UNITED STATES 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 Quarterly Period Ended March 31, 2000
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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: 01-13532
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EQUIPMENT ASSET RECOVERY FUND, L.P.
-----------------------------------
Exact Name of Registrant as Specified in its Charter
Texas 11-2661586
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State or Other Jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285
- --------------------------------------- ------
Address of Principal Executive Offices Zip Code
(212) 526-3183
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Registrant's Telephone Number, Including Area Code
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
---- ----
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
<TABLE>
<CAPTION>
===================================================================================
CONSOLIDATED BALANCE SHEETS
At March 31, At December 31,
2000 1999
- -----------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $1,425,214 $1,453,153
- -----------------------------------------------------------------------------------
Total Assets $1,425,214 $1,453,153
===================================================================================
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 685,491 $1,640,467
----------------------------
Total Liabilities 685,491 1,640,467
----------------------------
Partners' Capital (Deficit):
General Partners 29,589 (187,314)
Limited Partners 702,737 --
Special Limited Partner 7,397 --
----------------------------
Total Partners' Capital (Deficit) 739,723 (187,314)
- -----------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $1,425,214 $1,453,153
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================
CONSOLIDATED STATEMENT OF PARTNERS' DEFICIT
For the three months ended March 31, 2000
Special
General Limited Limited
Partners Partners Partner Total
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1999 $(187,314) $ -- $ -- $(187,314)
Net Income 216,903 702,737 7,397 927,037
- ------------------------------------------------------------------------------------
Balance at March 31, 2000 $ 29,589 $702,737 $7,397 $ 739,723
====================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements. 2
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
<TABLE>
<CAPTION>
===================================================================================
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31,
2000 1999
- -----------------------------------------------------------------------------------
<S> <C> <C>
Income
Other income $1,051,654 $ --
Interest 21,361 18,826
-----------------------
Total Income 1,073,015 18,826
- -----------------------------------------------------------------------------------
Expenses
General and administrative 145,978 136,539
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Total Expenses 145,978 136,539
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Income (Loss) from Operations 927,037 (117,713)
- -----------------------------------------------------------------------------------
Net Income (Loss) $ 927,037 $(117,713)
===================================================================================
Net Income (Loss) Allocated:
To the General Partners $ 216,903 $ (99,108)
To the Limited Partners 702,737 (18,412)
To the Special Limited Partner 7,397 (193)
- -----------------------------------------------------------------------------------
$ 927,037 $(117,713)
===================================================================================
Per limited partnership unit
(32,722 outstanding) $21.48 $(.56)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
===================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
2000 1999
- -----------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) $ 927,037 $ (117,713)
Adjustments to reconcile net income (loss)
to net cash used for operating activities:
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Accounts payable and accrued expenses (954,976) 76,089
-----------------------
Net cash used for operating activities (27,939) (41,624)
- -----------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (27,939) (41,624)
Cash and cash equivalents, beginning of period 1,453,153 1,585,699
- -----------------------------------------------------------------------------------
Cash and cash equivalents, end of period $1,425,214 $1,544,075
===================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements. 3
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited consolidated financial statements should be read in conjunction
with the Partnership's 1999 annual audited consolidated financial statements
within Form 10-K.
The unaudited consolidated financial statements include all normal and recurring
adjustments which are, in the opinion of management, necessary to present a fair
statement of financial position as of March 31, 2000 and the results of
operations for the three months ended March 31, 2000 and 1999, cash flows for
the three months ended March 31, 2000 and 1999 and the statement of changes in
partners' capital for the three months ended March 31, 2000. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1999, except for
the resolution of the outstanding litigation as indicated in Part II, Item 1,
and no material contingencies exist which would require disclosure in this
interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
4
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- -------------------------------
On November 27, 1996, the Partnership, DSC Venture ("DSC") and SFN Corporation
("SFN") executed a sale (the "Liquidating Sale") of their crane fleets, related
equipment and existing customer crane rental agreements to Western Crane Supply,
Inc. ("Western"), a Kennewick, Washington-based operator of construction cranes
and an affiliate of Neil F. Lampson, Inc., for a total consideration of $15.9
million in cash. Reference is made to the Partnership's 1996 annual report on
Form 10-K for a discussion of the terms and conditions of the Liquidating Sale.
