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:
March 31, 1998 2-95034LA
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ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 85-0503193
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(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) 230-1655
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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)
March 31, December 31,
1998 1997
----------- -----------
ASSETS
Property
Land $ 1,139,828 $ 1,139,828
Buildings 5,856,762 5,856,762
Furniture and fixtures 77,515 74,576
----------- -----------
7,074,105 7,071,166
Less accumulated depreciation (2,293,891) (2,244,891)
----------- -----------
4,780,214 4,826,275
Cash and cash equivalents 605,477 490,961
Other assets 18,165 18,165
----------- -----------
$ 5,403,856 $ 5,335,401
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 71,735 $ 92,405
Commitments (Note 3)
Partners' capital
General partner 71,227 66,771
Limited partners 5,260,894 5,176,225
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$ 5,403,856 $ 5,335,401
=========== ===========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Years
Ended Ended
------------------------------- ------------------------------
March 31, 1998 March 31, 1997 Dec. 31, 1997 Dec. 31, 1996
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Income
Rental $ 283,693 $ 275,574 $1,105,613 $1,118,273
Interest 5,170 2,324 18,426 7,084
---------- ---------- ---------- ----------
288,863 277,898 1,124,039 1,125,211
---------- ---------- ---------- ----------
Expenses
Property Operations 110,697 113,408 436,207 393,958
Administration 40,041 23,320 96,005 84,114
Amortization &
Depreciation 49,000 49,000 195,224 196,585
---------- ---------- ---------- ----------
199,738 185,728 727,436 674,657
---------- ---------- ---------- ----------
Net Income $ 89,125 $ 92,170 $ 396,603 $ 450,554
========== ========== ========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF CASH FLOWS
(unaudited)
For the three months ended
-------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 283,693 $ 275,574
Cash paid to suppliers (171,408) (142,635)
Interest received 5,170 2,324
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Net cash provided by (used in)
operating activities $ 117,455 $ 135,263
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and fixtures (2,939) --
--------- ---------
Net cash provided by (used in)
Investing activities $ (2,939) $ --
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners -- --
--------- ---------
Net cash used in financing activities -- --
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Increase (decrease) in cash $ 114,516 $ 135,263
Cash and cash equivalents:
Beginning 490,961 426,865
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Ending $ 605,477 $ 562,128
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RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income (loss) $ 89,125 $ 92,170
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 49,000 49,000
Increase (decrease) in accounts payable (20,670) (5,907)
--------- ---------
Net cash provided by (used in)
operating activities $ 117,455 $ 135,263
========= =========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 1998
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
March 31, 1998
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 three months ended March 31,
1998 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 Armored
Management, LLC, on January 1, 1998, 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
March 31, 1998
NOTE 3 Commitments, continued
The Partnership also entered into an agreement with Armored
Management, LLC 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
March 31, 1998
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 $283,693 during the first
three months of 1998 compared to $275,574 during the first three months of 1997.
Rental income decreased at Bell Road but increased at the other two facilities
compared to the prior period.
Occupancies (based on number of available units) at the three facilities
are summarized as follows:
March 31, 1998 March 31, 1997
-------------- --------------
Bell Road 86% 87%
63rd Avenue 75% 70%
Tramway 76% 78%
Operational expenses through March 31, 1998 were $110,697 compared to
$113,408 for 1997. Administrative expenses for 19987 were $40,041 compared to
$23,320 for the corresponding period in 1997. The variances in administrative
expenses are primarily timing differences.
Liquidity and Capital Resources
As of March 31, 1998, the Partnership held cash and cash equivalents
totaling $605,477 as compared to $562,128 for the corresponding quarter of 1997.
<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: 5/7/98
----------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Armored Storage Income Investors Limited Partnership
Appendix A to Item 601(c) of Regulation S-K
Commercial and Industrial Companies
Article 5 of Regulation S-X
3 Months Ended March 31, 1998
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollar
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 605,477
<SECURITIES> 0
<RECEIVABLES> 36,000
<ALLOWANCES> 18,000
<INVENTORY> 0
<CURRENT-ASSETS> 587,312
<PP&E> 7,074,105
<DEPRECIATION> 2,293,891
<TOTAL-ASSETS> 5,403,856
<CURRENT-LIABILITIES> 71,735
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,332,121
<TOTAL-LIABILITY-AND-EQUITY> 5,403,856
<SALES> 0
<TOTAL-REVENUES> 288,863
<CGS> 0
<TOTAL-COSTS> 159,697
<OTHER-EXPENSES> 40,041
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,125
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,125
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,125
<EPS-PRIMARY> 5.64
<EPS-DILUTED> 5.64
</TABLE>
