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FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 period ended June 30, 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: 33-18089-A
HICKORY HILLS, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1336904
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
One Belle Meade Place, 4400 Harding Road, Suite 500, Nashville,
Tennessee 37205
(Address of principal executive office) (Zip Code)
(615) 292-1040
(Registrant's telephone number, including area code)
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 at least the past 90 days.
YES X NO ___
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HICKORY HILLS, LTD.
(A Tennessee Limited Partnership)
FINANCIAL STATEMENTS
For The Three and Six Months Ended June 30, 1998 and 1997
INDEX
Financial Statements:
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
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<TABLE>
HICKORY HILLS, LTD.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1998 1997
------------- -------------
<S> <C> <C>
ASSETS
CASH $ 111,326 $ 180,308
Restricted Cash 170,735 167,859
LAND & IMPROVEMENTS HELD
FOR INVESTMENT 1,710,688 2,071,767
OTHER ASSETS 280 280
Total Assets $1,993,029 $2,420,214
========= ==========
LIABILITIES AND PARTNERS' DEFICIT
ACCRUED INTEREST PAYABLE $ 631,489 $ 831,855
NOTE PAYABLE
TO AFFILIATE 3,454,300 3,454,300
OTHER ACCRUED EXPENSES 102,475 110,122
TOTAL LIABILITIES 4,188,264 4,396,277
PARTNERS' DEFICIT:
Limited Partners (1,800
units outstanding) (2,195,335) (1,976,163)
General Partner 100 100
Total partners' deficit (2,195,235) (1,976,063)
Total Liabilities &
Partners' Deficit $ 1,993,029 $ 2,420,214
=========== ===========
<FN>
See notes to financial statements.
/TABLE
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<TABLE>
HICKORY HILLS, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Quarter to Date Year to Date
Ending June 30,
-------------------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
REVENUE:
Land Sales
Sales of Land &
Improvements $ - 235,000 $432,650 436,000
Cost of Land
& Improvements Sold - (146,490) (399,049) (280,376)
Closing Costs - (15,284) (43,900) (28,862)
Gain(Loss) on Sale
of Land - 73,226 (10,299) 126,762
Interest Income 1,137 6,849 6,885 8,631
Total Revenue 1,137 80,075 (3,414) 135,393
EXPENSES:
Insurance 625 - 625 -
Management Fees 750 750 1,500 1,500
Legal & Accounting Fees 4,282 3,145 11,993 12,270
Administrative Expenses 1,729 1,492 4,684 3,658
Maintenance Fees - 14,355 22,322 19,031
Interest Expense 87,317 87,317 174,634 174,634
Total Expenses 94,703 107,059 215,758 211,093
NET LOSS $ (93,566) $(26,984) $(219,172) $(75,700)
<FN>
See notes to financial statements
/TABLE
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<TABLE>
HICKORY HILLS, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Year-to-date
JUNE 30,
__________________________
1998 1997
____ ____
<S> <C> <C>
Cash Flows from
Operating Activities:
Net Loss $(219,172) $ (75,700)
Adjustments to reconcile
Net Loss to Net Cash used
in Operating Activities:
(Increase) decrease in
Restricted Cash (2,876) 95,163
Cost of Sales of Land &
Improvements 399,049 280,376
Cost of Land & Improvements
Held for Investment (37,970) (142,704)
Increase in Accrued
Interest Payable (200,366) (170,366)
Decrease in Accrued
Property Taxes - (10,635)
Decrease in other
accrued Expenses (7,647) (16,712)
Net Cash used in
Operating Activities (68,982) (40,578)
Net decrease in Cash (68,982) (40,578)
CASH AT JANUARY 1, 180,308 142,345
CASH AT JUNE 30, $ 111,326 $ 101,767
Supplemental Disclosures of
Cash Flow Information:
Cash paid during the year
for interest $ 375,000 $ 345,000
======== ========
<FN>
See notes to financial statements.
/TABLE
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HICKORY HILLS, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
A.ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include
all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the financial statements and notes thereto included
in the Partnership's Form 10-K for the year ended December 31, 1997.
