UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934.
For the period ended March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number 0-15802
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QSR Income Properties, Ltd., a California Limited Partnership
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(Exact name of registrant as specified in its charter)
California 95-4084042
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
701 Western Avenue, Glendale, California 91201
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(Address of principal executive officer) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
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Indicate by check mark whether the registrant (1) had 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.
X
--- ---
Yes No
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QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
INDEX
Page
Reference
PART I. FINANCIAL INFORMATION
Item 1. Condensed Balance Sheets at March 31, 1996
and December 31, 1995 2
Condensed Statements of Operations for the three
month periods ended March 31, 1996 and 1995 3
Condensed Statement of Partners' Equity for the
three months ended March 31, 1996 4
Condensed Statements of Cash Flows for the three
month periods ended March 31, 1996 and 1995 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 8
PART II. OTHER INFORMATION 9
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
CONDENSED BALANCE SHEETS
March 31, December 31,
1996 1995
----------- -----------
(Unaudited)
ASSETS
------
Cash and cash equivalents $1,697,000 $1,630,000
Accounts receivable 3,000 10,000
Notes receivable 231,000 234,000
Facilities, net 9,685,000 9,743,000
----------- -----------
$11,616,000 $11,617,000
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $147,000 $148,000
Partners' equity:
Limited partners' equity, $500 per
unit, 52,004 units authorized,
issued and outstanding 11,378,000 11,378,000
General partner's equity 91,000 91,000
----------- -----------
Total partners' equity 11,469,000 11,469,000
----------- -----------
$11,616,000 $11,617,000
=========== ===========
See accompanying notes to Condensed Financial Statements
2
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
For the three month periods ended March 31, 1996 and 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Lease income $288,000 $281,000
-------- --------
Interest income 25,000 22,000
-------- --------
313,000 303,000
-------- --------
COSTS AND EXPENSES:
Cost of operations 36,000 31,000
Depreciation 58,000 62,000
Idle facility costs 8,000 12,000
Partnership administrative expenses 26,000 27,000
-------- --------
128,000 132,000
-------- --------
Net income $185,000 $171,000
======== ========
Allocation of net income
Limited partners $169,000 $155,000
General partner 16,000 16,000
-------- --------
$185,000 $171,000
======== ========
Limited partners' allocation per unit $ 3.25 $ 2.98
======== ========
See accompanying notes to Condensed Financial Statements
3
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
CONDENSED STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
Limited General
Partners Partner Total
----------- -------- -----------
Balances at December 31, 1995 $11,378,000 $ 91,000 $11,469,000
Net income 169,000 16,000 185,000
Distributions (169,000) (16,000) (185,000)
----------- -------- -----------
Balances at March 31, 1996 $11,378,000 $ 91,000 $11,469,000
=========== ======== ===========
See accompanying notes to Condensed Financial Statements
4
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
STATEMENTS OF CASH FLOWS
For the three month periods ended March 31, 1996 and 1995
(Unaudited)
1996 1995
---------- ---------
Cash flows from operating activities:
Net income $ 185,000 $ 171,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 58,000 62,000
Decrease in accounts receivable 7,000 13,000
Decrease in accounts payable (1,000) (2,000)
Total adjustments 64,000 73,000
---------- ---------
Net cash provided by operating activities 249,000 244,000
---------- ---------
Cash flows from financing activities:
Distributions to partners (185,000) (185,000)
Payments received on note receivables 3,000 10,000
---------- ---------
Net cash used in financing activities (182,000 (175,000)
---------- ---------
Net increase in cash and cash equivalents 67,000 69,000
Cash and cash equivalents at the beginning of the period 1,630,000 1,115,000
---------- ---------
Cash and cash equivalents at the end of the period $1,697,000 $1,184,000
========== ==========
See accompanying notes to Condensed Financial Statements
5
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures contained herein are adequate to make the information presented
not misleading. These unaudited condensed financial statements should be
read in conjunction with the financial statements and related notes
appearing in the Partnership's Form 10-K for the year ended December 31,
1995.
2. In the opinion of management, the accompanying unaudited condensed
financial statements reflect all adjustments, consisting of only normal
accruals, necessary to present fairly the Partnership's financial position
at March 31, 1996 and December 31, 1995, the results of its operations for
the three months ended March 31, 1996 and 1995 and its cash flows for the
three months then ended.
3. The results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the results expected for the full year.
6
<PAGE>
QSR INCOME PROPERTIES, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 1996
The Partnership was formed to acquired and operate pizza restaurants. All
twenty-three of the Partnership's restaurants were closed because of
disappointing operating results. Of the twenty-three restaurants closed, four
have been sold, three lease commitments have been terminated and fifteen
facilities have been leased to unaffiliated third parties. The Partnership is
continuing efforts to lease or sell its final closed restaurants (located in
Coon Rapids, Minnesota) that has not yet been redeployed. This property may not
be redeployable in the foreseeable future because of current market conditions.
Results of Operations
- ---------------------
The Partnership's net income increased to $185,000 for the three months
ended March 31, 1996 from $171,000 for the same period in 1995. The increase is
primarily attributable to a decrease in cost associated with a property sold in
the fourth quarter of 1995.
Lease income increased $7,000 for the three months ended March 31, 1996
compared to the same period in 1995 primarily as the result of scheduled
escalations in lease income. Included in lease income is approximately $17,000
and $26,000 for the three months ended March 31, 1995 and 1994, respectively, of
additional lease income under a percentage rent feature with respect to
incremental sales above specified levels.
Cost of operations increased $5,000 for the three months ended March 31,
1996 over the same period in 1995 due to an increase in office expenses
associated in operating the Partnership's leased properties.
Idle facility expenses decreased $4,000 for the three months ended March
31, 1996 over the same period in the prior year, due to the sale of one of the
Partnership's closed facilities in the fourth quarter of 1995.
7
<PAGE>
Liquidity and capital resources
- -------------------------------
For the three months ended March 31, 1996, the Partnership's activities
generated cash flow of $249,000. This represents an increase over cash flow of
$5,000 generated by the Partnership for the three months ended March 31, 1995.
Cash flow from the Partnership's operations have been sufficient to meet all
current obligations of the Company.
For the three months ended March 31, 1996 the Partnership made a $3.25
distribution per Partnership unit.
8
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K.
(a) The following exhibit is included herein:
(27) Financial Data Schedule
(b) Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: May 13, 1996
QSR Income Properties, Ltd.,
a California Limited Partnership
BY: /s/ B. Wayne Hughes
-----------------------------
B. Wayne Hughes
General Partner
9
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<ARTICLE> 5
<CIK> 0000783287
<NAME> QSR INCOME PROPERTIES, LTD.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1996
<PERIOD-END> Mar-31-1996
<CASH> 1,697,000
<SECURITIES> 0
<RECEIVABLES> 234,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,931,000
<PP&E> 12,942,000
<DEPRECIATION> (3,257,000)
<TOTAL-ASSETS> 11,616,000
<CURRENT-LIABILITIES> 147,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,469,000
<TOTAL-LIABILITY-AND-EQUITY> 11,616,000
<SALES> 0
<TOTAL-REVENUES> 313,000
<CGS> 0
<TOTAL-COSTS> 94,000
<OTHER-EXPENSES> 34,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 185,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 185,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 185,000
<EPS-PRIMARY> 3.25
<EPS-DILUTED> 3.25
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