<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
-----------------------------------------
For Quarter Ended Commission File
- ----------------- ---------------
September 30, 1996 Number 0-17672
PS MARINA INVESTORS I,
A California Limited Partnership
--------------------------------
(Exact name of registrant as specified in its charter)
California 95-4137996
- ----------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
16633 Ventura Boulevard, 6th Floor, Encino, California 91436
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's phone number, including area code: (818) 907-0400
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.
X
--------- ---------
Yes No
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
BALANCE SHEETS
September 30, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
- ------
Cash $ 57,000 $ 26,000
Accounts receivable 153,000 80,000
Tower Park Marina, net 2,311,000 2,529,000
Marina facilities and other related
assets to be abandoned, net - 2,750,000
Other assets, net 254,000 115,000
------------ ------------
$ 2,775,000 $ 5,500,000
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Accounts payable and accrued expenses $ 1,035,000 $ 848,000
Accounts payable and other liabilities
related to marinas to be abandoned 100,000 1,034,000
Interest payable 1,426,000 1,328,000
Advances from affiliates 1,193,000 1,208,000
Deferred rentals 218,000 111,000
Notes payable 6,735,000 6,729,000
Notes payable related to marinas to
be abandoned - 2,557,000
Commitments and contingencies - -
Partners' deficit:
Limited partners' deficit, $5,000
per unit, 4,508 units authorized, issued
and outstanding (6,992,000) (7,371,000)
Less deferred contributions (76,000) (76,000)
------------ ------------
(7,068,000) (7,447,000)
General partners' deficit (864,000) (868,000)
------------ ------------
Total partners' deficit (7,932,000) (8,315,000)
------------ ------------
$ 2,775,000 $ 5,500,000
------------ ------------
------------ ------------
See accompanying notes.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the three month periods ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------- ---------
Revenues:
Slip rentals $ 347,000 $ 345,000
RV Park 208,000 225,000
Lease income 70,000 72,000
Restaurant and retail 506,000 -
Other income 29,000 59,000
--------- ---------
1,160,000 701,000
--------- ---------
Expenses:
Cost of operations 924,000 536,000
Interest expense 58,000 283,000
Depreciation and amortization 88,000 230,000
Management fees paid to an affiliate 60,000 44,000
--------- ---------
1,130,000 1,093,000
--------- ---------
Net income (loss) before net realizable value
adjustment 30,000 (392,000)
Net realizable value adjustment 638,000 -
--------- ---------
Net income (loss) $ 668,000 $ (392,000)
--------- ---------
--------- ---------
Allocation of net income (loss):
Limited Partners' $ 661,000 $ (388,000)
General Partners' 7,000 (4,000)
--------- ---------
$ 668,000 $ (392,000)
--------- ---------
--------- ---------
Limited Partners' net income (loss)
per unit $ 146.63 $ (86.07)
--------- ---------
--------- ---------
See accompanying notes.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the nine month periods ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------- ---------
Revenues:
Slip rentals $ 951,000 $ 971,000
RV Park 498,000 528,000
Lease income 190,000 194,000
Restaurant and retail 1,048,000 -
Other income 82,000 121,000
--------- ---------
2,769,000 1,814,000
--------- ---------
Expenses:
Cost of operations 2,409,000 1,649,000
Interest expense 206,000 810,000
Depreciation and amortization 263,000 691,000
Management fees paid to an affiliate 146,000 112,000
--------- ---------
3,024,000 3,262,000
--------- ---------
Net loss before net realizable value adjustment (255,000) (1,448,000)
Net realizable value adjustment 638,000 (1,650,000)
--------- ---------
Net income (loss) $ 383,000 $ (3,098,000)
--------- ---------
--------- ---------
Allocation of net income (loss):
Limited Partners' $ 379,000 $ (3,067,000)
General Partners' 4,000 (31,000)
--------- ---------
$ 383,000 $ (3,098,000)
--------- ---------
--------- ---------
Limited Partners' net income (loss)
per unit $ 84.07 $ (680.35)
--------- ---------
--------- ---------
See accompanying notes.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
STATEMENTS OF CASH FLOWS
For the nine month periods ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------- ---------
Cash flows from operating activities:
