SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996 Commission File Number 2-95219
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2859087
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8600
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>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
PART I - FINANCIAL INFORMATION
<TABLE>
STATEMENT OF OPERATIONS
(UNAUDITED) (NOTE 1)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
---------- -------- -------- ------
<S> <C> <C> <C> <C>
Fruit Sales $ - $3,293,769 $ 707,598 $4,008,318
Less - Harvesting expenses - 812,702 155,541 1,038,772
---------- ---------- ---------- ----------
Net Fruit Sales - 2,481,067 552,057 2,969,546
Cost of Fruit Sales - 1,370,655 257,840 1,769,115
---------- ---------- ---------- ----------
Operating Margin - 1,110,412 294,217 1,200,431
Other Revenues:
Interest income - 53,256 28,919 75,652
Other Expenses:
Interest expense (Note 3) 159,562 651,821 697,181 1,296,478
Grove management fees 14,252 49,417 65,809 100,900
Partnership management fees - 75,000 84,000 150,000
Real estate taxes 17,965 17,929 34,065 32,629
Amortization - 11,416 4,692 22,832
Building depreciation - 1,822 - 4,190
General Administrative - 16,357 53,291 34,462
---------- ---------- ---------- ----------
191,779 823,762 939,038 1,641,491
---------- ---------- ---------- ----------
Earnings before reorganization items (191,779) 339,906 (615,902) (365,408)
---------- ---------- ---------- ----------
Reorganization items:
Net fruit sales 2,184,622 - 2,184,622 -
Cost of sales (1,379,966) - (1,379,966) -
Grove management fees (41,072) - (41,072) -
Partnership management fees (84,000) - (84,000) -
General and administrative (52,084) - (52,084) -
Interest earned on accumulated cash 28,582 - 28,582 -
---------- ----------- ---------- ------
656,082 - 656,082 -
---------- ----------- ---------- ------
Net Income/(Loss) $ 464,303 $ 339,906 $ 40,180 $ (365,408)
========== ========== ========== ==========
Net Income/(Loss)
allocated to General Partner $ 46,430 $ 33,991 $ 4,018 $ (36,541)
========== ========== ========== ==========
Net Income/(Loss)
allocated to Limited Partners $ 417,873 $ 305,915 $ 36,162 $ (328,867)
========== ========== ========== ==========
Net Income (Loss) per Unit of Limited
Partnership Interest $ 26.96 $ 19.74 $ 2.33 $ ( 21.22)
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
BALANCE SHEETS
<TABLE>
ASSETS
(NOTE 1)
June 30, December 31,
1996 1995
(Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents......................................... $ 4,566,035 $ 2,676,875
Accounts receivable............................................... - 329,413
Inventory......................................................... 1,098,068 1,792,035
Other assets...................................................... 24,614 64,660
----------- -----------
$ 5,688,717 $ 4,862,983
Property, net......................................................... 18,066,390 18,401,799
Deferred financing costs............................................. - 4,692
----------- , -----------
$23,755,107 $23,269,474
=========== ===========
</TABLE>
<TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<S> <C> <C>
Liabilities Not Subject to Compromise:
Current Liabilities:
Accounts payable-trade ........................................... $ 35,499 $ 33,179
Other liabilities................................................. 65,947 150,331
----------- -----------
Total Current Liabilities .................................... 101,446 183,510
Notes payable..................................................... - 22,869,735
Accrued interest.................................................. - 767,970
Liabilities Subject to Compromise (Note 4)............................ 24,165,222 -
----------- -----------
24,266,668 23,821,215
Partners' Capital:
Limited Partners, $1,000 stated value per
Unit; 15,500 Units authorized, issued
and outstanding................................................ 690,200 654,038
General Partner................................................... (1,201,761) (1,205,779)
----------- -----------
$23,755,107 $23,269,474
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
<TABLE>
STATEMENTS OF CASH FLOWS
(UNAUDITED) (NOTE 1)
SIX MONTHS ENDED
JUNE 30,
-------------
1996 1995
-------- ------
<S> <C> <C>
Cash Flows From Operating Activities:
Cash received from customers...................................... $ 673,758 $ 4,107,420
Cash paid to suppliers............................................ ( 252,630) (1,978,622)
Interest received................................................. 28,919 75,652
Interest paid..................................................... ( 149,556) ( 1,463,833)
----------- -----------
Net cash provided by operating activities.....................
