<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1994
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from --------------to -----------------
Commission file number 1-9524
BURNHAM PACIFIC PROPERTIES, INC.
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(Exact name of Registrant as specified in its Charter)
California 33-0204162
----------------------- --------------
(State of other jurisdiction (IRS Employer Identification No.)
of incorporation)
610 West Ash Street, San Diego, California 92101
- ------------------------------------------ ----------------
(Address of principal executive offices) (Zip Code)
(619) 232-2001
--------------
Registrant's telephone number, including area code
NA
--------------------------------------
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
--- ---
Number of shares of the Registrant's common stock outstanding at July 26, 1994:
15,803,465
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
- -----------------------------
BURNHAM PACIFIC PROPERTIES, INC.
BALANCE SHEETS
JUNE 30, 1994 AND DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
June 30, 1994 December 31, 1993
-------------- ------------------
<S> <C> <C>
Property $385,931 $383,863
Less Accumulated Depreciation (45,971) (40,751)
-------- --------
Property-Net 339,960 343,112
Cash and Cash Equivalents 843 900
Receivables-Net 8,059 7,393
Other Assets 8,798 8,857
-------- --------
Total $357,660 $360,262
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts Payable and Other Liabilities $ 1,933 $ 1,976
Accrued Interest on Convertible Debentures 1,297 1,650
Tenant Security Deposits 930 940
Notes Payable 118,338 115,253
Convertible Debentures 34,030 42,354
Line of Credit Advances 0 5,000
-------- --------
Total Liabilities 156,528 167,173
-------- --------
Stockholders' Equity:
Preferred Stock, 5,000,000 Shares
Authorized; No Shares Issued or
Outstanding
Common Stock, No Par Value,
40,000,000 Shares Authorized;
15,745,647 and 14,987,097 Shares
Outstanding at June 30, 1994, and
December 31, 1993, Respectively 242,989 231,021
Dividends Paid in Excess of Net Income (41,857) (37,932)
-------- --------
Total Stockholders' Equity 201,132 193,089
-------- --------
Total $357,660 $360,262
======== ========
See the Accompanying Notes
</TABLE>
2
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BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
REVENUES THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Rents $12,748 $9,464 $25,462 $17,754
Interest 106 264 192 466
------- ------ ------- -------
Total Revenues 12,854 9,728 25,654 18,220
------- ------ ------- -------
COSTS AND EXPENSES
Interest 2,828 2,476 5,815 5,564
Rental Operating 2,903 2,174 5,936 4,026
General and Administrative 558 386 1,128 740
Depreciation and Amortization 2,973 2,264 5,847 4,290
------- ------ ------- -------
Total Costs and Expenses 9,262 7,300 18,726 14,620
------- ------ ------- -------
Net Income $ 3,592 $2,428 $ 6,928 $ 3,600
======= ====== ======= =======
Net Income Per Share $ 0.23 $ 0.19 $ 0.45 $ 0.33
======= ====== ======= =======
Dividends Per Share $ 0.35 $ 0.34 $ 0.70 $ 0.69
======= ====== ======= =======
</TABLE>
See the Accompanying Notes
3
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
June 30, June 30,
1994 1993
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 6,928 $ 3,600
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating
Activities:
Depreciation and Amortization 5,847 4,290
Changes in Other Assets and
Liabilities:
Receivables and Other Assets (2,348) (299)
Accounts Payable and Other (396) (1,899)
Tenant Security Deposits (10) (22)
-------- --------
Net Cash Provided By Operating 10,021 5,670
Activities -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for Acquisitions of Property (2,018) (36,121)
Principal Payments on Notes Receivable 741 28
Notes Receivable Advances (1,286)
-------- --------
Net Cash Used For Investing Activities (1,277) (37,379)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings Under Line of Credit 14,960 4,800
Agreements
Repayments Under Line of Credit (16,320) (2,500)
Agreements
Principal Payments of Notes Payable (555) (28,535)
Redemption of Convertible Debentures (1,631)
Issuance of Stock-Net 2,771 65,459
Dividends Paid (10,853) (7,991)
Dividend Reinvestment 1,196 1,083
-------- --------
Net Cash (Used for) Provided by (8,801) 30,685
Financing Activities -------- --------
Net Decrease in Cash and Cash (57) (1,024)
Equivalents
Cash and Cash Equivalents at Beginning 900 2,060
Of Period -------- --------
Cash and Cash Equivalents at End Of $ 843 $ 1,036
Period ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash Paid During Six Months For Interest $ 6,156 $ 6,165
======== ========
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Conversion of Debentures Into Common
Stock $ 8,324 $ 24,626
======== ========
</TABLE>
See the Accompanying Notes
4
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BURNHAM PACIFIC PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994, DECEMBER 31, 1993, AND JUNE 30, 1993
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are unaudited but, in the opinion of
management, reflect all normal recurring adjustments necessary for a fair
presentation of operating results. These financial statements should be
read in conjunction with the latest audited financial statements of Burnham
Pacific Properties, Inc. at December 31, 1993. Certain of the 1993 amounts
have been reclassified to conform to 1994 presentation.