Net income (loss) $ 383,000 $(3,098,000)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 263,000 691,000
Change in net realizable value reserve
and other assets to be abandoned, net (741,000) 1,639,000
Increase in accounts receivable (73,000) (14,000)
(Increase) decrease in other assets (139,000) 86,000
Increase in accounts payable
and accrued expenses 187,000 249,000
Increase in interest payable, net 98,000 625,000
Decrease in deferred rentals 107,000 (2,000)
--------- ---------
Net cash provided by operating activities 85,000 176,000
--------- ---------
Cash flow used for investing activities:
Improvements to marina facilities to be
abandoned - (69,000)
Improvements to Tower Park Marina (45,000) (108,000)
--------- ---------
Net cash used for investing activities (45,000) (177,000)
--------- ---------
Cash flows from financing activities:
Increase in (repayments of) notes payable 6,000 (84,000)
Advances from affiliates, net (15,000) (98,000)
--------- ---------
Net cash used for financing activities (9,000) (182,000)
--------- ---------
Net increase (decrease) in cash 31,000 (183,000)
Cash at the beginning of period 26,000 314,000
--------- ---------
Cash at the end of period $ 57,000 $ 131,000
--------- ---------
--------- ---------
See accompanying notes.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
DESCRIPTION OF THE PARTNERSHIP
PS Marina Investors I, a California Limited Partnership (the
"Partnership"), was organized under the California Revised Limited
Partnership Act, pursuant to a Certificate of Limited Partnership filed on
January 6, 1988 to acquire, own, and operate and to a lesser extent,
develop marina facilities.
The General Partners in the Partnership are PS Marina Investors, Inc., a
wholly-owned subsidiary of Westrec Properties, Inc. ("Westrec"), and B.
Wayne Hughes, a shareholder of Westrec until June 1990.
The Partnership was formed to sell a maximum of 12,000 units of limited
partnership interest at $5,000 per unit ($60,000,000). The General
Partners have contributed a total of $1,000. On November 27, 1989, the
Partnership's offering was terminated with 4,508 units issued, resulting in
$22,540,000 of limited partner funds being raised (before commission
discount of $3,000 granted to an investor). Half of each Limited Partner's
total capital contribution was deferred. The final installment was due on
August 1, 1990, and $76,000 of such deferrals remain outstanding.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from these estimates.
NET REALIZABLE VALUE RESERVE
As of September 30, 1996 the Partnership owns Tower Park Marina. Because
of continued operating cash flow deficits, the Partnership allowed the
Chandlers Landing Yacht Club to be sold at a trustee foreclosure sale on
February 6, 1996. In addition, the Partnership allowed the lender on the
ThunderBoat and Banyan Bay Marinas to foreclose on these properties on
September 30, 1996.
As a result of the above, a net realizable value reserve of $6,851,000 was
established at December 31, 1995 and all the assets and liabilities
associated with these properties were reclassified on the December 31, 1995
Balance Sheet.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
NET REALIZABLE VALUE RESERVE (CONTINUED)
In addition, a net realizable value reserve of $2,193,000 was established
at December 31, 1995 to reduce the carrying value of Tower Park Marina to
its estimated realizable value.
The Partnership adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" effective January 1,
1996. In accordance with this pronouncement, the Partnership records
impairment losses on long-lived assets held and used in operations when
indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than their related
carrying amounts. The adoption of SFAS No. 121 had no impact on the
Partnership's financial position and results of operations. Additionally,
no provision was made for depreciation of the cost of marina facilities and
other related assets to be abandoned.
OFFERING AND ORGANIZATION COSTS
Costs incurred in preparing Partnership documents, prospectuses and any
other sales literature, costs incurred in qualifying the units for sale
under federal and state securities laws and costs incurred in marketing the
units have been charged to the limited partners' equity to the extent the
total does not exceed 5% of the gross proceeds of the offering. The amount
by which these organization and registration costs exceeded 5% of the gross
proceeds of the offering were borne by PS Marina Investors, Inc.
