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 June 30, 1999
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 0-11533
GREEN GOLD CONSOLIDATED
__________________________________________________________
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0023916
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
711 Daily Drive, Suite 120, Camarillo, CA 93010
(Address of principal executive office) (Zip Code)
(805) 987-6921
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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 [ ]
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
GREEN GOLD CONSOLIDATED
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEET
June 30, September 30,
1999 1998
(Unaudited)
--------- ------------
<S> <C> <C>
ASSETS
Assets:
Cash and cash equivalents $1,051,000 $1,204,000
Notes receivable 412,000 666,000
Inventories of growing crops 8,000 8,000
Accrued interest receivable 15,000 17,000
Property held for sale 437,000 655,000
Other assets 5,000 17,000
---------- ----------
TOTAL ASSETS $1,928,000 $2,567,000
========= =========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts payable and accrued
liabilities $ 53,000 $ 49,000
---------- ----------
TOTAL LIABILITIES 53,000 49,000
Partners' equity 1,875,000 2,518,000
---------- ---------
TOTAL LIABILITIES AND
PARTNERS' EQUITY $1,928,000 $2,567,000
========= =========
See accompanying notes to financial statements
</TABLE>
<TABLE>
GREEN GOLD CONSOLIDATED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine Months Ending
June 30,
1999 1998
----------- ---------
<S> <C> <C>
CROP SALES $ 106,000 $ 224,000
OPERATING COSTS AND EXPENSES:
Cultural Care Costs 65,000 125,000
Professional services 117,000 103,000
Depreciation, property tax and other 32,000 74,000
----------- ----------
Total Operating Costs and Expenses 214,000 302,000
LOSS FROM OPERATIONS (108,000) (78,000)
OTHER INCOME:
Realized gross profit 211,000 45,000
Interest income 134,000 135,000
Gain on sale of property 16,000 -0-
Other income 12,000 7,000
---------- ----------
NET INCOME $ 265,000 $ 109,000
=========== ==========
NET INCOME PER LIMITED
PARTNERSHIP INTEREST $ .0265 $ .0109
=========== ===========
Weighted average number of limited partnership
interests outstanding during the period used
to compute earnings per limited partnership
interest 9,986,000 9,986,000
========= =========
See accompanying notes to financial statements
</TABLE>
<TABLE>
GREEN GOLD CONSOLIDATED
(A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
For Three Months Ending
June 30,
1999 1998
---------- ---------
<S> <C> < c>
CROP SALES $ 83,000 $ 114,000
Cultural Care Costs 29,000 45,000
Professional Services 27,000 25,000
Depreciation, property tax and other 14,000 32,000
---------- ---------
Total Operating Costs and Expenses 70,000 102,000
INCOME FROM OPERATIONS 13,000 12,000
OTHER INCOME:
Realized gross profit 59,000 18,000
Interest Income 39,000 44,000
Gain on sale of property 16,000 -0-
Other Income 7,000 -0-
---------- ---------
NET INCOME $ 134,000 $ 74,000
========== =========
NET INCOME PER LIMITED
PARTNERSHIP INTEREST $ .0134 $ .0074
========== =========
Weighted average number of limited partnership
interests outstanding during the period used
to compute earnings per limited partnership
interest 9,986,000 9,986,000
========= =========
See accompanying notes to financial statements
</TABLE>
<TABLE>
GREEN GOLD CONSOLIDATED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF CASH FLOWS
For the Nine Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 265,000 $ 109,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Deferred profit recognized (211,000) (45,000)
Changes in assets and liabilities:
Decrease in interest receivables 2,000 11,000
Decrease (increase) in other assets 13,000 (3,000)
Increase (decrease) in accounts payable
and accrued liabilities 4,000 (2,000)
------------ ----------
Net cash provided by operating activities 73,000 70,000
------------ ----------
Cash flows from investing activities:
Collection on notes receivable 546,000 243,000
New notes receivable (191,000) -0-
Property sold 218,000 -0-
Additions to deferred income from
property sales 109,000 -0-
------------ ----------
Net cash provided by investing
activities 682,000 243,000
------------ ----------
Cash flows from financing activities:
Distributions to limited partners (900,000) (320,000)
Distributions to general partner (8,000) (11,000)
----------- ----------
Net cash used by financing
activities (908,000) (331,000)
----------- ----------
Net (decrease) in cash (153,000) (18,000)
Cash at September 30 1,204,000 656,000
--------- ---------
Cash at June 30 $1,051,000 $ 638,000
========== =========
See accompanying notes to financial statements
</TABLE>
GREEN GOLD CONSOLIDATED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
A. SIGNIFICANT ACCOUNTING POLICIES
Property and Depreciation - Property is stated at the lower of cost or net
realizable value. Depreciation is provided on a straight-line method over
the estimated useful lives of the respective assets.
Inventories - Inventories, consisting of growing crops, is valued at the
lower of cost or net realizable value under the first-in, first-out (FIFO)
method. Cost is defined as cultural care costs related to the growing
crops.
Income Taxes - The Partnership reports its tax returns on the cash basis of
accounting. No provision for income taxes is included in the accompanying
financial statements as the Partnership's results of operations are
distributed to the partners for inclusion in their respective income tax
returns.
Profit Recognition on Real Estate Sales - It is the Partnership's policy to
defer profit on real estate sales until such time as the purchaser's
cumulative investment and continued involvement in the property meet the
minimum criteria for full profit recognition as set forth in the Financial
Accounting Standards Board Statement No. 66, Accounting for Sales of Real
Estate. Until such time as profit can be recognized under the full accrual
method, the cost recovery and installment methods are used.
