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, 2000
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
requirements 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, 2000 (Unaudited) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
Assets March 31, 2000 December 31, 1999
-------------- -----------------
Property:
<S> <C> <C>
Building and improvements, at cost $15,752,582 $15,744,707
Less: accumulated depreciation 6,751,684 6,605,544
---------- ----------
Building and improvements, net 9,000,898 9,139,163
Land, at cost 10,987,034 10,987,034
---------- ----------
Property, net 19,987,932 20,126,197
Cash and cash equivalents 635,325 561,737
Accounts receivable 227,125 209,899
Restricted cash 304,245 215,400
Debt financing costs, net 235,003 242,836
Prepaid expenses and other assets, net 58,111 67,306
------------ ------------
Total assets $21,447,741 $21,423,375
========== ==========
Liabilities
Mortgage loans payable $16,278,301 $16,327,881
Accrued interest 110,742 114,809
Accrued expenses 200,302 112,462
Deferred income and other liabilities 174,878 153,481
Accrued expenses payable to affiliates 43,706 51,999
------------ ------------
Total liabilities 16,807,929 16,760,632
---------- ----------
Partners' capital:
General partner (76,166) (75,937)
Limited partners:
Class A Interests, 1,518,800 4,715,978 4,738,680
Class B Interests, 2,111,072 0 0
--------------- ----------------
Total partners' capital 4,639,812 4,662,743
---------- -----------
Total liabilities and partners' capital $21,447,741 $21,423,375
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
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<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
March 31, 2000 March 31, 1999
Revenues:
<S> <C> <C>
Rent $631,613 $648,090
Reimbursed expenses 110,289 118,466
Interest and other income 5,904 3,633
---------- -----------
Total revenues 747,806 770,189
-------- ---------
Expenses:
Interest expense 332,671 336,495
Depreciation and amortization 156,209 165,844
Management and property expenses 216,109 210,175
Administrative and management fees to related party 47,891 38,774
Professional fees and other expenses 17,857 17,593
--------- ---------
Total expenses 770,737 768,881
-------- --------
Net (loss) income $(22,931) $ 1,308
======= ========
Net (loss) income attributable to:
Limited partners $(22,702) $1,295
General partner (229) 13
--------- ---------
Net (loss) income $(22,931) $ 1,308
======= =======
(Loss) income per weighted average
Limited Partnership 100 Class A
Interests outstanding $ (1.51) $ .09
-------- =========
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, 2000
<TABLE>
<CAPTION>
General Class A Class B
Total Partner Interests Interests
PARTNERS' CAPITAL (DEFICIT)
<S> <C> <C> <C> <C>
January 1, 2000 $4,662,743 $(75,937) $4,738,680 $ 0
Net Loss (22,931) (229) (22,702) 0
----------- ---------- ---------- --------------
PARTNERS' CAPITAL (DEFICIT)
March 31, 2000 $4,639,812 $(76,166) $4,715,978 $ 0
========= ====== ========= ==============
</TABLE>
See Accompanying Notes to Financial Statements
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<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
March 31, 2000 March 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net (loss) income $(22,931) $1,308
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation and amortization 156,209 165,844
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (17,226) 19,511
Decrease in prepaid expenses and other assets, net 6,958 12,911
Decrease in accrued interest (4,067) (348)
Increase in accrued expenses, deferred income and
other liabilities 109,237 31,351
Decrease in accrued expenses payable to affiliates (8,293) (29,800)
-------- -------
Net cash provided by operating activities 219,887 200,777
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements (7,874) (21,550)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash (88,845) (88,129)
Principal repayments on mortgage loans payable (49,580) (49,477)
Cash distributions to partners 0 (50,001)
---------- -------
Net cash used in financing activities (138,425) (187,607)
NET INCREASE (DECREASE)
CASH AND CASH EQUIVALENTS 73,588 (8,380)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 561,737 436,256
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $635,325 $427,876
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $336,738 $336,843
======= =======
</TABLE>
See Accompanying Notes to Financial Statements
-5-
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Partners of
Concord Milestone Plus, L.P.
We have reviewed the accompanying balance sheet of Concord Milestone Plus, L.P.
(the "Partnership") as of March 31, 2000, and the related statements of revenues
and expenses, changes in partners' capital, and cash flows for the three month
period then ended. These financial statements are the responsibility of the
management of the Partnership.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying March 31, 2000 financial statements for them to be
in conformity with generally accepted accounting principles.
/s/ Ahearn, Jasco + Company, P.A.