As a result of the Liquidating Sale and the resolution of the litigation
discussed in Part II, Item 1 contained herein, the Partnership is expected to be
terminated during the second quarter of this year.
At March 31, 2000, the Partnership's cash and cash equivalents balance totaled
$1,425,214 compared to $1,453,153 at December 31, 1999. The decrease primarily
is due to the payment of general and administrative expenses. The Partnership's
remaining cash reserves after payment of, or provision for, the Partnership's
obligations, liabilities and expenses, including any costs associated with the
litigation, will be distributed to the limited partners upon termination.
Accounts payable and accrued expenses decreased from $1,640,467 at December 31,
1999 to $685,491 at March 31, 2000. The change is due primarily to reversal of
amounts previously accrued for liquidation expenses.
Results of Operations
- ---------------------
Other income relates to reversal of amounts previously accrued for liquidation
expenses which management anticipates will not be realized.
For the three month period ended March 31, 2000, the Partnership generated net
income of $927,037, compared to net losses of $117,713 for the corresponding
period in 1999. The change for the three month period primarily is due to
reversal of amounts previously accrued for liquidation expenses.
Interest income for the three month period ended March 31, 2000 was $21,361,
compared to $18,826 for the corresponding period in 1999. The change primarily
is due to increased interest rates in 2000.
General and administrative expenses for the three month period ended March 31,
2000 were $145,978, compared to $136,539 for the corresponding period in 1999.
The increase primarily is due to additional legal expenses incurred in 2000.
Part II Other Information
Item 1 On June 4, 1997, a purported class action suit was commenced by a
limited partner who acquired its interest in the Partnership through
a tender offer (the "Plaintiff"), on behalf of, among others, all
limited partners of the Partnership, in the 151st Judicial
District Court for Harris County, Houston, Texas against
Steven A. Webster, Equipment Management, Inc. (the general partners
of the Partnership), DSC Venture (a Texas joint venture in which the
Partnership owns a 99% interest), Dayton-Scott Equipment Company (the
former manager of the Partnership's construction crane fleet) and
SFN Corporation (a corporation which was owned, in part, by the
Partnership, which, in turn, owned construction cranes which were
sold with the balance of the Partnership's crane fleet in the fourth
quarter of 1996) and the Partnership (a Nominal Defendant). On
March 13, 2000, the parties filed with the court an agreed
Stipulation and Order Dismissing Claims with Prejudice which provided
for the dismissal of this action. On March 31, 2000, the court
ordered the dismissal of this action.
5
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
Items 2-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None.
--------
(27) Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
March 31, 2000.
6
<PAGE>
EQUIPMENT ASSET RECOVERY FUND, L.P.
AND CONSOLIDATED VENTURE AND SUBSIDIARY
SIGNATURE
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.
EQUIPMENT ASSET RECOVERY FUND, L.P.
BY: EQUIPMENT MANAGEMENT INC.
General Partner
Date: May 22, 2000 BY: /s/Michael T. Marron
----------------------------------------------
Name: Michael T. Marron
Title: President, Director and Chief Financial Officer
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-END> Mar-31-2000
<CASH> 1,425,214
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 1,425,214
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 1,425,214
<CURRENT-LIABILITIES> 685,491
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 739,723
<TOTAL-LIABILITY-AND-EQUITY> 1,425,214
<SALES> 000
<TOTAL-REVENUES> 1,073,015
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 145,978
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 927,037
<INCOME-TAX> 000
<INCOME-CONTINUING> 927,037
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 927,037
<EPS-BASIC> 21.48
<EPS-DILUTED> 21.48
</TABLE>
