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 March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-15675
DAVIDSON GROWTH PLUS, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1462866
(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) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
(Unaudited)
March 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 1,042
Restricted-tenant security deposits 110
Accounts receivable 4
Escrows for taxes and insurance 239
Restricted escrows 460
Other assets 414
Investment properties:
Land $ 4,650
Buildings and related personal property 18,749
23,399
Less accumulated depreciation (7,809) 15,590
$17,859
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 59
Tenant security deposits 108
Accrued taxes 110
Other liabilities 315
Subordinated management fee 55
Mortgage notes payable 12,283
Minority Interest 340
Partners' Capital (Deficit)
General partner $ (681)
Limited partners (28,371.75 units
issued and outstanding) 5,270 4,589
$17,859
See Accompanying Notes to Consolidated Financial Statements
b) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
(Unaudited)
Three Months Ended
March 31,
1996 1995
Revenues:
Rental income $1,216 $1,165
Other income 62 81
Total revenues 1,278 1,246
Expenses:
Operating 324 276
General and administrative 48 52
Property management fees 63 60
Maintenance 180 118
Depreciation 185 174
Interest 271 274
Property taxes 110 105
Loss on disposal of investment property -- 3
Subordinated partnership management fee 6 6
Total expenses 1,187 1,068
Minority interest in net
income of joint venture (14) (18)
Net income $ 77 $ 160
Net income allocated to general partners (3%) $ 2 $ 5
Net income allocated to limited partners (97%) 75 155
$ 77 $ 160
Net income per limited
partnership unit $ 2.71 $ 5.47
See Accompanying Notes to Consolidated Financial Statements
c) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 28,371.75 $ 1 $28,376 $28,377
Partners' capital (deficit) at
December 31, 1995 28,371.75 $(672) $ 5,544 $ 4,872
Distributions to partners -- (11) (349) (360)
Net income for the three months
ended March 31, 1996 -- 2 75 77
Partners' capital (deficit) at
March 31, 1996 28,371.75 $(681) $ 5,270 $ 4,589
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 77 $ 160
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 185 174
Amortization of discounts and loan costs 25 24
Loss on disposal of investment property -- 3
Minority interest in net income of joint venture 14 18
Change in accounts:
Restricted cash (2) 2
Accounts receivable 5 5
Escrows for taxes and insurance 46 61
Accounts payable 26 (27)
Tenant security deposit liabilities 2 4
Accrued taxes (52) (50)
Other liabilities 23 (55)
Accrued subordinated partnership
management fee 6 6
Net cash provided by operating activities 355 325
Cash flows from investing activities:
Property improvements and replacements (56) (49)
Deposits to restricted escrows (5) (48)
Receipts from restricted escrows 4 50
Net cash used in investing activities (57) (47)
Cash flows from financing activities:
Payments on mortgage notes payable (50) (46)
Distributions to partners (360) (344)
Distributions to minority partner (7) --
Net cash used in financing activities (417) (390)
Net decrease in cash and cash equivalents (119) (112)
Cash and cash equivalents at beginning of period 1,161 1,978
Cash and cash equivalents at end of period $1,042 $1,866
Supplemental disclosure of cash flow information:
Cash paid for interest $ 246 $ 249
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) DAVIDSON GROWTH PLUS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements 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 Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three month
period ended March 31, 1996, are not necessarily indicative of the results that
may be expected for the fiscal year ended 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
Affiliates of Insignia Financial Group, Inc. ("Insignia") own the controlling
ownership interest in the Partnership s Managing General Partner, with certain
affiliates of Insignia providing property management and asset management
services to the Partnership.
The following payments were made to Insignia and its affiliates in the
quarters ended March 31, 1996 and 1995:
1996 1995
(in thousands)
Property management fees $ 63 $ 60
Reimbursement for services
of affiliates 30 32
Note B - Transactions with Affiliated Parties (continued)
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Managing General Partner. An affiliate
of the Managing 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 Managing General
Partner, who receives payments on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations is not
significant.
Subordinated partnership management fees of $55,000 had not been paid to the
Managing General Partner as of March 31, 1996. $6,000 of this amount relates to
the current year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three apartment complexes.
