<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, 2000 Number 0-17672
TOWER PARK MARINA INVESTORS, L.P.,
a California Limited Partnership
--------------------------------
(Exact name of registrant as specified in its charter)
California 95-4137996
- ------------------------------- ------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Ientification No.)
16633 Ventura Boulevard, 6/th/ 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 than 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
-----
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE REFERENCE
<S> <C> <C>
Balance Sheets at March 31, 2000 and
December 31, 1999 2
Statements of Operations for the three month
periods ended March 31, 2000 and 1999 3
Statements of Cash Flows for the three month
periods ended March 31, 2000 and 1999 4
Notes to Financial Statements 5-12
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13-14
PART II. OTHER INFORMATION 15
</TABLE>
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Cash $ 46,000 $ 27,000
Accounts receivable 104,000 97,000
Tower Park Marina, net 2,515,000 2,542,000
Other assets, net 487,000 416,000
----------- ----------
$ 3,152,000 $3,082,000
=========== ==========
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Accounts payable and accrued expenses $ 247,000 $ 148,000
Interest payable 17,000 17,000
Payable to affiliates 3,348,000 3,162,000
Deferred rentals 138,000 160,000
Notes payable 2,089,000 2,100,000
Commitments and contingencies - -
----------- ----------
5,839,000 5,587,000
Partners' deficit:
Limited partners' deficit, $50,000
per unit, 4,508 units authorized
issued and outstanding (1,799,000) (1,619,000)
Less deferred contributions (76,000) (76,000)
----------- ----------
(1,875,000) (1,695,000)
General partners' deficit (812,000) (810,000)
----------- -----------
Total partners' deficit (2,687,000) (2,505,000)
----------- -----------
$ 3,152,000 $ 3,082,000
=========== ===========
</TABLE>
See accompanying notes.
-2-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the three month periods ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
Revenues:
Slip rentals $ 161,000 $ 152,000
RV Park 133,000 118,000
Lease income 38,000 45,000
Restaurant 78,000 39,000
Retail 38,000 31,000
Other income 22,000 26,000
--------- ---------
470,000 411,000
--------- ---------
Expenses:
Cost of operations 450,000 385,000
Interest expense 130,000 230,000
Depreciation and amortization 47,000 33,000
Management fees paid to affiliates 25,000 23,000
--------- ---------
652,000 671,000
--------- ---------
Net loss $(182,000) $(260,000)
========= =========
Allocation of net loss:
Limited Partners' $(180,000) $(257,000)
General Partners' (2,000) (3,000)
--------- ---------
$(182,000) $(260,000)
========= =========
Limited Partners' net loss
per unit $ (39.93) $ (57.01)
========= =========
</TABLE>
See accompanying notes.
-3-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
STATEMENTS OF CASH FLOWS
For the three month periods ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(182,000) $(260,000)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 47,000 33,000
(Increase) decrease in accounts receivable (7,000) 18,000
Increase in inventory (25,000) -
Increase in other assets (17,000) (38,000)
Increase (decrease) in accounts payable and
accrued expenses 99,000 (18,000)
Increase in interest payable - 148,000
(Decrease) increase in deferred rentals (22,000) (19,000)
--------- ---------
Net cash used for operating activities (107,000) (136,000)
--------- ---------
Net cash used for investing activities:
Construction in progress and improvements to
Tower Park Marina (13,000) (9,000)
--------- ---------
Cash flows from financing activities:
Repayments of notes payable, net (11,000) (52,000)
Advances from affiliates, net 186,000 176,000
Increase in capitalized financing costs (36,000) -
--------- ---------
Net cash provided by financing activities 139,000 124,000
--------- ---------
Net increase (decrease) in cash 19,000 (21,000)
Cash at the beginning of period 27,000 25,000
--------- ---------
Cash at the end of period $ 46,000 $ 4,000
========= =========
</TABLE>
See accompanying notes.
-4-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAX BASIS
March 31, 2000
(Unaudited)
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
Description of the Partnership
------------------------------
Tower Park Marina Investors L.P., (formerly 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 Westrec Investors, Inc., a
wholly-owned subsidiary of Westrec Properties, Inc. ("Westrec"), and B. Wayne
Hughes, a shareholder of Westrec until September 1990. Effective March 1,
1997, the limited partners approved the substitution of Tower Park Marina
Operating Corporation, a wholly owned subsidiary of Westrec Financial, Inc.,
for Mr. Hughes.
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, 2000 the Partnership owns Tower Park Marina. 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 then estimated net
realizable value. No addition to this reserve has been considered necessary
since the Partnership has determined that, based on current cash flows,
estimated future cash flows will be sufficient to recover the carrying value
of the marina.
-5-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
(continued)
-----------
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 Westrec Investors, Inc.
Inventory
---------
Inventory is stated at the lower of cost or market. Cost is determined
principally under the average cost method.
Cash Distributions
------------------
The General Partners have an interest in Cash Flow from Operations (as
defined) and Cash from Sales or Refinancings (as defined). No distributions
have been made since 1991.
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.
-6-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
(continued)
-----------
Tower Park Marina
-----------------
Tower Park Marina is stated at cost to the Partnership less net realizable
value reserve. 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
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.
