<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 29, 1996
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 .
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Page 1 of 11 Pages
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PART I
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ITEM 1: FINANCIAL STATEMENTS
- -----------------------------
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
February 29, November 30,
1996 1995
(Unaudited)
------------ ------------
ASSETS:
Cash and short-term investments $ 452,032 $ 275,823
Accounts receivable 136,198 186,369
Prepaid expenses and deposits 41,120 69,139
Investment property, at cost:
Land and improvements 1,013,858 1,013,858
Buildings 12,917,892 12,904,376
------------ ------------
13,931,750 13,918,376
Less accumulated depreciation 6,805,864 6,702,698
------------ ------------
7,125,886 7,215,536
Investment property held for sale 3,485,617 3,490,426
Deferred expenses-At amortized cost 93,689 85,696
------------ ------------
$11,334,542 $11,322,989
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Accounts payable and accrued expenses $ 118,075 $ 74,635
Mortgage notes payable 12,602,966 12,628,720
Refundable tenant deposits 99,236 95,098
------------ ------------
12,820,277 12,798,453
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Partners' Deficit (1,485,735) (1,475,464)
------------ ------------
$11,334,542 $11,322,989
============ ============
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS AND PARTNERS' DEFICIT
(UNAUDITED)
Three Months Ended
--------------------------
February 29, February 28,
1996 1995
------------ ------------
REVENUES:
Rental and other income $ 854,762 $ 809,016
Interest 295 851
------------ ------------
855,057 809,867
EXPENSES:
Interest 284,402 287,079
Depreciation and amortization 127,347 166,519
Real estate taxes 99,164 124,707
Property management fees paid to
Nooney Krombach Company 45,234 43,277
Reimbursement to Nooney Krombach Company
for partnership management services and
indirect expenses 10,000 10,000
Other operating expenses 299,181 273,498
------------ ------------
865,328 905,080
------------ ------------
NET LOSS $ (10,271) $ (95,213)
============ ============
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (0.75) $ (6.92)
============ ============
PARTNERS' DEFICIT:
Beginning of Period $(1,475,464) $(1,323,629)
Net Loss (10,271) (95,213)
------------ ------------
End of Period $(1,485,735) $(1,418,842)
============ ============
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
--------------------------
February 29, February 28,
1996 1995
------------ ------------
CASH FLOWS PROVIDED BY(USED IN) OPERATING ACTIVITIES:
Net Loss $ (10,271) $ (95,213)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 127,347 166,519
Changes in assets and liabilities:
Decrease in accounts receivable 50,171 16,321
Decrease in prepaid expenses and deposits 28,016 4,381
Increase (Decrease) accounts payable and
accrued expenses 43,440 (114,534)
Increase (Decrease) in refundable tenant
deposits 4,138 (108)
Decrease in deferred expenses (26,840) (5,187)
------------ ------------
Total Adjustments 226,272 67,392
------------ ------------
Net cash provided by (used in)
operating activities 216,001 (27,821)
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Addition to investment property (14,037) (20,443)
------------ ------------
Net cash used in investing activities (14,037) (20,443)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Payments on mortgage notes payable (25,755) (25,247)
------------ ------------
Net cash used in financing activities (25,755) (25,247)
------------ ------------
NET INCREASE (DECREASE) IN CASH 176,209 (73,511)
CASH, Beginning of period 275,823 363,649
------------ ------------
CASH, End of period $ 452,032 $ 290,138
============ ============
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED FEBRUARY 29, 1996 AND 1995
NOTE A:
Refer to the Registrant's financial statements for the year ended November 30,
1995, 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. During the first quarter of fiscal year 1996, the
Registrant implemented "Financial Accounting Standards Board Rule 121,
Accounting for the Long-lived Asset and for the Long-lived Assets to Be
Disposed Of". The implementation had no financial statement impact for the
quarter ended February 29, 1996. 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 29, 1996 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 29,
1996 and February 28, 1995 was computed based on 13,529 units, the number of
units outstanding during the periods.
<PAGE> 6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
- -------------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Cash on hand as of February 29, 1996 is $452,032, an increase of $176,209 from
year end November 30, 1995. The increase in cash balances can be attributed to
the improved operations at Woodhollow Apartments due to a strengthening of the
multi-family market in the west St. Louis County area. The additional cash flow
at Woodhollow Apartments has been deposited into an established capital reserve
to fund certain deferred capital improvements including new siding, parking lot
upgrades and common area renovations. These improvements to the property will
commence in the current year. Additional capital expenditures by property are
as follows:
Leasing Other
Capital Capital Total
------------ ------------ ------------
Cobblestone Court $ 96,950 $ 0 $ 96,950
Woodhollow Apartments $ 0 $ 67,250 $ 67,250
------------ ------------ ------------
$ 96,950 $ 67,250 $164,200
============ ============ ============
During the remainder of 1996, approximately $164,200 of capital expenditures
are expected. The capital to be expended at Cobblestone Court relates to tenant
alterations and lease commissions for new tenants and lease renewals. At
Woodhollow Apartments a majority of the capital to be expended will be for the
replacement of air conditioning units and the completion of a handicap ramp for
wheelchair access.
