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 August 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
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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 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
2
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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)
August 31,
2000
ASSETS:
Investment property
Land $ 1,014,000
Buildings and improvements 15,285,000
------------
16,299,000
Less accumulated depreciation 9,107,000
------------
Total investment property 7,192,000
Cash 629,000
Accounts receivable, less allowance for doubtful accounts 33,000
Prepaid expenses --
Deferred expenses, less accumulated amortization 42,000
Total Assets $ 7,896,000
============
LIABILITIES AND PARTNER'S DEFICIT:
Liabilities:
Mortgage notes payable $ 9,159,000
Accounts payable and accrued expenses 312,000
Refundable tenant deposits 95,000
------------
Total liabilities 9,566,000
Partners' deficit (1,670,000)
Total liabilities and partners' deficit $ 7,896,000
============
3
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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 Nine Months Ended
August 31, August 31, August 31, August 31,
2000 1999 2000 1999
Revenues:
Rental $ 655,000 701,000 2,133,000 2,110,000
Other 54,000 97,000 238,000 334,000
---------- ---------- ---------- ----------
Total revenues 709,000 798,000 2,371,000 2,444,000
---------- ---------- ---------- ----------
Expenses:
Depreciation and amortization 160,000 420,000 512,000 446,000
Repairs and maintenance, including common
area maintenance 67,000 114,000 242,000 365,000
Real estate taxes 34,000 89,000 194,000 270,000
Interest, net 220,000 278,000 825,000 814,000
Professional fees 37,000 121,000 96,000 250,000
General and administrative 50,000 67,000 146,000 184,000
Utilities 42,000 50,000 144,000 126,000
Management fees - related parties 61,000 43,000 142,000 127,000
Other 94,000 103,000 235,000 264,000
---------- ---------- ---------- ----------
Total expenses 765,000 1,285,000 2,536,000 2,846,000
---------- ---------- ---------- ----------
Loss before adjustment to liquidation
basis and gain on sale (56,000) (487,000) (165,000) (402,000)
Adjustment to liquidation basis -- -- -- 586,000
Gain on sale of Cobblestone Court -- -- 1,541,000 --
---------- ---------- ---------- ----------
Net Income (loss) $ (56,000) (487,000) 1,376,000 184,000
========== ========== ========== ==========
Net income (loss) allocation:
General partners $ (1,000) (8,000) 24,000 3,000
Limited partners (55,000) (479,000) 1,352,000 181,000
---------- ---------- ---------- ----------
$ (56,000) (487,000) 1,376,000 184,000
========== ========== ========== ==========
Limited partners' data:
Net loss per unit:
Loss before adjustment to liquidation
basis and gain on sale $ (4.07) (35.40) (11.95) (29.18)
Adjustment to liquidation basis -- -- -- 42.52
Gain on sale of Cobblestone Court -- -- 111.90 --
---------- ---------- ---------- ----------
Total $ (4.07) (35.40) 99.95 13.34
========== ========== ========== ==========
Weighted average limited partnership units outstanding 13,529 13,529 13,529 13,529
========== ========== ========== ==========
</TABLE>
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>
Nine Months Ended
August 31, August 31,
2000 1999
Cash flows from operating activities:
Net income $ 1,376,000 184,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Adjustment to liquidation basis -- (586,000)
Gain on sale of Cobblestone Court (1,541,000) --
Depreciation and amortization 512,000 446,000
Changes in accounts affecting operations:
Accounts receivable 156,000 (34,000)
Prepaid expenses 19,000 (30,000)
Deferred expense -- 122,000
Accounts payable and accrued expenses (154,000) 215,000
Refundable tenant deposits 26,000 --
----------- -----------
Net cash provided by operating activities 394,000 317,000
----------- -----------
Cash flows from investing activities:
Capital expenditures (60,000) (780,000)
Proceeds from sale of Cobblestone Court, net of
related expenses 4,941,000 --
----------- -----------
Net cash provided (used) by investing activities 4,881,000 (780,000)
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage notes payable (4,667,000) (142,000)
Funding on mortgage notes payable -- 500,000
Net cash provided (used) by financing activities (4,667,000) 358,000
----------- -----------
Net increase (decrease) in cash 608,000 (105,000)
Cash, beginning of period 21,000 227,000
----------- -----------
Cash, end of period $ 629,000 122,000
=========== ===========
Supplemental disclosure of cash flow information -
cash paid during the nine months for interest $ 826,000 719,000
=========== ===========
</TABLE>
5
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED AUGUST 31, 2000 AND AUGUST 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 August 31, 2000 and
for all periods presented have been made. The results for the three and
nine-month periods ended August 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 97.5% of total revenues for the quarter ended August 31, 2000.
Cobblestone Court, a retail shopping center located in Burnsville, Minnesota, a
suburb of Minneapolis, was sold for a price of $5,100,000 on May 24, 2000.
(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 nine months of 1999.
