UNITED STATES
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 June 30, 1995
Commission File Number 1-8893
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-2501059
- --------------------------------- ---------------------------------------
(State of other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
2501 S. Ocean Drive
Hollywood, Florida 33019
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 927-3080
--------------
NONE
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by checkmark 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 [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
CLASS Outstanding at June 30, 1995
- -------------------------------- ----------------------------
Limited Partnership Units 4,485,504 units
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
INDEX
PART I. Financial information
Balance sheets - June 30, 1995 and September 30, 1994
Statements of income -
Three months and nine months ended
June 30, 1995 and 1994
Statements of cash flows -
Three months and nine months ended
June 30, 1995 and 1994
Notes to financial statements
Management's discussion and analysis
of financial condition
Part II. Other information and signatures
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
1995 1994
----------- ----------
(unaudited)
<S> <C> <C>
ASSETS
Cash $ 255,724 $ 543,243
Mortgage notes and other receivables:
Mortgage notes receivable 292,698 383,215
Other 138,500 147,153
Property held for sale 4,393,157 3,444,824
Other assets 196,462 131,434
----------- ----------
$ 5,276,541 $4,649,869
=========== ==========
LIABILITIES AND EQUITY
Liabilities:
Mortgage Payable, bank $ 1,010,513 --
Mortgage, general partner 500,000 --
Accounts payable and accrued
liabilities 672,962 $ 542,966
Estimated cost of development
of land and property sold 14,941 259,420
Equity:
Partners' equity, 4,485,504 units
outstanding 3,078,125 3,847,483
----------- ----------
$ 5,276,541 $4,649,869
=========== ==========
</TABLE>
See notes to financial statements
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
--------------------- ----------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues $ 10,666 $ 390,362 $ 67,264 $ 606,334
--------- --------- ---------- ----------
Cost and expenses:
Cost of sales -- 245,367 -- 325,048
Selling, administrative
and other expenses 292,086 226,349 742,551 624,653
Depreciation and
property taxes 46,496 27,310 94,071 81,128
--------- --------- ---------- ----------
Total costs and expenses 338,582 499,026 836,622 1,030,829
--------- --------- ---------- ----------
Net loss $(327,916) $(108,664) $ (769,358) $ (424,495)
========= ========= ========== ==========
Net loss per unit $ (0.07) $ (0.02) $ (0.17) $ (0.09)
========= ========= ========== ==========
Weighted average number of
units outstanding 4,485,504 4,485,504 4,485,504 4,485,504
========= ========= ========== ==========
</TABLE>
See notes to financial statements
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------- --------------------
1995 1994 1995 1994
---------- --------- ---------- -------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Cash was received from:
Collections on sales
and receivables $ 16,671 $ 61,999 $ 144,676 $ 243,494
Interest income 6,339 4,331 70,523 48,680
Sale of utility system - - 85,800 215,050
Other 200 55,291 1,706 175,541
----------- ---------- ---------- ----------
23,210 121,621 302,705 682,765
----------- ---------- ---------- ----------
Cash was expended for:
Selling, administrative
and property taxes 245,954 212,020 650,380 829,418
Improvements to property
held for sale 260,022 204,246 1,432,080 508,058
---------- ---------- ---------- ----------
505,976 416,266 2,082,460 1,337,476
---------- ---------- ---------- ----------
Net cash used in
operating activities (482,766) (294,645) (1,779,755) (654,711)
---------- ---------- ---------- ----------
Cash flow from investing activities:
Purchase of property and
equipment -- (4,255) (758) (8,173)
Investment costs (17,519) -- (17,519) --
---------- ---------- ---------- ----------
Net cash used in investing
activities (17,519) (4,255) (18,277) (8,173)
---------- ---------- ---------- ----------
</TABLE>
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (CONTINUED)
THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------- --------------------
1995 1994 1995 1994
---------- --------- ---------- -------
<S> <C> <C> <C> <C>
Cash flow from financing activities:
Proceeds from loan payable:
Mortgage payable, bank 53,491 -- 1,010,513 --
Mortgage Payable, general
partner 500,000 -- 500,000 --
---------- ---------- ---------- ----------
Net cash provided by
financing activities 553,491 -- 1,510,513 --
---------- ---------- ---------- ----------
Net increase (decrease) in cash 53,206 (298,900) (287,519) (662,884)
Cash, beginning of period 202,518 1,056,769 543,243 1,420,753
---------- ---------- ---------- ----------
Cash end of period $ 255,724 $ 757,869 $ 255,724 $ 757,869
========== ========== ========== ==========
</TABLE>
See notes to financial statements
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
RECONCILIATION OF NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES
THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1994 1995 1994
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net loss $(327,916) $(108,664) $ (769,358) $(424,495)
--------- --------- ----------- ---------
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Provision for doubtful
accounts (24,250) -- (24,250) --
Change in assets and
liabilities:
Increase in:
Property held for sale (233,194) 4,459 (948,333) (266,667)
Decrease in:
Mortgage notes and
other receivables (112,456) (254,057) 123,420 91,112
Other assets (82,993) (74,136) (46,749) (41,197)
Accounts payable and
accrued liabilities 298,843 111,091 129,994 (87,121)
Estimated costs of
development of land
and property sold (800) 26,662 (244,479) 73,657
--------- --------- ----------- ---------
Total adjustments (154,850) (185,981) (1,010,397) (230,216)
--------- --------- ----------- ---------
Net cash flow used in
operating activities $(482,766) $(294,645) $(1,779,755) $(654,711)
========= ========= =========== =========
</TABLE>
See notes to financial statements.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1995 AND 1994
1. Interim financial statements:
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine months ended June 30, 1995 are not
necessarily indicative of the results that may be expected for the
fiscal year ending September 30, 1995. These statements should be read
in conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994.