before reorganization items..................................... 300,491 740,617
----------- -----------
Operating cash flows from reorganization items:
Cash received from customers during
reorganization............................................... 3,205,911 -
Interest received on cash accumulated because
of the Chapter 11 proceeding................................. 28,582 -
Cash paid to suppliers during reorganization.......... (1,495,824) -
Interest paid during reorganization............................... (150,000) -
----------- -------
Net cash provided by reorganization items......................... 1,588,669 -
----------- -------
Net cash provided by operating activities......................... 1,889,160 740,617
----------- -----------
Cash Flows From Investing Activities:
Capital expenditures.............................................. - (12,353)
----------- -----------
Net cash used in investing activities............................. - (12,353)
----------- -----------
Net Increase in Cash and Cash
Equivalents....................................................... 1,889,160 728,264
----------- -----------
Cash and Cash Equivalents at Beginning
of Period......................................................... 2,676,875 3,124,628
----------- -----------
Cash and Cash Equivalents at End of Period............................ $ 4,566,035 $ 3,852,892
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
<TABLE>
STATEMENTS OF CASH FLOWS
(CONTINUED)
(UNAUDITED) (NOTE 1)
Reconciliation of net loss to net cash provided by operating activities:
SIX MONTHS ENDED
JUNE 30,
-------------
1996 1995
-------- ------
<S> <C> <C>
Net (Loss) Income $ 40,180 $ (365,408)
Adjustments to Reconcile
Net Loss to Net Cash Provided
(Used) By Operating Activities:
Depreciation and amortization................................ 4,692 27,022
Decrease (Increase) in:
Accounts receivable..................................... 329,413 99,102
Inventory............................................... 693,967 635,383
Other assets............................................ 40,046 10,637
Increase (Decrease) in:
Accrued interest........................................ 397,626 (167,355)
Accounts payable and other liabilities..... (82,064) 167,944
Postpetition payables and
other liabilities..................................... 129,891 -
Depreciation capitalized to inventory........................ 335,409 333,292
----------- -----------
Net Cash Provided by Operating Activities............................. $ 1,889,160 $ 740,617
=========== ===========
</TABLE>
Disclosure of accounting policy:
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.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED
JUNE 30, 1996 AND
1995 (UNAUDITED)
(NOTE 1)
<TABLE>
Limited Partners General
Units Capital Partner Total
<S> <C> <C> <C> <C>
Balance, December 31, 1995 15,500 $ 654,038 $(1,205,779) $ (551,741)
Net Loss 36,162 4,018 40,180
---------- ---------- ----------- -----------
Balance, June 30, 1996 15,500 $ 690,200 $(1,201,761) $ (511,561)
========== ========== =========== ===========
Balance, December 31, 1994 15,500 $2,256,415 $ (1,027,737) $2,513,435
Net Loss (328,867) (36,541) (365,408)
---------- ---------- ----------- ----------
Balance, June 30, 1995 15,500 $1,927,548 $(1,064,278) $ 863,270
========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The
Partnership's accounting and financial reporting policies are in
conformity with generally accepted accounting principles and include
all adjustments in interim periods considered necessary for a fair
presentation of the results of operations. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Registrant's latest annual report on Form 10-K.
The accompanying financial statements reflect the Partnership's results
of operations for an interim period and are not necessarily indicative
of the results of operations for the year ending December 31, 1996.
2. TAXABLE INCOME (LOSS)
The Partnership's taxable loss for 1996 is expected to differ from that
for financial reporting purposes primarily due to accounting
differences in the recognition of results of operations.
3. INTEREST EXPENSE
Interest expense on the Caulkins note has been accrued through March 4,
1996, the date of the Chapter 11 filing. Assuming the same rate of
interest as under the terms of the note, additional interest expense
for the period March 5, 1996 through June 30, 1996 would be $697,045
for a six months total of $1,075,102.
4. LIABILITIES SUBJECT TO COMPROMISE
<TABLE>
Liabilities subject to compromise consist of the following:
<S> <C>
Secured debt, 8% secured by first mortgage on property $ 8,000,000
Accrued interest on first mortgage 65,968
Secured debt, 14.5% secured by second mortgage on property 14,869,735
Accrued interest on second mortgage 1,099,628
Trade and other miscellaneous claims 129,891
-----------
$24,165,222
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Item should be read in conjunction with the financial statements
and other items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership's only business is owning and operating a commercial
citrus grove consisting of approximately 3,150 acres of land and
related improvements and equipment located near Stuart, Martin County,
Florida (the "Grove"). The two mortgages encumbering the Grove were
scheduled to mature on January 31, 1996. The first mortgage was
extended to May 30, 1996. In February, 1996, the holder of the second
mortgage, Caulkins Citrus Company ("Caulkins"), terminated negotiations
with the Partnership with respect to a loan modification, declared a
default and commenced foreclosure proceedings. In addition, a receiver
was appointed to collect revenues and take over control of the Grove.
