<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 1995
-------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________________ to _________________
Commission file number 0-15699
-------------------------------------
WINDSOR PARK PROPERTIES 3, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0115651
- --------------------------------------------- ------------------------------
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(619) 746-2411
-----------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ( )
--- ---
1
<PAGE>
TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II
-------
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE
2
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
June 30, 1995
--------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 920,000
Buildings and improvements 3,191,700
Fixtures and equipment 78,300
--------------
4,190,000
Less accumulated depreciation (2,153,900)
--------------
2,036,100
Investments in joint ventures 1,228,100
Cash and cash equivalents 231,000
Other assets 49,200
--------------
$ 3,544,400
==============
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Accounts payable $ 20,300
Accrued liabilities 52,400
Tenant deposits and other liabilities 55,300
--------------
128,000
--------------
Partners' equity:
Limited partners 3,959,100
General partners (542,700)
--------------
3,416,400
--------------
$ 3,544,400
=================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1995 1994
----------- -----------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 251,600 $ 246,300
Equity in earnings of joint ventures 7,000 3,700
Interest 3,000 2,300
Other 9,900 10,300
----------- -----------
271,500 262,600
----------- -----------
COSTS AND EXPENSES
- ------------------
Property operating costs 153,200 156,100
Depreciation and amortization 27,500 35,600
General and administrative:
Related parties 15,800 18,800
Other 13,000 16,200
----------- -----------
209,500 226,700
----------- -----------
Net income $ 62,000 $ 35,900
=========== ===========
Net income - general partners $ 600 $ 400
=========== ===========
Net income - limited partners $ 61,400 $ 35,500
=========== ===========
Net income per limited partnership unit $ 0.30 $ 0.18
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1995 1994
------------ -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 497,300 $ 491,100
Equity in earnings of joint ventures 14,500 8,200
Interest 6,100 4,400
Other 20,900 25,200
------------ -----------
538,800 528,900
------------ -----------
COSTS AND EXPENSES
- ------------------
Property operating costs 329,500 347,500
Depreciation and amortization 54,300 70,700
General and administrative:
Related parties 34,500 38,200
Other 28,800 30,900
Interest 1,000
------------ -----------
447,100 488,300
------------ -----------
Net income $ 91,700 $ 40,600
=========== ===========
Net income - general partners $ 900 $ 400
=========== ===========
Net income - limited partners $ 90,800 $ 40,200
=========== ===========
Net income per limited partnership unit $ 0.45 $ 0.20
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 91,700 $ 40,600
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 54,300 70,700
Equity in earnings of joint ventures (14,500) (8,200)
Joint ventures' cash distributions 14,500 8,200
Changes in operating assets and liabilities:
Other assets 13,100 47,200
Accounts payable (15,300) 500
Accrued liabilities 200 (22,200)
Tenant deposits and other liabilities (6,800) (3,200)
------------- -------------
Net cash provided by operating activities 137,200 133,600
------------- -------------
Cash flows from investing activities:
Increase in property held for investment (63,100) (26,800)
Proceeds from sale of property held for investment 1,000 400
Joint ventures' cash distributions 44,300 28,600
------------- -------------
Net cash (used in) provided by investing activities (17,800) 2,200
------------- -------------
Cash flows from financing activities:
Cash distributions (147,400) (210,500)
Repurchase of limited partnership units (1,000) (12,700)
Repayment of note payable (10,000)
------------- -------------
Net cash used in financing activities (148,400) (233,200)
------------- -------------
Net decrease in cash and cash equivalents (29,000) (97,400)
Cash and cash equivalents at beginning of period 260,000 434,400
------------- -------------
Cash and cash equivalents at end of period $ 231,000 $ 337,000
============= =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ -- $ 1,000
============= =============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 1995 and the related statements of operations for
the three and six months ended June 30, 1995 and 1994 and the statements of cash
flows for the six months ended June 30, 1995 and 1994 are unaudited. However, in
the opinion of the General Partners, they contain all adjustments, of a normal
recurring nature, necessary for a fair presentation of such financial
statements. Interim results are not necessarily indicative of results for a
full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes. Certain 1994 amounts have been reclassified to
conform with the 1995 presentation.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of undivided interests
in two manufactured home communities. The combined condensed results of
operations of these properties for the six months ended June 30, 1995 and 1994
follows:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Total revenues $ 441,700 $ 395,000
----------- -----------
Expenses:
Property operating 258,100 235,400
Depreciation 130,600 127,300
----------- -----------
388,700 362,700
----------- -----------
Net income $ 53,000 $ 32,300
=========== ===========
</TABLE>
NOTE 3. NET INCOME PER LIMITED PARTNERSHIP UNIT
---------------------------------------
Net income per limited partnership unit is calculated based on the weighted
average number of limited partnership units outstanding during the period and
the net income allocated to the Limited Partners. The weighted average number
of limited partnership units outstanding during the three and six months ended
June 30, 1995 was 200,228 and 200,245, respectively; and 200,506 and 200,675 for
the three and six months ended June 30, 1994, respectively.