Dividends Per Share - Dividends of 35 cents per share were paid on June 30,
1994 to shareholders of record on June 21, 1994.
2. EARNINGS PER SHARE
Earnings per share is computed by dividing the net income for the
respective periods by the weighted average number of shares outstanding
during the applicable period. The computations follow:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Income $ 3,592,000 $ 2,428,000 $ 6,928,000 $ 3,600,000
Weighted Average Number
of Shares Outstanding 15,591,293 12,972,512 15,351,291 11,058,803
----------- ----------- ----------- -----------
Net Income Per Share $ 0.23 $ 0.19 $ .45 $ 0.33
=========== =========== =========== ===========
</TABLE>
3. REGISTRATION STATEMENT
During September 1993, the Corporation filed with the Securities and
Exchange Commission a $200 million shelf registration statement on Form S-
3. This registration statement was filed for the purpose of issuing either
common stock or debentures for the purpose of repaying outstanding debt,
potential future acquisitions of commercial properties and for general
corporate purposes. As of June 30, 1994, no such issuances have occurred.
5
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ----------------------------------------------------------------------------
RESULTS OF OPERATIONS.
----------------------
(1) CHANGES IN FINANCIAL CONDITION
June 30, 1994 and December 31, 1993:
During the six months ended June 30, 1994, 520,248 shares of the Corporation's
common stock were issued as a result of the conversion of $8.3 million of the
Corporation's convertible debentures and 226,019 shares were issued for $3.8
million under the Dividend Reinvestment and Optional Cash Payment Plan. The
Corporation experienced no other material changes in financial condition.
(2) CHANGES IN RESULTS OF OPERATIONS
Six Months Ended June 30, 1994 and 1993:
During the six months ended June 30, 1994, net income increased $3.3 million, or
92%, to $6.9 million ($0.45 per share) compared to $3.6 million ($0.33 per
share) for the same period in 1993. Funds from operations increased $4.9
million, or 62%, to $12.8 million for the 1994 period. These increases were
primarily due to new property acquisitions and financing activities during 1993.
For the six months ended June 30, 1994, compared to the same period in 1993, the
Corporation experienced an increase in rental revenue of $7.7 million, of which
$2.0 million was due to the April 1993 acquisition of the Pacific West Outlet
Center, $200,000 was due to the September 1993 acquisition of the remaining 50%
interest in the Navajo Shopping Center, $200,000 was due to the September 1993
acquisition of the remaining 50% interest in the Village Station Shopping
Center, $246,000 was due to the October 1993 acquisition of the K-Mart building
and $4.2 million was due to the Plaza at Puente Hills acquisition in October
1993. Interest income during the 1994 period was less than 1993 primarily due
to the reduction of $1.9 million of notes receivable related to the Navajo
Shopping Center.
Interest expense increased $200,000 for the six months ended June 30, 1994 to
$5.8 million, as compared to $5.6 million for the same period in 1993. This was
primarily due to the $58.0 million of credit line advances for the purchase of
the Plaza at Puente Hills in October 1993 and rising interest rates, offset by
the conversion of $22.0 million of Convertible Debentures during the second half
of 1993 and the first six months of 1994, and the paydown of $29.5 million in
notes payable and credit line advances from the proceeds of the April 1993
public offering.
Rental operating expenses were $5.9 million for the six months ended June 30,
1994, and $4.0 million for the same period in 1993, and Depreciation and
Amortization was $5.8 million for the six months ended June 30, 1994 and $4.3
million for the same period in 1993. These increases were primarily the result
of the property additions made by the Corporation during 1993.
Three Months Ended June 30, 1994 and 1993
During the three months ended June 30, 1994, net income increased $1.2 million,
or 50%, to $3.6 million ($.23 per share) compared to $2.4 million ($.19 per
share) for the same period in 1993. Funds from operations increased $1.9
million, or 40%, to $6.6 million for the same period. These increases were
primarily due to new property acquisitions and financing activities during 1993.
