SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934
For the quarter period ended May 31, 2000
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
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(Exact name of small business issuer as specified in its charter)
Missouri 43-1250566
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
104 Armour Road, North Kansas City, Missouri 64116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 303-4500
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
--- ---
1
<PAGE>
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheet 3
Statements of Operations 4
Statements of Cash Flows 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS 8
PART II - OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
EXHIBIT INDEX 13
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEET
(UNAUDITED)
May 31,
2000
ASSETS:
Investment property
Land $ 1,014,000
Buildings and improvements 15,257,000
----------
16,271,000
Less accumulated depreciation 8,956,000
-----------
Total investment property 7,315,000
Cash 509,000
Accounts receivable, less allowance for doubtful accounts 31,000
Prepaid expenses 4,000
Deferred expenses, less accumulated amortization 50,000
-----------
Total Assets $ 7,909,000
===========
LIABILITIES AND PARTNER'S DEFICIT:
Liabilities:
Mortgage notes payable $ 9,193,000
Accounts payable and accrued expenses 245,000
Refundable tenant deposits 86,000
-----------
Total liabilities 9,524,000
Partners' deficit (1,615,000)
Total liabilities and partners' deficit $ 7,909,000
===========
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MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
Revenues:
Rental $ 794,000 704,000 1,478,000 1,409,000
Other 69,000 135,000 184,000 237,000
----------- ----------- ----------- -----------
Total revenues 863,000 839,000 1,662,000 1,646,000
----------- ----------- ----------- -----------
Expenses:
Depreciation and amortization 188,000 13,000 352,000 26,000
Repairs and maintenance, including common
area maintenance 93,000 133,000 175,000 251,000
Real estate taxes 70,000 88,000 160,000 181,000
Interest, net 288,000 262,000 605,000 536,000
Professional fees 18,000 53,000 59,000 129,000
General and administrative 54,000 61,000 96,000 117,000
Utilities 51,000 44,000 102,000 76,000
Property management fees - related parties 44,000 44,000 81,000 84,000
Other 78,000 91,000 141,000 161,000
----------- ----------- ----------- -----------
Total expenses 884,000 789,000 1,771,000 1,561,000
----------- ----------- ----------- -----------
Income (loss) before adjustment to liquidation
basis and gain on sale (21,000) 50,000 (109,000) 85,000
Adjustment to liquidation basis -- 517,000 -- 586,000
Gain on sale of Cobblestone Court 1,541,000 -- 1,541,000 --
----------- ----------- ----------- -----------
Net Income $ 1,520,000 567,000 1,432,000 671,000
=========== =========== =========== ===========
Net income allocation:
General partners $ 26,000 10,000 25,000 12,000
Limited partners 1,494,000 557,000 1,407,000 659,000
----------- ----------- ----------- -----------
$ 1,520,000 567,000 1,432,000 671,000
=========== =========== =========== ===========
Limited partners' data:
Net income (loss) per unit:
Income (loss) before adjustment to liquidation
basis and gain on sale $ (1.46) 3.61 (7.89) 6.19
Adjustment to liquidation basis -- 37.56 -- 42.52
Gain on sale of Cobblestone Court 111.89 -- 111.89 --
----------- ----------- ----------- -----------
Total $ 110.43 41.17 104.00 48.71
=========== =========== =========== ===========
Weighted average limited partnership units outstanding 13,529 13,529 13,529 13,529
=========== =========== =========== ===========
</TABLE>
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended
May 31 May 31
2000 1999
Cash flows from operating activities:
Net income $ 1,432,000 671,000
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Adjustment to liquidation basis -- (586,000)
Gain on sale of Cobblestone Court (1,541,000) --
Depreciation and amortization 352,000 26,000
Changes in accounts affecting operations:
Accounts receivable 158,000 (34,000)
Prepaid expenses 15,000 (48,000)
Deferred expense -- 69,000
Accounts payable and accrued expenses (221,000) (22,000)
Refundable tenant deposits 17,000 1,000
----------- -----------
Net cash provided by operating activities 212,000 77,000
----------- -----------
Cash flows from investing activities:
Capital expenditures (32,000) (391,000)
Proceeds from sale of Cobblestone Court, net of
related expenses 4,941,000 --
----------- -----------
Net cash provided (used) by investing activities 4,909,000 (391,000)
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage notes payable (4,633,000) (95,000)
Proceeds from mortgage note payable -- 342,000
----------- -----------
Net cash provided (used) by financing activities (4,633,000) 247,000
----------- -----------
Net increase (decrease) in cash 488,000 (67,000)
Cash, beginning of period 21,000 227,000
----------- -----------
Cash, end of period $ 509,000 160,000
=========== ===========
Supplemental disclosure of cash flow information -
cash paid during the six months for interest $ 605,000 536,000
=========== ===========
</TABLE>
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED MAY 31, 2000 AND MAY 31, 1999
(1) Summary of Significant Accounting Policies
Refer to the financial statements of Maxus Real Property Investors - Four, L.P.,
formerly known as Nooney Real Property Investors - Four, L.P. (the
"Partnership"), for the year ended November 30, 1999, which are contained in the
Partnership'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
Partnership'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. In
the opinion of the general partner, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and changes in financial position at May 31, 2000 and for
all periods presented have been made. The results for the three- and six-month
periods ended May 31, 2000 are not necessarily indicative of the results which
may be expected for the entire year.