NOTE 4. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and John A. Coseo, Jr. (Mr. Coseo is also the president,
chief executive officer and the principal stockholder of The Windsor
Corporation.)
7
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The General Partners and their affiliates are entitled to receive various fees
and compensation from the Partnership which are summarized as follows:
Operational Stage
- -----------------
The Partnership's investment properties were managed by Windsor Asset
Management, Inc. (WAMI), an affiliate of The Windsor Corporation, until November
1994. At that time, WAMI was merged into an independent property management
company. For management services, WAMI received 5 percent of gross property
receipts. During the three and six months ended June 30, 1994, WAMI received
fees of $12,900 and $25,900, respectively. WAMI received no fees during the
three and six months ended June 30, 1995.
The net profits and losses of the Partnership during the operational stage are
allocated 99 percent to the Limited Partners and 1 percent to the General
Partners. Cash distributions from operations during the operational stage are
allocated 95 percent to the Limited Partners and 5 percent to the General
Partners.
The Partnership reimburses The Windsor Corporation and affiliates for certain
direct expenses, and employee, executive and administrative time, which are
incurred on the Partnership's behalf. The Partnership was charged $18,000 and
$21,500 for such costs during the three months ended June 30, 1995 and 1994,
respectively; and $39,100 and $43,700 during the six months ended June 30, 1995
and 1994, respectively.
Liquidation Stage
- -----------------
The General Partners receive 1 percent of profits, losses, and cash
distributions from the sale or financing of Partnership properties. This
participation increases to 15 percent after the Limited Partners have received
their original invested capital plus a 9 percent cumulative, non-compounded
annual return.
During the three months ended June 30, 1995 and 1994, the General Partners
received cash distributions of $3,700 and $5,200, respectively; and $7,400 and
$10,500 for the six months ended June 30, 1995 and 1994, respectively.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to limited partners for the six months ended June 30, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---------------------- -----------------------
Per Per
Amount Unit Amount Unit
----------- ------- ----------- --------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 90,800 $ 0.45 $ 40,200 $ 0.20
Return of capital 49,200 0.25 159,800 0.80
---------- ------- ---------- --------
$ 140,000 $ 0.70 $ 200,000 $ 1.00
========== ======= ========== ========
</TABLE>
8
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
June 30, 1995 as compared to December 31, 1994
- ----------------------------------------------
The Partnership's primary source of cash during the six months ended June 30,
1995 was from the operations of its investment properties. The primary use of
cash during the same period was for cash distributions to partners.
In May 1995, through a proxy vote of the limited partners, an amendment to the
Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing. Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.
The General Partners are currently evaluating financing proposals and new
property acquisitions. It is currently anticipated that existing properties
will be financed and new properties acquired before the end of 1995.
Partners' equity decreased from $3,473,100 at December 31, 1994 to $3,416,400 at
June 30, 1995, as a result of $147,400 in cash distributions to partners and
$1,000 for repurchased limited partnership units, offsetting $91,700 in net
income.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, possibly mortgage financing, and ultimately from the
sale of property. The future uses of cash will be for Partnership
administration, capital expenditures, distributions to partners and possibly
debt service and the acquisition of additional investment properties. The
General Partners believe that the future sources of cash are sufficient to meet
the working capital requirements of the Partnership for the foreseeable future.