Segment Reporting
-----------------
Effective January 1, 1998, the Partnership adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 131
"Disclosures about Segments of an Enterprise and Related Information".
Statement No. 131 establishes standards for the way public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information
about operating segments in interim financial reports. Statement No. 131
also establishes standards for related disclosures about products and
services, geographic areas, and major customers. As management views the
Partnership as operating in a single business segment as described in Note 1,
the adoption of Statement No. 131 did not result in additional disclosure of
segment information.
-7-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
2. Tower Park Marina
-----------------
Tower Park Marina includes the purchase price of the property and related
acquisition and closing costs. The Partnership paid an acquisition fee of 6%
of the contract purchase price of the property, plus a development fee of 6%
of the cost of improvements made. Capitalized as a cost of Tower Park Marina
were development fees paid to Westrec of $1,000 and $15,000 for the three
months ended March 31, 2000, and for the year ended December 31, 1999,
respectively. At March 31, 2000 and December 31, 1999 the investment in
Tower Park Marina was comprised of the following:
<TABLE>
<CAPTION>
2000 1999
----------- ------------
<S> <C> <C>
Land $ 1,040,000 $ 1,040,000
Buildings 2,110,000 2,111,000
Improvements 2,230,000 2,230,000
Floating docks 2,831,000 2,831,000
Furniture, fixtures and equipment 1,221,000 1,220,000
Leasehold interest 941,000 941,000
Construction in progress 12,000 -
----------- -----------
10,385,000 10,373,000
Less accumulated depreciation and
amortization (5,677,000) (5,638,000)
----------- -----------
4,708,000 4,735,000
Net realizable value reserve (2,193,000) (2,193,000)
----------- -----------
$ 2,515,000 $ 2,542,000
=========== ===========
</TABLE>
-8-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
3. Other Assets
------------
Other assets at March 31, 2000 and December 31, 1999 are composed of the
following:
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
Inventory $201,000 $175,000
Capitalized financing costs 166,000 130,000
Other 142,000 125,000
-------- --------
509,000 430,000
Accumulated amortization (22,000) (14,000)
-------- --------
$487,000 $416,000
======== ========
</TABLE>
Capitalized financing costs were incurred during 2000 in connection with the
refinancing of Tower Park Marina. These costs are amortized over the loan
term, five years. Amortization for the three months ended March 31, 2000
totaled $8,000.
4. Notes Payable
-------------
Notes payable at March 31, 2000 and December 31, 1999 consist of the
following:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Note payable secured by a deed
of trust on Tower Park Marina $2,076,000 $2,085,000
Other 13,000 15,000
---------- -----------
$2,089,000 $2,100,000
========== ===========
</TABLE>
At March 31, 2000 future principal payments are as follows:
Year
----
2000 $ 34,000
2001 49,000
2002 50,000
2003 52,000
2004 1,904,000
----------
$2,089,000
==========
-9-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
4. Notes Payable (continued)
-------------------------
Between September 1991 and June 1999, no payments had been made on the note
secured by Tower Park Marina. 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. In connection with the substitution of Tower Park Marina Operating
Corporation for Mr. Hughes as General Partner, the affiliate of Mr. Hughes
which holds the note, entered into a new option agreement with the
Partnership, which allows the Partnership to purchase the note secured by
Tower Park Marina, for the affiliate's cost, $1,700,000, plus $68,000 of
accrued unpaid interest.
As of December 31, 1998, the note was reflected on the Partnership's balance
sheet at its face value of $6,665,000 with an additional $3,199,000 being
shown as accrued unpaid interest. The option was initially for a one-year
period expiring on February 28, 1998. The Partnership extended the option
agreement for one year in February 1998 by paying the affiliate $50,000,
which was applied as a reduction in the principal amount due. The Partnership
extended the option agreement for one additional year by making an additional
$50,000 principal payment in February 1999. On July 1, 1999 the Partnership
completed the refinancing of Tower Park and exercised its option to repay the
note payable for $1,600,000. As a result, the Partnership recognized a gain
of $8,515,000 from the forgiveness of debt.
The new note payable was for an initial amount of $2,000,000, with an
additional $500,000 available to make improvements to the property. As of
March 31, 2000, $100,000 had been borrowed for capital improvements. The loan
accrues interest at 9.34% and requires monthly principal and interest
payments of $23,000. The loan is due on July 1, 2004.
Interest paid on these notes for the three months ended March 31, 2000 and
1999 was $49,000, and $33,000, respectively.
In connection with the refinancing of the Partnership's note payable during
1999 the General Partner was paid $25,000 of loan brokerage fees in
accordance with the Partnership agreement.
Based on the market rate of the mortgage note, the fair value at March 31,
2000 and December 31, 1999 is deemed to be the carrying value.
-10-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
5. 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 marina for a
fee equal to 6% of the marina's monthly gross revenues (as defined).
Management fees for the three months ended March 31, 2000 and 1999, were
$25,000 and $23,000, respectively.