6
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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)
7
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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 August 31, 2000 was $629,000, an increase of $608,000 from November
30, 1999. Cash provided from operating activities for the nine months ended
August 31, 2000 was $394,000. Investing activities provided cash of $4,881,000
primarily due to the sale proceeds of Cobblestone Court. Financing activities
used cash of $4,667,000 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
nine months ended August 31, 2000 and August 31, 1999 are detailed in the
schedule below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Woodhollow Apartments Cobblestone Court
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
August 31, 2000 August 31, 2000
Revenues $ 691,000 1,999,000 $ 18,000 372,000
Expenses 708,000 1,996,000 27,000 510,000
------------- ---------- ---------- ----------
Net Income (Loss) before
adjustment to liquidation
basis and gain on sale $ (17,000) 3,000 $ (9,000) (138,000)
============= ========== ========== ==========
Woodhollow Apartments Cobblestone Court
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
August 31, 1999 August 31, 1999
Revenues $ 596,000 1,820,000 $ 200,000 616,000
Expenses 987,000 2,015,000 298,000 830,000
------------ ---------- ---------- ----------
Net Income (Loss) before
adjustment to liquidation
basis and gain on sale $ (391,000) (195,000) $ (98,000) (214,000)
============= ========== ========== ==========
</TABLE>
8
<PAGE>
2000 Property Comparisons
At Woodhollow Apartments, revenues increased $95,000 (15.9%) in the third
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 decreased $279,000 when compared
to the third quarter of last year. This decrease in expenses is primarily due to
a decrease in depreciation and amortization of $256,000, repairs and maintenance
of $26,000, and professional fees of $16,000. The decreased expenses were
partially offset by increases in interest expense of $34,000. The decrease 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 for all nine months of 2000.
At Cobblestone Court, revenues recorded for the quarter ended August 31, 2000
are residual CAM income items and expenses are residual operating expenses.
Pro Forma Results
The table below presents the pro-forma results of operations without Cobblestone
Court for the three and nine months ended August 31, 2000 and August 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 Nine Months Ended
August 31, August 31, August 31, August 31,
2000 1999 2000 1999
Revenues $ 691,000 598,000 1,999,000 1,828,000
Repairs and maintenance, including
common area maintenance 60,000 85,000 166,000 263,000
Interest, net 220,000 186,000 630,000 540,000
Depreciation 159,000 416,000 476,000 433,000
General and administrative 50,000 57,000 144,000 152,000
Other 249,000 243,000 610,000 627,000
------- ------- ------- -------
Total expenses 738,000 987,000 2,026,000 2,015,000
------- ------- --------- ---------
Net loss before adjustment to
liquidation basis and gain on sale $ (47,000) (389,000) (27,000) (187,000)
========= =========== ========== ===========
Net loss before adjustment to
liquidation basis and gain on sale
per limited partnership units: $ (3.44) (28.24) (1.99) (13.62)
========= ========= ========== ==========
</TABLE>
9
<PAGE>
The occupancy levels at August 31, 2000 and August 31, 1999 are as follows:
Occupancy levels as of:
August 31, August 31,
Property 2000 1999
Cobblestone Court Shopping Center N/A 54%
Woodhollow Apartments 96% 91%
At Woodhollow Apartments the occupancy increased to 96% 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 nine month periods ended August 31, 2000, the Partnership's
consolidated revenues were $709,000 and $2,371,000, respectively. Revenues
decreased by $89,000 (11.2%) and $73,000 (3.0%) for the three and nine month
periods ended August 31, 2000 as compared to the same periods ended August 31,
1999. Revenue at Woodhollow for the three months ended August 31, 2000 increased
by $95,000, offset by a decrease in income due to the sale of Cobblestone Court
of $182,000. For the nine months ended August 31, 2000, revenue increased at
Woodhollow by $179,000 offset by a decrease at Cobblestone Court of $244,000,
which is primarily due to the sale of Cobblestone Court in May 2000.
For the three and nine month periods ended August 31, 2000, the Partnership's
consolidated expenses were $765,000 and $2,536,000, respectively. Expenses
decreased by $520,000 (40.5%) and $310,000 (10.9%) for the three and nine month
periods ended August 31, 2000 as compared to the same periods ended August 31,
1999. Expenses at Woodhollow for the three months ended August 31, 2000
decreased by $279,000, primarily due to a decrease in depreciation and
amortization of $256,000. Expenses at Cobblestone Court decreased by $272,000
due to the sale of Cobblestone Court in May 2000. For the nine months ended
August 31, 2000, expenses at Woodhollow decreased by $19,000. For the same
period, expenses at Cobblestone Court decreased by $321,000, which was primarily
due to the sale of Cobblestone Court in May 2000.
For the three and nine month periods ended August 31, 2000, Management fee
expense increased by $18,000 and $15,000 respectively. The increase was due
primarily to the partnership management fee, provided for in the Partnership
agreement, of $30,000, payable to the General Partner of the Partnership, being
incurred in 2000 and not in 1999. Property management fees for the three and
nine month periods ended August 31, 2000 were $31,000 and $112,000 respectively,
compared to $43,000 and $127,000 for the same periods ended August 31, 1999.
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 Exhibits Index on Page 14
(b) Reports on Form 8-K
None
11
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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: October 13, 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
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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 date May 19, 2000 amending the Contract for
the Sale of Cobblestone Court Shopping Center.
27 Financial Data Schedule for the period ended August 31, 2000.
13
