<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 September 30, 1995
-----------------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________________ to____________________
Commission file number 0-16642
-----------------------------------------------
WINDSOR PARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0243223
------------------------------- ---------------------------------
(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
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TABLE OF CONTENTS
PART I
------
Page
----
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II
-------
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE
2
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
September 30, 1995
------------------
ASSETS
- ------
<S> <C>
Property held for investment:
Land $ 1,507,800
Buildings and improvements 2,039,400
Fixtures and equipment 20,100
------------------
3,567,300
Less accumulated depreciation (723,500)
------------------
2,843,800
Investments in joint ventures 1,689,400
Cash and cash equivalents 1,087,700
Other assets 149,000
------------------
$ 5,769,900
==================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Accounts payable $ 3,800
Accrued liabilities 46,500
Tenant deposits and other liabilities 37,400
Note payable 1,097,000
------------------
1,184,700
------------------
Partners' equity:
Limited partners 4,756,700
General partners (171,500)
------------------
4,585,200
------------------
$ 5,769,900
==================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
Three Months Ended September 30,
------------------------------------
1995 1994
---------------- ------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 104,400 $ 107,100
Equity in earnings (losses) of joint ventures 19,000 (2,000)
Interest 6,400 4,800
Other 3,900 2,000
-------------- --------------
133,700 111,900
-------------- --------------
COSTS AND EXPENSES
- ------------------
Property operating costs 64,900 56,200
Depreciation and amortization 26,100 25,800
General and administrative:
Related parties 11,000 12,400
Other 10,900 9,400
Interest 5,300
-------------- --------------
118,200 103,800
-------------- --------------
Net income $ 15,500 $ 8,100
============== ==============
Net income - general partners $ 100 $ 100
============== ==============
Net income - limited partners $ 15,400 $ 8,000
============== ==============
Net income per limited partnership unit $ 0.07 $ 0.04
============== ==============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-----------------------------------
1995 1994
------------------ ----------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 316,800 $ 315,300
Equity in earnings of joint ventures 48,200 5,700
Interest 16,800 12,600
Other 9,300 13,800
-------------- -------------
391,100 347,400
-------------- -------------
COSTS AND EXPENSES
- ------------------
Property operating costs 171,300 179,100
Depreciation and amortization 77,800 77,700
General and administrative:
Related parties 35,400 39,400
Other 30,400 61,800
Interest 5,300
-------------- -------------
320,200 358,000
-------------- -------------
Net income (loss) $ 70,900 $ (10,600)
============== =============
Net income (loss) - general partners $ 700 $ (100)
============== =============
Net income (loss) - limited partners $ 70,200 $ (10,500)
============== =============
Net income (loss) per limited partnership unit $ 0.29 $ (0.04)
============== ==============
</TABLE>
See accompaning notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------------------
1995 1994
--------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 70,900 $ (10,600)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 77,800 77,700
Equity in earnings of joint ventures (48,200) (5,700)
Joint ventures' cash distributions 48,200 5,700
Loss on sale of property held for
investment 7,600 15,500
Changes in operating assets and
liabilities:
Other assets (20,300) 22,800
Accounts payable (2,800) 1,700
Accrued liabilities 31,900 17,800
Tenant deposits and other liabilities (6,000) 2,200
-------------- -------------
Net cash provided by operating activities 159,100 127,100
-------------- -------------
Cash flows from investing activities:
Increase in property held for investment (17,000) (2,200)
Investment in joint venture (754,400)
Proceeds from sale of property held for
investment 4,500
Joint ventures' cash distributions 649,400 39,300
-------------- -------------
Net cash (used in) provided by investing
activities (122,000) 41,600
-------------- -------------
Cash flows from financing activities:
Cash distributions (151,500) (353,500)
Repurchase of limited partnership units (4,300) (800)
Proceeds from issuance of note payable, net 1,035,900
-------------- -------------
Net cash provided by (used in) financing
activities 880,100 (354,300)
-------------- -------------
Net increase (decrease) in cash and cash
equivalents 917,200 (185,600)
Cash and cash equivalents at beginning of
period 170,500 438,000
-------------- -------------
Cash and cash equivalents at end of period $ 1,087,700 $ 252,400
============== =============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at September 30, 1995 and the related statements of operations
for the three and nine months ended September 30, 1995 and 1994 and the
statements of cash flows for the nine months ended September 30, 1995 and 1994
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. Certain 1994 amounts have been reclassified to
conform with the 1995 presentation.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
On September 12, 1995, the Partnership and Windsor Park Properties 6, an
affiliated limited partnership, obtained a $1,550,000 loan collateralized by the
Town and Country Estates manufactured home community, a jointly owned property.