In connection with funding the Partnership's operating deficits funds have
been borrowed from Westrec. These borrowings accrue interest at the prime
rate plus 1% (10% at March 31, 2000). Total interest paid or accrued to
Westrec for the three months ended March 31, 2000 and 1999 was $72,000 and
$49,000, respectively.
6. Commitments and Contingencies
-----------------------------
In September 1994, Mr. Leaman, the prior owner of ThunderBoat and Banyan Bay
Marina, 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 alleged that the bonus was actually just deferred
consideration due from his sale of the properties to the Partnership. This
case was settled in October 1998, and reserves of $250,000 were established
at that time to cover the legal fees and settlement costs associated with the
case.
-11-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
6. Commitments and Contingencies (continued)
-----------------------------------------
In November 1991, contamination was discovered in the area surrounding a fuel
storage tank at Tower Park Marina. Environmental consultants have been
engaged to perform sampling to determine the extent of the contamination.
Presently, sufficient data has not been obtained to estimate the cost of
remediation, consequently no loss accrual has been made in the financial
statements.
The operations at Tower Park Marina are influenced by factors that affect the
boating industry both locally and nationally, with activity at Tower Park
Marina increasing seasonally during the period April through October of each
year.
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"). Effective January 1, 1999, the Partnership
entered into a new lease with the CSLC for a term of 25 years. The CSLC
Lease provides for an annual rental based on gross receipts, with a minimum
annual rental of $40,000 payable in advance. Rent expense associated with
the CSLC Lease is included in cost of operations and was $10,000 for each of
the three months ended March 31, 2000 and 1999.
-12-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
March 31, 2000
(Unaudited)
The revenues and expenses of the Partnership for the three months ended March
31, 2000 are generated solely from the operations of Tower Park Marina in the
Sacramento - San Joaquin Delta near Sacramento, California. As of March 31,
2000, Tower Park Marina had the following occupancies:
Spaces %
Available Occupied
---------- ---------
Wet slips 238 (1) 73.1%
Dry storage 115 80.9%
RV Park 136 (1) 87.5%
(1) non-transient spaces only
For the three months ended March 31, 2000, revenues for Tower Park Marina
increased $59,000 to $470,000. The increase was primarily due to a $39,000
increase in restaurant revenues, a $15,000 increase in RV parking and a
$9,000 increase in slip rentals. The increase in restaurant revenues is due
to extended hours of operation and a higher level of activity at the
property. Overall the property's net operating income declined $2,000 to
$5,000 for the three months ended March 31, 2000.
The Partnership's net loss before forgiveness of debt of $182,000 for the
three months ended March 31, 2000 includes $47,000 of depreciation and
amortization, a non-cash item, an improvement of $92,000 in cash flow over
the same period a year ago. This improvement is primarily the result of
successfully refinancing the debt on the property which reduced interest
charges on the property debt for the period by $122,000. This reduction was
partially offset by a $23,000 increase in interest payable to affiliates,
which is the result of higher interest rates and higher outstanding balances.
-13-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
March 31, 2000
(Unaudited)
Liquidity and capital resources
-------------------------------
Since its inception, the Partnership has received advances from affiliates of
the General Partners to acquire properties, make capital improvements to the
properties, cover operating deficits, and to a lesser extent, make
distributions to the partners.
From 1991 to 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 secured
by Tower Park Marina. 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 was exercised on July
1, 1999 and with the additional capital provided by the refinancing, the
Partnership's financial uncertainty has been stabilized.
The Partnership's ability to continue to operate through 2000 and beyond is
contingent on among other factors, the improvement in Tower Park Marina
operations and continued advances from the General Partners. Management's
plans include the expenditure of approximately $400,000 in additional repairs
and capital improvements during 2000, which management believes will continue
to improve the operating results of the property.
-14-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
PART II. OTHER INFORMATION
March 31, 2000
(Unaudited)
ITEMS 1 through 6 are 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: May 9, 2000
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
BY: Westrec Investors, Inc.
General Partner
BY: /s/Jeffrey K. Ellis
--------------------
Jeffrey K. Ellis
Vice President
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 46,000 4,000
<SECURITIES> 0 0
<RECEIVABLES> 104,000 193,000
<ALLOWANCES> 0 0
<INVENTORY> 201,000 168,000
<CURRENT-ASSETS> 351,000 365,000
<PP&E> 8,192,000 7,925,000
<DEPRECIATION> (5,677,000) (5,530,000)
<TOTAL-ASSETS> 3,152,000 2,905,000
<CURRENT-LIABILITIES> 385,000 685,000
<BONDS> 2,089,000 6,618,000
0 0
0 0
<COMMON> 0 0
<OTHER-SE> (2,687,000) (10,691,000)
<TOTAL-LIABILITY-AND-EQUITY> 3,152,000 2,905,000
<SALES> 0 0
<TOTAL-REVENUES> 470,000 411,000
<CGS> 0 0
<TOTAL-COSTS> 522,000 441,000
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 130,000 230,000
<INCOME-PRETAX> (182,000) (260,000)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (182,000) (260,000)
<EPS-BASIC> (39.93) (57.01)
<EPS-DILUTED> (39.93) (57.01)
</TABLE>
