UNITED STATES
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: March 31, 1998
OR
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 000-16757
CONCORD MILESTONE PLUS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1494615
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
150 EAST PALMETTO PARK ROAD
4TH FLOOR
BOCA RATON, FLORIDA 33432
(Address of Principal Executive Offices) (Zip Code)
(561) 394-9260
Registrant's Telephone Number, Including Area Code
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 for the
past 90 days. Yes X No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 (Unaudited) AND DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
Property, at cost
<S> <C> <C>
Building and improvements ................................................................. $ 15,469,687 $ 15,453,945
Less: accumulated depreciation ............................................................ 5,574,259 5,413,087
--------------- ---------------
Building and improvements, net ............................................................ 9,895,428 10,040,858
Land ...................................................................................... 10,987,034 10,987,034
--------------- ---------------
Total property ............................................................................ 20,882,462 21,027,892
Cash and cash equivalents ..................................................................... 224,139 257,905
Accounts receivable ........................................................................... 149,145 123,152
Restricted cash ............................................................................... 307,005 269,895
Prepaid expenses and other assets, net ........................................................ 81,964 67,516
Debt financing costs, net ..................................................................... 297,670 305,504
--------------- ---------------
Total assets ............................................................................ $ 21,942,385 $ 22,051,864
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loans payable ........................................................................ $ 16,636,964 $ 16,683,574
Accrued interest .............................................................................. 116,985 117,308
Accrued expenses and other liabilities ........................................................ 336,501 341,263
Accrued expenses payable to affiliates ........................................................ 14,602 73,935
--------------- ---------------
Total liabilities ......................................................................... 17,105,052 17,216,080
--------------- ---------------
Partners' capital:
General partner ............................................................................... (74,192) (74,207)
Limited partners:
Class A Interests, 1,518,800 .............................................................. 4,911,525 4,909,991
--------------- ---------------
Total partners' capital ................................................................... 4,837,333 4,835,784
--------------- ---------------
Total liabilities and partners' capital ................................................... $ 21,942,385 $ 22,051,864
=============== ===============
</TABLE>
See Accompanying Notes to Financial Statements
-2-
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
March 31,1998 March 31, 1997
Revenues:
<S> <C> <C>
Rent .......................................................................................... $ 628,805 $ 692,868
Reimbursed expenses ........................................................................... 109,695 115,241
Interest and other income ..................................................................... 2,662 6,140
--------------- ---------------
Total revenues ............................................................................ 741,162 814,249
--------------- ---------------
Expenses:
Interest expense .............................................................................. 339,387 411,300
Depreciation and amortization ................................................................. 171,801 142,606
Management and property expenses .............................................................. 177,139 191,758
Administrative and management fees to related party ........................................... 33,181 34,858
Professional fees and other expenses .......................................................... 18,105 24,395
--------------- ---------------
Total expenses ............................................................................ 739,613 804,917
--------------- ---------------
Net income .................................................................................... $ 1,549 $ 9,332
=============== ===============
Net income attributable to:
Limited partners .......................................................................... $ 1,534 $ 9,239
General partner ........................................................................... 15 93
--------------- ---------------
Net income .................................................................................... $ 1,549 $ 9,332
=============== ===============
Income per weighted average
Limited Partnership 100 Class A
Interests outstanding ......................................................................... $ .10 $ .61
=============== ===============
Weighted average number of 100
Class A interests outstanding ................................................................. 15,188 15,188
=============== ===============
</TABLE>
See Accompanying Notes to Financial Statements
-3-
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
General Class A
Total Partner Interests
PARTNERS' CAPITAL (DEFICIT)
<S> <C> <C> <C>
January 1, 1998 ............................... $ 4,835,784 $ (74,207) $ 4,909,991
Distributions ....................................... -- -- --
Net Income .......................................... 1,549 15 1,534
-------------------- -------------------- --------------------
PARTNERS' CAPITAL (DEFICIT)
March 31, 1998 ................................ $ 4,837,333 $ (74,192) $ 4,911,525
==================== ==================== ====================
</TABLE>
See Accompanying Notes to Financial Statements
-4-
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
March 31,1998 March 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income ............................................................................... $ 1,549 $ 9,332
