FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
For the transition period from...................to...........
Commission file number 0-11949
SILVER SCREEN PARTNERS, L.P.
(A Delaware Limited Partnership)
(Exact name of registrant as specified in its
Certificate and Agreement of Limited Partnership)
Delaware 13-3163899
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Chelsea Piers, Pier 62 - Suite 300
New York, New York 10011
- ---------------------------------- ----------
(Address of principal executive offices) (zip Code)
Registrant's telephone number, including area code (212) 336-6700
Securities registered pursuant to Section 12 (b) of the Act: NONE
Securities registered pursuant to Section 12 (g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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, and (2) has been subject to such requirements
for the past 90 days.
YES X NO
-------- ----------
1
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial information set forth below is set forth in the March 31,
1998 First Quarter Report of Silver Screen Partners, L.P. (the "Partnership")
filed herewith as Exhibit 20 and is incorporated herein by reference.
Balance Sheets -- March 31, 1998 and December 31, 1997.
Statements of Operations -- For the Three Months ended
March 31, 1998 and 1997.
Statements of Partners' Equity -- For the Three Months
ended March 31, 1998 and the Year ended December 31,
1997.
Statements of Cash Flows -- For the Three Months ended
March 31, 1998 and 1997.
Notes to Financial Statements.
The financial statements included herein are unaudited. In the opinion of
the management of the Partnership, all adjustments necessary for a fair
presentation of the results of operations have been included and all adjustments
are of a normal recurring nature. The results of operations for the three months
ended March 31, 1998 are not necessarily indicative of the results of operations
which may be expected for the entire year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
---------------------
Revenues for the three months ended March 31, 1998 were approximately
$38,000, as compared with approximately $43,000 for the comparable three months
in 1997. Revenues for the first three months of 1998 consisted of film revenues
of approximately $4,000 and investment revenues of approximately $35,000 while
those for the comparable period in 1997 consisted of film revenues of
approximately $3,000 and investment revenues of approximately $40,000. Film
revenues continue to be infrequent and unpredictable. Film revenues increased by
approximately $1,000 from 1997 to 1998. Interest income decreased by
approximately $5,000 from 1997 to 1998. This is due to the decrease in funds
available for investment from the previous year. Interest rates for the first
three months of 1998 ranged from 5.17% to 5.4%, while those for the comparable
period in 1997 ranged from 5.27% to 5.53%.
2
<PAGE>
Expenses for the three months ended March 31, 1998 were approximately
$37,000 as compared with approximately $35,000 for the comparable period in
1997. The Partnership expenses in general increased by approximately $2,000.
The Partnership generated net income of approximately $1,000 for the three
months ended March 31, 1998, as compared with net income of approximately $8,000
for the comparable period in 1997. The decrease in net income is due to a
decrease in interest income and an increase in expenses.
The Partnership pre-licensed certain television rights (which became
available one year after theatrical release) on all of its films to a subsidiary
of HBO for a price determined by a formula designed to assure the Partnership a
return of 100% of its original investment in each completed film. As part of
this arrangement, HBO agreed to pay a minimum license fee of 50% of the
Partnership's investment in each film without regard to other film revenues
earned. Amounts due to the Partnership from HBO were payable five years after
the United States theatrical release of each film, but not later than August 31,
1991. The Partnership has received substantially all film revenues and the full
amount of license fees from HBO.
The Partnership financed seven films, all of which have been completed and
released in most media. Total budgets amounted to approximately $73,800,000, of
which substantially all has been expended. Accordingly, all Partnership funds
have been committed and the Partnership will not finance or purchase any
additional motion pictures.
The seven Partnership films are: "Flashpoint," released on August 31, 1984;
"Heaven Help Us," released on February 8, 1985; "Volunteers," released on August
16, 1985; "Sweet Dreams," released on October 2, 1985; "Head Office," released
on January 3, 1986; "The Hitcher," released on February 21, 1986; and "Odd
Jobs," released on March 7, 1986.
