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 February 29, 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)
1100 Main St., Ste 2100 Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 421-4670
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
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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
ITEM 2. CHANGES IN SECURITIES
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES 12
EXHIBIT INDEX 13
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEET
(UNAUDITED)
(in thousands except unit information) February 29,
2000
ASSETS:
Investment property
Land $ 1,014
Buildings and improvements 15,244
------
16,258
Less accumulated depreciation 8,807
-----
7,451
Investment property held for sale 3,400
-----
Total investment property 10,851
Cash 10
Accounts receivable, less allowance for doubtful accounts 125
Prepaid expenses 13
Deferred expenses, less accumulated amortization 89
-------
Total assets $ 11,088
======
LIABILITIES AND PARTNERS' DEFICIT:
Liabilities:
Mortgage notes payable $ 13,763
Accounts payable and accrued expenses 385
Refundable tenant deposits 75
-------
Total liabilities 14,223
Partners' deficit (3,135)
-------
Total liabilities and partners' deficit $ 11,088
======
3
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MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands except unit information) Three Months Ended
February 29 February 28
2000 1999
Revenues:
Rental $ 684 705
Other 115 102
--- ---
Total revenues 799 807
---- ---
Expenses:
Depreciation and amortization 164 13
Repairs and maintenance, including common
area maintenance 82 118
Real estate taxes 90 92
Interest, net 317 275
Professional fees 41 76
General and administrative 42 56
Utilities 51 32
Property management fees - related parties 37 40
Other 63 69
--- ---
Total expenses 887 771
--- ---
Income (loss) before adjustment
to liquidation basis (88) 36
Adjustment to liquidation basis -- 68
----- ----
Net Income (loss) $ (88) 104
======= ===
Net income (loss) allocation:
General partners $ (1) 2
Limited partners (87) 102
------ ---
$ (88) 104
====== ====
Limited partners' data:
Net income (loss) per unit:
Income (loss) before adjustment
to liquidation basis $ (6.41) 2.57
Adjustment to liquidation basis -- 4.96
--------- ---------
Total $ (6.41) 7.53
========= =========
Weighted average limited partnership
units outstanding 13,529 13,529
======== ========
4
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands except unit information) Three Months Ended
February 29 February 28
2000 1999
Cash flows from operating activities:
Net income (loss) $ (88) 104
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Adjustment to liquidation basis -- (68)
Depreciation and amortization 164 13
Changes in accounts affecting operations:
Accounts receivable 64 14
Prepaid expenses 6 --
Accounts payable and accrued expenses (80) 77
Refundable tenant deposits 5 4
----- -----
Net cash provided by operating activities 71 144
----- -----
Cash flows from investing activities - capital
expenditures (19) (22)
----- -----
Cash flows from financing activities -principal payments
on mortgage notes payable (63) (47)
----- -----
Net (decrease) increase in cash (11) 75
Cash, beginning of period 21 227
----- ----
Cash, end of period $ 10 302
===== =====
Supplemental disclosure of cash flow information -
cash paid during the quarter for interest $ 404 275
===== =====
</TABLE>
5
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 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 February 29, 2000 and
for all periods presented have been made. The results for the three-month period
ended February 29, 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. 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 76% of total revenues for the quarter ended February
29, 2000, and a retail shopping center (Cobblestone Court) located in
Burnsville, Minnesota, a suburb of Minneapolis, which generated the remaining
24% of total revenues for the quarter ended February 29, 2000. 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.
(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.
6
<PAGE>
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.
$68 of the 1999 reversals were made during the first quarter of 1999.
On January 28, 2000, a sales agreement was signed on the Cobblestone Court
property that provides for a net sales price of $5,100. The sale is subject to a
due diligence period and, if completed, is expected to close by the end of the
second quarter of 2000.
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 since these taxes are the
responsibility of the partners.
(The remainder of this page is left blank intentionally.)
7
<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 reserves as of February 29, 2000 are $10, a decrease of $11 from November
30, 1999. Cash provided from operating activities for the three months ended
February 29, 2000 was $71. Investing activities used $19 due to property and
equipment purchases. Financing activities, composed of principal payments on
mortgage notes payable, used $63.
On January 28, 2000, the Partnership entered into a contract to sell the
Cobblestone Court Shopping Center ("Cobblestone"), 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
price is $5,100. The contract was subject to a fifteen (15) day due diligence
period pursuant to which Farrington had the right to terminate the contract
without liability to the Partnership. The due diligence period expired February
12, 2000. The sale was tentatively scheduled to close on March 28, 2000 with the
contract providing for one 45 day extension. The extension was exercised and the
sale is now tentatively scheduled to close in May 2000. The sale is subject to
certain conditions, including but not limited to delivery of satisfactory title
and delivery of satisfactory subordination, non-disturbance and attornment
agreements and estoppel letters from all tenants of the Property.
The Cobblestone sales contract provides for a net sale price of $5,100. If
consummated as currently structured, the transaction will result in a gain of
approximately $1,529. There is no assurance at this time, however, that the
transaction will be consummated or that the gain will be realized.
On November 30, 1998, the Partnership refinanced the debt on both of its
properties. A new loan agreement with a balance of $13,500 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. The loan matures November 30, 2001.
In 1999, additional funds of $500 were borrowed on these notes.
Results of Operations
The results of operations for the Partnership's properties for the quarters
ended February 29, 2000 and February 28, 1999 are detailed in the schedule
below. Expenses of the Partnership are excluded.