(a) Description of Business
The Partnership is a limited partnership organized under the laws of the State
of Missouri on February 9, 1982. On December 21, 1999, the Partnership's
Certificate of Limited Partnership was amended to change the name of the
Partnership from Nooney Real Property Investors-Four, L.P. to Maxus Real
Property Investors-Four, L.P. The Partnership was organized to invest primarily
in income-producing real properties such as shopping centers, office buildings
and other commercial properties, apartment buildings, warehouses, and light
industrial properties. The Partnership's portfolio is comprised of an apartment
building located in West St. Louis County, Missouri (Woodhollow Apartments)
which generated 81% of total revenues for the quarter ended May 31, 2000, and a
retail shopping center (Cobblestone Court) located in Burnsville, Minnesota, a
suburb of Minneapolis, which generated the remaining 19% of total revenues for
the quarter ended May 31, 2000. On May 24, 2000, Cobblestone Court was sold for
a price of $5,100,000.
(b) Basis of Accounting
On January 21, 1999, a plan to sell the Partnership's Woodhollow Apartments
property and Cobblestone Court property was approved by a majority of the
limited partners by proxy. The Partnership entered into sales contracts on both
properties with American Spectrum Realty, Inc., an affiliate of Nooney Capital
Corporation, corporate general partner of the Partnership at that time.
As a result of the partners' approval to sell the properties and liquidate the
Partnership, the Partnership's financial statements as of November 30, 1998 and
for the year then ended were prepared on a liquidation basis. Accordingly,
assets were valued at estimated net realizable value and liabilities included
estimated costs associated with carrying out the plan of liquidation.
In 1999, certain contingencies of the sale contracts were not fulfilled and the
sale contracts were rendered null and void. As a result of the cancellation of
the planned liquidation and the partners' intent to continue operations of the
Woodhollow Apartments property, the financial statements are no longer presented
on the liquidation basis of accounting. The cost of liquidation and other
accruals made in 1998 when adopting the liquidation basis were reversed in 1999.
$586,000 of the 1999 reversals were made during the first six months of 1999, of
which $517,000 were made during the second quarter of 1999.
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On January 28, 2000, a new sales agreement was signed on the Cobblestone Court
property that provided for a net sales price of $5,100,000. The sale was
completed May 24, 2000. Proceeds from the sale were used to reduce mortgage
notes payable.
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Maxus 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 because these taxes are the
responsibility of the partners.
(the remainder of this page left blank intentionally)
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<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR RESULTS OF OPERATIONS
This 10-QSB contains forward-looking information (as defined in the Private
Securities Litigation Reform Act of 1995) that involves risk and uncertainty,
including trends in the real estate investment market, projected leasing and
sales, and future prospects for the Partnership. Actual results could differ
materially from those contemplated by such statements.
Liquidity and Capital Resources
Cash as of May 31, 2000 was $509,000, an increase of $488,000 from November 30,
1999. Cash provided from operating activities for the six months ended May
31, 2000 was $212,000. Investing activities provided cash of $4,909,000
primarily due to the sale proceeds of Cobblestone Court. Financing activities
used cash of $4,633,000 composed of the payoff of the Cobblestone Court
mortgage note payable, and regular principal payments on other mortgage notes
payable.
On January 28, 2000, the Partnership entered into a contract to sell the
Cobblestone Court Shopping Center, located at 14150 Nicollet Avenue South in
Burnsville, Minnesota, a suburb of Minneapolis, to an unrelated third party,
Farrington Properties, Inc., a Minnesota corporation. The sale closed on May 24,
2000. The sale price was $5,100,000. The transaction resulted in a gain of
approximately $1,541,000.