The following table sets forth the average occupancy of the properties for the
three months ended March 31, 1996 and 1995:
Average
Occupancy
1996 1995
The Fairway Apartments
Plano, Texas 98% 99%
The Village Apartments
Brandon, Florida 98% 98%
Brighton Crest Apartments
Marietta, Georgia 96% 96%
The Partnership realized net income of $77,000 for the three months ended
March 31, 1996, compared to net income of $160,000 for the three months ended
March 31, 1995. Rental income increased slightly due to rental increases at
all three properties since the first quarter of 1995. The decrease in other
income was primarily due to a nonrecurring tax refund of approximately $20,000
received in the first quarter of 1995 for The Village Apartments resulting from
a property value reassessment.
Total expenses increased for the three months ended March 31, 1996, compared
to the three months ended March 31, 1995, primarily due to increases in
operating and maintenance expenses. The increase in operating expenses was
partly due to salary increases for the first quarter of 1996 compared to the
first quarter of 1995. This increase resulted from the hiring of a full-time
painter at The Fairway Apartments. In addition, all properties experienced
increases in utility expenses during 1996. The increase in maintenance expense
for the three months ended March 31, 1996, was due to increases at all of the
properties. The Village Apartments had a maintenance increase of approximately
$18,000 due to major landscaping projects including tree trimming, tree
removals, and parking lot repairs. The Fairway Apartments had a maintenance
increase of approximately $19,000 due to exterior building repairs and major
repairs to the sprinkler system. Brighton Crest Apartments experienced major
plumbing and pipe repairs due to damages from extreme cold weather in January
and February of 1996. These maintenance items resulted in a maintenance expense
increase of approximately $ 24,000 for Brighton Crest Apartments.
The loss on disposal of property for the three months ended March 31, 1995,
related to roof replacements at The Fairway Apartments.
As part of the ongoing business plan of the Partnership, the Managing 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
expense. As part of this plan, the Managing 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 Managing General Partner will be able to sustain such a plan.
The Partnership held unrestricted cash of $1,042,000 at March 31, 1996,
compared to unrestricted cash of $1,866,000 at March 31, 1995. Net cash
provided by operating activities was comparable for the quarters ended March 31,
1996 and 1995. Net cash used in investing activities increased primarily due to
increased property improvements and replacements. Net cash used in financing
activities increased primarily due to increased partner distributions and
distributions to the minority partner.
On December 8, 1995, an affiliate of the Managing General Partner, DGP
Acquisition, L.L.C., ("DGP Acquisition"), distributed an offer to purchase up to
11,349 Limited Partner Units (the "Tender Offer") for a cash price of $240 per
Unit to Limited Partners of record as of October 1, 1995. The Tender offer,
which originally expired on January 8, 1996, was extended to January 16, 1996.
Approximately 254 Limited Partners holding approximately 2,049 Units (7.22% of
total Units) accepted the Tender Offer and sold their units to DGP Acquisition
for an aggregate sales price of approximately $492,000. As of January 1996,
there were 2,829 holders of record owning an aggregate of 28,371.75 Units.
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 approximately $12,283,000, net of discount, is amortized over 21
years to approximately 29 years with balloon payments due in 2002 and 2003 at
which time the individual properties will either be refinanced or sold. Future
cash distributions will depend on the levels of net cash generated from
operations, property sales and the availability of cash reserves. Cash
distributions of $360,000 and $344,000 were made to the partners for the
quarters ended March 31, 1996, and 1995, respectively. Cash distributions of
$7,000 were paid to the minority interest holder during the quarter ended March
31, 1996.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits: None.
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 March 31,
1996.
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.
DAVIDSON GROWTH PLUS L.P.
BY: DAVIDSON DIVERSIFIED PROPERTIES, INC.,
Managing 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: May 6, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Davidson
Growth Plus L.P. 1996 First Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000795757
<NAME> DAVIDSON GROWTH PLUS L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,042
<SECURITIES> 0
<RECEIVABLES> 4
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,269
<PP&E> 23,399
<DEPRECIATION> (7,809)
<TOTAL-ASSETS> 17,859
<CURRENT-LIABILITIES> 592
<BONDS> 12,283
0
0
<COMMON> 0
<OTHER-SE> 4,589
<TOTAL-LIABILITY-AND-EQUITY> 17,859
<SALES> 0
<TOTAL-REVENUES> 1,278
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 271
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77
<EPS-PRIMARY> 2.71
<EPS-DILUTED> 0
</TABLE>
