<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended March 31, 1996
-------------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
---------- -----------
Commission file number 0-15700
--------------------------------
WINDSOR PARK PROPERTIES 4, A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0202608
- --------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
------------------------------------------------------------
(Address of principal executive offices)
(619) 746-2411
---------------------------
(Issuer's telephone number)
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 [_]
--- ---
1
<PAGE>
TABLE OF CONTENTS
PART I
------
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II
-------
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
SIGNATURE
2
<PAGE>
WINDSOR PARK PROPERTIES 4
----------------------------------
(A California Limited Partnership)
BALANCE SHEET
----------------------------------
(unaudited)
<TABLE>
<CAPTION>
March 31, 1996
-----------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 1,037,700
Buildings and improvements 5,366,000
Fixtures and equipment 70,100
-----------------
6,473,800
Less accumulated depreciation (2,974,700)
-----------------
3,499,100
Investments in joint ventures 3,150,900
Cash and cash equivalents 782,900
Deferred financing costs 85,200
Other assets 90,100
-----------------
$ 7,608,200
=================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,400,000
Accounts payable 12,200
Accrued expenses 51,700
Tenant deposits and other liabilities 22,200
-----------------
1,486,100
-----------------
Partners' equity:
Limited partners 6,239,300
General partners (117,200)
-----------------
6,122,100
-----------------
$ 7,608,200
=================
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
WINDSOR PARK PROPERTIES 4
----------------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
----------------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
----------- -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 271,600 $ 258,300
Equity in earnings of joint ventures 36,000 18,900
Interest 10,000 4,300
Other 19,900 23,200
----------- -----------
337,500 304,700
----------- -----------
COSTS AND EXPENSES
- ------------------
Property operating 187,000 166,900
Depreciation and amortization 57,200 73,200
Interest 32,600
General and administrative:
Related parties 17,200 18,900
Other 9,800 17,500
----------- -----------
303,800 276,500
----------- -----------
Net income $ 33,700 $ 28,200
=========== ===========
Net income - general partners $ 300 $ 300
=========== ===========
Net income - limited partners $ 33,400 $ 27,900
=========== ===========
Net income per limited partnership unit $ 0.17 $ 0.14
=========== ===========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
WINDSOR PARK PROPERTIES 4
----------------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
----------------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 33,700 $ 28,200
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 57,200 73,200
Equity in earnings of joint ventures (36,000) (18,900)
Joint ventures' cash distributions 36,000 18,900
Loss (gain) on sale of property held for investment 5,100 (18,000)
Amortization of deferred financing costs 3,100
Changes in operating assets and liabilities:
Other assets (9,200) 7,900
Accounts payable (25,500) 2,600
Accrued expenses 17,100 18,700
Tenant deposits and other liabilities (6,100) (600)
------------- ------------
Net cash provided by operating activities 75,400 112,000
------------- ------------
Cash flows from investing activities:
Joint ventures' cash distributions 55,200 46,300
Proceeds from sale of property held for investment 12,000 31,700
Increase in property held for investment (7,400) (22,700)
------------- ------------
Net cash provided by investing activities 59,800 55,300
------------- ------------
Cash flows from financing activities:
Cash distributions (226,300) (113,100)
Repurchase of limited partnership units (11,500) (1,100)
------------- ------------
Net cash used in financing activities (237,800) (114,200)
------------- ------------
Net (decrease) increase in cash and cash equivalents (102,600) 53,100
Cash and cash equivalents at beginning of period 885,500 303,200
------------- ------------
Cash and cash equivalents at end of period $ 782,900 $ 356,300
============= ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ 30,200 $ --
============= ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 4
----------------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
----------------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at March 31, 1996 and the related statements of operations and
of cash flows for the three months ended March 31, 1996 and 1995 are unaudited.
However, in the opinion of the General Partners, they contain all adjustments,
of a normal recurring nature, necessary for a fair presentation of such
financial statements. Interim results are not necessarily indicative of results
for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of undivided interests
in four manufactured home communities in 1996 and two manufactured home
communities in 1995. The combined condensed results of operations of these
properties for the three months ended March 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Total revenues $ 657,400 $ 219,200
----------- -----------
Expenses:
Property operating 296,900 127,600
Interest 150,400
Depreciation 126,200 65,200
----------- -----------
573,500 192,800
----------- -----------
Net income $ 83,900 $ 26,400
=========== ===========
</TABLE>
NOTE 3. NET INCOME PER LIMITED PARTNERSHIP UNIT
---------------------------------------
Net income per limited partnership unit is calculated based on the weighted
average number of limited partnership units outstanding during the period and
the net income allocated to the Limited Partners. The weighted average number
of limited partnership units outstanding during the three months ended March 31,
1996 and 1995 was 199,321 and 200,984, respectively.
NOTE 4. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and John A. Coseo, Jr. (Mr. Coseo is also the
president, chief executive officer and the principal stockholder of The Windsor
Corporation.)
6
<PAGE>
The General Partners are entitled to receive various fees and compensation from
the Partnership which are summarized as follows:
Operational Stage
- -----------------
The net profits, losses and cash distributions of the Partnership during the
operational stage are allocated 99% to the Limited Partners and 1% to the
General Partners.
The Partnership reimburses The Windsor Corporation for certain direct expenses,
and employee, executive and administrative time, which are incurred on the
Partnership's behalf. The Partnership was charged $19,700 and $21,300 for such
costs during the three months ended March 31, 1996 and 1995, respectively.
These costs are included in property operating and general and administrative
expenses in the accompanying Statements of Operations.