As discussed in the third quarter and annual report, the General Partners have
put Cobblestone Court on the market for sale. The General Partners elected to
sell the property at this time because Cobblestone Court needs to be
reconfigured and repositioned to stay competitive in today's retail
environment, and the partnership is not in financial position to supply the
capital needed for such a project. In addition, due to the harsh winter, it has
become apparent that the building may need extensive roof repairs. The
Registrant has received offers for the property, however, no contract has been
executed at this time.
If the Registrant's efforts to market and sell the property are unsuccessful,
it may become necessary to extend the first mortgage debt. The mortgage debt is
due to mature June 28, 1996. At this time, the Registrant cannot determine if
the mortgage debt can be further extended.
During the fourth quarter of 1995, the Registrant extended the second mortgage
debt on Cobblestone Court and Woodhollow Apartments through June 30, 1996. The
balance of the loans as of February 29, 1996 were $1,438,039 and $218,841,
respectively.
The long-term liquidity of the Registrant is dependent on its ability to fund
future capital expenditures and mortgage payments, maintain high 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 and a
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profitable sale of the properties is feasible, the Registrant will continue to
manage the properties to achieve its investment objectives.
Results of Operations
- ---------------------
The results of operations for the Registrant's properties for the quarters
ended February 29, 1996 and February 28, 1995 are detailed in the schedule
below. Expenses of the Registrant are excluded.
Woodhollow Cobblestone
Apartments Court
------------ ------------
1996
- ----
Revenues $ 578,058 $ 272,168
Expenses $ 556,897 $ 280,272
------------ ------------
Net Income (Loss) $ 21,161 $ (8,104)
============ ============
1995
- ----
Revenues $ 525,446 $ 283,420
Expenses $ 590,829 $ 290,924
------------ ------------
Net Loss $ (65,383) $ (7,504)
============ ============
At Woodhollow Apartments the operations have significantly improved from the
first quarter of 1995 to the first quarter of 1996. Net income for the three
month period ended February 29, 1996 is $21,161 compared to a net loss of
$65,383 for the same period ended February 28, 1995. The increase in net income
can be attributed to increased revenues along with a decrease in expenses. The
improvement in the multi-family market in the west St. Louis County continues
to put upward pressure in the rental rates resulting in increased revenues. The
decrease in operating expenses relates primarily to real estate taxes which
resulted from a law change in the State of Missouri. During the third quarter
of 1995, the State of Missouri passed a law that reduced Woodhollow Apartment's
assessment rate from 32% to 19%.
Cobblestone Court's operating results remained relatively stable when comparing
1996 first quarter results to 1995 first quarter results. Though total expenses
remained consistent from quarter end to quarter end, individual components
varied significantly. Snow removal increased $10,320 along with repairs and
maintenance ($4,443) and insurance ($3,536). Offsetting the increase in
expenses is a decrease in depreciation expense of $37,210. The decrease in
depreciation expense relates to the fact that the property is held for sale and
under generally accepted accounting principles when a property is held for sale
it may no longer be depreciated.
<PAGE> 8
The occupancy levels at the Registrant's properties during the first quarter
decreased at Cobblestone Court while at Woodhollow Apartments they remained
stable. The occupancy levels at February 29, 1996 and February 28, 1995 and
1994 are as follows:
Property
Occupancy Rates at February 29, 1996
and February 28, 1995 and 1994
-------------------------------------
1996 1995 1994
----------- ----------- -----------
Woodhollow Apartments 96% 96% 94%
Cobblestone Court 85% 99% 96%
At Woodhollow Apartments the occupancy remained constant when comparing
February 29, 1996 to February 28, 1995 and February 28, 1994 statistics. The
Registrant attributes the consistently high occupancy level at Woodhollow
Apartments to increasing demand for apartment units in the west St. Louis
County area without a corresponding increase in supply. The Registrant expects
this trend to continue throughout 1996.
During the first quarter the occupancy level at Cobblestone Court decreased
from 92% to 85% due to the move out of a single tenant occupying 6,584 square
feet. The Registrant renewed 26,400 square feet for two tenants. A major tenant
occupying 25,600 square feet renewal became effective December 1, 1995 for a
term of five years. The property has two major tenants that occupy
approximately 26% and 10% with lease expiring in December 2000 and May 1996,
respectively. The tenant whose lease expires in May 1996 has given verbal
notice that they are interested in renewing their lease, however, terms have
not been agreed upon.
