<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended February 28, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ To ______________________
Commission file number 0-11023
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
- - -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-1250566
- - ------------------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
- - ------------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
- - -------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
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 [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date __________.
Page 1 of 11 Pages
<PAGE> 2
PART I
ITEM 1 - FINANCIAL STATEMENTS:
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
-----------------------
BALANCE SHEETS
--------------
<CAPTION>
February 28, November 30,
1995 1994
(Unaudited)
------------- ------------
<S> <C> <C>
ASSETS:
Cash and short-term investments $ 290,138 $ 363,649
Accounts receivable 106,423 122,744
Prepaid expenses and deposits 36,455 35,649
Investment property, at cost:
Land and improvements 2,219,236 2,219,236
Buildings 17,837,678 17,817,235
------------ ------------
20,056,914 20,036,471
Less accumulated depreciation 9,027,142 8,865,810
------------ ------------
11,029,772 11,170,661
Deferred expenses-At amortized cost 92,104 97,291
------------ ------------
$ 11,554,892 $ 11,789,994
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Accounts payable and accrued expenses $ 184,666 $ 299,200
Mortgage notes payable 12,696,055 12,721,302
Refundable tenant deposits 93,013 93,121
------------ ------------
12,973,734 13,113,623
------------ ------------
Partners' Deficit (1,418,842) (1,323,629)
------------ ------------
$ 11,554,892 $ 11,789,994
============ ============
</TABLE>
<PAGE> 3
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
-----------------------
STATEMENTS OF OPERATIONS AND PARTNERS' DEFICIT
----------------------------------------------
(UNAUDITED)
-----------
<CAPTION>
Three Months Ended
February 28, February 28,
1995 1994
As Restated
See Note E
------------- ------------
<S> <C> <C>
REVENUES:
Rental and other income $ 809,016 $ 792,878
Interest 851 751
------------ ------------
809,867 793,629
EXPENSES:
Interest 287,079 304,717
Depreciation and amortization 166,519 192,433
Real estate taxes 124,707 119,611
Property management fees paid to
Nooney Krombach Company 43,277 42,536
Reimbursement to Nooney Krombach Company
for partnership management services and
indirect expenses 10,000 10,000
Other operating expenses 273,498 251,050
------------ ------------
905,080 920,347
------------ ------------
NET LOSS $ (95,213) $ (126,718)
============ ============
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (6.92) $ (9.19)
============ ============
PARTNERS' DEFICIT:
Beginning of Period $ (1,323,629) $ (918,457)
Net Loss (95,213) (126,718)
------------ ------------
End of Period $ (1,418,842) $(1,045,175)
============ ============
</TABLE>
<PAGE> 4
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
-----------------------
STATEMENTS OF CASH FLOWS
------------------------
(UNAUDITED)
-----------
<CAPTION>
Three Months Ended
February 28, February 28,
1995 1994
As Restated
See Note E
------------ ------------
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $ (95,213) $ (126,718)
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 166,519 192,433
Changes in assets and liabilities:
Decrease in accounts receivable 16,321 23,798
(Increase) Decrease in prepaid
expenses and deposits (806) 20,744
Decrease in accounts payable
and accrued expenses (114,534) (150,651)
(Decrease) Increase in refundable
tenant deposits (108) 906
------------ ------------
Total Adjustments 67,392 87,230
------------ ------------
Net cash used in operating activities (27,821) (39,488)
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Addition to investment property (20,443) (9,665)
------------ ------------
Net cash used in investing activities (20,443) (9,665)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Payments on mortgage notes payable (25,247) ( 37,516)
------------ ------------
Net cash used in financing activities (25,247) (37,516)
------------ ------------
NET DECREASE IN CASH (73,511) (86,669)
CASH, Beginning of period 363,649 349,758
------------ ------------
CASH, End of period $ 290,138 $ 263,089
============ ============
</TABLE>
<PAGE> 5
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
THREE MONTHS ENDED FEBRUARY 28, 1995 AND 1994
---------------------------------------------
NOTE A:
Refer to the Registrant's financial statements for the year ended November 30,
1994, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without change
except as noted below. Also, refer to the footnotes to those statements for
additional details of the Registrant's financial condition. The details in
those notes have not changed except as a result of normal transactions in the
interim or as noted below.