CASH DISTRIBUTIONS
Prior to December 1994, the General Partners had an interest in Cash Flow
from Operations (as defined) and Cash from Sales or Refinancings (as
defined) based on the timing and amount of prior distributions. No
distributions have been made since 1991.
In December 1994, in connection with the settlement of a lawsuit brought by
33 limited partners of the Partnership, the General Partners agreed to
reduce their interest in all future cash distributions from any source to
1%.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
ALLOCATIONS OF NET INCOME OR LOSS
As set forth in the Partnership Agreement, net loss shall be allocated 99%
to the Limited Partners and 1% to the General Partners. Net income shall
generally be allocated to Partners in proportion to their cash
distributions.
EARNINGS PER UNIT
Per unit data is based on the weighted average number of the Limited
Partnership units outstanding during the period, 4,508.
MARINA FACILITIES
Marina facilities are stated at cost to the Partnership less net realizable
value reserves. Depreciation is calculated on a straight-line basis.
Depreciable lives for the major asset categories are as follows:
Asset Category Depreciable Life
-------------- ----------------
Buildings 20 years
Improvements 20 years
Floating docks 7 years
Fixed docks 20 years
Dry storage racks 7 years
Furniture, fixtures and equipment 7 years
Leasehold interest life of lease
TAXES BASED ON INCOME
Taxes based on income are the responsibility of the individual partners and
accordingly, are not reflected in the accompanying financial statements.
-8-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
2. MARINA FACILITIES
Marina facilities include the purchase price of the properties and related
acquisition and closing costs. The Partnership pays an acquisition fee of
6% of the contract purchase price of the marina facilities, plus a
development fee of 6% of the cost of improvements made to the Marina
facilities. Capitalized as a cost of marina facilities were development
fees paid to Westrec of $2,000 and $6,000 for the nine months ended
September 30, 1996 and 1995, respectively. Marina facilities at September
30, 1996 and December 31, 1995 were comprised of the following:
1996 1995
--------- ---------
Land $ 1,040,000 $ 7,244,000
Buildings 2,070,000 4,849,000
Improvements 1,984,000 3,647,000
Floating docks 2,759,000 3,085,000
Fixed docks - 186,000
Dry storage racks - 843,000
Furniture, fixtures and equipment 1,074,000 1,805,000
Leasehold interest 941,000 941,000
Construction in progress 45,000 -
--------- ---------
9,913,000 22,600,000
Less accumulated depreciation
and amortization (5,409,000) (8,000,000)
--------- ---------
4,504,000 14,600,000
Other assets related to marinas
to be abandoned - 135,000
Net realizable value reserve (2,193,000) (9,456,000)
--------- ---------
$ 2,311,000 $ 5,279,000
--------- ---------
--------- ---------
As of September 30, 1996, Tower Park Marina, located in the Sacramento -
San Joaquin Delta near Sacramento, California, had a cost of $9,913,000,
accumulated depreciation of $5,409,000 and a net realizable value reserve
of $2,193,000.
Marina facilities abandoned consist of ThunderBoat Marina ($7,352,000),
located in Dania, Florida near Fort Lauderdale and Banyan Bay Marina
($4,126,000) also located in Dania, Florida which were foreclosed on
September 30, 1996 and the Chandlers Landing Yacht Club, which was sold at
a trustee foreclosure sale on February 6, 1996.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
2. MARINA FACILITIES (CONTINUED)
The Partnership's marinas are not generating satisfactory levels of cash
flows and cash flow projections do not indicate significant improvement in
the near term. These matters raise substantial doubt about the
Partnership's ability to recover the carrying value of its assets and to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Partnership
to continue as a going concern.
