[TEST]
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1995 Commission File Number 2-98025
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SIGNATURE VII LTD. LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Indiana 35-1636684
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
250 East 96th Street, Suite 450, Indianapolis, Indiana 46240
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (317) 581-1111
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Check whether the Registrant (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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SIGNATURE VII LTD. LIMITED PARTNERSHIP
INDEX
Part I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements (Unaudited)
Balance Sheets
June 30, 1995 and December 31, 1994
Statements of Operations
Three and six months ended June 30, 1995 and 1994
Statement of Partners' Equity
Six months ended June 30, 1995 and year ended
December 31, 1994
Statements of Cash Flows
Six months ended June 30, 1995 and 1994
Note to Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II - OTHER INFORMATION
---------------------------
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<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Balance Sheets
(Unaudited)
<CAPTION>
June 30, December 31,
1995 1994
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $550,505 533,943
Accounts receivable 69,393 26,785
Other current assets 71,635 75,134
---------- ----------
Total current assets 691,533 635,862
Property and equipment:
Land 792,528 792,528
Land improvements 443,417 443,417
Buildings 5,617,802 5,374,062
Furniture and equipment 1,728,281 1,639,006
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8,582,028 8,249,013
Less accumulated depreciation 2,902,411 2,779,148
---------- ----------
Net property and equipment 5,679,617 5,469,865
Furniture and equipment reserves 39,467 131,419
Deferred costs, net of accumulated
amortization of $361,299 and $342,816 90,586 60,567
---------- ----------
$6,501,203 6,297,713
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Current portion of long-term debt 95,467 98,674
Accounts payable 118,185 35,428
Accrued payroll and related taxes 32,372 30,594
State and local taxes 126,047 125,653
Accrued interest - 4,574
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Total current liabilities 372,071 294,923
Long-term debt, less current portion 4,858,687 4,706,957
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Total liabilities 5,230,758 5,001,880
Partners' equity 1,270,445 1,295,833
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$6,501,203 6,297,713
========== ==========
</TABLE>
<PAGE>
<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
________________________ _____________________
1995 1994 1995 1994
__________ _________ __________ __________
<S> <C> <C> <C> <C>
Revenue:
Room revenue $ 895,098 756,204 1,562,590 1,343,945
Other hotel revenue 34,474 29,671 68,141 60,699
Interest 5,541 2,346 11,460 3,795
_________ _______ _________ _________
935,113 788,221 1,642,191 1,408,439
_________ _______ _________ _________
Cost and expenses:
Hotel operations 257,061 200,827 495,667 410,759
Salaries and benefits 190,405 179,602 357,564 325,659
Management and franchise fees 83,194 70,327 145,828 125,639
Advertising and reservations 32,354 27,350 56,711 48,860
Interest 128,305 129,525 254,361 259,193
Depreciation and amortization 64,547 62,593 129,080 125,186
_________ _______ _________ _________
755,866 670,224 1,439,211 1,295,296
_________ _______ _________ _________
Net income 179,247 117,997 202,980 113,143
General partner's interest 44,812 29,487 50,745 28,286
_________ _______ _________ _________
Limited partner's interest $ 134,435 88,510 152,235 84,857
========= ======= ========= =========
Limited partner's interest per unit $ 298.08 196.25 337.55 188.15
========== ========= ======== ========
Average number of limited partner
units outstanding 451 451 451 451
========== ======== ======== ========
</TABLE>
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<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statement of Partners' Equity
Six months ended June 30, 1995
(Unaudited)
<CAPTION>
General Limited
Partner Partners Total
_________ __________ __________
<S> <C> <C> <C>
Balance at
December 31, 1994 $442,661 853,172 1,295,833
Net income 50,745 152,235 202,980
Cash distributions (57,092) (171,276) (228,368)
Balance at June 30, 1995 $436,314 834,131 1,270,445
======== ======== =========
Accumulated balances:
Capital
contributions 1,503,333 4,510,000 6,013,333
Offering expenses - (474,671) (474,671)
Cash distributions (233,587) (700,908) (934,495)
Net loss (833,432) (2,500,290) (3,333,722)
_________ __________ __________
Balance at
June 30, 1995 $436,314 834,131 1,270,445
========= ========== ==========
</TABLE>
<PAGE>
<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statements of Cash Flows
(Unaudited)
<CAPTION>
Six months ended
June 30
_______________________________
1995 1994
________ _______
<S> <C> <C>
Cash flows from operating activities:
Net income $202,980 113,143
Items which do not use (provide)
cash:
Depreciation of property
and equipment 123,263 118,704
Amortization of deferred costs 5,817 6,482
Write off of deferred
loan costs 12,666 -
Accrued revenue and other
expenses, net 45,820 (13,172)
_________ ________
Net cash provided by
operating activities 390,546 225,157
_________ ________
Cash flows from investing activities:
Additions to furniture and
equipment reserves, net (59,320) (40,198)
Other additions to property
and equipment (181,743) -
_________ _________
Net cash used in
investing activities (241,063) (40,198)
_________ _________
Cash flows from financing activities:
Payments on long-term debt (56,956) (59,847)
Proceeds from long-term debt 200,905 -
Deferred financing costs (48,502) -
Cash distributions to partners (228,368) (71,559)
_________ _________
Net cash used in
financing activities (132,921) (131,406)
_________ _________
Change in cash and cash
equivalents 16,562 53,553
_________ _________
Cash and cash equivalents at
beginning of period 533,943 287,542
_________ _________
Cash and cash equivalents
at end of period $550,505 341,095
========= =========
Additional disclosures:
Interest paid $254,361 259,193
========= =========
Additions to property and
equipment from furniture and
equipment reserves $151,272 16,531
========= =========
</TABLE>
<PAGE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
NOTE TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, the financial statements 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 interim
period are not necessarily indicative of the results that may be expected for
the year ended December 31, 1995. For further information, refer to the
financial statements included in the Partnership's annual report on Form 10-KSB
for the year ended December 31, 1994.