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
May 5, 2000
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<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2000
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, 2000 and 1999 are
unaudited. The financial statements for the period ended March 31, 2000 have
been reviewed by an independent public accountant pursuant to Rule 10-01(d) of
Regulation S-X and following applicable standards for conducting such reviews,
and the report of the accountant is included as part of this filing. The results
of operations for the interim periods shown in this report are not necessarily
indicative of the results of operations for the fiscal year. Certain information
for 1999 has been reclassified to conform to the 2000 presentation. These
interim financial statements should be read in conjunction with the annual
financial statements and footnotes included in the Partnership's financial
statements filed on Form 10-K for the year ended December 31, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
This Form 10-Q and documents incorporated herein by reference, if any,
contain forward- looking statements that have been made within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements are
based on current expectations, estimates and projections about the Partnership's
(as defined below) industry, management beliefs, and certain assumptions made by
the Partnership's management and involve known and unknown risks, uncertainties
and other factors. Such factors include 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; risks of real
estate development and acquisition; governmental actions and initiatives; and
environmental and safety requirements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements.
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
-7-
<PAGE>
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.
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 consisted of
$1,000 principal amount of Bonds and 36 Class B Interests. The Partnership
redeemed all of the outstanding Bonds as of September 30, 1997 with the proceeds
of three new fixed rate mortgage loans. Each Equity Unit consisted 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
represented the Class B Interests from the sale of the Bond Units.
Results of Operations
Comparison of Three Months Ended March 31, 2000 to Three Months Ended
March 31, 1999
The Partnership recognized net loss of $22,931 for the three months
ended March 31, 2000 as compared to income of $1,308 for the same period in 1999
due to the following factors:
A decrease in revenues of $22,383, or 2.9%, to $747,806 for the three
months ended March 31, 2000 as compared to $770,189 for the three months ended
March 31, 1999 primarily due to a decrease in base rent and tenant
reimbursements revenues at both the Green Valley Property due to Abco, a
principal anchor tenant, vacating its space during 1999, and at the Valencia
Property due to a temporary vacancy in the first quarter of 2000.
An increase in management and property expenses of $5,934, or 2.8%, to
$216,109 for the three months ended March 31, 2000 as compared to $210,175 for
the three months ended March 31, 1999 primarily due to an increase in real
estate taxes at each of the three properties.
A decrease in depreciation and amortization expense of $9,635, or 5.8%
to $156,209 for the three months ended March 31, 2000 as compared to $165,844
for the three months ended March 31,1999 primarily due to certain assets
reaching the end of their depreciable lives.
An increase in administrative and management fees to related party of
$9,117, or 23.5%, to $47,891 for the three months ended March 31, 2000 as
compared to $38,774 for the three months ended March 31, 1999 due to an increase
in administrative costs.
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 remainder of the year. 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.
-8-
<PAGE>
During February 1999, the Partnership received notice from Abco, a
principal anchor tenant at the Green Valley Property, that Abco would not be
renewing its lease at the expiration of its current term on July 31, 1999. Abco
vacated its space in May, 1999. No replacement tenant has yet been identified,
however, the Partnership has retained a large regional real estate brokerage
firm to help market the space. The brokerage firm has shown the space to several
qualified prospective tenants. Many of the other tenants at the Green Valley
Property have short term leases. It is not possible to determine the long-term
effects of the vacancy of the Abco space. However, this vacancy could have a
material adverse effect on the results of operations at the Green Valley
Property by impairing the Partnership's ability to obtain new tenants, retain
current tenants or renew leases with current tenants on favorable terms due to
reduced traffic at the Property and by negatively affecting percentage rents. In
addition, the Partnership will incur expenses in leasing the space vacated by
Abco to a new tenant, and the Partnership cannot predict how soon such space
will be leased and the terms of such new lease. Currently, approximately
$150,000 of the Partnership's working capital is being held in escrow in
connection with the refinancing by the holder of the first mortgage on the Green
Valley Property (the "Lender") pending the resolution of the vacant anchor
tenant space created by the departure of Abco.
The Partnership periodically makes distributions to its Partners. A 1998
fourth quarter distribution of $50,001 was paid during February 1999. Also, a
first quarter distribution of $50,001 was paid during May 1999 and a second
quarter distribution of $20,002 was paid during August 1999. Distributions were
suspended after the second quarter of 1999 following the departure of Abco from
the Green Valley Property, which created vacant anchor tenant space. Further,
the Partnership expects to incur material capital costs in the near term related
to parking lot work at the Valencia Property, certain roof replacements at the
Green Valley Property, and miscellaneous other costs at all three of the
Partnership Properties. The Partnership will evaluate the amount of future
distributions, if any, on a quarter by quarter basis. No assurances can be given
as to the timing or amount of any future distributions by the Partnership.