3. NOTES PAYABLE
Notes payable at September 30, 1996 and December 31, 1995 consist of the
following:
1996 1995
---------- ----------
Note payable to an individual, bearing
interest at 11% per annum, secured by
deed of trust on Tower Park Marina, due
on April 10, 1996. $ 6,715,000 $ 6,715,000
$2,000,000 revolving line of credit with a
financial institution bearing interest at
the bank's prime rate plus 1% secured by
deeds of trust on ThunderBoat and Banyan
Bay Marinas. - 2,000,000
Note payable to a financial institution
bearing interest at a variable rate secured
by a deed of trust on Chandlers Landing
Marina Yacht Club. - 571,000
Other 20,000 99,000
---------- ----------
$ 6,735,000 $ 9,385,000
---------- ----------
---------- ----------
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
3. NOTES PAYABLE (CONTINUED)
At September 30, 1996 future principal payments are as follows:
Year
----
1996 $ 6,724,000
1997 4,000
1998 4,000
1999 3,000
---------
$ 6,735,000
---------
---------
No payments have been made on the note secured by Tower Park Marina since
September 1991. Throughout 1991, 1992, 1993 and 1994, the Partnership was
involved in various negotiations with the lender, a financial institution,
and its successor, Resolution Trust Corporation ("RTC"), to restructure or
otherwise settle the note. In January 1995, the RTC sold the note as part
of a sales initiative to a third party. The note was immediately sold to
an affiliate of the individual general partner. The Partnership entered
into an option agreement to purchase the note from its current holder for
its cost ($1,700,000) plus carrying costs which expired on April 10, 1996.
On October 1, 1996 the Partnership commenced a solicitation to substitute a
new general partner for the individual general partner. In exchange for
allowing this substitution, the individual general partner has agreed to
extend the option period for the Partnership to purchase the note for three
years from the date the substitution is approved. For the nine months
ended September 30, 1996, interest on the note was accrued at the rate of
8% per annum on the option price of $1,700,000.
In October 1993, the Partnership discontinued making payments on its
$2,000,000 note payable secured by ThunderBoat Marina and Banyan Bay Marina
and, as a result, is currently in default on this note. In September 1994,
the lender initiated an action seeking to foreclose on the marinas. In
January 1995, the Partnership entered into a forbearance agreement in which
the lender agreed to forbear action to foreclose until July 15, 1995 as
long as the Partnership made monthly payments to the lender of $4,000. As
part of the forbearance agreement, the Partnership agreed that if the note
was not paid in full or otherwise acceptably restructured prior to July 15,
1995, the lender would be entitled to a judgment of foreclosure. In July
1995, the Partnership and the lender agreed to extend the forbearance
period until February 15, 1996. The extension required an initial fee of
$30,000 and monthly payments, beginning in September 1995, of $25,000,
which were applied to accrued unpaid interest. In February 1996, the lender
offered to extend the forbearance period if the monthly payments were
increased to $40,000. Due to the continued operating cash flow deficits of
the properties and the inability to sell the Banyan Bay Marina, the
Partnership allowed the lender to foreclose on the properties on September
30, 1996. As such, no additional interest was accrued on this loan since
January 15, 1996, and only the $25,000 paid on January 15, 1996 is included
in interest expense.
-11-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
3. NOTES PAYABLE (CONTINUED)
On October 5, 1995, the loan secured by Chandlers Landing Yacht Club was
sold to President's Square Limited Partnership. On October 13, 1995,
President's Square Limited Partnership notified the Partnership that it was
in default of several provisions of the loan, and demanded that the
defaults be corrected within 30 days or the note would be accelerated and
due immediately. As all the conditions of default could not be corrected,
and after evaluating the current value of the property, the Partnership
decided to allow the property to be sold at a trustee foreclosure sale on
February 6, 1996.
The Partnership's ability to continue as a going concern is dependent upon
the successful resolution of the note secured by Tower Park Marina and
increased cash flow from operations. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability
of the Partnership to continue as a going concern.
4. RELATED PARTY TRANSACTIONS
The Partnership has an agreement with Westrec Marina Management, Inc., an
affiliate of Westrec, to manage the day-to-day operations of the marinas
for a fee equal to 6% of the marinas' monthly gross revenues (as defined).
Management fees for the nine months ended September 30, 1996 and 1995 were
$146,000 and $112,000, respectively.