2. Income tax:
The Partnership has made no provision for income taxes since it is not
subject to income taxes. Instead, the partners are required to include
in their income tax returns their share of the Partnership's taxable
income or loss.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1995 AND 1994
(UNAUDITED)
Liquidity and Capital Resources
During the past fiscal year and last three quarters, the Partnership incurred
substantial expenses in the planning and development of its properties in
addition to normal ongoing administrative costs. The time lag between
development and ultimate sale results in a substantial net cash outflow during
the periods. In addition, receipts from mortgage payments declined as purchase
money mortgagees completed interest and amortization schedules.
In June, 1995 the Partnership increased its line of credit with Union Bank from
$975,000 to $2,175,000 in order to complete the development of certain
residential lots the Partnership intends to offer for sale. In addition, in
June, 1995 the Partnership borrowed $500,000 from Hasam Realty L.P., one of its
general partners, repayable in one year. It is anticipated that such borrowings,
together with projected receivables collections, will provide sufficient working
capital pending the completion of development activities on portions of its land
and the resumption of land sales.
The Partnership has previously indicated that it was considering the resumption
of active business operations. During May, 1995 the Partnership announced an
agreement in principle with Regency Homes, Inc., a privately owned builder with
operations focused in Southern Florida, which contemplates a merger of the two
entities. The parties are currently negotiating the terms of a definitive
agreement which, if consummated, would result in Unitholders of the Partnership
acquiring approximately 37.5% of the combined entity. The transaction is
subject, among other matters, to approval by a majority of the Partnership's
Unitholders. Management believes that any such transaction would include
provision for adequate financing for the combined entity's ongoing operations.
Affect of Land Sales on Future Cash Flow
Assuming that the Partnership determines to continue to liquidate, total net
cash flow which might become available for distribution remains unpredictable
due to uncertain conditions in the South Florida real estate market in which the
Partnership's remaining real estate is located, and the competitive factors
described in Item 1 -- Business -- "Competition" of the Company's Report on Form
10-K for the year ended September 30, 1995. These conditions will continue to
affect the realizable value of the Partnership's remaining land.
Certain of the Partnership's land in Palm Beach County located outside of the
Village of Royal Palm Beach has been the subject of substantial regulatory
concerns relating to land use issues, and the salability of such land has been
adversely affected by doubts concerning the future availability of building
permits. At the inception of the Partnership, such land, in the aggregate, had
appraised or estimated values aggregating approximately $1.7 million and is
carried on the Partnership's balance sheet at $324,000. While the Partnership
believes that all or a major portion of such land could ultimately be sold,
aggregate realizable values cannot be estimated. It also remains possible, on
the other hand, that continuing development and possible future road building
activity in the vicinity of this land could have a favorable impact on the value
of the land, although such impact is entirely speculative.
The Partnership has determined to develop portions of its remaining properties
in order to enhance their ultimate selling price. Such development will continue
whether or not the Partnership continues to liquidate, contingent upon the
continued availability of financing. Management believes that such financing
will continue to be available on commercially acceptable terms.
In the event that the Partnership effects a business combination with Regency
Homes, Inc. (see "Liquidity and Capital Resources"), the cash flow of the
resulting entity will relate largely to the construction business of the ongoing
operation, and the financing requirements of such business will therefore depend
upon factors which do not relate to the Partnership's current operations.
Environmental Matters
There are no environmental contingencies in respect of the Partnership or its
properties. Use of all of the Partnership's properties is subject to compliance
with state and county land use regulations relating to environmental matters,
which the Partnership takes into account in considering the values of its
properties.
Results of Operations
The three months ended June 30, 1994 included land sales in the amount of
$310,000 compared to no such sales in the current quarter.
Revenues for the nine months ended June 30, 1994 includes $119,000 received in
settlement of certain contractual arrangements.
The increases in selling, administrative and other expenses are generally
attributable to costs related to the consideration of the resumption of active
business activities.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K: None
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.
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
By: Stein Management Company, Inc.
Managing General Partner
DATE: August 11, 1995 By: /s/ Martin J. Katz
--------------- ----------------------------------
Martin J. Katz, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 255,724
<SECURITIES> 0
<RECEIVABLES> 316,948
<ALLOWANCES> 24,250
<INVENTORY> 4,393,157
<CURRENT-ASSETS> 0
<PP&E> 20,509
<DEPRECIATION> 11,300
<TOTAL-ASSETS> 5,276,541
<CURRENT-LIABILITIES> 0
<BONDS> 1,510,513
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,276,541
<SALES> 0
<TOTAL-REVENUES> 67,264
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 836,622
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (769,358)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> 0
</TABLE>
