<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
- ----------------- ---------------
March 31, 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>
INDEX
PART I. FINANCIAL INFORMATION PAGE REFERENCE
Balance Sheets at March 31, 1996 and
December 31, 1995 2
Statements of Operations for the three month
periods ended March 31, 1996 and 1995 3
Statements of Cash Flows for the three month
periods ended March 31, 1996 and 1995 4
Notes to Financial Statements 5-13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 14-15
PART II. OTHER INFORMATION 16
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Cash $ 62,000 $ 26,000
Accounts receivable 88,000 80,000
Tower Park Marina, net 2,459,000 2,529,000
Marina facilities and other related
assets to be abandoned, net 2,191,000 2,750,000
Other assets, net 320,000 115,000
----------- -----------
$ 5,120,000 $ 5,500,000
----------- -----------
----------- -----------
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable and accrued expenses $ 1,115,000 $ 848,000
Accounts payable and other liabilities
related to marinas to be abandoned 974,000 1,034,000
Interest payable 1,513,000 1,328,000
Advances from affiliates 1,426,000 1,208,000
Deferred rentals 91,000 111,000
Notes payable 6,729,000 6,729,000
Notes payable related to marinas to
be abandoned 2,000,000 2,557,000
Commitments and contingencies - -
Partners' deficit:
Limited partners' deficit, $5,000
per unit, 4,508 units authorized, issued
and outstanding (7,780,000) (7,371,000)
Less deferred contributions (76,000) (76,000)
----------- -----------
(7,856,000) (7,447,000)
General partners' deficit (872,000) (868,000)
----------- -----------
Total partners' deficit (8,728,000) (8,315,000)
----------- -----------
$ 5,120,000 $ 5,500,000
----------- -----------
----------- -----------
</TABLE>
See accompanying notes.
-2-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the three month periods ended March 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Slip rentals $ 293,000 $ 312,000
RV Park 112,000 121,000
Lease income 58,000 57,000
Restaurant and retail 165,000 -
Other income 25,000 24,000
---------- ----------
653,000 514,000
---------- ----------
Expenses:
Cost of operations 690,000 539,000
Interest expense 252,000 262,000
Depreciation and amortization 88,000 231,000
Management fees paid to an affiliate 36,000 31,000
---------- ----------
1,066,000 1,063,000
---------- ----------
Net loss $ (413,000) $ (549,000)
---------- ----------
---------- ----------
Allocation of net loss:
Limited Partners' $ (409,000) $ (544,000)
General Partners' (4,000) (5,000)
---------- ----------
$ (413,000) $ (549,000)
---------- ----------
---------- ----------
Limited Partners' net loss
per unit $ (90.73) $ (120.67)
---------- ----------
---------- ----------
</TABLE>
See accompanying notes.
-3-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
STATEMENTS OF CASH FLOWS
For the three month periods ended March 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(413,000) $(549,000)
Adjustments to reconcile net loss to net cash
(used for) provided by operating activities:
Depreciation and amortization 88,000 231,000
(Increase) decrease in accounts receivable (8,000) 14,000
(Increase) decrease in other assets (205,000) 75,000
Increase in accounts payable
and accrued expenses 267,000 196,000
Increase in interest payable, net 185,000 214,000
Decrease in deferred rentals (20,000) (15,000)
--------- ----------
Net cash (used for) provided by operating activities (106,000) 166,000
--------- ----------
Net cash flow used for investing activities:
Construction in progress and improvements
to marina facilities (76,000) (81,000)
--------- ----------
Cash flows from financing activities:
Payments on notes payable - (9,000)
Advances from affiliates, net 218,000 (71,000)
--------- ----------
Net cash provided by (used for) financing activities 218,000 (80,000)
--------- ----------
Net increase in cash 36,000 5,000
Cash at the beginning of period 26,000 314,000
--------- ----------
Cash at the end of period $ 62,000 $ 319,000
--------- ----------
--------- ----------
</TABLE>
See accompanying notes.