In connection with funding operating deficits and with the acquisition of
marina facilities, funds have been borrowed from Westrec. These borrowings
accrue interest at the prime rate plus 1% (9.25% at September 30, 1996).
Total interest accrued to Westrec for the nine months ended September 30,
1996 and 1995 was $71,000 and $45,000, respectively.
Through December 31, 1995, the Partnership had a lease agreement with
Marine Ventures Limited ("MVL"), an affiliate of the Corporate General
Partner, for the operation of the restaurant and bar and general store at
Tower Park Marina. Lease payments were based on the level of cash flow
from the businesses. The lease was terminated effective January 1, 1996.
As such, the operations of the Partnership currently reflect the restaurant
and retail operations described above.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
5. COMMITMENTS AND CONTINGENCIES
In September 1994, Mr. Leaman, the prior owner of ThunderBoat and Banyan
Bay Marinas, filed suit alleging that the Partnership had failed to pay him
$1,100,000 of additional compensation relating to the Partnership's
purchase of ThunderBoat and Banyan Bay Marinas. In connection with the
purchase of these properties from Mr. Leaman in 1989, the Partnership
entered into an employment agreement that provided that Mr. Leaman would be
entitled to earn a bonus, payable over three years. The maximum bonus that
Mr. Leaman could have earned was $1,100,000. Mr. Leaman resigned from his
employment in less than one year. Mr. Leaman has alleged that the bonus is
actually just deferred consideration due from his sale of the properties to
the Partnership. The Partnership intends to defend the case vigorously.
In connection with the acquisition of Tower Park Marina, the Partnership
had agreed to pay a bonus price to the seller of the marina if certain
approvals from governmental authorities regarding the development of a
portion of the property were received before February 1, 1993. The amount
of the bonus price was dependent upon the amount of acreage covered by the
approvals, the length of time to receive such approvals, and the out-of-
pocket expenses incurred by the Partnership to receive such approvals.
Depending on these factors, the bonus price could have been as much as
$1,800,000.
A suit that was filed against the Partnership in 1992 by the prior owners
of Tower Park regarding this bonus price was settled in February 1995. In
connection with the Partnership obtaining the full release from all
obligations associated with these bonus price provisions, the Partnership
agreed to pay $50,000.
In October 1992, thirty-three of the Partnership's Limited Partners,
representing 130 of the Partnership's 4,508 Limited Partner units, filed a
complaint against the Partnership, its General Partners and others. The
suit alleged securities fraud, negligent misrepresentation and breach of
fiduciary duty. This matter was settled in December 1994. The terms of
the settlement required: (1) the General Partners to forgive advances
totalling $577,000 previously made to the Partnership, (2) the General
Partners to bear all costs of administering the Partnership for three
years, (3) the General Partners to reduce their interest in future cash
distributions of the Partnership to one percent, and (4) the General
Partners to pay $120,000 to the plaintiff's attorneys in reimbursement of
fees.
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<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
The Partnership operates a portion of Tower Park Marina on approximately 14
acres of waterfront property under a lease with the California State Land
Commission (the "CSLC Lease"). The CSLC Lease expires on December 31,
1998, and provides that it may be renewed for two successive periods for 10
years each. The CSLC Lease provides for an annual rental based on gross
receipts, with a minimum annual rental of $5,000 payable in advance. Rent
expense associated with the CSLC Lease is included in cost of operations
and was $31,000 and $33,000, respectively, for the nine months ended
September 30, 1996 and 1995.
Annual minimum lease payments are as follows:
Year
----
1996 $ 1,000
1997 5,000
1998 5,000
----------
$ 11,000
----------
----------
6. PROFORMA INFORMATION
As discussed in Note 3, the Partnership's Chandlers Landing Yacht Club was
sold at a trustee foreclosure sale on February 6, 1996 and their
ThunderBoat and Banyan Bay Marinas were foreclosed on September 30, 1996.
