FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
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 September 30, 1997
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)
(864) 239-1000
Issuer's telephone number
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 past 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)
September 30, 1997
Assets
Cash and cash equivalents $ 810
Notes receivable (net of allowance
of $3,002) --
$ 810
Liabilities and Partners' Capital (Deficit)
Liabilities
Other liabilities $ 17
Partners' Capital (Deficit)
General partner $ (106)
Limited partners (12,400 units
issued and outstanding) 899 793
$ 810
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)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Rental income $ -- $ 1 $ -- $ 290
Other income 10 13 28 54
Total revenues 10 14 28 344
Expenses:
Operating -- 2 -- 146
General and administrative 9 9 27 35
Maintenance -- -- -- 56
Interest -- -- -- 73
Property taxes -- -- -- 24
Total expenses 9 11 27 334
Gain on sale of investment
property -- -- -- 1,348
Income before
extraordinary item 1 3 1 1,358
Extraordinary loss on
early extinguishment of debt -- -- -- (221)
Net income $ 1 $ 3 $ 1 $ 1,137
Net income allocated
to general partner (1%) $ -- $ -- $ -- $ 11
Net income allocated
to limited partners (99%) 1 3 1 1,126
$ 1 $ 3 $ 1 $ 1,137
Per limited partnership unit:
Income before
extraordinary item $ .08 $ .21 $ .08 $108.41
Extraordinary item -- -- -- (17.63)
Net income per limited
partnership unit $ .08 $ .21 $ .08 $ 90.78
See Accompanying Notes to Consolidated Financial Statements
c) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' capital (deficit)
at December 31, 1996 12,400 $ (106) $ 898 $ 792
Net income for the nine months
ended September 30, 1997 -- -- 1 1
Partners' capital (deficit)
at September 30, 1997 12,400 $ (106) $ 899 $ 793
See Accompanying Notes to Consolidated Financial Statements
d) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(dollar amounts in thousands)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities:
Net income $ 1 $ 1,137
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of discounts and loan costs -- 13
Gain on sale of investment property -- (1,348)
Loss on early extinguishment of debt -- 221
Change in accounts:
Restricted cash -- 26
Accounts receivable 78 --
Escrows for taxes -- 17
Other assets -- 11
Accounts payable -- (36)
Tenant security deposit liabilities -- 2
Other liabilities (5) 25
Net cash provided by operating
activities 74 68
Cash flows from investing activities:
Property improvements and replacements -- (13)
Deposits to restricted escrows -- (15)
Receipts from restricted escrows -- 126
Proceeds from sale of investment property -- 927
Net cash provided by investing activities -- 1,025
Cash flows from financing activities:
Payments on mortgage notes payable -- (21)
Distributions -- (926)
Net cash used in financing activities -- (947)
Net increase in cash and cash equivalents 74 146
Cash and cash equivalents at beginning of period 736 586
Cash and cash equivalents at end of period $ 810 $ 732
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ 67
Supplemental disclosure of non-cash activity:
Assumption of first and second mortgage debt
related to the sale of La Plaza $ -- $ 1,984
See Accompanying Notes to Consolidated Financial Statements
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 (the "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 Jacques Miller, Inc. (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 nine month
periods ended September 30, 1997, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1997. 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, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has outstanding notes receivable with affiliated partnerships.
During March 1997, the Partnership accepted a payment of approximately $78,000
in full satisfaction of the two notes receivable on Governour's Square. The
outstanding balances for these two notes receivable totaled approximately
$296,000, including accrued interest, of which $218,000 was fully reserved.
(See "Note C" for further information concerning the notes receivable).
NOTE C - NOTES RECEIVABLE
The Partnership holds five notes receivable at September 30, 1997, totaling
approximately $1,422,000 with approximately $1,580,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,224,000 of deferred interest revenue. Four
of the five notes in the principal amount of approximately $1,023,000 are due
from related partnerships. These four promissory notes are unsecured by the
related partnerships and are subordinated to the underlying mortgages of the
respective partnerships. One note in the amount of approximately $455,000 with
accrued interest due in the amount of approximately $287,000, the "Quail Run
Note," matured June 1, 1997 and is currently in default. The Partnership is
currently in discussions with respect to receiving payment on this note;
however, an agreement has not been reached as of September 30, 1997. A second
note in the amount of $70,000 with accrued interest due in the amount of
approximately $422,000, the "Highridge Note," matured May 1, 1996 and was in
default at September 30, 1997. Subsequent to September 30, 1997, the Partnership
obtained verbal approval to extend the call date for this note to May 1, 1998.
NOTE D - 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. 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 sold its final investment property to an unaffiliated purchaser
May 24, 1996 (see Note D - Sale of La Plaza).
The Partnership's net income for both the three and nine month periods ended
September 30, 1997 was approximately $1,000 compared to net income of
approximately $3,000 and $1,137,000 for the corresponding periods of 1996. The
decrease in net income is directly attributable to the sale of La Plaza, the
sole operating real estate asset, on May 24, 1996. The Partnership currently
holds five notes which require payments from excess cash flow (see discussion
below).
At September 30, 1997, the Partnership reported unrestricted cash of
approximately $810,000 versus approximately $732,000 at September 30, 1996. Net
cash provided by operating activities increased due to cash received in
settlement on the two notes receivable on Governour's Square (see discussion
below). Net cash provided by investing activities and used in financing
activities decreased due to the sale of the Partnership's remaining property in
May 1996.
During 1996, the Partnership agreed to accept a payment of approximately $78,000
in 1997 as full satisfaction of the two notes receivable on Governour's Square.
The outstanding balances for these two notes receivable totaled approximately
$296,000, including accrued interest, of which $218,000 was reserved.
Governour's Square sold its sole operating property and the majority of the
sales proceeds were used to pay off the first mortgage.
The Partnership holds five notes receivable at September 30, 1997, totaling
approximately $1,422,000 with approximately $1,580,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,224,000 of deferred interest revenue. Four
of the five notes in the principal amount of approximately $1,023,000 are due
from related partnerships. These four promissory notes are unsecured by the
related partnerships and are subordinated to the underlying mortgages of the
respective partnerships. One note in the amount of approximately $455,000 with
accrued interest due in the amount of approximately $287,000, the "Quail Run
Note," matured June 1, 1997 and is currently in default. The Partnership is
currently in discussions with respect to receiving payment on this note;
however, an agreement has not been reached as of September 30, 1997. A second
note in the amount of $70,000 with accrued interest due in the amount of
approximately $422,000, the "Highridge Note," matured May 1, 1996 and was in
default at September 30, 1997. Subsequent to September 30, 1997, the Partnership
obtained verbal approval to extend the call date for this note to May 1, 1998.
Payments on these notes are restricted to excess cash flow after payment of the
first and second mortgages. 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:
None filed during the quarter ended September 30, 1997.
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: November 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Jacques-Miller Income Fund, L.P. II 1997 Third Quarter 10-QSB and is qualified
in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000774655
<NAME> JACQUES-MILLER INCOME FUND, L.P. II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 810
<SECURITIES> 0
<RECEIVABLES> 3,002
<ALLOWANCES> (3,002)
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 810
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 793
<TOTAL-LIABILITY-AND-EQUITY> 810
<SALES> 0
<TOTAL-REVENUES> 28
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 27
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1
<EPS-PRIMARY> .08<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
