[LIVE]
<PAGE>
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 March 31, 1996 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
incorporation or organization) Identification No.)
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
<TABLE>
<CAPTION>
Part I - FINANCIAL INFORMATION PAGE #
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<S> <C>
Item 1. Financial Statements (Unaudited)
Balance Sheets 1
March 31, 1996 and December 31, 1995
Statements of Operations 2
Three months ended March 31, 1996 and 1995
Statement of Partners' Equity 3
Three months ended March 31, 1996
Statements of Cash Flows 4
Three months ended March 31, 1996 and 1995
Note to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Part II - OTHER INFORMATION 8
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SIGNATURES 9
</TABLE>
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<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Balance Sheets
(Unaudited)
<CAPTION>
March 31, December 31,
1996 1995
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 401,002 853,930
Accounts receivable 48,240 39,587
Other current assets 78,916 72,014
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Total current assets 528,158 965,531
Property and equipment:
Land 792,528 792,528
Land improvements 449,003 449,003
Buildings 5,563,526 5,563,526
Furniture and equipment 1,867,059 1,821,149
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8,672,116 8,626,206
Less accumulated depreciation 3,018,595 2,962,922
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Net property and equipment 5,653,521 5,663,284
Furniture and equipment reserves 51,113 88,775
Deferred costs, net of accumulated
amortization of $123,556 and $120,715 82,063 84,904
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$ 6,314,855 6,802,494
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Current portion of long-term debt 117,284 119,389
Accounts payable 62,584 60,394
Accrued payroll and related taxes 22,201 35,346
State and local taxes 148,909 137,492
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Total current liabilities 350,978 352,621
Long-term debt, less current portion 4,853,951 4,901,217
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Total liabilities 5,204,929 5,253,838
Partners' equity 1,109,926 1,548,656
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$ 6,314,855 6,802,494
========== ==========
</TABLE>
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<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
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<S> <C> <C>
Revenue:
Room revenue $ 804,043 667,492
Other hotel revenue 37,248 33,667
Interest 8,699 5,919
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849,990 707,078
Cost and expenses:
Hotel operations 262,442 238,606
Salaries and benefits 175,083 167,159
Management and franchise fees 75,359 62,634
Advertising and reservations 29,306 24,357
Interest 128,465 126,056
Depreciation and amortization 68,248 64,533
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738,903 683,345
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Net income 111,087 23,733
General partner's interest 27,772 5,933
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Limited partner's interest $ 83,315 17,800
========== ==========
Number of limited partner 451 451
units outstanding ========== ==========
Limited partners' interest per unit $ 185 39
========== ==========
</TABLE>
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<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statement of Partners' Equity
Three months ended March 31, 1996
(Unaudited)
<CAPTION>
General Limited
Partner Partners Total
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<S> <C> <C> <C>
Balance at December 31, 1995 $ 505,867 1,042,789 1,548,656
Net income 27,772 83,315 111,087
Cash distributions (137,454) (412,363) (549,817)
---------- ---------- ----------
Balance at March 31, 1996 $ 396,185 713,741 1,109,926
========== ========== ==========
Accumulated balances:
Capital contributions 1,503,333 4,510,000 6,013,333
Offering expenses - (474,671) (474,671)
Cash distributions (371,041) (1,113,271)(1,484,312)
Net loss (736,107) (2,208,317)(2,944,424)
---------- ---------- ----------
Balance at March 31, 1996 $ 396,185 713,741 1,109,926
========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
Statements of Cash Flows
Three months ended March 31, 1996 and 1995
(Unaudited)
<CAPTION>
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 111,087 23,733
Items which do not use (provide) cash:
Depreciation of property and equipment 65,407 61,632
Amortization of deferred costs 2,841 2,901
Write off of deferred loan costs - 12,666
Loss on disposal of assets 249 -
Accrued revenue and other expenses, net (15,093) 6,459
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Net cash provided by operating
activities 164,491 107,391
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Cash flows from investing activities:
Additions to furniture and equipment
reserves, net (18,231) (22,452)
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Net cash used in investing activities (18,231) (22,452)
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Cash flows from financing activities:
Proceeds from long-term debt - 64,135
Payments on long-term debt (49,371) (29,095)
Deferred financing costs - (48,336)
Cash distributions to partners (549,817) (228,368)
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Net cash used in financing activities (599,188) (241,664)
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Change in cash and cash equivalents (452,928) (156,725)
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Cash and cash equivalents at beginning
of period 853,930 533,943
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Cash and cash equivalents at end of period $ 401,002 377,218
========== ==========
Additional disclosures:
Interest paid $ 128,465 130,630
========== ==========
Additions to property and equipment
from furniture and equipment reserves $ 68,304 46,148
========== ==========
</TABLE>
<PAGE>
SIGNATURE VII LTD. LIMITED PARTNERSHIP
NOTE TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1996
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, 1996. 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, 1995.
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<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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Certain operating and financial data for the quarter ended March 31, 1996 and
1995 is as follows:
<CAPTION>
Occupancy Average Daily Rate
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YTD YTD YTD YTD
Hotel 3/31/96 3/31/95 3/31/96 3/31/95
- ------ ------- -------- ------- --------
<S> <C> <C> <C> <C>
Columbus 60.3% 54.5% $57.79 $53.80
Kokomo 75.7% 70.1% $59.36 $52.98
</TABLE>
<TABLE>
<CAPTION>
QTD QTD
3/31/96 3/31/95 Change
------- ------- ------
<S> <C> <C> <C>
Room & Other Hotel Revenues $841,291 $701,159 $140,132
Interest Income $8,698 $5,919 $2,779
Operating & Related Expenses $542,190 $492,756 $49,434
Interest Expense $128,465 $126,056 $2,409
Depreciation & Amortization $68,248 $64,533 $3,715
Net Income $111,086 $23,733 $87,353
</TABLE>
Room and other hotel revenues of the two hotels increased for the three month
period ended March 31, 1996 compared to the same period in 1995 due to
increases in occupancy and average room rates.
Operating and related expenses of the hotels consist of the following costs
and expenses - hotel operations, salaries and benefits, management and
franchise fees and advertising and reservation contributions:
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. These
expenses increased primarily due to the increase in the number of rooms sold
during the first three months of 1996 compared to 1995.
<PAGE>
Management and franchise fees increased due to the increase in room and
other hotel revenue 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.
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 revenue for the period.
Interest expense represents interest on hotel mortgage loans and capitalized
equipment leases on the hotels. Interest expense increased primarily due to
the scheduled amortization reduction of the notes.
LIQUIDITY AND CAPITAL RESOURCES
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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 May 14, 1996 By
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John D. Bontreger, President and C.E.O.
Signature Inns, Inc.
Date May 14, 1996 By
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Mark D. Carney, Vice President Finance
and C.F.O.
Signature Inns, Inc.
Date May 14, 1996 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 VII LTD. Limited Partnership as of and for the three months ended
March 31, 1996, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 401,002
<SECURITIES> 0
<RECEIVABLES> 48,240
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 528,158
<PP&E> 8,672,116
<DEPRECIATION> 3,018,595
<TOTAL-ASSETS> 6,314,855
<CURRENT-LIABILITIES> 350,978
<BONDS> 4,853,951
0
0
<COMMON> 1,109,926
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,314,855
<SALES> 0
<TOTAL-REVENUES> 849,990
<CGS> 0
<TOTAL-COSTS> 610,438
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 128,465
<INCOME-PRETAX> 111,087
<INCOME-TAX> 0
<INCOME-CONTINUING> 111,087
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,087
<EPS-PRIMARY> 185
<EPS-DILUTED> 185
</TABLE>