NOTE B:
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Nooney Real Property
Investors-Four, L.P. The statements do not include assets, liabilities,
revenues or expenses attributable to the partners' individual activities. No
provision has been made for federal and state income taxes since these taxes
are the responsibility of the partners. In the opinion of the general
partners, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
changes in financial position at February 28, 1995 and for all periods
presented have been made.
NOTE C:
The Registrant's properties are managed by Nooney Krombach Company, a wholly-
owned subsidiary of Nooney Company. Certain individual general partners of the
Registrant are officers and directors of Nooney Company. Nooney Four Capital
Corp., a general partner, is a 75% owned subsidiary of Nooney Company.
NOTE D:
The loss per limited partnership unit for the three months ended February 28,
1995 and 1994 was computed based on 13,529 units, the number of units
outstanding during the periods.
NOTE E:
Subsequent to the filing of the 1994 10-Q's, the Registrant's management
determined that certain adjustments were not properly reflected in the
quarterly financial statements. The adjustments were as follows:
(i) Depreciation expense had previously been overstated as a result of a
computational error. The adjustment results in a reduction of
depreciation expense and an increase in net income of $8,819 for the
quarter ended February 28, 1994. The aforementioned adjustment was
properly reflected in the November 30, 1994 financial statements.
(ii) Net loss per limited partnership unit amounts have also been restated
to reflect an error made in the previous per unit calculations.
<PAGE> 6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- - -------------------------------
The Registrant's cash at February 28, 1995 was lower when compared to the
previous year-end due to lower cash flow from operations and an increase in
capital expenditures. The Registrant expects that the properties will continue
to provide adequate cash for operations and debt service.
During 1994, the Registrant successfully negotiated with the first
mortgage lender on Woodhollow Apartments, an extension of the maturity of its
note, which matured August 1, 1994. Under the modification, the note, with a
principal balance of $8,276,961, was extended for an additional seven years
reducing the interest rate from 10-3/8% to 9-1/8%. During the first three
years, the payments are interest only, thereafter the Registrant will pay
principal based on a 25-year amortization schedule. In connection with the
refinancing, the Registrant was required to establish a capital reserve escrow
account to fund certain deferred capital improvements including new siding,
parking lot upgrades and common area renovations estimated to cost
approximately $900,000. The refinancing of the first mortgage of Woodhollow
reduced its annual debt service by approximately $170,000. In addition, rental
rates are increasing as the apartment market continues to strengthen. Due to
the foregoing factors, the Registrant will fund deferred capital improvements
from cash flow from operations over a three-to-five year period if occupancy
and rental rates remain level or improve.
During the first quarter of 1995, Cobblestone Court provided cash flow
from operations. The Registrant anticipates Cobblestone Court to provide
adequate cash flow from operations to fund future capital expenditures. The
first mortgage debt of $2,759,158 matures in May 1995. The Registrant has
negotiated an extension of this mortgage note until July 1, 1995. The
Registrant feels any refinancing or permanent restructuring of the loan will be
contingent upon the renewal of the major tenant whose lease expires in November
1995. This tenant has an option to renew its lease which must be exercised by
May 1995. The Registrant renegotiated the lease of the other major tenant
whose lease expired in April 1995. The signed renewal is for an additional 5-
year term at a higher base rental rate. The Registrant believes that the
tenant whose lease expires in November 1995 will exercise its option to renew.
At that time, the Registrant will begin renegotiating the first mortgage debt
and will hopefully increase it to include the balance of the second mortgage.
Assuming the lease is renewed, the Registrant believes such refinancing will be
possible due to the cash flow of the property.
During the fourth quarter of 1994, the Registrant successfully negotiated a
renewal, to September 1995, of its second mortgage debts with principal
balances of $1,438,039 and $227,821 secured by Cobblestone Court and
Woodhollow, respectively. For the past several years the second mortgage debt
has been renewed in short-term increments. The Registrant anticipates, based
on past experience, the second mortgage debt will be renewed. As long as the
second mortgage debt is current, the Registrant is unaware of any reason the
mortgage holder would not continue to renew the debt on a short-term basis.
The long-term liquidity of the Registrant is dependent on its ability to fund
future capital expenditures and mortgage payments, maintain higher occupancy
and negotiate with lenders the renewal and/or refinancing of certain mortgage
debt as it matures. Until such time as real estate market conditions recover
<PAGE> 7
and profitable sale of the properties is feasible, the Registrant will continue
to manage the properties to achieve its investment objectives.
