SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: Commission File Number:
September 30, 1997 2-95034LA
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ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 85-0503193
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3839 North 3rd Street, Suite 108
Phoenix, Arizona 85012
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(Address of and zip code of principal executive offices)
(602) 230-1656
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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
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<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
PART I
FINANCIAL INFORMATION
---------------------
ITEM 1 FINANCIAL STATEMENTS PAGE
- ---------------------------- ----
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Unaudited Financial Statements 6
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
BALANCE SHEETS
(Unaudited)
September 30, September 30,
1997 1996
------------- -------------
ASSETS
Property
Land $1,139,828 $1,139,828
Buildings 5,856,761 5,856,761
Furniture and fixtures 74,576 74,576
---------- ----------
7,071,165 7,071,165
Less accumulated depreciation 2,196,667 2,000,523
---------- ----------
4,874,498 5,070,642
Cash and cash equivalents 369,189 264,154
Other assets 13,183 21,849
---------- ----------
$5,256,870 $5,356,645
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable 104,885 83,732
Commitments (Note 3)
Partners' capital
General partner $ 62,221 $ 47,056
Limited partners 5,089,764 5,225,857
---------- ----------
$5,256,870 $5,356,645
========== ==========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the Nine Months For the Years
Ended Ended
-------------------------- --------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31,
1997 1996 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income
Rental $ 832,660 $ 856,452 $1,118,127 $1,070,463
Interest 15,079 5,199 7,084 24,664
---------- ---------- ---------- ----------
847,739 861,651 1,125,211 1,095,127
---------- ---------- ---------- ----------
Expenses
Property Operations 314,370 297,964 393,958 406,069
Administration 80,776 69,474 84,114 87,566
Amortization &
Depreciation 147,000 147,441 196,585 197,365
Interest -0- -0- -0- 86,987
---------- ---------- ---------- ----------
542,146 514,879 674,657 777,987
---------- ---------- ---------- ----------
Net Income (loss) $ 305,593 $ 346,772 $ 450,554 $ 317,140
========== ========== ========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
----------------------------------
Sept. 30, 1997 Sept. 30, 1996
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 832,660 $ 856,452
Cash paid to suppliers (375,112) (374,814)
Interest received 15,079 5,199
--------- ---------
Net cash provided by
operating activities $ 472,627 $ 486,837
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment -- --
--------- ---------
Net cash provided by (used in)
Investing activities $ -- $ --
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (530,303) (378,787)
--------- ---------
Net cash used in financing activities (530,303) (378,787)
--------- ---------
Increase (decrease) in cash $ (57,676) $ 108,050
Cash and cash equivalents:
Beginning 426,865 156,104
--------- ---------
Ending $ 369,189 $ 264,154
========= =========
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 305,593 $ 346,772
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 147,000 147,441
Increase (decrease) in accounts payable 20,034 (7,376)
--------- ---------
Net cash provided by
operating activities $ 472,627 $ 486,837
========= =========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1997
NOTE 1. Partnership Organization
Armored Storage Income Investors Limited Partnership ("the Partnership")
was organized under the laws of the State of Arizona pursuant to an
agreement of limited partnership filed December 4, 1984, for the purpose of
acquiring, developing, owning and operating self-service storage
facilities. The initial General Partners were Armored Storage, Inc., an
Arizona corporation (the "Managing General Partner") and Armored Storage
One Limited Partnership, an Arizona Limited Partnership. The Partnership
commenced full activity on January 9, 1985. During 1986, the Partnership
completed an offering of limited partnership units wherein 15,000 limited
partnership units were purchased by investors for $7,500,000. In December
1987 Armored Storage, Inc., withdrew and Armored Storage One Limited
Partnership, became the "Managing General Partner."
NOTE 2. Summary of Significant Accounting Policies
Property and equipment:
Property and equipment is stated at cost. Depreciation is computed
principally by the straight-line method over the following estimated
useful lives:
Years
-----
Buildings 30
Furniture and fixtures 5
Interest, real estate taxes and other costs related directly to
properties under long-term development contracts were capitalized.
Costs were not capitalized beyond net realizable value. Costs related
to operating properties are expensed as incurred.
Acquisition fees are allocated to the Partnership's property based on
the expected total capitalized cost of the respective property.
Development fees are allocated to the Partnership's property based on
the expected total capitalized cost of the respective property.
Loan acquisition costs:
Loan acquisition costs which are included in other assets are
amortized over the life of the note payable of 9 years.
Rental income:
The Partnership receives rental income from its self-storage
facilities. All rental agreements are for month-to-month tenancy.