6
<PAGE>
For the three months ended June 30, 1994, compared to the same period in 1993,
the Corporation experienced an increase in rental revenue of $3.3 million, of
which $500,000 was due to the April 1993 acquisition of the Pacific West Outlet
Center, $91,000 was due to the September 1993 acquisition of the remaining 50%
interest in the Navajo Shopping Center, $100,000 was due to the September 1993
acquisition of the remaining 50% interest in the Village Station Shopping
Center, $123,000 was due to the October 1993 acquisition of the K-Mart building
and $2.2 million was due to the Plaza at Puente Hills acquisition in October
1993. Interest income during the 1994 period was less than 1993 primarily due
to the reduction of $1.9 million of notes receivable related to the Navajo
Shopping Center.
Interest expense increased $300,000 for the three months ended June 30, 1994 to
$2.8 million, as compared to $2.5 million for the same period in 1993. This was
primarily due to the $58.0 million of credit line advances for the purchase of
the Plaza at Puente Hills in October 1993 and rising interest rates offset by
the conversion of $22.2 million of Convertible Debentures subsequent to June 30,
1993, and the paydown of $29.5 million in notes payable and credit line advances
from the proceeds of the April 1993 public offering.
Rental operating expenses were $2.9 million for the three months ended June 30,
1994, and $2.2 million for the same period in 1993, and Depreciation and
Amortization was $3.0 million for the three months ended June 30, 1994 and $2.2
million for the same period in 1993. These increases were primarily the result
of the property additions made by the Corporation during 1993.
(3) LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1994, the Corporation obtained an
additional $5.0 million of capacity on its $25.0 million revolving secured line
of credit. This additional capacity brings the Corporation's total credit line
availability to $70.0 million, consisting of $30.0 million revolving secured
line, $35.0 million non-revolving secured line and $5.0 million unsecured line.
In addition, the Corporation obtained an extension on the maturity date of the
$35.0 million non-revolving secured line to August 1, 1994, at which time the
Corporation has the option to convert any outstanding borrowings into a term
loan.
At June 30, 1994, the Corporation had $62.7 million outstanding under its bank
lines of credit including $27.7 million under its $30.0 million revolving
secured line, $35.0 million under its $35.0 million non-revolving secured line
and $0 under its $5.0 million unsecured line. Such amounts were borrowed
primarily to finance the October 1993 acquisition of the Plaza at Puente Hills.
During September 1993, the Corporation filed with the Securities and Exchange
Commission a $200 million shelf registration statement on Form S-3. This
registration statement was filed for the purpose of issuing either common stock
or debentures for the purpose of repaying outstanding debt, potential future
acquisitions of commercial properties and for general corporate purposes. As of
June 30, 1994, no such issuances have occurred.
The Corporation expects that its sources of capital, including cash flow from
operations, potential mortgage financing, bank lines of credit, and the public
equity and debt markets are adequate to provide necessary funds for corporate
obligations, the payment of dividends, and other corporate needs in the
foreseeable future under current conditions.
7
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
The Corporation was not a party to any material legal proceedings during the
period covered by this report or subsequently.
ITEM 2. CHANGES IN SECURITIES:
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
On May 3, 1994 the Corporation held its regular Annual Meeting of Shareholders.
Proxies for such meeting were solicited pursuant to Regulation 14 under the Act.
At such meeting, three matters were presented for vote. The first matter was
the re-election of incumbent directors and there was no solicitation in
opposition to such nominees. All such incumbent directors were re-elected for a
one-year term. Of 13,597,493 shares voting, 13,515,368 voted in favor of the
re-election of directors and 82,123 voted against it.
The second matter presented was to approve amended and restated Bylaws.
Management believed that the existing Bylaws contained various provisions that
were no longer applicable to the Corporation. Of 13,597,493 shares voting,
12,211,485 voted in favor of the amendment to the Bylaws, and 1,386,006 voted
against it.
The third matter presented was to approve an amendment to the stock option plan
to amend the automatic grant provision of the plan to provide that each Non-
employee Director receive a non-qualified option to purchase 5,000 shares
(increased from 1,000 shares) of common stock on his annual election. Of
13,597,493 shares voting, 12,085,879 voted in favor of the amendment to the
stock option plan and 1,511,612 voted against it.
ITEM 5. OTHER INFORMATION:
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Not applicable.
(b) The Corporation filed, on April 4, 1994, Amendment No. 1 on Form 8-K/A,
pursuant to comments received dated March 24, 1994, regarding Items 2 and 7 of
the October 22, 1993 acquisition of the Plaza at Puente Hills.
8
<PAGE>
SIGNATURES
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.
BURNHAM PACIFIC PROPERTIES, INC.
Date: 7/26/94 By: //Louis J. Garday//
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Louis J. Garday, President
Date: 7/26/94 By: //Jeffrey R. Fisher//
------- ---------------------
Jeffrey R. Fisher, Vice President/Finance
9
