FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........to.........
Commission file number 0-15758
JACQUES-MILLER INCOME FUND, L.P. II
(Exact name of small business issuer as specified in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 Woodmont Boulevard, Suite 420
Nashville, Tennessee 37205
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1996
Assets
Cash and cash equivalents $ 1,651
Accounts receivable 7
Notes receivable (net of allowance
of $2,956) --
$ 1,658
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 2
Other liabilities 17
Partners' Capital (Deficit)
General partner $ (97)
Limited partners (12,400 units
issued and outstanding) 1,736 1,639
$ 1,658
See Accompanying Notes to Consolidated Financial Statements
b) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 107 $ 183 $ 289 $ 425
Other income 17 11 41 56
Total revenues 124 194 330 481
Expenses:
Operating 64 74 144 184
General and administrative 12 32 26 61
Maintenance 12 24 56 55
Depreciation -- 29 -- 58
Interest 27 46 73 112
Property taxes 9 15 24 39
Total expenses 124 220 323 509
Gain on sale of investment
property 1,348 -- 1,348 856
Income (loss) before
extraordinary item 1,348 (26) 1,355 828
Extraordinary loss on
early extinguishment of debt (221) -- (221) --
Net income (loss) $ 1,127 $ (26) $ 1,134 $ 828
Net income (loss) allocated
to general partner (1%) $ 11 $ -- $ 11 $ 8
Net income (loss) allocated
to limited partners (99%) 1,116 (26) 1,123 820
$ 1,127 $ (26) $ 1,134 $ 828
Per limited partnership unit:
Income (loss) before
extraordinary item $107.64 $ (2.14) $108.20 $ 66.07
Extraordinary item (17.63) -- (17.63) --
Net income (loss) per limited
partnership unit $ 90.01 $ (2.14) $ 90.57 $ 66.07
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Partners' capital (deficit)
at December 31, 1995 12,400 $ (108) $ 613 $ 505
Net income for the six
months ended June 30, 1996 11 1,123 1,134
Partners' capital (deficit)
at June 30, 1996 12,400 $ (97) $1,736 $1,639
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,134 $ 828
Adjustments to reconcile net income to net cash
provided by (used in) in operating activities:
Depreciation -- 58
Amortization of discounts and loan costs 13 16
Gain on sale of investment property (1,348) (856)
Loss on early extinguishment of debt 221 --
Change in accounts:
Restricted cash 26 65
Accounts receivable (7) --
Escrow for taxes 17 111
Other assets 11 --
Accounts payable (36) (186)
Tenant security deposit liabilities 2 (68)
Accrued taxes -- (145)
Other liabilities 28 (42)
Net cash provided by (used in) operating
activities 61 (219)
Cash flows from investing activities:
Property improvements and replacements (13) (26)
Deposits to restricted escrows (15) (19)
Receipts from restricted escrows 126 463
Proceeds from sale of investment property 927 1,613
Net cash provided by investing activities 1,025 2,031
Cash flows from financing activities:
Payments on mortgage notes payable (21) (33)
Distributions -- (1,872)
Net cash used in financing activities (21) (1,905)
Net increase (decrease) in cash and cash equivalents 1,065 (93)
Cash and cash equivalents at beginning of period 586 744
Cash and cash equivalents at end of period $ 1,651 $ 651
Supplemental disclosure of cash flow information:
Cash paid for interest $ 67 $ 114
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) JACQUES-MILLER INCOME FUND, L.P. II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Jacques-Miller
Income Fund, L.P. II ("Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the General Partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and six month periods ended June 30,
1996, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Partnership's annual report on Form 10-KSB for the fiscal year ended December
31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - Transactions With Affiliated Parties
The Partnership has outstanding notes receivable with affiliated partnerships.
No income was recorded for the years ended December 31, 1995 and 1994, as no
payments were made to the Partnership. (See "Note C" for further information
concerning the notes receivable).
Note C - Notes Receivable
The Partnership holds seven notes receivable at June 30, 1996, totaling
approximately $1,599,000 with approximately $1,357,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $984,000 of deferred interest revenue. Six of
the seven notes in the principal amount of approximately $1,201,000 are due from
related partnerships. These six promissory notes are unsecured by the related
partnerships and are subordinated to the underlying mortgages of the respective
partnerships.
Note D - Sale of Willow Oaks
On January 17, 1995, Jacques-Miller Income Fund II Special Asset Partnership
(Willow Oaks), L.P., which is 99.9% owned by the Partnership, sold Willow Oaks
to an unaffiliated purchaser, Willow Bryan Apartments, L.P., a Delaware limited
partnership. The buyer assumed the mortgages, payable to Bank of America. The
total outstanding balance on the mortgage notes payable, including interest, was
approximately $5,439,000. The Partnership received net proceeds of
approximately $1,613,000 after payment of closing costs. This disposition
resulted in a gain of approximately $856,000.