Management is not aware of any other significant trends, events, commitments or
uncertainties that will or are likely to materially impact the Partnership's
liquidity.
The cash on hand at March 31, 2000 may be used to fund (a) costs
associated with releasing the Abco space should the costs of releasing exceed
the $150,000 already held in escrow by the Lender for this purpose, (b) material
capital costs in the near term related to parking lot work at the Valencia
Property and certain roof replacements at the Green Valley Property and (c)
other general Partnership purposes.
Net cash provided by operating activities of $219,887 for the three
months ended March 31, 2000 included (i) net loss of $22,931, (ii) non-cash
adjustments of $156,209 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $86,609.
Net cash provided by operating activities of $200,777 for the three
months ended March 31, 1999 included (i) net income of $1,308 (ii) non-cash
adjustments of $165,844 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $33,625.
Net cash used in investing activities of $7,874 for the three months
ended March 31, 2000 was for capital expenditures for property improvements.
Net cash used in investing activities of $21,550 for the three months
ended March 31, 1999 was for capital expenditures for property improvements.
-9-
<PAGE>
Net cash used in financing activities of $138,425 for the three months
ended March 31, 2000 include (i) principal repayments on mortgage loans payable
of $49,580 and (ii) an increase in restricted cash of $88,845.
Net cash used in financing activities of $187,607 for the three months
ended March 31, 1999 included (i) principal repayments on mortgage loans payable
of $49,477, (ii) an increase in restricted cash of $88,129 and (iii) cash
distributions to partners of $50,001.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership, in its normal course of business, is theoretically
exposed to interest rate changes as they relate to real estate mortgages and the
effect of such mortgage rate changes on the values of real estate. However, for
the Partnership, all of its mortgage debt is at fixed rates, is for extended
terms, and would be unaffected by any sudden change in interest rates. The
Partnership's possible risk is from increases in long-term real estate mortgage
rates that may occur over a decade or more, as this may decrease the overall
value of real estate. Since the Partnership has the intent to hold its existing
mortgages to maturity (or until the sale of a Property), there is believed to be
no interest rate market risk on the Partnership's results of operations or its
working capital position.
The Partnership's cash equivalents and short-term investments, if any,
generally bear variable interest rates. Changes in the market rates of interest
available will affect from time-to-time the interest earned by the Partnership.
Since the Partnership does not rely on its interest earnings to fund working
capital needs, changes in these interest rates will not have an impact on the
Partnership's results of operations or working capital position.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description of Document
3.1 Amended and Restated Agreement of Limited Partnership of Concord Milestone
Plus, L.P. Incorporated herein by reference to Exhibit A to the
Registrant's Prospectus included as Part I of the Registrant's
Post-Effective Amendment No. 3 to the Registrant's Registration Statement
on Form S-11 (the "Registration Statement") which was declared effective on
April 3, 1987.
3.2 Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P., included as Exhibit 3.2 to Registrant's Form
10-K for the fiscal year ended December 31, 1987 ("1987 Form 10-K"), which
is incorporated herein by reference.
3.3 Amendment No. 2 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.3 to the 1987 Form 10-K,
which is incorporated herein by reference.
-10-
<PAGE>
3.4 Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.4 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.5 Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.5 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.6 Amendment No. 5 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.6 to Registrant's Form
10-K for the fiscal year ended December 31, 1988, which is incorporated
herein by reference.
27 Financial Data Schedule is included.
(b) Reports:
No reports on form 8-K were filed during the quarter covered by this
Report.
-11-
<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 5, 2000 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
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 635,325
<SECURITIES> 0
<RECEIVABLES> 227,125
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 26,739,616
<DEPRECIATION> 6,751,684
<TOTAL-ASSETS> 21,447,741
<CURRENT-LIABILITIES> 0
<BONDS> 16,278,301
0
0
<COMMON> 0
<OTHER-SE> 4,639,812
<TOTAL-LIABILITY-AND-EQUITY> 21,447,741
<SALES> 0
<TOTAL-REVENUES> 747,806
<CGS> 0
<TOTAL-COSTS> 438,066
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 332,671
<INCOME-PRETAX> (22,931)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,931)
<EPS-BASIC> (1.51)
<EPS-DILUTED> 0
</TABLE>