-4-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
DESCRIPTION OF THE PARTNERSHIP
PS Marinas 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 March 31, 1996 the Partnership owned three properties, Tower Park
Marina, ThunderBoat Marina and Banyan Bay 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 has decided to allow the lender to
foreclose on the ThunderBoat and Banyan Bay Marinas. The foreclosure is
expected to occur in 1996.
As a result of the above, a net realizable value reserve of $6,851,000
(including a reserve for miscellaneous assets of $135,000) was established
at December 31, 1995 and all the assets and liabilities associated with
these properties were reclassified on the March 31, 1996 and December 31,
1995 Balance Sheet.
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.
-5-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
NET REALIZABLE VALUE RESERVE (CONTINUED)
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%.
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.
-6-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
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:
<TABLE>
<CAPTION>
Asset Category Depreciable Life
-------------- ----------------
<S> <C>
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
</TABLE>
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.
-7-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 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 $1,000 and $2,000 for the three months ended March
31, 1996 and 1995, respectively. Marina facilities at March 31, 1996 and
December 31, 1995 were comprised of the following:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Land $ 6,965,000 $ 7,244,000
Buildings 4,141,000 4,849,000
Improvements 3,518,000 3,647,000
Floating docks 3,085,000 3,085,000
Fixed docks 186,000 186,000
Dry storage racks 843,000 843,000
Furniture, fixtures and equipment 1,677,000 1,805,000
Leasehold interest 941,000 941,000
Construction in progress 13,000 -
----------- -----------
21,369,000 22,600,000
Less accumulated depreciation
and amortization (7,833,000) (8,000,000)
----------- -----------
13,536,000 14,600,000
Other assets related to marinas
to be abandoned 114,000 135,000
Net realizable value reserve (9,000,000) (9,456,000)
----------- -----------
$ 4,650,000 $ 5,279,000
----------- -----------
----------- -----------
</TABLE>
As of March 31, 1996, Tower Park Marina, located in the Sacramento - San
Joaquin Delta near Sacramento, California, had a cost of $9,886,000,
accumulated depreciation of $5,234,000 and a net realizable value reserve
of $2,193,000.
The marina facilities to be abandoned consist of ThunderBoat Marina
($7,357,000), located in Dania, Florida near Fort Lauderdale and Banyan Bay
Marina ($4,126,000) also located in Dania, Florida. The Chandlers Landing
Yacht Club was sold at a trustee foreclosure sale on February 6, 1996 (see
Note 3) and due to the continued operating losses at Thunderboat and Banyan
Bay marinas the Partnership has decided to allow the lender to foreclose on
these properties (see Note 3).
-8-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 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 March 31, 1996 and December 31, 1995 consist of the
following:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
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 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 14,000 99,000
---------- ----------
$8,729,000 $9,385,000
---------- ----------
---------- ----------
</TABLE>
-9-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
3. NOTES PAYABLE (CONTINUED)
At March 31, 1996 future principal payments are as follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1996 $8,718,000
1997 4,000
1998 4,000
1999 3,000
----------
$8,729,000
----------
----------
</TABLE>
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.
The Partnership is currently negotiating the terms on which the option
agreement will be extended.
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 has decided to allow the Lender to foreclose on the properties.
As such, no additional interest was accrued on this loan during 1996.
-10-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 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 three months ended March 31, 1996 and 1995 were
$36,000 and $31,000, 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 March 31, 1996). Total
interest accrued to Westrec for the three months ended March 31, 1996 and
1995 was $24,000 and $19,000, 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.
-11-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 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.
-12-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 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
$10,000 and $11,000, respectively, for the three months ended March 31, 1996
and 1995.
Annual minimum lease payments are as follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1996 $ 3,000
1997 5,000
1998 5,000
-------
$13,000
-------
-------
</TABLE>
6. PROFORMA INFORMATION
As discussed in Note 3, the Partnership has decided to allow the lender to
foreclose on ThunderBoat Marina and Banyan Bay Marina. As also discussed
in Note 3, the Partnership's Chandlers Landing Yacht Club was sold at a
trustee foreclosure sale on February 6, 1996. Below is proforma
information for the Partnership, excluding the operations of ThunderBoat
Marina, Banyan Bay Marina and Chandlers Landing Yacht Club, for the three
months ended March 31, 1996, and 1995.
