<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For Quarter Ended March 31, 1995 Commission file number 33-8115.
Leastec Income Fund IV, A California Limited Partnership
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 68-0100223
---------- ----------
(State or other jurisdiction of (I.R.S. Employer Identifi-
incorporation or organization) cation Number)
2855 Mitchell Drive, Suite 215, Walnut Creek, California 94598
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 938-3443
__________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has 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.
Yes X No __
-
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS: N/A
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes __ No __
APPLICABLE ONLY TO CORPORATE ISSUERS: N/A
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
1
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Part 1. Financial Information
-----------------------------
Item l
------
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31 December 31
-------- -----------
1995 1994
---- ----
<S> <C> <C>
ASSETS:
Cash $ 663,570 $ 928,298
Accounts receivable 144,192 45,445
Net investment in direct financing leases 3,125,647 3,711,391
Equipment on operating leases, net of
accumulated depreciation of $2,885,043
in 1995 and $2,992,283 in 1994 -0- -0-
---------- ----------
Total assets $3,933,409 $4,685,134
========== ==========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Payables to affiliates $ 127,393 144,124
Accounts payable 39,098 114,531
Deposits 341,037 360,197
Prepaid rental income 16,737 11,086
Distributions payable 526,316 652,632
Notes payable 200,914 305,610
---------- ----------
Total liabilities 1,251,495 1,588,180
---------- ----------
Partners' Capital:
Partners' capital 2,681,914 3,096,954
---------- ----------
Total partners' capital 2,681,914 3,096,954
---------- ----------
Total liabilities &
partners' capital $3,933,409 $4,685,134
========== ==========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
2
<PAGE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three
Months Ended
March 31
1995 1994
---- ----
<S> <C> <C>
REVENUE:
Rental income $ 72,549 $ 252,478
Direct financing lease income 116,443 198,325
Gain on sale of equipment 39,430 24,204
Interest income 5,978 3,457
Other income 3,972 275
--------- ---------
Total revenues 238,372 478,739
--------- ---------
EXPENSES:
Depreciation -0- 188,594
Management fees 56,017 59,184
General & administrative 39,845 37,574
Data processing 9,335 13,703
Interest expense 21,898 44,073
--------- ---------
Total expenses 127,095 343,128
--------- ---------
Net income $ 111,277 $ 135,611
========= =========
Net income
per limited partnership unit $ 1.04 $ 1.26
========= =========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
3
<PAGE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31
--------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 111,277 $ 135,611
Adjustments to reconcile net income
to net cash provided by operating activities:
Accumulated depreciation -0- 188,594
Gain on disposition of equipment (39,430) (24,204)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (98,747) 120,240
Decrease in payables to affiliates (16,731) (15,097)
Decrease in accounts payable (75,433) (114,931)
Decrease in deposits (19,160) (13,274)
Increase in prepaid rental income 5,651 1,254
Increase (decrease) in distributions payable (126,316) 252,633
--------- -----------
Net cash provided (used) by operating activities (258,889) 530,826
--------- -----------
Cash flows from investing activities:
Proceeds from disposition of equipment 39,430 134,747
Decrease in net investment in direct
financing leases 585,744 460,682
--------- -----------
Net cash provided by investing activities 625,174 595,429
--------- -----------
Cash flows from financing activities:
Repayment of notes payable (104,696) (496,892)
Net distributions to partners (526,317) (568,421)
--------- -----------
Net cash used in financing activities (631,013) (1,065,313)
--------- -----------
Net increase (decrease) in cash (264,728) 60,942
Cash at beginning of period 928,298 576,596
--------- -----------
Cash at end of period $ 663,570 $ 637,538
========= ===========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
4
<PAGE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1995, MARCH 31, 1994 AND DECEMBER 31, 1994
(Unaudited)
1. Basis of Condensed Financial Statement Preparation
--------------------------------------------------
In the opinion of the General Partner, the accompanying unaudited condensed
financial statements contain all adjustments (consisting principally of
normal, recurring accruals) necessary to present fairly the financial
position of Leastec Income Fund IV (the Partnership) as of March 31, 1995,
March 31, 1994 and December 31, 1994.
As provided for in the Partnership agreement and offering document, the
Partnership engaged in leasing activities which intended to be completed in
approximately nine years from its inception at which time all remaining cash
is to be distributed to the partners. The Partnership has presented its 1995
financial statements to reflect its leasing activities on a basis consistent
with prior periods.
