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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-16010
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
(Exact name of small business issuer as specified in its charter)
California 94-3004963
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(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 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 1,811
Restricted - tenant security deposits 53
Investments 447
Accounts receivable, net of allowance 20
Escrows for taxes and insurance 110
Restricted escrows 130
Prepaid and other assets 225
Investment properties:
Land $ 1,896
Buildings and related personal property 11,755
13,651
Less accumulated depreciation (5,674) 7,977
$10,773
Liabilities and Partners' Capital (Deficit)
Accounts payable $ 23
Tenant security deposits 53
Accrued taxes 84
Other liabilities 107
Mortgage notes payable 1,870
Partners' Capital (Deficit)
General partner $ (159)
Corporate limited partner on behalf
of the Unitholders - (128,810 Units
issued and outstanding) 8,795 8,636
$10,773
See Accompanying Notes to Financial Statements
b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
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 $ 504 $ 504 $1,018 $1,046
Other income 43 145 88 195
Total revenues 547 649 1,106 1,241
Expenses:
Operating 163 150 321 340
General and administrative 92 112 153 195
Maintenance 66 46 129 79
Depreciation 128 143 255 266
Interest 46 44 95 88
Property taxes 42 42 86 84
Total expenses 537 537 1,039 1,052
Net income $ 10 $ 112 $ 67 $ 189
Net income allocated to
general partner (1%) $ -- $ 1 $ 1 $ 2
Net income allocated to
Unitholders (99%) 10 111 66 187
$ 10 $ 112 $ 67 $ 189
Net income per Unit of
Depositary Receipt $ .08 $ .86 $ .51 $ 1.45
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
c) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Unitholders
Units of
Units of Depositary
Depositary General Receipts
Receipts Partner (Note A) Total
<S> <C> <C> <C> <C>
Original capital contributions 129,266 $ 1 $ 32,317 $ 32,318
Partners' capital (deficit)
at December 31, 1995 128,810 $ (155) $ 9,219 $ 9,064
Distributions to partners -- (5) (490) (495)
Net income for the six months
ended June 30, 1996 -- 1 66 67
Partners' capital (deficit) at
June 30, 1996 128,810 $ (159) $ 8,795 $ 8,636
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
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 $ 67 $ 189
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 255 266
Amortization of lease commissions, discounts
and loan costs 24 20
Change in accounts:
Restricted cash (1) (1)
Accounts receivable, net of allowance 14 8
Escrows for taxes and insurance (73) (52)
Prepaids and other assets 12 36
Accounts payable 7 (9)
Tenant security deposit liabilities 1 7
Accrued taxes 84 84
Other liabilities 18 60
Net cash provided by operating
activities 408 608
Cash flows from investing activities:
Property improvements and replacements (27) (66)
Purchase of investments -- (1,009)
Proceeds from sale of investments -- 2,460
Deposits to restricted escrows (12) (10)
Net cash (used in) provided by
investing activities (39) 1,375
Cash flows from financing activities:
Payments on notes payable (30) (23)
Distributions to partners (495) (500)
Net cash used in financing
activities (525) (523)
Net (decrease) increase in cash and cash equivalents (156) 1,460
Cash and cash equivalents at beginning of period 1,967 564
Cash and cash equivalents at end of period $ 1,811 $ 2,024
Supplemental disclosure of cash flow information:
Cash paid for interest $ 79 $ 67
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
e) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Johnstown/Consolidated Income
Partners, (the "Partnership" or "Registrant") 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 ConCap Equities, Inc. (the "General Partner"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six months 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 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.
Investments
Investments consisting primarily of U.S. Treasury Notes with original maturities
of more than ninety days are considered to be held-to-maturity securities.
Units of Depositary Receipts
Johnstown/Consolidated Depositary Corporation (the "Corporate Limited Partner"),
an affiliate of the General Partner, serves as a depositary of certain Units of
Depositary Receipts ("Units"). The Units represent economic rights attributable
to the limited partnership interests in the Partnership and entitle the holders
thereof ("Unitholders") to certain economic benefits, allocations and
distributions of the Partnership.
Note B - Transactions with Affiliated Parties
The Partnership Agreement provides that the Partnership shall pay in monthly
installments to the General Partner, or an affiliate, a yearly asset management
fee equal to: (i) 3/8 of 1% of the original principal balance of mortgage loans
outstanding at the end of the month preceding the installment payment; (ii) 1/8
of 1% of the market value of guaranteed mortgage-backed securities as of the end
of the Partnership quarter immediately preceding the installment payment; and
(iii) 5/8 of 1% of the purchase price of the properties plus improvements for
managing the Partnership's assets. In the event the property was not owned at
the beginning or end of the year, such fee shall be pro-rated for the short-year
period of ownership. Under this provision, fees of $49,000 and $50,000 were
paid to the General Partner and affiliates for the six months ended June 30,
1996 and 1995, respectively, and are included in general and administrative
expenses.