The loan is payable in monthly interest only installments bearing interest at 90
day LIBOR plus 2.95% (8.87% at September 30, 1995), and is due in September
2002. The Partnership is contingently liable for the full amount of the loan.
On September 20, 1995, the Partnership purchased a 26% interest in the Rancho
Margate manufactured home community located in Margate, Florida. The remaining
interests in the property were acquired by Windsor Park Properties 4 and Windsor
Park Properties 6, both California limited partnerships which have the same
General Partners as the Partnership. The Partnership's cost of its 26% interest
was $754,400. In connection with the purchase, the Partnership, Windsor Park
Properties 4 and Windsor Park Properties 6 assumed a $3,737,100 loan,
collateralized by the property. The loan is payable in monthly installments and
bears interest at 50% of 6 month LIBOR plus 6.26% until June 2003 (9.29% at
September 30, 1995). Thereafter, the interest rate increases to 50% of 6 month
LIBOR plus 7.26% until the note matures in July 2023. In a separate agreement,
the seller of the property will reimburse the Partnership for any interest
expense which, in total, exceeds 9.1% during the three year period subsequent to
the purchase.
The Partnership's investments in joint ventures consist of interests in two
manufactured home communities at September 30, 1995 and one manufactured home
community at September 30, 1994. The combined condensed results of operations
of these properties (including the operations of the Rancho Margate since its
purchase) for the nine months ended September 30, 1995 and 1994 follows:
7
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<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Property revenues $ 475,600 $ 388,100
---------- ----------
Expenses:
Property operating 246,900 289,400
Depreciation 89,700 85,200
Interest 17,900
---------- ----------
354,500 374,600
---------- ----------
Net income $ 121,100 $ 13,500
========== ==========
</TABLE>
NOTE 3. NOTE PAYABLE
------------
On September 14, 1995, the Partnership obtained a $1,097,000 loan collateralized
by the Plantation and Lakeside manufactured home communities. The loan is
payable in monthly interest only installments bearing interest at 90 day LIBOR
plus 2.95% (8.87% at September 30, 1995) and is due in September 2002. The
Partnership incurred loan costs of $61,100.
NOTE 4. NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT
----------------------------------------------
Net income (loss) per limited partnership unit is calculated based on the
weighted average number of limited partnership units outstanding during the
period and the net income (loss) allocated to the Limited Partners. The
weighted average number of limited partnership units outstanding during the
three and nine months ended September 30, 1995 was 243,519 and 243,637,
respectively; and 243,835 and 243,853 for the three and nine months ended
September 30, 1994, respectively.
NOTE 5. 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).
The General Partners and their affiliates are entitled to receive various fees
and compensation from the Partnership which are summarized as follows:
Operational Stage
- -----------------
The Partnership's investment properties were managed by Windsor Asset
Management, Inc. (WAMI), an affiliate of The Windsor Corporation, until November
1994. At that time, WAMI was merged into an independent property management
company. For management services, WAMI received 5 percent of gross property
receipts. During the three and nine months ended September 30, 1994, WAMI
received fees of $5,400 and $16,000, respectively. WAMI received no fees during
the three and nine months ended September 30, 1995.
The net profits, losses and cash distributions of the Partnership during the
operational stage are allocated 99 percent to the Limited Partners and 1 percent
to the General Partners.
The Partnership reimburses The Windsor Corporation and affiliates for certain
direct expenses, and
8
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employee, executive and administrative time, which are incurred on the
Partnership's behalf. The Partnership was charged $12,300 and $13,800 for such
costs during the three months ended September 30, 1995 and 1994, respectively;
and $39,800 and $43,800 for the nine months ended September 30, 1995 and 1994,
respectively.
Liquidation Stage
- -----------------
During the Partnership's liquidation stage, total compensation paid to all
persons for the sale of Partnership properties is limited to competitive real
estate commissions, not to exceed 6 percent of the contract price for the sale
of the property. The General Partners may receive up to one-half of the
competitive real estate commission, not to exceed 3 percent, if they provide a
substantial amount of services in the sales effort. The General Partners'
commission is subordinated to the Limited Partners receiving a 9 percent
cumulative, non-compounded annual return (Preferred Return) on their original
capital investments. No commissions were paid to the General Partners during
the three and nine months ended September 30, 1995 and 1994.
The General Partners also receive 1 percent of net income, loss and cash
distributions from the sale or financing of Partnership properties. The
participation increases to 15 percent after the Limited Partners have received
their original invested capital plus their Preferred Return.