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization .................................................... 171,801 142,606
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable ....................................... (25,993) 14,233
Increase in prepaid expenses and other
assets, net ................................................................. (17,244) (49,289)
(Decrease) increase in accrued interest .......................................... (323) 411,300
(Decrease) increase in accrued expenses
and other liabilities ....................................................... (4,762) 62,379
(Decrease) increase in due to affiliate .......................................... (59,333) 3,599
--------------- ---------------
Net cash provided by operating activities ................................................ 65,695 594,160
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements ............................................................ (15,741) (31,261)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash ...................................................... (37,110) 0
Principal repayments on mortgage loans payable ................................... (46,610) 0
Cash distributions to partners ................................................... 0 (52,007)
--------------- ---------------
Net cash used in financing activities .................................................... (83,720) (52,007)
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS ...................................................................... (33,766) 510,892
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD .............................................................. 257,905 326,120
--------------- ---------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD .................................................................... $ 224,139 $ 837,012
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest ................................................. $ 339,710 $ 0
=============== ===============
</TABLE>
See Accompanying Notes to Financial Statements
-5-
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1998
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
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 management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
financial statements as of and for the period ended March 31, 1998 and 1997 are
unaudited. The results of operations for the interim periods are not necessarily
indicative of the results of operations for the fiscal year. Certain information
for 1997 has been reclassified to conform to the 1998 presentation. These
financial statements should be read in conjunction with the financial statements
and footnotes included thereto in the Partnership's financial statements filed
on form 10-K for the year ended December 31, 1997.
Recently Issued Accounting Pronouncements
The Partnership adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income" in the first quarter of 1998.
Because the Partnership has no items of other comprehensive income, adoption of
this standard had no effect on current or prior financial statement displays.
The Partnership also adopted SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information" in the first quarter of 1998. Adoption
of SFAS No. 131 did not have a material effect on disclosures presented by the
Partnership, as the Partnership operates as a single segment.
-6-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Certain statements made in this report constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Such forward-looking statements include
statements regarding the intent, belief or current expectations of the
Partnership and its management and involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, the
following: general economic and business conditions, which will, among other
things, affect the demand for retail space or retail goods, availability and
creditworthiness of prospective tenants, lease rents and the terms and
availability of financing; adverse changes in the real estate markets including,
among other things, competition with other Partnerships; risks of real estate
development and acquisition; governmental actions and initiatives; and
environment/safety requirements.
Organization and Capitalization
Concord Milestone Plus, L.P., a Delaware limited partnership (the
"Partnership"), was formed on December 12, 1986, for the purpose of investing in
existing income-producing commercial and industrial real estate. The Partnership
began operations on August 20, 1987, and currently owns and operates three
shopping centers located in Searcy, Arkansas; Valencia, California; and Green
Valley, Arizona.
-7-
<PAGE>
The Partnership commenced a public offering on April 8, 1987 in order to
fund the Partnership's real property acquisitions. The Partnership terminated
its public offering on April 2, 1988 and was fully subscribed to with a total of
16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consists of
$1,000 principal amount of Bonds and 36 Class B Interests. Each Equity Unit
consists of 100 Class A Interests and 100 Class B Interests. Capital
contributions to the Partnership consisted of $15,187,840 from the sale of the
Equity Units and $592,272 which represent the Class B Interests from the sale of
the Bond Units.
Results of Operations
Comparison of Three Months Ended March 31, 1998 to Three Months Ended March
31, 1997
The Partnership recognized net income of $1,549 for the three months
ended March 31, 1998 as compared to income of $9,332 for the same period in 1997
due to the following factors:
A decrease in revenues of $73,087, or 9.0%, to $741,162 for the three
months ended March 31, 1998 as compared to $814,249 for the three months ended
March 31, 1997 primarily due to the following: (1) a decrease in base rent
revenue primarily due to two additional vacancies in 1998; (2) a decrease in
percentage rent revenue due to a decline in tenant sales and (3) a decrease in
tenant reimbursements due to a reduction in management and property expenses.
A decrease in management and property expenses of $14,619, or 7.6%, to
$177,139 for the three months ended March 31, 1998 as compared to $191,758 for
the three months ended March 31, 1997 primarily due to the following: (1) common
area expenses decreasing as a result of cost savings efforts by management, and
(2) reduced insurance expense due to lower insurance premiums.