On November 30, 1998, the Partnership refinanced the debt on both of its
properties. A new loan agreement with a balance of $13,500,000 secured by both
Cobblestone Court and Woodhollow Apartments was obtained. The loan agreement
includes two notes, which are at a floating interest rate of LIBOR + 2.75% and
call for monthly principal payments of $16,000. The loan matures November 30,
2001. In 1999, additional funds of $500,000 were borrowed on these notes. On May
24, 2000, $4,530,000 of the loan was paid off due to the sale of Cobblestone
Court.
Results of Operations
The results of operations for the Partnership's properties for the three and six
months ended May 31, 2000 and May 31, 1999 are detailed in the schedule below.
Woodhollow Apartments Cobblestone Court
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
May 31, 2000 May 31, 2000
Revenues $ 698,000 1,308,000 $ 165,000 354,000
Expenses 651,000 1,288,000 232,000 483,000
--------- --------- --------- ---------
Net Income (Loss) before
extraordinary item $ 47,000 20,000 $ (67,000) (129,000)
========= ========= ========= =========
Woodhollow Apartments Cobblestone Court
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
May 31, 1999 May 31, 1999
Revenues $ 616,000 1,224,000 $ 220,000 416,000
Expenses 542,000 1,028,000 247,000 532,000
--------- --------- --------- ---------
Net Income (Loss) $ 74,000 196,000 $ (27,000) (116,000)
========= ========= ========= =========
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<PAGE>
2000 Property Comparisons
At Woodhollow Apartments, revenues increased $82,000 (13.3%) in the second
quarter of 2000 compared to the same period in 1999. Under the new management
company, Maxus Properties, Inc., occupancy and rental rates have increased,
contributing to the increased revenue. Expenses increased $109,000 when compared
to the second quarter of last year. This increase in expenses is primarily due
to an increase in depreciation and amortization of $149,000, and interest
expense of $21,000. The increased expenses were partially offset by decreases in
repairs and maintenance and other operating expenses of $38,000 and $34,000,
respectively. The increase in depreciation and amortization is due to Woodhollow
being held for sale in 1999, while it was not classified as held for sale in
2000. Woodhollow Apartments was held for sale from the period of December 1998
through June 1999. The property's sale status was halted effective July 1, 1999
and liquidation basis accounting was reversed. Commencing in July 1999,
adjustments were made to depreciate all new and existing assets for the previous
held for sale period. Woodhollow Apartments' assets have been depreciated in the
first and second quarter of 2000.
At Cobblestone Court, the net loss before adjustment to liquidation basis and
gain on sale for the quarters ended May 31, 2000 and May 31, 1999 was $67,000
and $27,000, respectively. The increase in the net loss is primarily
attributable to a decrease in CAM reimbursement of $74,000. Expenses decreased
$15,000 in the second quarter 2000 compared to the second quarter of 1999,
largely due to a decrease in professional fees of $34,000 offset by an increase
in amortization of $26,000.
Pro Forma Results
The table below presents the pro-forma results of operations without Cobblestone
Court for the three and six months ended May 31, 2000 and May 31, 1999.
Cobblestone Court was sold May 24, 2000. These pro forma operating results are
not necessarily indicative of what the actual results would have been had the
Cobblestone Court property been sold at the beginning of the earliest period
presented.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
Revenues $ 698,000 619,000 1,308,000 1,230,000
Repairs and maintenance, including
common area maintenance 66,000 112,000 106,000 178,000
Interest, net 195,000 173,000 410,000 354,000
Depreciation 157,000 8,000 317,000 17,000
General and administrative 53,000 50,000 94,000 95,000
Other 180,000 199,000 361,000 384,000
--------- --------- --------- ---------
Total expenses 651,000 542,000 1,288,000 1,028,000
--------- --------- --------- ---------
Net Income before adjustments $ 47,000 77,000 20,000 202,000
to liquidation basis and gain on sale ========= ========= ========= =========
Net income before adjustment to liquidation
basis and gain on sale per limited
partnership units: $ 3.39 5.59 1.45 14.62
========= ========= ========= =========
</TABLE>
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The occupancy levels at May 31, 2000 and May 31, 1999 are as follows:
Occupancy levels as of:
May 31, May 31,
Property 2000 1999
Cobblestone Court Shopping Center N/A 54%
Woodhollow Apartments 95% 91%
At Cobblestone Court Shopping Center, occupancy before it was sold on May 24,
2000 decreased to 56%, compared to 61% at November 30, 1999. Two seasonal
tenants vacated which occupied 5,823 square feet. One major tenant exercised its
renewal option in March of 2000 for five additional years. The property has two
major tenants that occupy approximately 26% and 9% of the available space under
leases that expire January 2001 and December 2005, respectively.
