses relating
to deferred maintenance of the golf course during 1996 which were not
incurred in 1997.
<PAGE> 6
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Revenue from tree cutting through March 31, 1997 was $692, compared to revenue
of $5,045 in the same period in 1996. As stated in recent financial reports,
Management has viewed timber cutting as a source of temporary revenue with
limited prospects in the future due to, among other factors, the size and number
of trees which may be logged, the demand for wood pulp, and market prices in
general. As such, Management expects that, if and when realized, revenue from
tree cutting will be highly variable from quarter to quarter.
Direct cost of land sold during the three months ended March 31, 1997 and 1996
was $5,321 and $65,464, respectively. The decrease is due principally to the
sale of the approximately 430 acre tract of land during the first quarter of
1996 as well as to a revision in the formula for calculating the direct
cost of land sold.
To provide funds for working capital and other purposes, on June 1, 1995 the
Partnership borrowed $200,000 from the president of the General Partner, payable
in full on June 1, 1998. The promissory note issued bears interest at a rate
equal to 6% above 12-month LIBOR, requires interest to be paid quarterly
commencing September 1, 1995, and allows for prepayment without penalty. The
promissory note is secured by a mortgage on Fox Squirrel. As of March 31, 1997,
$100,000 of the principal has been repaid, leaving an outstanding balance of
$100,000.
<PAGE> 7
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1997
(Unaudited)
- --------------------------------------------------------------------------------
In April, 1997, the Partnership began the installation of a multi-user septic
system which, when completed, will allow for development of an eight-unit
commercial district on approximately two acres of land owned by the Partnership
along State Route 87. Management expects that the multi-user system will cost
approximately $45,000 and will be fully operational in May or June, 1997. Of the
eight lots which comprise the commercial district, none have been sold but one
is currently under contract for sale for approximately $25,000. The Partnership
intends to sell the remaining lots within the commercial district to one or more
third parties for development but, depending on market factors and terms that
may be agreed upon, the Partnership may itself develop one or more of such lots
and lease the storefront(s) to third parties.
The improvements discussed above are representative of the Partnership's
continuing efforts to improve the development at Boiling Spring Lakes so that
the Partnership will eventually be able to consistently generate revenues in
excess of operating expenses and capital expenditures. Management believes,
however, that the variable nature of the Partnership's revenues and its current
liquidity position raise doubts about the Partnership's ability to fund its
operations and currently planned capital programs without obtaining additional
financing. Management is not certain that additional outside financing is
available and, if available, that such financing may be obtained on terms
Management believes to be acceptable.
<PAGE> 8
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1997
(Unaudited)
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PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
The Partnership filed no reports on Form 8-K for the quarter ended
March 31, 1997
<PAGE> 9
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1997
(Unaudited)
- --------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
REEVES TELECOM LIMITED PARTNERSHIP
By: Grace Property Management, Inc.
General Partner
By: /s/ JOHN S. GRACE
---------------------
John S. Grace
President
Dated: May 20,1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 113,577
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 113,577
<PP&E> 1,022,789
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,136,366
<CURRENT-LIABILITIES> 1,018,925
<BONDS> 138,940
0
0
<COMMON> (21,499)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,136,366
<SALES> 61,288
<TOTAL-REVENUES> 147,717
<CGS> 5,321
<TOTAL-COSTS> 189,604
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,887)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,887)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,887)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
