UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1999 Commission File Number 2-93980
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FJS PROPERTIES FUND I, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 13-3252067
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
264 Route 537 East
Colts Neck, NJ 07722
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (732) 542-9209
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities and 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
Authorized 100,000 limited partnership interests of which 16,788 have been sold
as of May 8, 1999.
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FJS PROPERTIES FUND I, L.P.
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INDEX
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Part I: FINANCIAL INFORMATION (See Preliminary Note Below)
Item 1: Financial Statements
Balance Sheets as of March 31, 1998 [Unaudited]
and December 31, 1998........................................ 1
Statement of Operations for the three months ended
March 31, 1999 and 1998 [Unaudited].......................... 2
Statement of Partners' Capital for the three months
ended March 31, 1999 [Unaudited]............................. 3
Statements of Cash Flows for the three months ended
March 31, 1999 and 1998 [Unaudited].......................... 4
Notes to Financial Statements [Unaudited].................... 5
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 6
Part III: OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K............................. 7
Signature............................................................. 8
. . . . . . . . .
Preliminary Note - In a recent letter, the Staff of the Securities and Exchange
Commission raised the issue that the Partnership's auditors may not be
independent of the Partnership, as required by law, in that a member of the
audit firm had a relationship with an entity which is a holder of Partnership
interests. Neither the Staff letter, nor any other information available to the
Partnership indicates that there is any inaccuracy in the "audited" financial
statements. As a result of the Staff's position, however, the "audited"
financial statements might be deemed to be unaudited. The Partnership is in the
process of obtaining a new auditing firm to serve as the Partnership's principal
independent accountants to audit its financial statements, and, if necessary, to
review prior years' financials and confirm their accuracy.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
FJS PROPERTIES FUND I, L.P.
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BALANCE SHEETS
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March 31, December 31,
1 9 9 9 1 9 9 8
[Unaudited]
Assets:
Current Assets:
Cash and Cash Equivalents $ 445,565 $ 458,782
Cash - Escrow 221,936 148,617
Cash - Security Deposits 132,946 125,397
Other Current Assets 13,178 25,752
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Total Current Assets 813,625 758,548
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Property Investment:
Land 2,296,804 2,296,804
Buildings 6,569,125 6,569,125
Furniture, Fixtures and Building Improvements ,972,252 1,953,010
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Totals - At Cost 10,838,181 10,818,939
Less: Accumulated Depreciation (4,841,336) (4,772,099)
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Property Investment - Net 5,996,845 6,046,840
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Other Assets 266,281 271,341
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Total Assets $7,076,751 $ 7,076,729
========== ===========
Liabilities and Partners' Capital:
Current Liabilities:
Accounts Payable $ 60,145 $ 66,582
Accrued Interest 38,219 38,371
Other Accrued Expenses 57,511 6,826
Accounts Payable - Related Party 19,781 19,707
Tenant Security Deposits 135,708 125,397
Mortgage Payable - Current Portion 79,398 77,641
Deferred Income - Current Portion 7,143 7,143
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Total Current Liabilities 397,905 341,667
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Long-Term Liabilities:
Mortgage Payable - Non-Current Portion 4,624,321 4,644,938
Deferred Income - Non-Current Portion 23,214 25,000
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Total Long-Term Liabilities 4,647,535 4,669,938
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Partners' Capital:
General Partner (1,215,545) (1,215,207)
Limited Partners 3,246,856 3,280,331
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Total Partners' Capital 2,031,311 2,065,124
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Total Liabilities and Partners' Capital $7,076,751 $ 7,076,729
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See Accompanying Notes to These Financial Statements.
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
FJS PROPERTIES FUND I, L.P.