During the three months ended September 30, 1995 and 1994, the General Partners
received cash distributions of $500 and $1,200, respectively; and $1,500 and
$3,500 for the nine months ended September 30, 1995 and 1994, respectively.
NOTE 6. 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 nine months ended September 30, 1995 and 1994
follows:
<TABLE>
<CAPTION>
1995 1994
----------------------- -------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C>
Net income
- limited partners $ 70,200 $ 0.29 $ $
Return of capital 79,800 0.33 350,000 1.44
------------ -------- --------- ----------
$ 150,000 $ 0.62 $ 350,000 $ 1.44
============ ======== ========= ==========
</TABLE>
NOTE 7. SUBSEQUENT EVENT
----------------
On October 11, 1995, the Partnership purchased a 26% interest in the Winter
Haven manufactured home community located in Winter Haven, Florida. The
remaining interests in the property were acquired by Windsor Park Properties 4
and Windsor Park Properties 6, both California limited partnerships which have
the same General Partners as the Partnership. The Partnership's cost of its 26%
interest was approximately $501,200. In connection with the purchase, the
Partnership, Windsor Park Properties 4 and Windsor Park Properties 6 assumed a
$1,641,600 loan, collateralized by the property. The loan is payable in monthly
installments and bears interest at 50% of 6 month LIBOR plus
9
<PAGE>
6.26% until June 2003. Thereafter, the interest rate increases to 50% of 6
month LIBOR plus 7.26% until the note matures in June 2023. In a separate
agreement, the seller of the property will reimburse the Partnership for any
interest expense which, in total, exceeds 9.1% during the three year period
subsequent to the purchase.
10
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
September 30, 1995 as compared to December 31, 1994
- ---------------------------------------------------
The Partnership's primary sources of cash during the nine months ended September
30, 1995 were from the operations of its investment properties, distributions
from joint ventures and loan proceeds. The primary uses of cash during the same
period were for cash distributions to partners and the purchase of an interest
in an investment property.
On September 12, 1995, the Partnership and Windsor Park Properties 6, an
affiliated limited partnership, obtained a $1,550,000 loan collateralized by the
Town and Country Estates manufactured home community, a jointly owned property.
The loan is payable in monthly interest only installments bearing interest at 90
day LIBOR plus 2.95%, and is due in September 2002.
On September 14, 1995, the Partnership obtained a $1,097,000 loan collateralized
by the Plantation and Lakeside manufactured home communities. The loan is
payable in monthly interest only installments bearing interest at 90 day LIBOR
plus 2.95% and is due in September 2002. The Partnership incurred loan costs of
$61,100.
On September 20, 1995, the Partnership purchased a 26% interest in Rancho
Margate manufactured home community located in Margate, Florida. The remaining
interests in the property were acquired by Windsor Park Properties 4 and Windsor
Park Properties 6, both California limited partnerships which have the same
General Partners as the Partnership. The Partnership's cost of its 26% interest
was $754,400. In connection with the purchase, the Partnership, Windsor Park
Properties 4 and Windsor Park Properties 6 assumed a $3,737,100 loan,
collateralized by the property. The loan is payable in monthly installments and
bears interest at 50% of 6 month LIBOR plus 6.26% until June 2003. Thereafter,
the interest rate increases to 50% of 6 month LIBOR plus 7.26% until the note
matures in July 2023. In a separate agreement, the seller of the property will
reimburse the Partnership for any interest expense which, in total, exceeds 9.1%
during the three year period subsequent to the purchase.
On October 11, 1995, the Partnership purchased a 26% interest in the Winter
Haven manufactured home community located in Winter Haven, Florida. The
remaining interests in the property were acquired by Windsor Park Properties 4
and Windsor Park Properties 6, both California limited partnerships which have
the same General Partners as the Partnership. The Partnership's cost of its 26%
interest was approximately $501,200. In connection with the purchase, the
Partnership, Windsor Park Properties 4 and Windsor Park Properties 6 assumed a
$1,641,600 loan, collateralized by the property. The loan is payable in monthly
installments and bears interest at 50% of 6 month LIBOR plus 6.26% until June
2003. Thereafter, the interest rate increases to 50% of 6 month LIBOR plus
7.26% until the note matures in July 2023. In a separate agreement, the seller
of the property will reimburse the Partnership for any interest expense which,
in total, exceeds 9.1% during the three year period subsequent to the purchase.
No further financings or investment property acquisitions are planned by the
General Partners.
