FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
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, 1997
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, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 1,033
Restricted-tenant security deposits 107
Accounts receivable 4
Escrows for taxes and insurance 188
Restricted escrows 453
Other assets 358
Investment properties:
Land $ 4,650
Buildings and related personal property 18,948
23,598
Less accumulated depreciation (8,570) 15,028
$17,171
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 42
Tenant security deposits 107
Accrued taxes 114
Other liabilities 180
Subordinated management fee 75
Mortgage notes payable 12,119
285
Minority Interest
Partners' Capital (Deficit)
General partners $ (691)
Limited partners (28,371.75 units 4,940 4,249
issued and outstanding)
$17,171
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,
1997 1996
Revenues:
Rental income $1,243 $1,216
Other income 57 62
Total revenues 1,300 1,278
Expenses:
Operating 365 379
General and administrative 46 56
Maintenance 119 180
Depreciation 192 185
Interest 267 271
Property taxes 115 110
Subordinated partnership management fee 8 6
Total expenses 1,112 1,187
Minority interest in net (21) (14)
income of joint venture
Net income $ 167 $ 77
Net income allocated to general partners (3%) $ 5 $ 2
Net income allocated to limited partners (97%) 162 75
$ 167 $ 77
Net income per limited partnership unit $ 5.71 $ 2.63
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, 1996 28,371.75 $ (686) $ 5,127 $ 4,441
Distributions to partners -- (10) (349) (359)
Net income for the three months
ended March 31, 1997 -- 5 162 167
Partners' capital (deficit) at
March 31, 1997 28,371.75 $ (691) $ 4,940 $ 4,249
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 167 $ 77
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 192 185
Amortization of discounts and loan costs 25 25
Minority interest in net income of joint venture 21 14
Change in accounts:
Restricted cash 1 (2)
Accounts receivable (1) 5
Escrows for taxes and insurance 56 46
Accounts payable 9 26
Tenant security deposit liabilities (1) 2
Accrued taxes (50) (52)
Other liabilities (22) 23
Accrued subordinated partnership management fee 8 6
Net cash provided by operating activities 405 355
Cash flows from investing activities:
Property improvements and replacements (28) (56)
Deposits to restricted escrows (4) (5)
Receipts from restricted escrows -- 4
Net cash used in investing activities (32) (57)
Cash flows from financing activities:
Payments on mortgage notes payable (54) (50)
Distributions to partners (359) (360)
Distributions to minority partner (35) (7)
Net cash used in financing activities (448) (417)
Net decrease in cash and cash equivalents (75) (119)
Cash and cash equivalents at beginning of period 1,108 1,161
Cash and cash equivalents at end of period $1,033 $1,042
Supplemental disclosure of cash flow information:
Cash paid for interest $ 242 $ 246
<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, 1997, are not necessarily indicative of the results that
may be expected for the fiscal year ended 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
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 during the three
months ended March 31, 1997 and 1996:
1997 1996
(in thousands)
Property management fees $ 65 $ 63
Reimbursement for services
of affiliates 32 30
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.
The Partnership Agreement provides for the Managing General Partner to receive a
fee for managing the affairs of the Partnership. The fee is 2% of adjusted cash
from operations, as defined in the partnership agreement, and is payable only
after the Partnership has distributed, to the limited partners, adjusted cash
from operations in any year equal to 10% of the limited partners adjusted
invested capital as defined in the partnership agreement. Unpaid subordinated
partnership management fees at March 31, 1997, were $75,000, of which $8,000
relates to the three months ending March 31, 1997.
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 1997,
there were 2,829 holders of record owning approximately 28,372 Units.
On August 29, 1996, the Limited Partnership Agreement was amended to remove
Davidson Diversified Properties, Inc. ("DDPI") as Managing General Partner and
admit Davidson Growth Plus GP Corporation ("DGPGP"), an affiliate, as Managing
General Partner in the place and stead of DDPI effective as of that date.
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, 1997 and 1996:
Average
Occupancy
1997 1996
The Fairway Apartments
Plano, Texas 96% 98%
The Village Apartments
Brandon, Florida 98% 98%
Brighton Crest Apartments
Marietta, Georgia 91% 96%
The decrease in occupancy at Brighton Crest Apartments is attributable to
tenants vacating the property to purchase homes in a favorable local housing
market.
The Partnership realized net income of approximately $167,000 for the three
months ended March 31, 1997, compared to net income of approximately $77,000
for the three months ended March 31, 1996. The increase in net income for the
three month period ended March 31, 1997, is primarily attributable to a decrease
in maintenance expense at each of the Partnership's properties. The decrease in
maintenance expense at The Village Apartments was due to decreases in parking
lot repairs and major landscaping related to tree trimming and removal. The
decrease in maintenance expense at The Fairway Apartments was due to a decrease
in foundation repairs at two of its apartment buildings. Brighton Crest's
maintenance expense decreased as a result of decreased landscaping expense.
Included in maintenance expense is approximately $25,000 of major repairs and
maintenance comprised primarily of plumbing fixture replacement and sewer
repairs.
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 approximately $1,033,000 at March 31,
1997, compared to unrestricted cash of approximately $1,042,000 for the
corresponding period of 1996. Net cash provided by operating activities
increased primarily due to an increase in rental income combined with decreases
in operating and maintenance expenses. Net cash used in investing activities
decreased due to a decrease in property improvements and replacements. Net cash
used in financing activities increased primarily due to increased distributions
to the minority interest holder.
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 $12,119,000, 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 $359,000 and $360,000 were made to the partners for the
quarters ended March 31, 1997, and 1996, respectively. Cash distributions of
$35,000 and $7,000 were paid to the minority interest holder during the quarters
ended March 31, 1997 and 1996, respectively.
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, 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.
DAVIDSON GROWTH PLUS L.P.
BY: DAVIDSON GROWTH PLUS GP CORPORATION
Managing General Partner
BY: /s/ William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
BY: /s/ Ronald Uretta
Ronald Uretta
Vice President/Treasurer
DATE: May 7, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Davidson
Growth Plus L.P. 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,033
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 23,598
<DEPRECIATION> 8,570
<TOTAL-ASSETS> 17,171
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 12,119
0
0
<COMMON> 0
<OTHER-SE> 4,249
<TOTAL-LIABILITY-AND-EQUITY> 17,171
<SALES> 0
<TOTAL-REVENUES> 1,300
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,112
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 267
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167
<EPS-PRIMARY> 5.71<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