Rental income is recognized on the accrual basis in accordance with
generally accepted accounting principles.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1997
NOTE 2. Summary of Significant Accounting Policies, continued
Income taxes:
The Partnership does not record a provision for income taxes, since
Federal and state income tax regulations provide that any taxes on
income of a Partnership are payable by the partners as individuals.
The Partnership's tax returns are prepared on the accrual basis.
Syndication fees:
Syndication fees are those expenses incurred in the issuing and
marketing of partnership interests. These expenses include broker and
registration fees, legal fees, tax and accounting fees, and printing
costs. These fees are not amortizable and are presented as a reduction
in partners' capital in the financial statements.
Organization costs:
Organization costs which are included in other assets consist of legal
fees incident to the creation of the Partnership, accounting fees for
establishing an accounting system and filing fees. These costs are
being amortized using the straight-line method over 60 months.
Cash and cash equivalents:
For purposes of reporting cash flows, the Partnership considers all
money market funds to be cash equivalents.
Unaudited financial statements:
The financial statement for the nine months ended September 30, 1997
are unaudited, however, in management's opinion they include all
adjustments necessarily for a fair statement of the results of
operations for such interim period. The interim period results of
operations are not necessarily indicative of results for a full year.
NOTE 3. Commitments
The Partnership has the following commitments:
The Partnership entered into agreements with QuestCor, Inc., on
November 1, 1989, to manage the Partnership's self-storage facilities.
The term of the agreements are for one year and shall be renewed from
year to year unless, and until, either party terminates the
agreements. The agreements provide that the manager shall receive, as
compensation for services, 6% of the actual gross cash receipts.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1997
NOTE 3 Commitments, continued
The Partnership also entered into an agreement with QuestCor, Inc. for
the management of the Partnership's accounting, securities reporting,
database and investor relations activities. The term of the agreement
is for one year and shall be renewed from year to year unless either
party terminates the agreement. The agreement provides for a flat fee
of $5,000 per month as compensation for administration services.
The Partnership reimburses the General Partner for the costs of goods
and materials used by and for the Partnership and administrative
services necessary to the operation of the Partnership.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1997
ITEM 2 MANAGEMENT'S DISCUSSIONS AND ANALYSIS
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Results of Operations
The Partnership has three operating facilities, two located in Phoenix,
Arizona, and one in Albuquerque, New Mexico. The Partnership's three facilities
generated an aggregate gross operating revenue of $832,660 during the first nine
months of 1997 compared to $856,452 during the first nine months of 1996.
Disappointing results at 63rd Avenue and at Tramway were responsible for the
decline in revenues. Occupancy rates were lower at all three facilities compared
to the prior year.
Occupancies (based on number of available units) at the three facilities
are summarized as follows:
Sept. 30, 1997 Sept. 30, 1996
-------------- --------------
Bell Road 85% 91%
63rd Avenue 73% 74%
Tramway 78% 85%
Operational expenses through September 30, 1997 were $314,370 compared to
$297,964 for 1996. Administrative expenses for 1997 were $80,776 compared to
$69,474 for the corresponding period in 1996.
Liquidity and Capital Resources
As of September 30, 1997, the Partnership held cash and cash equivalents
totaling $369,189 as compared to $264,154 for the corresponding quarter of 1996.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
PART II
OTHER INFORMATION
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Item 1: Legal Proceedings:
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Not applicable.
Item 2: Changes in securities:
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Not applicable.
Item 3: Defaults Upon Senior Securities:
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Not applicable.
Item 4: Submission of Matters to a Vote of Security Holders:
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Not applicable.
Item 5: Other information:
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Not applicable.
<PAGE>
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.
ARMORED STORAGE INCOME INVESTORS
(Registrant)
By: Armored Management L.L.C.
Its General Partner
By: /s/ Dale D. Ulrich
-----------------------------
Dale D. Ulrich
Its: Member
Dated: 11/10/97
--------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 369,189
<SECURITIES> 0
<RECEIVABLES> 26,366
<ALLOWANCES> 13,183
<INVENTORY> 0
<CURRENT-ASSETS> 382,372
<PP&E> 7,071,166
<DEPRECIATION> 2,196,667
<TOTAL-ASSETS> 5,256,870
<CURRENT-LIABILITIES> 104,885
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,151,985
<TOTAL-LIABILITY-AND-EQUITY> 5,256,870
<SALES> 0
<TOTAL-REVENUES> 847,739
<CGS> 0
<TOTAL-COSTS> 461,370
<OTHER-EXPENSES> 80,776
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 305,593
<INCOME-TAX> 0
<INCOME-CONTINUING> 305,593
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 305,593
<EPS-PRIMARY> 19.35
<EPS-DILUTED> 19.35
</TABLE>