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STATEMENTS OF OPERATIONS
[UNAUDITED]
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Three months ended
March 31,
1 9 9 9 1 9 9 8
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Rental Income $ 543,883 $ 526,564
Cost of Rental Income 197,389 165,313
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Gross Profit 346,494 361,251
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Expenses:
Selling, General and Administrative Expenses 157,972 173,203
Depreciation and Amortization 75,340 69,963
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Total Expenses 233,312 243,166
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Operating Income 113,182 118,085
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Other [Income] and Expenses:
Interest Income (4,800) (6,473)
Interest Expense 114,658 116,053
Other Expense -- 2,900
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Other Expenses - Net 109,858 112,480
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Net Income $ 3,324 $ 5,605
========== ===========
Income Per Limited Partnership Unit $ .20 $ .33
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Distributions Per Limited Partnership Unit $ 2.19 $ 0.00
========== ===========
Weighted Average Number of Limited
Partnership Units Outstanding 16,788 16,788
========== ===========
See Accompanying Notes to These Financial Statements.
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
FJS PROPERTIES FUND I, L.P.
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STATEMENT OF PARTNERS' CAPITAL
[UNAUDITED]
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Total
General Limited Partners'
Partner Partners Capital
Partners' Capital - December 31, 1998 $(1,215,207) $3,280,331 $ 2,065,124
Net Income for the three months
ended March 31, 1999 33 3,291 3,324
Distributions to Partners (371) (36,766) (37,137)
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Partners' Capital - March 31, 1999
[Unaudited] $(1,215,545) $3,246,856 $ 2,031,311
=========== ========== ===========
See Accompanying Notes to These Financial Statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
FJS PROPERTIES FUND I, L.P.
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STATEMENTS OF CASH FLOWS
[UNAUDITED]
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Three months ended
March 31,
1 9 9 9 1 9 9 8
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Operating Activities:
Net Income $ 3,324 $ 5,605
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Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 69,237 63,861
Amortization 6,102 6,102
Changes in Assets and Liabilities:
[Increase] Decrease in:
Escrow (73,318) (75,618)
Security Deposits (7,549) (3,650)
Other Current Assets 12,573 17,927
Other Assets (1,042) (2,438)
Increase [Decrease] in:
Accounts Payable (6,437) (5,504)
Accrued Interest (152) (670)
Other Accrued Expenses 50,685 54,796
Accounts Payable - Related Party 75 (4,114)
Tenant Security Deposits 10,311 3,650
Deferred Income (1,786) (1,785)
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Total Adjustments 58,699 52,557
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Net Cash - Operating Activities 62,023 58,162
Investing Activities:
Capital Expenditures (19,242) (17,160)
Financing Activities:
Principal Payments on Mortgages (18,860) (16,977)
Cash Distributions to Partners (37,138) --
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Net [Decrease] Increase in Cash and Cash Equivalents (13,217) 24,025
Cash and Cash Equivalents - Beginning of Periods 458,782 535,546
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Cash and Cash Equivalents - End of Periods $ 445,565 $ 559,571
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Supplemental Disclosure of Cash Flow Information:
Cash paid for interest during the three months ended March 31, 1999 and 1998
was $114,658 and $116,722 respectively.
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
See Accompanying Notes to These Financial Statements.
4
<PAGE>
FJS PROPERTIES FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS
[UNAUDITED]
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[A] Significant Accounting Policies
Significant accounting policies of FJS Properties Fund I, L.P. are set forth in
the Partnership's Form 10-K for the year ended December 31, 1998, as filed with
the Securities and Exchange Commission. (See, also, Preliminary Note on Index
page).
[B] Basis of Reporting
The balance sheet as of March 31, 1999, the statements of operations for the
three months ended March 31, 1999 and 1998, the statement of partners' capital
for the three months ended March 31, 1999, and the statements of cash flows for
the three months ended March 31, 1999 and 1998 have been prepared by the
Partnership without audit. The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the managing partner, such statements
include all adjustments [consisting only of normal recurring items] which are
considered necessary for a fair presentation of the financial position of the
Partnership at March 31, 1999, and the results of its operations and cash flows
for the three months then ended. It is suggested that these financial statements
be read in conjunction with Form S-11 filed with the Securities and Exchange
Commission on April 25, 1985 and with the financial statements and notes
contained in the Partnership's Form 10-K for the year ended December 31, 1998.
(See, also, Preliminary Note on Index page).