Net Income Per Limited Partnership Interest - Net income per limited
partnership interest was calculated using the weighted average of limited
partnership interests outstanding during the year and the Limited Partners'
share of the net income.
B. GENERAL
Green Gold Consolidated was organized in accordance with the Provisions
of the California Uniform Limited Partnership Act for the purpose of
receiving the assets and liabilities of twelve limited partnerships under
common management and thereby consolidating the operations of those
partnerships under an exchange transaction effective June 30, 1983. Under
the exchange transaction, the Partnership issued 10,000,000 limited
partnership interests (pro rata) to the holders of interests in the twelve
individual limited partnerships in exchange for the assets and liabilities
of those partnerships.
Under the provisions of the partnership agreement, profits and losses are
allocated in the ratio of 93.5% to the Limited Partners and 6.5% to the
General Partner, provided that prior to the first fiscal quarter during
which a distribution is made to the General Partner from the proceeds of
the property sales or refinancing, all gains and losses resulting from
property sales are allocated in the ratio of 99% to the Limited Partners
and 1% to the General Partner.
The combination of the twelve partnerships into one partnership was treated
as a reorganization of entities under common control, accounted for similar
to a "pooling of interest".
C. NOTES RECEIVABLE
Notes receivable consist of the following as of:
June 30, September 30,
1999 1998
--------- -----------
First trust deed notes $ 1,011,000 $ 1,317,000
Accounts receivable -0- 75,000
Less:
Deferred profit on real estate sales (500,000) (627,000)
Allowance for doubtful accounts (99,000) (99,000)
---------- ---------
$ 412,000 $ 666,000
========== ==========
D. PROPERTY
Property is comprised of the following:
June 30, September 30,
1999 1998
Land $ 437,000 $ 651,000
Farm equipment 52,000 81,000
Trees 128,000 158,000
--------- ---------
Total 617,000 890,000
Accumulated depreciation (180,000) (235,000)
---------- ----------
$ 437,000 $ 655,000
========= =========
E. EARNINGS (LOSS) PER LIMITED PARTNERSHIP INTEREST
Earnings (loss) per limited partnership interest have been computed by
dividing the aggregate limited partners' share of net income (loss) by the
weighted average number of limited partnership interests outstanding during
the period, 9,986,000 in 1999 and 1998, respectively.
F. MANAGEMENT AGREEMENT
The Partnership has an agreement with Las Posas Investment Company and
Mr. Neno Spondello, Jr. to manage and market the Partnership properties.
G. STATEMENT BY MANAGEMENT
In the opinion of the Management, the financial information presented
herein reflects all adjustments which are necessary to a fair statement of
the results for the interim periods presented.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Crop sales for the quarter ended June 30, 1999, were $83,000, compared to
$114,000 for the same quarter in 1998. The quarterly decrease in crop revenue
is attributed to picking 64,000 pounds of avocados at an average price of $1.28
per pound this quarter compared to 140,000 at $.81 per pound the prior year's
quarter ended June 30. The 1999 crop decreased as a result of fewer avocado
trees due to property sales in 1998 and 1999 totaling 109 acres, leaving only 56
acres as of June 30, 1999.
Operating costs and expenses for the quarter ended June 30, 1999, decreased by
$32,000, from $102,000 to $70,000. Cultural care costs decreased by $16,000
from $45,000 to $29,000. The reason for the decrease results from significantly
reduced planted acreage and related pounds picked in 1999 compared to 1998.
Professional Services increased $2,000 from $25,000 to $27,000. The main
reason for the increase was the cost of a revised property analysis by an
appraiser. Other expenses decreased $18,000 from $32,000 to $14,000. The
decline mainly results from a reduction in property taxes due to prior year
property sales.
Other income increased $60,000 from $74,000 to $134,000. The increase is
mainly attributed to recognizing deferred profit of $59,000 for the quarter
ended June 30, 1999, compared to $18,000 the prior year. The early payoff of
two notes totaling $194,000 during the quarter ended June 30, 1999 accounted
for $57,000 of the quarter's $59,000 deferred profit recognized. Interest
income decreased $5,000 during the quarter as a result of a reduction of the
average outstanding notes receivable compared to the prior year. Other income
increased $7,000 as a result of selling shares of Fruit Growers Lab (FGL) held
by Green Gold back to FGL.
There was one ten acre parcel sold in the quarter ended June 30, 1999 for
$111,000 cash. Cash offers totaling $214,000 have also been accepted and are
expected to close next quarter on two other parcels (16 acres). The marketing
and sales program is actively underway for the remaining 4 parcels (39 acres).
Green Gold Consolidated implemented a note discount program in an effort to
convert outstanding notes into Partnership cash. All 13 existing note holders
with balances totaling $1.2 million were contacted and offered discounts of 5%
to 15% of the loan balance if they would retire their debt within 60-90 days.
The discount percent varied based on the date of maturity of the loan and
property appraised loan-to-value analysis. A total of $349,000 less $26,000 in
discounts has been converted to cash through June as a result of the program.
All remaining note holders have shown interest in participating in the program.
Liquidity and Capital Resources
As of June 30, 1999, the Partnership has cash reserves of approximately
$1,004,000 to cover operating expenses and any other small amount of remaining
real estate development costs. This is expected to be sufficient to comply with
the business plan.
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) No reports on Form 8-K were filed by the Registrant during the
quarter ended June 30, 1999.
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.
DATE: August 6, 1999 GREEN GOLD CONSOLIDATED,
a California limited partnership
(Registrant)
By: Economic Consultants,
a California Partnership,
General Partner
By: /s/Daniel Lee Stephenson
Daniel Lee Stephenson,
General Partner