3
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By the end of 1993, the U.S. home video rights to the Partnership's films
reverted back to the Partnership. The Partnership plans to sell these rights,
along with any other residual rights to the Films, and distribute net proceeds,
if any, to the partners. However, the Partnership does not expect these revenues
to be significant. Negotiations regarding the sale of the U.S. home video and
ancillary rights to the Films were not concluded in 1997; the Partnership
currently expects to finalize the sale during 1998. In order to conclude this
sale, any contingent liabilities that the Partnership may have in respect to
residual obligations relating to the Films must be settled or assumed by the
buyer of the Partnership's rights. It is impossible to predict the extent to
which the Partnership's remaining assets will be required to be dedicated to
these contingent liabilities. To the extent that the Partnership has assets
remaining after such a settlement or assumption, such assets will be distributed
to the partners in accordance with the Silver Screen partnership agreement.
During the quarter ended March 31, 1998, the Partnership made no cash
distributions to the Partners because revenues generated were insufficient to
warrant a distribution.
Liquidity and Capital Resources
-------------------------------
As of March 31, 1998, the General Partners' capital accounts reflect a
deficit of $719,593. At or prior to dissolution, this deficit will be reversed
through a special allocation to the limited partners. In view of the
Partnership's limited requirements for liquidity, short and long term
evaluations do not anticipate any effect of current capital account balances on
the Partnership's cash flow.
The Partnership has no material requirements for liquidity, other than its
general and administrative expenses and distributions to holders of Units of
limited partnership interests. Such sources are considered adequate for such
needs.
4
<PAGE>
ITEM 3. SELECTED FINANCIAL DATA.
SILVER SCREEN PARTNERS, L.P.
- ----------------------------
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
REVENUES:
Film revenues .............................. $ 3,595 $ 2,604
Interest income ............................ 34,594 39,944
----------- -----------
38,144 42,548
EXPENSES:
General and administrative
expenses .................................. 37,470 35,032
----------- -----------
Net income ................................... 674 7,516
=========== ===========
Net income per $500
limited partnership
unit (based on 165,639
Units outstanding) ......................... $ .00 $ .04
=========== ===========
Cash distribution
per $500 limited
partnership unit ........................... $ 0.00 $ 0.00
=========== ===========
March 31, 1998 March 31, 1997
-------------- --------------
Total assets ................................. $ 2,652,288 $ 2,991,225
========== ==========
See notes to financial statements.
5
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 20 -- 1998 First Quarter Report
(b) The Partnership did not file any reports on Form
8-K during the quarter ended March 31, 1998.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SILVER SCREEN PARTNERS, L.P.,
a Delaware limited partnership
By: Silver Screen Management, Inc.,
Managing General Partner
Date: May 15, 1998 By: /s/ Roland W. Betts
--------------------------------
Roland W. Betts, President
7
<PAGE>
Silver Screen Partners First Quarter Report
March 31, 1998
F-1
<PAGE>
Dear Limited Partner:
For some time, Silver Screen Partners has been seeking to dispose of
certain rights to the seven films in its portfolio. The Partnership cannot
dissolve until the rights are sold.
As reported in my last letter, we are continuing our efforts to settle the
sale of the film rights and to subsequently dissolve the Partnership. We are
making progress on all fronts and anticipate dissolving the Partnership prior to
year end.
Our Second Quarter Report will be mailed in July. If you need any
assistance in the meantime, please contact our Investor Relations Department
between the hours of 10 A.M. and 2 P.M., Eastern Standard Time.