On March 4, 1996, as a result of the pending foreclosure proceeding
instituted by Caulkins, the Partnership filed for protection under
Chapter 11 of the United States Bankruptcy Act in the Federal District
Court for the State of Florida, Southern District (Case No.
96-30843-BKC-SHF). In connection with the bankruptcy the Partnership
resumed legal possession of the Grove and its accounts and the
Receiver was removed. The Partnership has submitted its plan of
reorganization to the Bankruptcy Court. Creditors of the Partnership
also have the right to submit plans to the Bankruptcy Court. Pursuant
to the terms of the Partnership's plan, the existing mortgage debt
would be extended five years and the Partnership would agree to use
its reserves to fund any cash flow shortfalls. There can be no
assurance that the Bankruptcy court will approve the Partnership's
plan. If the Partnership is not permitted to reorganize under the
Bankruptcy Act or cannot reach an agreement with the existing lenders,
the Partnership will lose the Grove in a foreclosure proceeding. In
addition, if the Partnership's or a similar plan were to be adopted,
it is unlikely that the Partnership will be able to achieve earnings
which will enable or permit the Partnership to make distributions to
its partners. At this time, it appears that investors will not receive
a return of a substantial portion of their original investment in the
Registrant.
The level of liquidity based on cash and cash equivalents experienced a
$1,889,160 increase at June 30, 1996 as compared to December 31, 1995.
This increase is primarily due to the fact that there was no debt
service payment made during the first six months of 1996.
The Partnership invests its working capital reserves in a money market
account or repurchase agreements secured by United States Treasury
obligations.
RESULTS OF OPERATIONS
Operating results improved by $405,588 for the six months ended June
30, 1996 as compared to 1995 due to a decrease in interest expense of
$599,297, which offset a decrease in the operating margin on fruit
sales of $101,558, a decrease in interest income of $18,151 and an
increase in other expenses of $74,000.
<PAGE>
Interest expense decreased by $599,247 because no interest was accrued
for the Caulkins note after March 4, 1996, the date of the Chapter 11
filing. If interest expense on the note had been accrued through June
30, 1996, there would have been $697,045 of additional expense.
The operating margin on fruit sales decreased by $101,558 for the six
months ended June 30, 1996 as compared to 1995 due to a decrease in the
number of boxes of fruit harvested during the 1995-96 crop year,
562,170, compared with 740,390 for the 1994-95 crop year, a decrease of
24%. Taking into account the timing of the harvest, the number of boxes
harvested during the calendar year decreased from 558,770 during the
first six months of 1995, to 449,850 for the same period of 1996. This
decrease was due to adverse weather conditions, and was partially
offset by a slight increase in the price received per pound-solid of
fruit. The harvesting expense per box cost remained constant for the
six months ended June 30, 1996 as compared to 1995 at approximately
$1.90 per box.
The increase in other expenses of $74,000 was attributable to an
increase in general and administrative expenses of $70,913. This
increase was due primarily to legal and other costs related to the
Chapter 11 filing.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
No Report on Form 8-K was required to be filed during the period.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INDIAN RIVER CITRUS INVESTORS
LIMITED PARTNERSHIP
(Registrant)
By: Winthrop Agricultural Management, II, Inc.
General Partners
By: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
By: /s/ Michael Ashner
Michael Ashner
Chief Executive Officer
DATED: August 14, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
six month period ending June 30, 1996 and is
qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000760612
<NAME> INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 4456035
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1098068
<CURRENT-ASSETS> 24614
<PP&E> 24469930
<DEPRECIATION> (6403540)
<TOTAL-ASSETS> 23755107
<CURRENT-LIABILITIES> 101446
<BONDS> 22869735
<COMMON> 0
0
0
<OTHER-SE> (511561)
<TOTAL-LIABILITY-AND-EQUITY> 23755107
<SALES> 3543075
<TOTAL-REVENUES> 3600576
<CGS> 1637806
<TOTAL-COSTS> 806396
<OTHER-EXPENSES> 419013
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 697181
<INCOME-PRETAX> 40180
<INCOME-TAX> 0
<INCOME-CONTINUING> 40180
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40180
<EPS-PRIMARY> 02.33
<EPS-DILUTED> 00.00
</TABLE>