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Revenues $ 512,000 $ 360,000
Expenses 913,000 714,000
--------- ---------
Net loss $(401,000) $(354,000)
--------- ---------
--------- ---------
</TABLE>
-13-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
March 31, 1996
(Unaudited)
The Partnership's operations for the three months ended March 31, 1996
consist of Tower Park Marina in the Sacramento - San Joaquin Delta near
Sacramento, California, and ThunderBoat Marina in Dania, Florida. The
Partnership also owns Banyan Bay Marina in Dania, Florida, however, this
property remains closed due to the continued availability of space at the
Partnership's ThunderBoat Marina, which is near Banyan Bay. As of March 31,
1996, the marinas had the following occupancies:
<TABLE>
<CAPTION>
Tower Park Marina ThunderBoat Marina
Spaces % Spaces %
Available Occupied Available Occupied
----------------------- -----------------------
<S> <C> <C> <C> <C>
Wet slips 236(1) 82.2% 30 30.0%
Dry storage 162 60.5% 416 60.3%
RV Park 132 79.5%
</TABLE>
(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 three months ended March 31, 1996,
revenues for Tower Park Marina were $531,000 compared to $373,000 for the
same period a year ago. The increase is due to restaurant and retail
revenue of $165,000, offset by an $8,000 decline in slip rental income.
Overall, the property's net operating deficit increased $52,000 to $66,000.
The increase is primarily due to a loss of $30,000 being incurred on the
restaurant and retail operations and a $12,000 increase in maintenance
costs. The first quarter of the year is the slowest for the restaurant and
retail operations and they are expected to be profitable for the balance of
the year.
Revenues and operating cash flow at ThunderBoat Marina declined with
revenues decreasing $14,000 to $146,000 for the three months ended March
31, 1996, net operating income declined $16,000 to $8,000. The declines
are the result of the increasing deferred maintenance needed at the
property.
The Partnership's net loss of $413,000 for the three months ended March 31,
1996 includes $88,000 of depreciation and amortization, a non-cash item, a
decrease of $7,000 in cash flow over the same period of a year ago.
-14-
<PAGE>
PS MARINA INVESTORS I,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
March 31, 1996
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES
Since its inception in 1988 the Partnership 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 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.
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.
No payments have been made on the note payable 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
("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 Partnership 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, and the Partnership is
currently negotiating the terms on which the agreement will be extended.
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.
-15-
<PAGE>
PS MARINA INVESTORS I
a California Limited Partnership
PART II. OTHER INFORMATION
March 31, 1996
(Unaudited)
ITEMS 1 through 5 are inapplicable.
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits - not applicable
b) Report of Form 8-K dated February 15, 1996 was filed on March 4, 1996
and disclosed the intent of the Registrant to allow the lender on
ThunderBoat Marina and Banyan Bay Marina to foreclose on the properties.
See Note 6 for proforma information for the three months ended March 31,
1996 and 1995.
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: May 9, 1996
PS MARINA INVESTORS I,
a California Limited Partnership
BY: PS Marina Investors, Inc.
General Partner
BY: /s/ Jeffrey K. Ellis
--------------------------------
Jeffrey K. Ellis
Vice President
-16-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 62,000
<SECURITIES> 0
<RECEIVABLES> 88,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 12,483,000
<DEPRECIATION> 7,833,000
<TOTAL-ASSETS> 5,120,000
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 8,729,000
0
0
<COMMON> 0
<OTHER-SE> (8,728,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,120,000
<SALES> 0
<TOTAL-REVENUES> 653,000
<CGS> 0
<TOTAL-COSTS> 690,000
<OTHER-EXPENSES> 124,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 252,000
<INCOME-PRETAX> (413,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (413,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (413,000)
<EPS-PRIMARY> (90.73)
<EPS-DILUTED> (90.73)
<FN>
<F1>Partnership has an unclassified balance sheet
</FN>
</TABLE>