The future sources of cash for the Partnership will be provided from property
operations and cash reserves. The future uses of cash will be for Partnership
administration, capital expenditures, debt
11
<PAGE>
service and distributions to partners. 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 September 30, 1995 as compared to three months ended
- -----------------------------------------------------------------------
September 30, 1994
- ------------------
The Partnership realized net income of $15,500 and $8,100 for the three months
ended September 30, 1995 and 1994, respectively. Net income per limited
partnership unit was $0.07 in 1995 and $0.04 in 1994.
Rent and utilities revenues remained essentially level at $107,100 in 1994
compared to $104,400 in 1995. The overall occupancy of the Partnership's two
wholly-owned properties decreased from 80% at September 30, 1994 to 75% at
September 30, 1995. Offsetting the decrease in overall occupancy were $10 and
$5 per month rent increases implemented at both properties effective April 1994
and April 1995, respectively.
Equity in earnings of joint ventures, which reflects the Partnership's share of
the net income of the Town and Country Estates and Rancho Margate manufactured
home communities, increased from a $2,000 loss in 1994 to $19,000 income in
1995. These results are not directly comparable as the interest in Rancho
Margate was purchased in September 1995. The increase is due to the purchase of
Rancho Margate as well as improved results at Town and Country. Town and
Country increased occupancy from 95% at September 30, 1994 to 98% at September
30, 1995, and a $12 per month rent increase was implemented in May 1995. In
addition, promotional expenses are lower in 1995 as the park was essentially
full at the end of 1994.
The Partnership incurred interest expense of $5,300 in 1995, due to the loan
obtained in September 1995. No interest expense was incurred in 1994.
Nine months ended September 30, 1995 as compared to nine months ended September
- -------------------------------------------------------------------------------
30, 1994
- --------
The Partnership realized net income of $70,900 ($0.29 per limited partnership
unit) for the nine months ended September 30, 1995 as compared to a net loss of
$10,600 ($0.04 per limited partnership unit) for the comparable period in 1994.
Equity in earnings of joint ventures, which reflects the Partnership's share of
the net income of the Town and Country Estates and Rancho Margate manufactured
home communities, increased from $5,700 in 1994 to $48,200 in 1995 for the
reasons discussed previously.
Property operating costs decreased from $179,100 in 1994 to $171,300 in 1995.
The decrease is due to higher wages, and repairs and maintenance expenses,
offset by lower losses on the sales of mobile homes at Plantation Estates.
General and administrative expense decreased from $101,200 in 1994 to $65,800 in
1995 due mainly to a $23,000 tax imposed by the State of Michigan in 1994
relating to the wind-up of the Partnership's business in that state.
The Partnership incurred interest expense of $5,300 in 1995, due to the loan
obtained in September 1995. No interest expense was incurred in 1994.
12
<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
1) A Form 8-K (dated October 2, 1995) was filed with regards to
the Partnership's acquisition of a 26% interest in the
Rancho Margate manufactured home community located in
Margate, Florida.
The item reported in this current report was Item 2
(acquisition or disposition of assets).
2) A Form 8-K/A (dated October 25, 1995) was filed with regards
to the Partnership's acquisitions of 26% interests in both
the Rancho Margate and Winter Haven manufactured home
communities located in Margate, Florida and Winter Haven,
Florida, respectively.
The items reported in this current report were Item 2
(acquisition or disposition of assets) and Item 7 (financial
statements, proforma financial information and exhibits).
A summary of the financial information included in the
report follows:
a) Financial Statements and Proforma Financial Information
of Rancho Margate Manufactured Home Community.
b) Financial Statements and Proforma Financial Information
of Winter Haven Manufactured Home Community.
c) Proforma Financial Information of Windsor Park
Properties 5.
13
<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 5,
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: November 6, 1995
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 5 AT SEPTEMBER 30, 1995 AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE NINE MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 1,087,700
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,567,300
<DEPRECIATION> 723,500
<TOTAL-ASSETS> 5,769,900
<CURRENT-LIABILITIES> 0
<BONDS> 1,097,000
<COMMON> 0
0
0
<OTHER-SE> 4,585,200<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5,769,900
<SALES> 0
<TOTAL-REVENUES> 391,100
<CGS> 0
<TOTAL-COSTS> 171,300
<OTHER-EXPENSES> 143,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,300
<INCOME-PRETAX> 70,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 70,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,900
<EPS-PRIMARY> 0.29<F2>
<EPS-DILUTED> 0
<FN>
<F1>Limited and general partners equity.
<F2>Net income per limited partnership unit.
</FN>
</TABLE>