1996 Comparisons
- ----------------
As of February 29, 1996 the Registrant's consolidated revenues for the quarter
ended are $855,057 compared to $809,867 for the same period ended February 28,
1995. The increase in consolidated revenues is directly attributable to
Woodhollow Apartments. At Woodhollow Apartments revenues increased $52,612 when
comparing quarter ending results February 29, 1996 to February 28, 1995. The
increase is a result of an improving multi-family market in the west St. Louis
County area. Offsetting the increase in revenues at Woodhollow Apartments is a
decrease in revenues at Cobblestone Court of $11,252. The decrease at
Cobblestone Court relates to a decrease in rental income which can be
attributed to the decrease in occupancy.
Consolidated expenses for the quarter ended February 29, 1996 are $865,328
compared to $905,080 for the same period ended February 28, 1995. The decrease
in consolidated expenses relates primarily to the decrease in depreciation
expense. The decrease in depreciation expense relates to Cobblestone Court and
the fact that the property is being held for sale and under generally accepted
accounting principles a property held for sale may not be depreciated. Real
estate tax expense has also decrease from quarter end February 29, 1996 to
February 28, 1995. As previously mentioned, the decrease is due to a change in
the law in the State of Missouri.
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Offsetting the decreases in depreciation expense and real estate tax expense
were increases in operating expenses. The following operating expenses
increased when comparing quarter end February 29, 1996 to February 28, 1995:
snow removal ($11,634), furniture rental ($12,438), insurance ($4,620) and
cleaning ($4,989). Offsetting the aforementioned increases were decreases in
the following expenses: maintenance payroll (5,840) and professional services
($6,904).
1995 Comparisons
- ----------------
For the quarter ended February 28, 1995 and 1994 consolidated revenues were
$809,867 and $793,629, respectively. The increase in revenues of $16,238 is
attributable to an increase in revenues at Woodhollow Apartments ($23,043)
offset by a decrease in revenues at Cobblestone Court ($6,855). The revenue
increase at Woodhollow Apartments was caused by a general strengthening of the
multi-family market in west St. Louis County and as stated previously, this
trend continued throughout 1995 and into 1996. The decrease in revenues at
Cobblestone Court is attributable to decreases in percentage rent and common
area maintenance income.
Consolidated operating expenses for the quarter ended February 28, 1995 and
1994 were $905,080 and 920,347, respectively. The decrease in expenses is
attributable to decreases in interest expense and depreciation and amortization
offset by an increase operating expenses. The decrease in interest expense
relates to the refinancing of the first mortgage debt secured by Woodhollow
Apartments completed in August 1994. The decreases in depreciation and
amortization are attributable to certain capital expenditures (tenant
alterations, lease commission and building improvements) at the Registrant's
properties becoming fully amortized and/or depreciated. The increase in
operating expenses is attributable to repairs and maintenance ($3,973), snow
removal ($4,035), administration fees ($5,000), parking lot expenditures
($7,498) and professional services ($7,130).
Inflation
- ---------
The effects of inflation did not have a material impact upon the
Registrant's operation in fiscal 1995 and are not expected to materially affect
the Registrant's operation in 1996.
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE> 10
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 15, 1996 By: /s/ Gregory J. Nooney, Jr.
-----------------------------------------
Gregory J. Nooney, Jr.
General Partner
NOONEY CAPITAL CORPORATION
By: /s/ Gregory J. Nooney, Jr.
-----------------------------------------
Gregory J. Nooney, Jr.
Chairman
By: /s/ Patricia A. Nooney
-----------------------------------------
Patricia A. Nooney
Senior Vice President and Secretary
BEING A MAJORITY OF DIRECTORS
<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-01-1995
<PERIOD-END> FEB-29-1996
<CASH> 452,032
<SECURITIES> 0
<RECEIVABLES> 136,198
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 629,350
<PP&E> 13,931,750
<DEPRECIATION> 6,805,864
<TOTAL-ASSETS> 11,334,542
<CURRENT-LIABILITIES> 118,075
<BONDS> 12,602,966
0
0
<COMMON> 0
<OTHER-SE> (1,485,735)
<TOTAL-LIABILITY-AND-EQUITY> 11,334,542
<SALES> 854,762
<TOTAL-REVENUES> 855,057
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 580,926
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 284,402
<INCOME-PRETAX> (10,271)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,271)
<EPS-PRIMARY> (.75)
<EPS-DILUTED> 0
</TABLE>