Note E - Sale of La Plaza
On May 24, 1996, Jacques-Miller Income Fund II Special Asset Partnership (La
Plaza) L.P., which is 99.9% owned by the Partnership, sold La Plaza Apartments,
located in Altamonte Springs, Florida, to an unaffiliated purchaser, Wymore
Equity Associates, L.C., a Florida limited liability company. The General
Partner decided to sell La Plaza, the sole remaining property held by the
Partnership, in its effort to terminate the Partnership. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of $3.2
million. Included as part of this purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership consisted of one investment property until May 24, 1996, when La
Plaza Apartments was sold to an unaffiliated purchaser. The following table
sets forth the average occupancy for this property through May 24, 1996, and for
the six months ended June 30, 1995:
Average
Occupancy
Property 1996 1995
La Plaza Apartments
Altamonte Springs, Florida 94% 92%
Results of Operations
The Partnership's net income for the six months ended June 30, 1996, was
approximately $1,134,000 as compared to net income of approximately $828,000 for
the six months ended June 30, 1995. The Partnership recorded net income of
approximately $1,127,000 for the three months ended June 30, 1996, as compared
to a net loss of approximately $26,000 for the three months ended June 30, 1995.
The increases in net income for the three and six month periods ended June 30,
1996, are primarily attributable to the gain of approximately $1,348,000 on the
sale of La Plaza Apartments which occurred on May 24, 1996. Although Willow
Oaks Apartments was sold in 1995, the gain realized from that sale was not as
large as the gain realized from the sale of La Plaza Apartments. Also,
operating, depreciation, interest, and property tax expense all decreased for
both the three and six month periods ended June 30, 1996, due to the sale of La
Plaza Apartments. This was partially offset by a decrease in rental income for
both the three and six month periods ended June 30, 1996. Partially offsetting
the gain on the sale of La Plaza Apartments was the recognition of an
extraordinary loss on the early extinguishment of debt of approximately
$221,000. Also, maintenance expense increased for the six months ended June 30,
1996, but decreased for the three months ended June 30, 1996. The increase for
the six months ended June 30, 1996, is primarily due to repairs to underground
pipes and the parking lot. Leaks in the pipes were causing the ground to sink
which resulted in damage to the parking lot. The decrease in maintenance
expense for the three months ended June 30, 1996, is due to the sale of La Plaza
as previously explained. Other income decreased for the six months ended June
30, 1996, but increased for the three months ended June 30, 1996. The decrease
for the six months ended June 30, 1996, is due to recording of additional tenant
charges at La Plaza in 1995 as a result of the strict enforcement of the
property's policies. This decrease was partially offset by an increase in
interest income. Investments increased during 1996 which resulted in an
increase in interest income and also resulted in the increase in other income
for the three months ended June 30, 1996.
Liquidity and Capital Resources
At June 30, 1996, the Partnership reported unrestricted cash of approximately
$1,651,000 versus approximately $651,000 at June 30, 1995. Net cash provided by
operating activities increased as a result of the increase in accounts payable
due to timing of payments to vendors and an increase in other liabilities due to
timing of prepaid rental income from tenants. Net cash provided by investing
activities decreased primarily due to a decrease in the proceeds received from
the sale of investment properties. The Partnership recognized proceeds of
approximately $1,613,000 in January 1995 from the sale of Willow Oaks while only
recognizing proceeds of approximately $927,000 from the sale of La Plaza in May
1996. Also, the decrease is attributable to the decrease in net receipts from
restricted escrows in 1996. In 1995, these receipts were used to fund roof
replacement costs. Net cash used in financing activities decreased primarily
due to the distribution of approximately $1,872,000 made during the first six
months of 1995. No distributions were made during the first six months of 1996.
Also, payments on mortgage notes payable decreased due to the fact that La Plaza
was sold on May 24, 1996, and only five payments were recorded during the six
months ended June 30, 1996, versus six payments being recorded during the six
months ended June 30, 1995.
On May 24, 1996 the Partnership sold La Plaza Apartments to an unaffiliated
purchaser, Wymore Equity Associates, L.C., a Florida limited liability company.
The General Partner decided to sell La Plaza, the sole remaining property held
by the Partnership, in its effort to terminate the Partnership. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of
$3,200,000. Included as part of the purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000.
The Partnership holds seven notes receivable at June 30, 1996, totaling
approximately $1,599,000 with approximately $1,357,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $984,000 of deferred interest revenue. Six of
the seven notes in the principal amount of approximately $1,201,000 are due from
related partnerships. These six promissory notes are unsecured by the related
partnerships and are subordinated to the underlying mortgages of the respective
partnerships. Payments on these notes are restricted to excess cash flow after
payment of the first and second mortgages. No payments were received in the six
months ended June 30, 1996 or 1995. Future payments are dependent on excess
cash flows from the properties or sales proceeds.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
A Form 8-K dated May 24, 1996, was filed reporting the disposition
of La Plaza Apartments.
SIGNATURES
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.
JACQUES-MILLER INCOME FUND, L.P. II
By: Jacques-Miller, Inc.
Corporate General Partner
By:/s/ C. David Griffin
C. David Griffin
President
Chief Executive Officer
Date: August 12, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Jacques
Miller Income Fund II 1996 Second Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000774655
<NAME> JACQUES MILLER INCOME FUND II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,651
<SECURITIES> 0
<RECEIVABLES> 7
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,658
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,639
<TOTAL-LIABILITY-AND-EQUITY> 1,658
<SALES> 0
<TOTAL-REVENUES> 330
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 323
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (221)
<CHANGES> 0
<NET-INCOME> 1,134
<EPS-PRIMARY> 90.57<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