In the opinion of management, such financial statements include all
adjustments, consisting only of normal recurring adjustments,
necessary to summarize fairly the Partnership's financial position
and results of operations. The results of operations for the six month
period ended June 30, 1998 may not be indicative of the results that
may be expected for the year ending December 31,1998.
B.RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved
in managing the Partnership's operations. Compensation earned for
these services in the first six months were as follows:
<TABLE>
<CAPTION> 1998 1997
<S> <C> <C>
Management Fees $ 1,500 $ 1,500
Real Estate Brokerage Commission 16,556 13,080
Accounting Fees 1,300 1,300
</TABLE>
C. COMPREHENSIVE INCOME
Effective January 1, 1998, the Partnership adopted Statement of
Financial Accounting Standards (SFAS) No. 130. Reporting Comprehensive
Income, SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements and requires that all components of comprehensive
income be reported in a financial statement that is displayed with the
same prominence as other financial statements. Comprehensive income is
defined as the change in equity of a business enterprise, during a
period, associated with transactions and other events and circumstances
from non-owner sources. it includes all changes in equity during a
period except those resulting from investments by owners and
distributions to owners. During the three and six month periods ended
June 30, 1998 and 1997, the Partnership had no components of
comprehensive income. Accordingly, comprehensive income for each of the
periods ws the same as net loss.
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Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
During 1998, the Registrant sold one lakefront lot at the Hendersonville
Property for $75,000 and 71.53 acres of the Nashville Property for gross
proceeds of $357,650. From these sales proceeds, $375,000 in accrued
interest was paid to the Lender. The remaining proceeds were retained
to cover operating expenses. Overall operations of the Registrant are
comparable to prior quarters, except for the increase in land
maintenance fees which include architect and engineering fees. In
January 1998, the Registrant paid approximately $19,000 in engineering
fees related to sales and development done in 1997.
During the first six months of 1997, the Registrant sold 16 lots at the
Hendersonville Property for $23,500 per lot and one lake front lot for
$60,000. From these sales proceeds, $345,000 in accrued interest was
paid to the Lender. The remaining proceeds were retained to cover
operating expenses.
The General Partner continues to monitor the impact of year 2000 issues
on our computer systems and applications and has developed a remediation
plan. We expect the cost of upgrading computers and software to be
immaterial to the Registrant.
FINANCIAL CONDITION
LIQUIDITY
As of July 31, 1998 the Registrant had approximately $41,981 in cash
reserves. These funds are expected to be sufficient through 1998.
The Note payable to Affiliate comes due on December 31, 1998. The
General Partner plans to negotiate an extension of the loan term. The
General Partner does not expect the Registrant to have the liquidity to
retire the debt in full on December 31, 1998. Because the Registrant
and the Lender share the same general partner, it may be necessary to
appoint an independent party to represent the general partner for the
Registrant, the Lender or both during the loan negotiations. However,
if the loan term is not extended, the lack of payment would constitute
a default on the loan agreement. In such an event the Lender is
required to foreclose the loan. Currently, the Partnership has not
foreclosed or accelerated the amounts due under the loan agreement.
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PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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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.
HICKORY HILLS, LTD.
By: 222 HICKORY, LTD.
General Partner
By:222 PARTNERS, INC.
General Partner
Date: August 14, 1998 By:/s/ Steven D. Ezell
President
Date: August 14, 1998 By:/s/ Michael A. Hartley
Secretary/Treasurer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 111326
<SECURITIES> 0
<RECEIVABLES> 0
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<CURRENT-LIABILITIES> 102475
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 1993029
<SALES> 432650
<TOTAL-REVENUES> (3414)
<CGS> 399049
<TOTAL-COSTS> 442949
<OTHER-EXPENSES> 41124
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<INTEREST-EXPENSE> 174634
<INCOME-PRETAX> (219172)
<INCOME-TAX> 0
<INCOME-CONTINUING> (219172)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (219172)
<EPS-PRIMARY> (121.76)
<EPS-DILUTED> (121.76)
</TABLE>