Below is proforma information for the Partnership, excluding the operations
of ThunderBoat Marina, Banyan Bay Marina and Chandlers Landing Yacht Club,
for the nine months ended September 30, 1996 and 1995.
1996 1995
--------- ---------
Revenues $ 2,325,000 $ 1,178,000
Expenses 2,564,000 2,007,000
--------- ---------
Net loss $ (239,000) $ (829,000)
--------- ---------
--------- ---------
-14-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
September 30, 1996
(Unaudited)
The Registrant's operations for the nine months ended September 30, 1996 consist
of Tower Park Marina in the Sacramento - San Joaquin Delta near Sacramento,
California, and ThunderBoat Marina in Dania, Florida (until September 30, 1996).
The Partnership also owned Banyan Bay Marina in Dania, Florida, however, this
property remained closed due to the continued availability of space at the
Registrant's ThunderBoat Marina, which is near Banyan Bay. As of September 30,
1996, the marinas had the following occupancies:
Tower Park Marina ThunderBoat Marina
Spaces % Spaces %
Available Occupied Available Occupied
--------------------- ---------------------
Wet slips 233(1) 90.6% 30 33.3%
Dry storage 168 86.3% 416 56.7%
RV Park 130 80.8%
(1) non-transient spaces only
Effective January 1, 1996, the Partnership and Tower Park Marina took over the
operations of the restaurant and retail store, which had previously been leased
to an affiliate. For the nine months ended September 30, 1996, revenues for
Tower Park Marina were $2,571,000 compared to $1,527,000 for the same period a
year ago. The increase is primarily due to restaurant and retail revenues of
$1,044,000. Overall, the property's net operating increased to $232,000 from
$184,000. The increase is primarily due to an $87,000 reduction in fees
associated with the court appointed receiver (which was terminated in May 1995),
$137,000 of operating income from the restaurant and retail store, offset by a
$51,000 increase in maintenance and utility costs, $34,000 increase in
management fees and a $32,000 increase in insurance costs.
At ThunderBoat Marina revenues declined $14,000 to $444,000 for the nine months
ended September 30, 1996, while net operating income improved $32,000 to
$68,000.
The Registrant's net loss before net realizable value adjustment of $255,000 for
the nine months ended September 30, 1996 includes $263,000 of depreciation and
amortization, a non-cash item, an improvement of $765,000 in cash flow over the
same period of a year ago.
-15-
<PAGE>
PS MARINA INVESTORS I,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
September 30, 1996
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES
Since its inception in 1988 the Registrant has operated at a deficit. These
deficits have been partially covered by advances from the General Partners and
cash reserves. In addition, the Registrant has discontinued making debt service
payments on substantially all of its notes.
On October 5, 1995, the loan secured by Chandlers Landing Yacht Club was sold to
President's Square Limited Partnership. On October 13, 1995, President's Square
Limited Partnership notified the Registrant that it was in default of several
provisions of the loan, and demanded that the defaults be corrected within 30
days or the note would be accelerated and due immediately. As all the
conditions of default could not be corrected, and after evaluating the current
value of the property, the Registrant has decided to allow the property to be
sold at a trustee foreclosure sale on February 6, 1996.
In October 1993, the Partnership discontinued making payments on the $2,000,000
note payable secured by ThunderBoat Marina and Banyan Bay Marina, and, as a
result, is currently in default on this note. In September 1994, the lender
initiated an action seeking to foreclose on the marinas. In July 1995, the
Partnership entered into a forbearance agreement in which the lender agreed to
forbear action to foreclose until February 15, 1996. The forbearance agreement
required an initial fee of $30,000 and monthly payments, beginning in September
1995, of $25,000, which were applied to accrued unpaid interest. In February
1996, the lender offered to extend the forbearance period if the monthly
payments were increased to $40,000. Due to the continued operating cash flow
deficits of the properties and the inability to sell the Banyan Bay Marina, the
Partnership has decided to allow the lender to foreclose on the properties. On
September 30, 1996 the properties were foreclosed on by the lender.