A decrease in interest expense of $71,913, or 17.5%, to $339,387 for the
three months ended March 31, 1998 as compared to $411,300 for the three months
ended March 31, 1997 due to a decrease of approximately 2% in the interest rate
on the mortgage loans in 1998 compared to the interest rate on the bonds payable
in 1997. The Partnership closed on three new fixed rate first mortgage loans in
September 1997, the proceeds of which were used to redeem all of the then
outstanding bonds payable.
-8-
<PAGE>
An increase in depreciation and amortization expense of $29,195, or
20.5%, to $171,801 for the three months ended March 31, 1998 as compared to
$142,606 for the three months ended March 31,1997 primarily due to the
following: (1) an increase in depreciation expense due to property improvements
expenditures throughout 1997, and (2) an increase in amortization expense due to
debt financing costs associated with the 1997 bond refinancing.
A decrease in professional fees and other expenses of $6,290, or 25.8%,
to $18,105 for the three months ended March 31, 1998 as compared to $24,395 for
the three months ended March 31, 1997 due to trustee fees no longer being paid
in 1998 as the bonds payable were refinanced during September 1997.
Liquidity and Capital Resources
The General Partner believes that the Partnership's expected revenue and
working capital is sufficient to meet the Partnership's current operating
requirements for the next twelve months. Nevertheless, because the cash revenues
and expenses of the Partnership will depend on future facts and circumstances
relating to the Partnership's properties, as well as market and other conditions
beyond the control of the Partnership, a possibility exists that cash flow
deficiencies may occur. Currently, a significant amount (approximately $307,000)
of the Partnership's working capital is still in the control of the holder of
the first mortgage as funds held in escrow for real estate taxes, and pending
resolution of certain circumstances. There are currently no material commitments
for capital expenditures.
The Partnership suspended making distributions subsequent to the first
quarter of 1997 due to the cost of addressing an environmental issue identified
at the Valencia Property and payment of certain expenses relative to the
refinancing. The Partnership is anticipating resuming distributions as soon as
the Partnership's working capital requirements are funded.
Management is not aware of any other trends, events, commitments or
uncertainties that will or are likely to materially impact the Partnership's
liquidity.
Net cash provided by operating activities of $65,695 for the three
months ended March 31, 1998 included (i) a net income of $1,549 (ii) non-cash
adjustments of $171,801 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $107,655.
Net cash provided by operating activities of $594,160 for the three
months ended March 31, 1997 included (i) net income of $9,332, (ii) non-cash
adjustments of $142,606 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $442,222.
-9-
<PAGE>
Net cash used in investing activities of $15,741 for the three months
ended March 31, 1998 was for capital expenditures for property improvements.
Net cash used in investing activities of $31,261 for the three months
ended March 31, 1997 was for capital expenditures for property improvements.
Net cash used in financing activities of $83,720 for the three months
ended March 31, 1998 included (i) principal repayments on mortgage loans payable
of $46,610 and (ii) an increase in restricted cash of $37,110.
Net cash used in financing activities of $52,007 for the three months
ended March 31, 1997 was for cash distributions to partners.
PART II - OTHER INFORMATION
Item 6. Reports on Form 8-K
(b) No reports on form 8-K were filed during the quarter covered by this
Report.
-10-
<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.
DATE: May 8, 1998 CONCORD MILESTONE PLUS, L.P.
------------------------- ----------------------------
(Registrant)
BY: CM PLUS CORPORATION
General Partner
By: /S/ Robert Mandor
Robert Mandor
Director and Vice President
By: /S/ Patrick Kirse
Patrick Kirse
Treasurer and Controller
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 224,139
<SECURITIES> 0
<RECEIVABLES> 149,145
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 26,456,721
<DEPRECIATION> 5,574,259
<TOTAL-ASSETS> 21,942,385
<CURRENT-LIABILITIES> 0
<BONDS> 16,636,964
0
0
<COMMON> 0
<OTHER-SE> 4,837,333
<TOTAL-LIABILITY-AND-EQUITY> 21,942,385
<SALES> 0
<TOTAL-REVENUES> 741,162
<CGS> 0
<TOTAL-COSTS> 400,226
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 339,387
<INCOME-PRETAX> 1,549
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,549
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0
</TABLE>