Results of Operations
- ---------------------
Three months ended June 30, 1995 as compared to three months ended June 30, 1994
- --------------------------------------------------------------------------------
The Partnership realized net income of $62,000 and $35,900 for the three months
ended June 30, 1995 and 1994, respectively. Net income per limited partnership
unit was $0.30 in 1995 compared to $0.18 in 1994.
Rent and utilities revenues increased from $246,300 in 1994 to $251,600 in 1995.
The overall occupancy at the Partnership's four wholly-owned properties
increased from 70% at June 30, 1994 to 78% at June 30, 1995. Also, $5 per month
rent increases were implemented at Little Eagle and Shady Hills effective
January 1995 and May 1995, respectively.
Equity in earnings of joint ventures, which reflects the Partnership's share of
net income of the Big Country Estates and Harmony Ranch manufactured home
communities, was $7,000 and $3,700 for the three months ended June 30, 1995 and
1994, respectively. The increase in 1995 is due primarily to occupancy
increases at both properties. Big Country increased occupancy from 69% at June
30,
9
<PAGE>
1994 to 81% at June 30, 1995; while Harmony Ranch increased occupancy from 84%
at June 30, 1994 to 93% at June 30, 1995. In addition, Harmony Ranch
implemented an $8 per month rent raise effective October 1994.
Depreciation and amortization expense decreased from $35,600 in 1994 to $27,500
in 1995. The decrease is due mainly to a $600,000 provision for estimated loss
in value of The Pines manufactured home community recorded in September 1994. A
portion of the provision was allocated to the depreciable basis of the property,
thereby reducing future depreciation expense.
Six months ended June 30, 1995 as compared to six months ended June 30, 1994
- ----------------------------------------------------------------------------
The Partnership realized net income of $91,700 and $40,600 for the six months
ended June 30, 1995 and 1994, respectively. Net income per limited partnership
unit was $0.45 in 1995 compared to $0.20 in 1994.
Rent and utilities revenues increased from $491,100 in 1994 to $497,300 in 1995
due to occupancy increases and rent raises discussed previously.
Equity in earnings of joint ventures, which reflects the Partnership's share of
net income of the Big Country Estates and Harmony Ranch manufactured home
communities was $14,500 and $8,200 for the six months ended June 30, 1995 and
1994, respectively. The reasons for the increase were previously discussed.
Property operating costs decreased from $347,500 in 1994 to $329,500 in 1995,
due mainly to lower utilities and repairs and maintenance expenses.
Depreciation and amortization expense decreased from $70,700 in 1994 to $54,300
in 1995 for the reason discussed previously.
10
<PAGE>
PART II
-------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period covered by
this Form 10-QSB.
11
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WINDSOR PARK PROPERTIES 3,
A California Limited Partnership
--------------------------------
(Registrant)
By: The Windsor Corporation, General Partner
By /s/ John A. Coseo, Jr.
-------------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: August 10, 1995
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 3 AT JUNE 30, 1995 AND THE RELATED STATEMENTS
OF OPERATIONS AND OF CASH FLOWS FOR THE SIX MONTHS THEN ENDED.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 231,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,190,000
<DEPRECIATION> 2,153,900
<TOTAL-ASSETS> 3,544,400
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,416,400<F1>
<TOTAL-LIABILITY-AND-EQUITY> 3,544,400
<SALES> 0
<TOTAL-REVENUES> 538,800
<CGS> 0
<TOTAL-COSTS> 329,500
<OTHER-EXPENSES> 117,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 91,700
<INCOME-TAX> 0
<INCOME-CONTINUING> 91,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 91,700
<EPS-PRIMARY> 0.45<F2>
<EPS-DILUTED> 0
<FN>
<F1>Limited partners and general partners equity
<F2>Net income per limited partnership unit
</FN>
</TABLE>