Sincerely,
/s/ Roland W. Betts
- --------------------
Roland W. Betts
President
F-2
<PAGE>
March 31, December 31,
1998 1997
----------- -----------
ASSETS
Current Assets:
Cash ........................................... $ 15,583
Temporary investments (at cost plus accrued
interest, which approximates market) ......... 2,652,288 $ 2,650,398
----------- -----------
$ 2,652,288 $ 2,665,981
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Cash overdraft ................................. $ 3,399
Due to managing general partner ................ 399 $ 18,165
----------- -----------
Total current liabilities ...................... 3,798 18,165
Other liabilities .............................. 598,273 598,273
----------- -----------
Total liabilities .............................. 602,071 616,438
----------- -----------
Partners' equity:
General partners ............................... (719,593) (719,600)
Limited partners ............................... 2,769,810 2,769,143
----------- -----------
Total partners' equity ......................... 2,050,217 2,049,543
----------- -----------
$ 2,652,288 $ 2,665,981
=========== ===========
See notes to financial statements.
F-3
<PAGE>
Statements of Operations (Unaudited)
- ------------------------------------
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
REVENUES:
Film revenues .................................... $ 3,595 $ 2,604
Interest income .................................. 34,549 39,944
------- -------
38,144 42,548
COSTS AND EXPENSES:
General and administrative expenses .............. 37,470 35,032
------- -------
Net Income ....................................... $ 674 $ 7,516
======= =======
NET INCOME ALLOCATED TO:
General partners ................................. $ 7 $ 75
Limited partners ................................. 667 7,441
======= =======
$ 674 $ 7,516
======= =======
Net income per a $500 limited
partnership unit (based on
165,639 units outstanding) ..................... $ 0.00 $ 0.04
======= =======
See notes to financial statements.
Statements of Partners' Equity (Unaudited)
- ------------------------------------------
Year Ended December 31, 1997
and Three Months Ended March 31, 1998
------------------------------------------
General Limited
Partners Partners Total
----------- ----------- -----------
Balance, January 1, 1997 ......... $ (719,930) $ 2,736,466 $ 2,016,536
Net income, 1997 ................. 330 32,677 33,007
Distributions, 1997 .............. -- -- --
----------- ----------- -----------
Balance, December 31, 1997 ....... (719,600) 2,769,143 2,049,543
Net income, three months 1998 .... 7 667 674
Distributions during
three months 1998 ............... -- -- --
----------- ----------- -----------
$ (719,593) $ 2,769,810 $ 2,050,217
=========== =========== ===========
See notes to financial statements.
F-4
<PAGE>
Statements of Cash Flows (Unaudited)
- ------------------------------------
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................... $ 674 $ 7,516
Adjustments to reconcile net income to net
cash provided by operating activities:
Increase in accrued interest receivable .......... (1,890) (13,771)
Net change in operating assets and liabilities:
(Decrease) increase in due to
managing general partner ....................... (17,766) 14,159
Decrease in other liabilities .................... -- (50,500)
-------- --------
Net cash used in operating activities ................ (18,982) (42,596)
-------- --------
Cash flows from investing activities:
Sale of temporary investments, net ................... -- 16,938
-------- --------
Net cash provided by investing activities ............ -- 16,938
-------- --------
Net decrease in cash ................................. (18,982) (25,658)
Cash, beginning of year .............................. 15,583 27,424
-------- --------
(Cash overdraft) cash at end of three months ......... $ (3,399) $ 1,766
======== ========
See notes to financial statements.
F-5
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
Temporary Investments
- ---------------------
Temporary investments represent investments in commercial paper.
Film Revenues
- -------------
The film investments aggregated approximately $73,000,000 and have been
fully amortized. Film revenues are recognized when earned as reported by each
distributor. During the first three months of 1998, the Partnership received
approximately $3,595 in film revenues.
The Partnership expects to dissolve by the end of 1998 upon final
disposition of the remaining assets.
F-6
<PAGE>
Silver Screen Management, Inc.
Chelsea Piers-Pier 62
Suite 300
New York, NY 10011
(212) 336-6700
(c) 1998 Silver Screen Management, Inc.
Design: Pentagram
F-7
<PAGE>
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET AS OF MARCH 31, 1998, AND THE STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-END> MAR-31-1998
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