Results of Operations
- - ---------------------
During the quarters ended February 28, 1995, 1994 and 1993 the Registrant's
properties generated cash flows (excluding partnership expenses) as follows:
<TABLE>
<CAPTION>
Cobblestone Woodhollow
Court S.C. Apartments
----------- -----------
<S> <C> <C>
1995
- - ----
Net Operating Cash
Income <F1> $ 26,000 $ 33,000
Capital Expenditures (-0-) (9,000)
Tenant Alterations (-0-) (-0-)
Lease Commissions (-0-) (-0-)
----------- -----------
Net Property Cash Flow $ 26,000 $ 24,000
=========== ===========
1994
- - ----
Net Operating Cash
Income <F1> $ 43,000 $ 19,000
Capital Expenditures (-0-) (-0-)
Tenant Alterations (-0-) (-0-)
Lease Commissions (-0-) (-0-)
----------- -----------
Net Property Cash Flow $ 43,000 $ 19,000
=========== ===========
1993
- - ----
Net Operating Cash
Income <F1> $ 32,000 $ (12,000)
Capital Expenditures (-0-) (10,000)
Tenant Alterations (13,000) (-0-)
Lease Commissions (-0-) (-0-)
----------- -----------
Net Property Cash Flow $ 19,000 $ (22,000)
=========== ===========
- - ---------------
<FN>
<F1> Net Operating Cash Income represents Rental Revenue less Operating
Expenses, excluding depreciation and amortization, less Debt Service.
</TABLE>
<PAGE> 8
Expected remaining 1995 Capital Expenditures:
<TABLE>
<CAPTION>
Roof Other Leasing
Replacement Capital Capital Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cobblestone Court $ 26,000 $ 44,000 $ 16,000 $ 86,000
Woodhollow Apts. -0- 27,000 -0- 27,000
----------- ----------- ----------- -----------
$ 26,000 $ 71,000 $ 16,000 $113,000
=========== =========== =========== ===========
</TABLE>
During the remainder of 1995, approximately $113,000 of capital
expenditures are expected. Cobblestone is scheduled for partial roof
replacement, parking lot overlay and capital expenditures related to leasing.
Various smaller capital expenditures are anticipated at Woodhollow. Capital
expenditures relative to the improvement program previously discussed are not
reflected. All of these expenditures are based on the availability of cash
flow from operations. Presently, there are no contracts in place for any of
the capital expenditures.
The occupancy rates at the Registrant's properties are listed below:
<TABLE>
<CAPTION>
PROPERTY Occupancy Rates at February 28,
- - -------- -------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Woodhollow Apartments 96% 94% 94%
Cobblestone Court S.C. 99% 96% 95%
</TABLE>
During the first quarter of 1995, at Cobblestone Court, the Registrant
renewed 9,000 square feet having no effect on occupancy. Cobblestone currently
has three major tenants occupying approximately 46% of the property. Two of
the three major tenants' leases expire in 1995. The smaller of the major
tenants' lease (10% of the property) expires in April 1995. The Registrant
has executed a five-year renewal lease with a higher base rental rate. The
other lease (26% of the property) expires in November 1995. This tenant has an
option to renew its lease which must be exercised by May 1995. The Registrant
believes that this tenant will exercise its renewal option. The other major
tenant's (10% of the property) lease expires in May 1996.
<PAGE> 9
1995 Comparisons
- - ----------------
Gross revenues for the quarter ended February 28, 1995 were approximately
$809,000 compared to approximately $794,000 for the same quarter in the
previous year. Revenues at Woodhollow increased from $502,000 to $526,000
primarily due to higher occupancy, higher rental rates and fewer rent
concessions. Revenues at Cobblestone decreased from $290,000 to $283,000
primarily due to lower percentage rent.
Operating expenses, excluding depreciation and amortization, for the
quarter ended February 28, 1995 increased from approximately $423,000 to
approximately $451,000. Woodhollow had an increase in parking lot, landscaping
and maintenance expense. Operating expenses at Cobblestone Court remained
flat.