At Woodhollow Apartments the occupancy increased to 95% from 87% at November 30,
1999. A rental increase was implemented on each floor plan during 1999. There
were a high number of vacant one bedroom units at November 30, 1999. The rent on
these units has since been reduced in an effort to increase the demand for one
bedroom rental apartments.
Results of Operations - Consolidated
For the three and six month periods ended May 31, 2000, the Partnership's
consolidated revenues were $863,000 and $1,662,000, respectively. Revenues
increased by $24,000 (2.9%) and $16,000 (1.0%) for the three and six month
periods ended May 31, 2000 as compared to the same periods ended May 31, 1999.
The increase in revenues can be attributed to the increase in rental income from
Woodhollow, offset by a decline in revenues at Cobblestone Court.
For the three and six month periods ended May 31, 2000, the Partnership's
consolidated expenses were $884,000 and $1,771,000, respectively. Expenses
increased by $95,000 (12.0%) and $210,000 (13.5%) for the three and six month
periods ended May 31, 2000 as compared to the same periods ended May 31, 1999.
The Partnership's consolidated expenses for the three months ended May 31, 2000
and the three months ended May 31, 1999 were $884,000 and $789,000 respectively.
The increase in expenses of $95,000 (12.0%) is primarily due to an increase in
depreciation and amortization of $175,000, increased interest expense of $26,000
(9.9%), and increased utilities expense of $7,000 (15.9%). The increase in
expenses was partially offset by a decrease in repairs and maintenance expense
of $40,000 (30.1%), decreased professional fees of $35,000 (66.0%), and a
decrease in other operating expenses of $13,000 (14.3%). The increase in
depreciation and amortization expense is due to both properties being classified
as held for sale in 1999, while only Cobblestone Court was held for sale in
2000. The properties' sale status was halted effective July 1, 1999 and
liquidation basis accounting was reversed. Commencing in July 1999, adjustments
were made to depreciate all new and existing assets for the previous held for
sale period. Woodhollow Apartments' assets have been depreciated in the first
and second quarter of 2000. No depreciation was recorded in 1999 or 2000 for the
properties held for sale. The increase in interest expense is due to additional
funds borrowed in 1999 as described in Item 2, under the heading Liquidity and
Capital Resources, and higher interest rates in 2000. The increase in utilities
expense is partially due to higher utility expense for vacant units and
corporate suites in the first six months of 2000 compared to the same period of
1999. The decrease in repairs and maintenance, professional fees and general and
other operating expense can be attributed to the change in management companies
in November, 1999.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibits Index on Page 14
(b) Reports on Form 8-K
None
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<PAGE>
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.
Dated: July 14, 2000 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
By: MAXUS CAPITAL CORP.
General Partner
By: /s/John W. Alvey
John W. Alvey
Director, Vice President
Secretary and Treasurer
(Principal Financial Officer)
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3.1 Amended and Restated Agreement and Certificate of Limited
Partnership dated April 7, 1982, is incorporated by reference from
Exhibit 3.1 to the Registrant's Form 10-K for the fiscal year ended
November 30, 1999 (File No. 000-11023).
3.2 Amendment of Certificate of Limited Partnership dated December 21,
1999 is incorporated by reference to the Form 8-K filed by the
Registrant (File No. 000-11023).
10.1 Contract for the sale of Cobblestone Court Shopping Center dated
January 28, 2000 is incorporated by reference to the Form 8-K filed
by the Registrant under the Securities Act of 1933 (File No.
000-11023).
10.2 Letter agreement dated March 29, 2000 amending the Contract for the
Sale of Cobblestone Court Shopping Center.
10.3 Letter agreement dated May 3, 2000 amending the Contract for the
Sale of Cobblestone Court Shopping Center.
10.4 Letter agreement dated May 19, 2000 amending the Contract for the
Sale of Cobblestone Court Shopping Center.
27 Financial Data Schedule for the period ended May 31, 2000.
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