. . . . . . . . . . .
5
<PAGE>
FJS PROPERTIES FUND I, L.P.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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LIQUIDITY AND CAPITAL RESOURCES
As of the present date, the Partnership owns and operates one Property, the
Pavilion Apartments, and does not intend to acquire any other property.
Cash flow from Pavilion should be sufficient to permit the Partnership to make
the constant monthly payments due prior to maturity on the first mortgage and to
meet its monthly operating expenses. However, should there be a significant
decrease in Pavilion's occupancy or rental rates, there can be no assurance that
the Partnership would be able to obtain sufficient funds to make such payments.
OPERATIONS
The Partnership has operated the Pavilion Apartments, located in West Palm
Beach, Florida since January 1985.
The project operated with occupancies in the low-90% range for the first quarter
of 1999. Physical occupancy stands at 93% as of May 10, 1999, with 21 vacant
apartments of which 10 have been rented with tenant move-in scheduled during
May. Rental income for the three month period ended March 31, 1999, increased to
$543,883 as compared to $526,564 for the comparable period of the prior year.
This increase was attributable to the increased rental rates enjoyed by the
Pavilion Apartments as well as a reduction in rental allowances given to
tenants. This was offset somewhat by an increase in vacancies at the project.
Cost of Rental Income, consisting mainly of real estate taxes, repairs and
maintenance and utilities increased to $197,389 from $165,313 for the comparable
three month periods of 1999 and 1998 respectively. The increase was principally
from increased replacements at the project. During 1999, the Partnership
anticipates continuing an increased level of repairs, replacements and upgrades
at the Pavilion. Principal items included in the projected budget of
approximately $150,000 are: Aluminum roof coating of the buildings; pressure
cleaning and spot painting; replacement of shower and tub enclosures in
approximately fifty units with concrete wall board and fiberglass shower pans;
two new entrance gates for the property; and seal coating and striping of the
parking lots. Further tree removal and trimming is also contemplated to help
prevent roof damage, sidewalk damage and damage to building interiors. It is
anticipated that adequate funds will be available from cash flow and operating
funds on hand to complete this work.
Selling, General and Administrative Expenses decreased to $157,972 as compared
to $173,203 for the comparable three month period of the prior year. This
reflects decreases in professional fees as well as reduced costs for insurance
coverage for the Pavilion.
The Other Expense item of $2,900 under Other Income and Expenses for 1998,
reflects the net cost to the Partnership of fees and expenses in connection with
the tender offer completed by an unaffiliated third party in December 1997.
Transfer fees of $10,300 were received and administrative and legal fees of
$13,200 were incurred in connection with the review of the documents and
preparation of legal filings required to be made by the Partnership. This was a
non-recurring income and expense and was not duplicated during the first quarter
of 1999.
INFLATION
As of the present date, inflation has not had a major impact on the operations
of the Partnership.
6
<PAGE>
FJS PROPERTIES FUND I, L.P.
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PART II - OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
[a] Exhibits as required by Item 601 of Regulation S-K:
None Required
[b] Reports on Form 8-K:
None filed during the quarter for which this report is submitted
7
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FJS PROPERTIES FUND I, L.P.
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SIGNATURE
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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.
FJS PROPERTIES FUND I, L.P.
Date: May 11, 1999 By: /s/ Andrew C. Alson
--------------------------------
Andrew C. Alson
(President and Chief Financial Officer)
FJS Properties, Inc.
General Partner
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of operations and is
qualified in its entirety by reference to said statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 445,565
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 813,625
<PP&E> 10,838,181
<DEPRECIATION> 4,841,336
<TOTAL-ASSETS> 7,076,751
<CURRENT-LIABILITIES> 397,905
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,031,311
<TOTAL-LIABILITY-AND-EQUITY> 7,076,751
<SALES> 0
<TOTAL-REVENUES> 543,883
<CGS> 197,389
<TOTAL-COSTS> 978,624
<OTHER-EXPENSES> (4,800)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 114,658
<INCOME-PRETAX> 3,324
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,324
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,324
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