2. Wind Down Phase
---------------
The Registrant has ceased acquisition of new capital equipment and is in the
process of liquidating its lease portfolio. It is intended that the Registant
will be fully liquidated at the end of its tenth full year of opeartion,
December 1996.
5
<PAGE>
ITEM II
-------
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operation
- --------------------
The Registrant has been winding down operations since 1993 by
discontinuing new leasing activities and returning cash available from
operations to the Registrant's Partners. Although the Registrant has until
December 1997 to liquidate operations, the Registrant intends to be fully
liquidated by December 1996.
The majority of the Registrants operating leases have terminated. The
remaining leases will be fully depreciated in the first half of 1995. As
operating leases terminate, the equipment is sold. The remaining balance of the
lease portfolio is invested in Direct Finance leases which terminate with the
Lessees contractually required purchase of equipment. The income and expenses of
the Registrant are steadily declining as the lease portfolio size declines. The
cash balances and related interest income fluctuate according to the cash
amounts received from equipment sales and finance lease purchases during each
quarter. Cash is distributed to the partners according to their respective tax
basis capital accounts.
The Registrant reported net income of $135,611 or $1.26 per Limited
Partnership Unit for the three months ended March 31, 1994 as compared to
$111,277 or $1.04 per Limited Partnership Unit for the three months ended March
31, 1995.
Total revenues for the three months ended March 31, 1995 were $238,372
compared to $478,739 for the same period in the prior year. Revenue derived from
the Fund's equipment management activities comprised 98% of the total income for
the period, with the remaining 2% being interest income. As leases terminated
during the year, the majority of the equipment was not re-leased and was sold.
Total expenses for the three months ended March 31, 1995 were $127,095
compared to $343,128 for the same period in the prior year. Management fees,
interest, and general and administrative costs comprised 93% of the total
expenses. This decrease reflects the complete depreciation of the operating
lease equipment portfolio. The original cost of the equipment subject to
operating leases declined from $5,055,758 at March 31, 1994 to $2,885,043 at
March 31, 1995.
Liquidity and Capital Resources
- -------------------------------
Cash used by operating activities for the three months ended March 31, 1995
was $258,889 compared to cash provided by operating activities of $530,826 for
the same period in the prior year.
6
<PAGE>
Cash from investing activities increased from $595,429 in the first quarter
of 1994 to $625,174 for the first quarter 1995, reflecting primarily the decline
in rental receipts from the direct finance lease portfolio.
As rental payment on finance leases are received, the cash is broken up into
income and return of principal. As finance leases are completed, the rental
payments received by the Registrant decline, and the related declining
components of income and return of principal are reflected as a smaller decrease
in net investment in direct financing leases from $3,711,391 in 1994 to
$3,125,647 in 1995.
Sales proceeds of equipment for the three months ended March 31, 1995 totaled
approximately $39,430 resulting in a $39,430 gain after depreciation expense was
taken compared to $134,747 resulting in a gain of $24,204 for the same period in
the prior year.
Cash from operations and investing activities was used to repay $104,696 of
debt during the three months ended March 31, 1995 as compared to $496,892 for
the same period in the prior year.
The cash balance increased from $576,596 at December 31, 1993 to $637,538 at
March 31, 1994 to $928,298 at December 31, 1994 then decreased to $663,570 at
March 31, 1995.
As of March 31, 1995, investors were allocated cash distributions of $526,316
payable on April 14, 1995. Investor distributions depend on the timing of
equipment sales and collections of rents. As a result this amount can be
expected to decrease during 1995 and 1996 and to be variable in amount from
quarter to quarter depending on the timing of equipment sales.
The cash position as of March 31, 1995 was $663,570 The General Partner
anticipates that funds from operations will be adequate to cover all operating
expenses and future needs of the Partnership during 1995.
7
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
8
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEASTEC INCOME FUND IV
(Registrant)
LEASTEC CORPORATION
(General Partner)
Dated: May 10, 1995 By: ________________________________
Ernest V. Lavagetto, President
9
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 663,570
<SECURITIES> 0
<RECEIVABLES> 3,269,839
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,933,409
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,933,409
<CURRENT-LIABILITIES> 1,251,495
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,681,914
<TOTAL-LIABILITY-AND-EQUITY> 3,933,409
<SALES> 0
<TOTAL-REVENUES> 238,372
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 105,197
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,898
<INCOME-PRETAX> 111,277
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,277
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 0
</TABLE>