The Partnership has paid property management fees based upon collected gross
rental revenues for property management services in each of the six months ended
June 30, 1996 and 1995. In late December 1994, an affiliate of the General
Partner assumed day-to-day property management responsibilities for all of the
Partnerships' properties except Cedar Brooke Apartments. Management of Cedar
Brooke was assumed by an affiliate of the General Partner on February 15, 1995.
Property management fees of $60,000 and $53,000 were paid to an affiliate of the
General Partner for the six months ended June 30, 1996 and 1995, respectively.
These fees are included in operating expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of $59,000
and $91,000 were paid to the General Partner and affiliates for the six months
ended June 30, 1996 and 1995, respectively.
In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the General Partner who
receives payment on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
General Partner by virtue of the agent's obligations is not significant.
Note C - Commitment
The Partnership is required by the Partnership Agreement to maintain working
capital for contingencies of not less than 5% of Net Invested Capital as defined
in the Partnership Agreement. In the event expenditures are made from these
reserves, operating revenue shall be allocated to such reserves to the extent
necessary to maintain the foregoing level. Reserves, including cash and cash
equivalents, tenant security deposits and investments totalling $2,311,000 at
June 30, 1996, exceeded the Partnership's reserve requirement of $1,385,000.
Note D - Distributions
For the six months ended June 30, 1995, the Partnership paid distributions
attributable to cash flow from operations of $500,000. For the six months ended
June 30, 1996, the Partnership paid distributions attributable to cash flow from
operations of $495,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of one apartment complex, two
commercial properties and a one-third (1/3) undivided interest in the Florida #6
Mini-Warehouse property. The following table sets forth the average occupancy
of the properties for the six months ended June 30, 1996 and 1995:
Average Occupancy
1996 1995
Cedar Brooke Apartments 99% 98%
Independence, Missouri
Florida #6 Mini-Warehouse 92% 92%
Lauderhill, Florida
Florida #1l Mini-Warehouse 94% 95%
Davie, Florida
Phoenix Business Campus 58% 57%
College Park, Georgia
The vacancy created by a large tenant moving out during the first quarter of
1995 continues to negatively impact the 1996 occupancy of the Phoenix Business
Center. New tenants are being actively recruited in efforts to lease this
vacant space.
The Partnership realized net income of $10,000 and $67,000 for the three and six
months ended June 30, 1996, respectively, compared to net income of $112,000 and
$189,000 for the three and six months ended June 30, 1995, respectively. The
decrease in net income is primarily due to a decrease in other income and
increased maintenance costs as discussed below.
The decrease in other income resulted from the Partnership receiving no
dividends on its investment in Southmark Preferred Stock during 1996. General
and administrative expenses decreased due to reduced expense reimbursements
related primarily to the efforts of the Dallas partnership administration staff
during the management transition in 1995. This expense reduction was partially
offset by an increase in maintenance expenses due to exterior painting at the
Florida #11 Mini-Warehouse and exterior building improvements made at the Cedar
Brooke Apartments in efforts to increase the curb appeal of the Partnership's
properties.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership held cash of $1,811,000 compared to $2,024,000
at June 30, 1995. Net cash provided by operating activities decreased due to
reduced rental and other income as noted above, an increase in interest payments
and higher maintenance expenses. Net cash used by investing activities
increased primarily as a result of the Partnership investing primarily in
shorter term cash equivalents during 1996 rather than longer term securities.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The mortgage
indebtedness of $1,870,000, net of discount, matures in 2013, at which time the
related property will either be refinanced or sold. Future cash distributions
will depend on the levels of net cash generated from operations, capital
expenditure requirements, property sales and the availability of cash reserves.
As part of the Partnership's ongoing attempt to maximize the return to the
Unitholders, the Partnership is exploring the possibility of selling the Florida
#6 Mini-Warehouse. During the six months ended June 30, 1996, cash
distributions of $495,000 were paid to the partners compared to cash
distributions of $500,000 during the six months ended June 30, 1995.
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.
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.
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: August 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Johnstown/Consolidated Income Partners 1996 Second Quarter 10-QSB and is
qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000787621
<NAME> JOHNSTOWN CONSOLIDATED INCOME PARTNERS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,811
<SECURITIES> 447
<RECEIVABLES> 20
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 13,651
<DEPRECIATION> 5,674
<TOTAL-ASSETS> 10,773
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,870
0
0
<COMMON> 0
<OTHER-SE> 8,636
<TOTAL-LIABILITY-AND-EQUITY> 10,773
<SALES> 0
<TOTAL-REVENUES> 1,106
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,039
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 95
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 67
<EPS-PRIMARY> .51<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