<PAGE>
<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
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<CAPTION>
Occupancy Average Daily Rate
<S> <C> <C> <C> <C> <C> <C>
YTD YTD YTD YTD
6/30/95 6/30/94 Change 6/30/95 6/30/94 Change
Columbus 62.7% 58.7% 4.0% $55.01 $52.97 $2.04
Kokomo 80.0% 67.9% 12.1% $53.82 $51.47 $2.35
QTD QTD Percent YTD YTD Percent
6/30/95 6/30/94 Change 6/30/95 6/30/94 Change
Room &
Other Hotel
Revenues $929,572 $785,875 18.3% $1,630,731 $1,404,644 16.1%
Interest
Income $5,541 $2,346 136.2% $11,460 $3,795 202.0%
Hotel Operations
and Salaries and
Benefits $447,466 $380,429 17.6% $853,231 $736,418 15.9%
Management
and Franchise
Fees $83,194 $70,327 18.3% $145,828 $125,639 16.1%
Advertising and
Reserv $32,354 $27,350 18.3% $56,711 $48,860 16.1%
Interest
Expense $128,305 $129,525 (0.9)% $254,361 $259,193 (1.9)%
Depreciation and
Amort $64,547 $62,593 3.1% $129,080 $125,186 3.1%
Net
Income $179,247 $117,997 51.9% $202,980 $113,143 79.4%
</TABLE>
Room and other hotel revenues of the two hotels increased for both the three
and six month periods ended June 30, 1995 compared to the same period in 1994
due to increases in occupancy and average room rates.
Hotel operations and salaries and benefits represent all of the operational
and administrative costs of operating the hotels, including all payroll,
supply, utilities, maintenance and miscellaneous expenses. Hotel operations
and salaries and benefits increased primarily due to the increase in the
number of rooms sold during the first six months of 1995 compared to 1994.
Management and franchise fees increased due to the increase in room and other
hotel revenues for the same periods. These fees represent amounts paid to
Signature Inns, Inc., the general partner of the Partnership, for property
management, accounting services and franchise fees.
<PAGE>
The Partnership contributes to a cooperative advertising and reservation fund
administered by the general partner. Contributions increased due to the
increase in room and other hotel revenues for the periods.
Interest expense represents interest on hotel mortgage loans and capitalized
equipment leases. Interest expense decreased due to the scheduled
amortization reduction of the notes, offset slightly by interest expense on
additional borrowings on the Kokomo loan during the second quarter of 1995.
Additionally, the mortgage loan on the Kokomo hotel was refinanced in January
1995 at a lower interest rate than the retired indebtedness.
LIQUIDITY AND CAPITAL RESOURCES
The general partner believes that cash generated from the operation of the two
hotels, along with existing cash balances, will provide adequate liquidity for
the Partnership to meet its operating needs during the next twelve months.
<PAGE>
PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
See note below
Item 2. Changes in Securities
See note below
Item 3. Default upon Senior Securities
See note below
Item 4. Submission of matters to a Vote of Security Holders
See note below
Item 5. Other Information
See note below
Item 6. Exhibits and Reports on Form 8-K
See note below
NOTE: The response to each of the above items is not
applicable or is in the negative and does not
require a response pursuant to the instructions.
<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.
SIGNATURE INNS, INC., General Partner
of Signature VII Ltd. Limited Partnership
Date August 10, 1995 By
--------------- ---------------------------------------
John D. Bontreger, President and C.E.O.
Signature Inns, Inc.
Date August 10, 1995 By
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Mark D. Carney, Vice President
Finance and C.F.O.
Signature Inns, Inc.
Date August 10, 1995 By
--------------- ---------------------------------------
Martin D. Brew, Treasurer/Controller
Signature Inns, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Statement and Consolidated Statement of Operations of
Signature Inns, Inc. as of and for the six months ending June 30, 1995, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,311,479
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,896,413
<PP&E> 6,449,285
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,982,181
<CURRENT-LIABILITIES> 856,623
<BONDS> 9,465,566
<COMMON> 3,531,120
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,982,181
<SALES> 0
<TOTAL-REVENUES> 3,139,934
<CGS> 0
<TOTAL-COSTS> 2,153,740
<OTHER-EXPENSES> 73,257
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 973,400
<INCOME-PRETAX> 357,310
<INCOME-TAX> 0
<INCOME-CONTINUING> 357,310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 357,310
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