Interest expense decreased by approximately $17,000 primarily due to the
refinancing of the first mortgage debt on Woodhollow. In addition, interest
expense declines as first mortgage debt installments are made. Partially
offsetting this decrease is an increase in interest expense on second mortgage
debt due to an increase in prime interest rates.
1994 Comparisons
- - ----------------
Gross revenues for the quarter ended February 28, 1994 were $794,000
compared to $838,000 in 1993. The previous quarter's revenue included $80,000
of revenues from Quad I Warehouse which was disposed of during 1993. Partially
offsetting this decrease were increased revenues at Cobblestone Court Shopping
Center from $276,000 to $290,000 when compared to the previous year. This
increase was mainly a result of higher percentage rent and tax participation
recoveries. Revenues at Woodhollow Apartments also increased from $482,000 to
$502,000 due to fewer rent concessions granted in 1994 and an increase in
miscellaneous rental fees.
Operating expenses, excluding depreciation and amortization, for 1994
decreased. This decrease is due primarily to the sale of Quad I Warehouse
during the third quarter of 1993. Expenses at Cobblestone Court Shopping
Center remained constant. Operating expenses at Woodhollow decreased from
$246,000 to $238,000 due to lower cleaning expenses and repairs and
maintenance. This is partially offset by increases in insurance and tenant
related expenses.
Interest expenses for the quarter decreased due to the sale of Quad I
Warehouse in the third quarter of 1993.
1993 Comparisons
- - ----------------
Gross revenues for the quarter ended February 28, 1993 were $863,000
compared to $809,000 in 1992. Revenues at Cobblestone Court Shopping Center
increased from $268,000 to $276,000 when compared to the previous year. This
increase was mainly a result of higher common area income and percentage rent.
These are partially offset by lower tax participation and water income.
Revenues at Woodhollow Apartments decreased from $485,000 to $482,000 due to
higher rent concessions which is a result of higher occupancy. Revenues at
Quad I increased from $54,000 to $79,000 due to a 22% increase in occupancy.
<PAGE> 10
Operating expenses, excluding depreciation and amortization, for 1993
decreased $7,500 on a consolidated basis. Expenses at Cobblestone Court
Shopping Center decreased from $162,000 in 1992 to $141,000 in 1993 due
primarily to heavy snowfall in 1992. Operating expenses at Woodhollow
increased from $211,000 to $246,000 due to higher water/sewer expense, parking
lot/landscaping, and repairs and maintenance expenses. These are partially
offset by the timing of insurance payments. Operating expenses at Quad I
decreased from $44,000 to $31,000 due primarily to lower vacancy expenses which
results in higher occupancy. This is partially offset by higher real estate
taxes and parking lot repairs.
Interest expense in 1993 decreased by $6,090 when compared to the previous
year primarily due to lower interest rates on certain floating rate debt.
Inflation
- - ---------
The effects of inflation did not have a material impact upon the
Registrant's operation in fiscal 1994 and are not expected to materially affect
the Registrant's operation in 1995.
Interest Rates
- - --------------
Declining interest rates on floating rate debt positively affected the
operations of the Registrant during 1993. Increases in the prime interest rate
did adversely affect the operations of the Registrant in 1994, 1995 and will in
the future.
<PAGE> 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- - ----------------------------------------
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
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 thereunto duly authorized.
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
Dated: April 17, 1995 /S/ GREGORY J. NOONEY, JR.
---------------------------------------------
Gregory J. Nooney, Jr.
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REAL PROPERTY INVESTORS-FOUR, L.P. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000700720
<NAME> NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> FEB-28-1995
<CASH> 290,138
<SECURITIES> 0
<RECEIVABLES> 106,423
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 396,561
<PP&E> 20,056,914
<DEPRECIATION> 9,027,141
<TOTAL-ASSETS> 11,554,892
<CURRENT-LIABILITIES> 277,679
<BONDS> 12,696,055
<COMMON> 0
0
0
<OTHER-SE> (1,418,842)
<TOTAL-LIABILITY-AND-EQUITY> 11,554,892
<SALES> 809,867
<TOTAL-REVENUES> 809,867
<CGS> 618,003
<TOTAL-COSTS> 618,003
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 287,079
<INCOME-PRETAX> (95,213)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (95,213)
<EPS-PRIMARY> (6.92)
<EPS-DILUTED> 0
</TABLE>
