<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, 1998 Commission File #0-9305
REEVES TELECOM LIMITED PARTNERSHIP
(name changed from Reeves Telecom Associates)
- --------------------------------------------------------------------------------
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
- -----------------------------------------------------------------
(Address of General Partner) (Zip Code)
Registrants telephone number (516) 686-2201
----------------
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
<TABLE>
<CAPTION>
March 31, December 31,
Assets 1998 1997
------ (UNAUDITED) (AUDITED)
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 105,801 $ 148,131
Inventory 16,572 --
----------- -----------
122,373 148,131
Land held for development or sale
and related buildings and
equipment, net 910,837 911,197
----------- -----------
$ 1,033,210 $ 1,059,328
=========== ===========
Liabilities and Partners' Capital
Current Liabilities:
Accounts payable and
accrued expenses $ 1,209,118 $ 1,171,439
Notes payable - Current
portion 63,750 63,750
----------- -----------
1,272,868 1,235,189
Notes payable - Non-Current
portion 18,598 32,708
----------- -----------
Total Liabilities 1,291,466 1,267,897
Partners' capital (258,256) (208,569)
----------- -----------
$ 1,033,210 $ 1,059,328
=========== ===========
</TABLE>
<PAGE> 3
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS AND PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Operating revenues:
Land sales $ 91,966 $ 61,288
Fox Squirrel 90,983 84,699
Interest income 548 624
Other income and sale of timber -- 1,106
--------- ---------
183,497 147,717
--------- ---------
Operating Costs and Expenses:
Administrative 201,630 169,258
Direct cost of land sold 15,318 5,321
Depreciation 16,236 15,025
--------- ---------
233,184 189,604
--------- ---------
Net Income or (Loss) (49,687) (41,887)
Partners' capital at beginning
of period (208,569) 20,388
--------- ---------
Partners' capital at end of
period $(258,256) $ (21,499)
========= =========
Income or (Loss) per partnership
unit (1,828,248 units outstanding
as of March 31, 1998 and 1997
respectively.) $ (0.027) $ (0.023)
========= =========
</TABLE>
<PAGE> 4
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS:
Net Income or (Loss) $ (49,687) $ (41,887)
Deduct Items Not Using Cash:
Depreciation 16,236 15,025
--------- ---------
TOTAL (33,451) (26,862)
--------- ---------
CHANGES IN OPERATING ASSETS AND LIABILITIES
INCREASING OR (DECREASING) CASH:
(Increase) in inventory (16,572) --
Decrease in Land held for
development or sale 15,318 5,321
Increase or (decrease) in accounts
payable and accrued expenses 37,679 21,357
(Decrease) in notes payable (14,110) (14,701)
--------- ---------
22,315 11,977
--------- ---------
NET CASH PROVIDED OR (USED) BY
OPERATIONS (11,136) (14,885)
CASH (USED) BY INVESTING ACTIVITIES:
Additions to Fixed Assets (31,194) (5,457)
--------- ---------
NET INCREASE OR (DECREASE) IN CASH $ (42,330) $ (20,342)
========= =========
CASH BALANCE - BEGINNING $ 148,131 $ 133,919
NET INCREASE OR (DECREASE) IN
CASH, AS ABOVE (42,330) (20,342)
--------- ---------
CASH BALANCE - ENDING $ 105,801 $ 113,577
========= =========
</TABLE>
<PAGE> 5
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1998
(Unaudited)
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, 1998 and 1997, the
Partnership generated revenues from land sales of $91,966 and
$61,288, respectively. The Partnership sold 17 individual lots
in the first quarter of 1998 compared to 8 lots for the same
period one year ago. Management believes the improvement is
largely the result of the Winter of 1997-1998 being among the
warmest in recent memory for the region. Historically, real
estate sales in Boiling Spring Lakes and its environs are
lower in Winter than in any other season because, Management
believes, potential purchasers prefer to investigate real
estate during periods of warmer temperatures.
Revenues at Fox Squirrel Country Club ("Fox Squirrel") for the
three months ended March 31, 1998 and 1997 were $90,983 and
$84,699 respectively. The increase in revenue is due, in part,
to the Partnership's assuming the interim operation of the Pro
Shop and the operation of the Dining Service at Fox Squirrel
in February 1998. Prior to such time, the Pro Shop and Dining
Services were operated by the Manager of Fox Squirrel for his
own account and not for the benefit of the Partnership. As
stated in the Partnership's Form 10-K for the fiscal year
ended December 31, 1997, the Partnership and the Manager
concluded an agreement pursuant to which, among other things,
the Manager's employment agreement and related agreement to
operate the Dining Service were cancelled. Management believes
the increase in revenue is also due, in part, to a speedier
collection of membership dues following a change in the timing
of payment due dates. Direct operating expenses at Fox
Squirrel for the three months ended March 31, 1998 and 1997
were $82,864 and $64,807 respectively. Management attributes
the increase largely to one-time payments made to the Manager
of Fox Squirrel in February and March 1998 following the
cancellation of his employment agreement and to the
recognition of expenses relating to the operation of the
Dining Service since February 1998. The Partnership incurred
no similar expenses during the prior year although certain
payments were made during 1997 to the operator of the Dining
Service to reflect the collection of a one-time "food minimum"
from members of Fox Squirrel.
<PAGE> 6
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1998
(Unaudited)
Direct cost of land sold during the three months ended March
31, 1998 and 1997 was $15,318 and $5,321, respectively. The
increase is due to the larger number of lots sold during the
first quarter of 1998 than one year ago and the relative
carrying values of such lots.
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, 1998, $160,000 of
the principal has been repaid, leaving an outstanding balance
of $40,000.
Management is continuing its 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> 7
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1998
(Unaudited)
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, 1998
<PAGE> 8
REEVES TELECOM LIMITED PARTNERSHIP
MARCH 31, 1998
(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 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 105,801
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 16,572
<CURRENT-ASSETS> 122,373
<PP&E> 910,837
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,033,210
<CURRENT-LIABILITIES> 1,272,868
<BONDS> 18,598
0
0
<COMMON> (258,256)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,033,210
<SALES> 91,966
<TOTAL-REVENUES> 183,497
<CGS> 15,318
<TOTAL-COSTS> 233,183
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (49,686)
<INCOME-TAX> 0
<INCOME-CONTINUING> (49,686)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,686)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