No payments have been made on the note payable secured by Tower Park Marina
since September 1991. Throughout 1991, 1992, 1993 and 1994, the Registrant was
involved in various negotiations with the lender, a financial institution, and
its successor, Resolution Trust Corporation ("the RTC"), to restructure or
otherwise settle the note. In January 1995, the RTC sold the note as part of a
sales initiative to a third party. The note was immediately sold to an
affiliate of the individual general partner. The Registrant entered into an
option agreement to purchase the note from the affiliate at its cost
($1,700,000) plus carrying costs. The option agreement expired on April 10,
1996. On October 1, 1996 the Registrant commenced a solicitation to substitute
a new general partner for the individual general partner (see Item 4 below). In
exchange for allowing this substitution, the individual general partner has
agreed to extend the option period that the Registrant has to purchase the note
for 3 years from the date the substitution is approved.
-16-
<PAGE>
PS MARINA INVESTORS I,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
September 30, 1996
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Partnership's ability to continue as a going concern is dependent upon the
successful resolution of the note secured by Tower Park Marina and increased
cash flow from operations.
Between 1988 and 1996, the Registrant received advances from affiliates of the
General Partners. These advances were utilized to acquire properties, make
capital improvements to the properties to cover operating deficits, and, to a
lesser extent, make distributions to the partners.
-17-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
PART II. OTHER INFORMATION
September 30, 1996
(Unaudited)
ITEMS 1 through 3 are inapplicable.
ITEM 4. Submission of Matters to a vote of Security Holders
On October 1, 1996 a Solicitation of Consents in Lieu of a Special Meeting of
Unitholders was initiated. The Solicitation is requesting the unitholders
approval to substitute Tower Park Marina Operating Corporation for B. Wayne
Hughes as a general partner of the Registrant and to change the Registrant's
name to Tower Park Marina Investors, L.P.
As of November 7, 1996, 1,628, 254, and 83 votes have been cast for, against or
abstained, respectively. Consents will continue to be accepted until November
30, 1996. The Registrant requires 2,255 favorable votes in order for the
solicitation to be approved.
ITEM 5. Other Information
On September 30, 1996 the Registrant's ThunderBoat Marina and Banyan Bay Marina
were foreclosed on by the lender on the properties. See Note 6 for proforma
information for the nine months ended September 30, 1996 and 1995.
ITEM 6 is inapplicable.
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.
DATED: November 7, 1996
PS MARINA INVESTORS I,
a California Limited Partnership
BY: PS Marina Investors, Inc.
General Partner
BY: Jeffrey K. Ellis
----------------
Jeffrey K. Ellis
Vice President
-18-
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION PAGE REFERENCE
Balance Sheets at September 30, 1996 and
December 31, 1995 2
Statements of Operations for the three month
periods ended September 30, 1996 and 1995 3
Statements of Operations for the nine month
periods ended September 30, 1996 and 1995 4
Statements of Cash Flows for the nine month
periods ended September 30, 1996 and 1995 5
Notes to Financial Statements 6-14
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 15-17
PART II. OTHER INFORMATION 18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 57,000
<SECURITIES> 0
<RECEIVABLES> 153,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 7,720,000
<DEPRECIATION> 5,409,000
<TOTAL-ASSETS> 2,775,000
<CURRENT-LIABILITIES> 1,135,000<F1>
<BONDS> 6,735,000
0
0
<COMMON> 0
<OTHER-SE> (7,932,000)
<TOTAL-LIABILITY-AND-EQUITY> 2,775,000
<SALES> 0
<TOTAL-REVENUES> 2,769,000
<CGS> 0
<TOTAL-COSTS> 2,409,000
<OTHER-EXPENSES> 409,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 206,000
<INCOME-PRETAX> (255,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 638,000
<CHANGES> 0
<NET-INCOME> 383,000
<EPS-PRIMARY> 84.07<F2>
<EPS-DILUTED> 84.07<F2>
<FN>
<F1>PARTNERSHIP HAS AN UNCLASSIFIED BALANCE SHEET
<F2>LIMITED PARTNERS' NET LOSS PER UNIT
</FN>
</TABLE>