Liquidation Stage
- -----------------
The General Partners receive 1% of profits, losses, and cash distributions from
the sale or financing of Partnership properties. This participation increases
to 15% after the Limited Partners have received their original invested capital
plus a 9% cumulative, non-compounded annual return.
During the three months ended March 31, 1996 and 1995, the General Partners
received cash distributions of $2,300 and $1,100, respectively.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to limited partners for the three months ended March 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
---------------------- -----------------------
Per Per
Amount Unit Amount Unit
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 33,400 $ 0.17 $ 27,900 $ 0.14
Return of capital 190,600 0.95 84,100 0.42
----------- -------- ----------- ---------
$ 224,000 $ 1.12 $ 112,000 $ 0.56
=========== ======== =========== =========
</TABLE>
7
<PAGE>
WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
March 31, 1996 as compared to December 31, 1995
- -----------------------------------------------
The Partnership's primary sources of cash during the three months ended March
31, 1996 were from the operations of its investment properties and distributions
from joint ventures. The primary uses of cash during the same period were for
debt service and cash distributions to partners.
There have been no significant changes in the financial condition of the
Partnership since December 31, 1995. Partners' equity decreased from $6,326,200
at December 31, 1995 to $6,122,100 at March 31, 1996 due to cash distributions
of $226,300 and repurchased limited partnership units of $11,500 exceeding net
income of $33,700.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures, cash
distributions to partners and debt service. The General Partners believe that
the future sources of cash are sufficient to meet the working capital
requirements of the Partnership for the foreseeable future.
Results of Operations
- ---------------------
Three months ended March 31, 1996 as compared to three months ended
- -------------------------------------------------------------------
March 31, 1995
- --------------
The results of operations for the three months ended March 31, 1996 and 1995 are
not directly comparable due to the purchases of interests in the Rancho Margate
and Winter Haven manufactured home communities in September 1995 and October
1995, respectively. The Partnership realized net income of $33,700 and $28,200
for the three months ended March 31, 1996 and 1995, respectively. Net income
per limited partnership unit was $0.17 in 1996 and $0.14 in 1995.
Rent and utilities revenues increased from $258,300 in 1995 to $271,600 in 1996.
The overall occupancy level of the Partnership's two wholly-owned properties
increased from 62% at March 31, 1995 to 74% at March 31, 1996. This overall
increase in occupancy is attributable almost entirely to the Sunset Vista
community in Magna, Utah. Sunset Vista increased occupancy from 61% at March
31, 1995 to 96% at March 31, 1996 due to a strong local economy in the Salt Lake
City area.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of four manufactured home communities in 1996 and two communities in
1995 (as mentioned previously, two joint venture interests were acquired in
September and October 1995). Equity in earnings of joint ventures increased
from $18,900 in 1995 to $36,000 in 1996 due mainly to the purchase of the two
additional joint venture interests. The overall occupancy of the Partnership's
four joint venture properties was 95% at March 31, 1996, compared to 85% for two
properties at March 31, 1995. Recent rent increases implemented include $10 per
month at Harmony Ranch effective October 1995, $10 and $13 per month at Winter
Haven and Rancho Margate, respectively, effective January 1996, and $12 per
month at Big Country effective February 1996.
Interest income increased from $4,300 in 1995 to $10,000 in 1996 due mainly to
higher cash
8
<PAGE>
balances maintained by the Partnership.
Property operating expenses increased from $166,900 in 1995 to $187,000 in 1996
due mainly to losses incurred on the sale of rental mobile homes at Sunset
Vista. At March 31, 1996, the General Partners had completed their plan to sell
all rental homes at the property and replace them with owner occupied homes.
Depreciation expense decreased from $73,200 in 1995 to $57,200 in 1996. The
decrease is due to a $1,000,000 provision for estimated loss in value of the
Sunrise Village community recorded in December 1995. A portion of the provision
was recorded as a reduction to the depreciable basis of the property, thereby
reducing future depreciation expense.
Interest expense of $32,600 in 1996 represents interest incurred on the
$1,400,000 loan obtained by the Partnership in October 1995. No interest
expense was incurred by the Partnership in the first quarter of 1995.
General and administrative expense decreased from $36,600 in 1995 to $27,000 in
1996 due mainly to proxy solicitation expenses incurred in 1995.
9
<PAGE>
PART II
-------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period
covered by this Form 10-QSB.
10
<PAGE>
SIGNATURE
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.
WINDSOR PARK PROPERTIES 4,
A California Limited Partnership
---------------------------------
(Registrant)
By: The Windsor Corporation, General Partner
By /s/ John A. Coseo, Jr.
--------------------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: May 10, 1996
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 4 AS OF MARCH 31, 1996 AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE THREE MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 782,900
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,473,800
<DEPRECIATION> 2,974,700
<TOTAL-ASSETS> 7,608,200
<CURRENT-LIABILITIES> 0
<BONDS> 1,400,000
0
0
<COMMON> 0
<OTHER-SE> 6,122,100<F1>
<TOTAL-LIABILITY-AND-EQUITY> 7,608,200
<SALES> 0
<TOTAL-REVENUES> 337,500
<CGS> 0
<TOTAL-COSTS> 187,000
<OTHER-EXPENSES> 84,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,600
<INCOME-PRETAX> 33,700
<INCOME-TAX> 0
<INCOME-CONTINUING> 33,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,700
<EPS-PRIMARY> 0.17<F2>
<EPS-DILUTED> 0
<FN>
<F1> Limited and general partners equity.
<F2> Net income per limited partnership unit.
</FN>
</TABLE>