2000 Woodhollow Apartments Cobblestone Court
Revenues $ 610 $189
Expenses 637 251
----- -----
Net Loss $ (27) $ (62)
====== ======
1999 Woodhollow Apartments Cobblestone Court
Revenues $ 608 $196
Expenses 486 285
----- -----
Net Income (Loss) $ 122 $ (89)
===== ======
8
<PAGE>
2000 Property Comparisons
At Woodhollow Apartments, revenues increased $2 in first quarter of 2000
compared to the same period in 1999. Expenses increased $151 when compared to
first quarter of last year,. This increase is primarily due to an increase in
depreciation and amortization of $151, and interest expense of $35. The
increased expenses were partially offset by a decrease in repairs and
maintenance of $34. 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, entries were posted to depreciate all new and existing assets for the
previous held for sale period. Woodhollow Apartments' assets have been
depreciated in the first quarter of 2000. The increase in depreciation and
amortization is due to both properties being classified as held for sale in
1999, while only Cobblestone Court is held for sale in 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 being borrowed in 1999 as described
above in Item 2, under the heading Liquidity and Capital Resources.
At Cobblestone Court, the net loss for the quarters ended February 29, 2000 and
February 28, 1999 was $62 and $89, respectively. The decrease in the net loss is
primarily attributable to a decrease in expenses. Expenses decreased $34 in the
first quarter 2000 compared to the first quarter of 1999, largely due to a
decrease in professional fees of $22, and a decrease in real estate taxes of
$16.
The occupancy levels at February 29, 2000 and February 28 1999 are as follows:
Occupancy levels as of:
February 29 February 28
Property 2000 1999
Cobblestone Court Shopping Center 56% 59%
Woodhollow Apartments 89% 94%
At Cobblestone Court Shopping Center, occupancy decreased to 56% compared to 61%
at November 30, 1999. Two seasonal tenants vacated which occupied 5,823 square
feet. One major tenant exercised their 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 89% from 87% at November 30,
1999. A rental increase was implemented on each floorplan 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.
9
<PAGE>
Results of Operations - Consolidated
For the three month period ended February 29, 2000, the Partnership's
consolidated revenues were $799 compared with $807 for the three months end
February 28, 1999. The decrease in revenue of $8 (1.0%) can be attributed to the
decrease in revenue from Cobblestone Court due to decreased occupancy.
The Partnership's consolidated expenses for the three months ended February 29,
2000 and the three months ended February 28, 1999 were $887 and $771
respectively. The increase in expenses of $116 (15.0%) is primarily due to an
increase in depreciation and amortization of $151, increased interest expenses
of $42 (15.3%), and increased utilities expense of $19 (59.3%). The increase in
expenses was partially offset by a decrease in repairs and maintenance expense
of $36 (30.5%), decreased professional fees of $35 (46.1%), and decreased
general and administrative expense of $14 (25.1%). The property's sale status
was halted effective July 1, 1999 and liquidation basis accounting was reversed.
Commencing in July 1999, entries were posted to depreciate all new and existing
assets for the previous held for sale period. Woodhollow Apartments' assets have
been depreciated in the first quarter of 2000. The increase in depreciation and
amortization is due to both properties being classified as held for sale in
1999, while only Cobblestone Court is held for sale in 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 being borrowed in 1999 as described
in Item 2, under the heading Liquidity and Capital Resources. The increase in
utilities expense is partially due to higher utility expense for vacant units
and corporate suites in the first three months of 2000 compared to the same
period of 1999. The decrease in repairs and maintenance, professional fees and
general and administrative fees can be attributed to the change in management
companies in November, 1999.
Year 2000 Issues
Information Technology Systems
Subsequent to December 31, 1999, the Partnership has not experienced any
material information technology ("IT") or embedded ("non-IT") systems
disruptions or failures and anticipates no material systems problems at
Cobblestone Court or Woodhollow Apartments.
Material Third Parties' Systems Failures
Evaluation of material third parties' Year 2000 readiness status was essentially
complete as of December 31, 1999. The Partnership continues to monitor for any
additional information pertaining to these parties' Year 2000 readiness. The
Partnership has not experienced and does not anticipate any Year 2000
performance issues related to its material third parties.
10
<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 Exhibit Index on Page 13
(b) Reports on Form 8-K
The following reports on Form 8-K were filed by the Registrant
during the first quarter of 2000, each of which are incorporated herein by
reference (File No. 000-11023):
On January 21, 2000, the Registrant filed a Form 8-K reporting the
change of the Registrant's name and the change of its general partner's name
(Item 5).
On January 25, 2000, the Registrant filed a Form 8-K reporting the
dismissal of Deloitte and Touche L.L.P. as its certifying accountant. On
February 16, 2000, the Registrant filed Amendment No. 1 to this Form 8-K (Items
4 and 7).
On February 11, 2000, the Registrant filed a report on Form 8-K
reporting the appointment of KPMG L.L.P. as its certifying accountant (Item 4).
On February 17, 2000, the Registrant filed a Form 8-K reporting an
agreement entered into by the Registrant to sell Cobblestone Court Shopping
Center (Items 5 and 7).
11
<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: April 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)
12
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
3.1 Amended and Restated Agreement and Certificate of Limited
Partnership date April 7, 1982, is incorporated by
reference to the Prospectus contained in the Registration
Statement on Form S-11 under the Securities Act of 1933
(File No. 2-76046)
27 Financial Data Schedule for the period ended February 29,
2000.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS UNAUDITED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS FOR MAXUS REAL PROPERTY INVESTORS -FOUR, L.P. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000700720
<NAME> MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-2000
<PERIOD-START> DEC-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 10,000
<SECURITIES> 0
<RECEIVABLES> 125,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,088,000
<CURRENT-LIABILITIES> 0
<BONDS> 13,763,000
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,088,000
<SALES> 684,000
<TOTAL-REVENUES> 799,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 570,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 317,000
<INCOME-PRETAX> (88,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (88,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME>(88,000)
<EPS-BASIC> 6.41
<EPS-DILUTED> 0
</TABLE>
