<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 1997
--------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________________ to ___________________
Commission file number 0-17576
-------------------------
WINDSOR PARK PROPERTIES 6, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0299846
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(760) 746-2411
- -------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (x) No (_)
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1
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TABLE OF CONTENTS
PART I
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<TABLE>
<CAPTION>
Page
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<C> <S> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II
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Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE
</TABLE>
2
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WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
June 30, 1997
--------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 508,800
Buildings and improvements 3,421,200
Fixtures and equipment 33,900
--------------
3,963,900
Less accumulated depreciation (1,349,500)
--------------
2,614,400
Investments in joint ventures 5,401,000
Cash and cash equivalents 473,600
Deferred financing costs 54,600
Other assets 33,000
--------------
$ 8,576,600
==============
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,340,000
Accounts payable 4,400
Accrued expenses 38,200
Tenant deposits and other liabilities 44,800
--------------
1,427,400
--------------
Partners' equity:
Limited partners 7,139,400
General partners 9,800
--------------
7,149,200
--------------
$ 8,576,600
==============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 153,300 $ 140,000
Equity in earnings of joint ventures 52,900 71,900
Interest 4,300 5,700
Other 10,800 11,800
----------- -----------
221,300 229,400
----------- -----------
COSTS AND EXPENSES
- ------------------
Property operating 72,800 63,100
Depreciation and amortization 44,500 43,700
Interest 32,100 30,900
General and administrative:
Related parties 20,600 18,100
Other 12,000 15,000
----------- -----------
182,000 170,800
----------- -----------
Net income $ 39,300 $ 58,600
=========== ===========
Net income - general partners $ 400 $ 600
=========== ===========
Net income - limited partners $ 38,900 $ 58,000
=========== ===========
Net income per limited partnership unit $ 0.13 $ 0.20
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 302,100 $ 275,600
Equity in earnings of joint ventures 115,900 143,300
Interest 8,100 12,500
Other 17,200 20,000
----------- -----------
443,300 451,400
----------- -----------
COSTS AND EXPENSES
- ------------------
Property operating 142,000 131,500
Depreciation and amortization 89,100 86,800
Interest 63,300 61,600
General and administrative:
Related parties 41,000 37,200
Other 25,300 26,200
----------- -----------
360,700 343,300
----------- -----------
Net income $ 82,600 $ 108,100
=========== ===========
Net income - general partners $ 800 $ 1,100
=========== ===========
Net income - limited partners $ 81,800 $ 107,000
=========== ===========
Net income per limited partnership unit $ 0.28 $ 0.36
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
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WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 82,600 $ 108,100
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 89,100 86,800
Equity in earnings of joint ventures (115,900) (143,300)
Joint ventures' cash distributions 115,900 143,300
Amortization of deferred financing costs 5,200 5,200
Gain on sale of property held for investment (6,300)
Changes in operating assets and liabilities:
Other assets 8,000 16,300
Accounts payable (1,700) (4,500)
Accrued expenses (8,600) (10,000)
Tenant deposits and other liabilities (3,200) (18,300)
------------ ------------
Net cash provided by operating activities 165,100 183,600
------------ ------------
Cash flows from investing activities:
Joint ventures' cash distributions 142,300 116,800
Increase in property held for investment (34,500) (16,000)
Proceeds from sale of property held for investment 6,300
------------ ------------
Net cash provided by investing activities 114,100 100,800
------------ ------------
Cash flows from financing activities:
Cash distributions (303,000) (303,000)
Repurchase of limited partnership units (32,800) (7,600)
------------ ------------
Net cash used in financing activities (335,800) (310,600)
------------ ------------
Net decrease in cash and cash equivalents (56,600) (26,200)
Cash and cash equivalents at beginning of period 530,200 652,900
------------ ------------
Cash and cash equivalents at end of period $ 473,600 $ 626,700
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ 57,700 $ 56,900
============ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 1997 and the related statements of operations for
the three and six months ended June 30, 1997 and 1996 and the statements of cash
flows for the six months ended June 30, 1997 and 1996 are unaudited. However, in
the opinion of the General Partners, they contain all adjustments, of a normal
recurring nature, necessary for a fair presentation of such financial
statements. Interim results are not necessarily indicative of results for a
full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of interests in five
manufactured home communities. The combined condensed results of operations of
these properties for the six months ended June 30, 1997 and 1996 follows:
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Total revenues $ 2,742,100 $ 2,708,300
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Expenses:
Property operating 1,281,700 1,203,800
Interest 735,300 724,900
Depreciation 432,500 418,000
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2,449,500 2,346,700
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Net income $ 292,600 $ 361,600
============= =============
</TABLE>
NOTE 3. NET INCOME PER LIMITED PARTNERSHIP UNIT
---------------------------------------
Net income per limited partnership unit is calculated based on the weighted
average number of limited partnership units outstanding during the period and
the net income allocated to the Limited Partners. The weighted average number
of limited partnership units outstanding during the three and six months ended
June 30, 1997 was 294,622 and 295,067, respectively; and 296,815 and 296,960 for
the three and six months ended June 30, 1996, respectively.
NOTE 4. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and John A. Coseo, Jr. (Mr. Coseo is also the
president, chief executive officer and the principal stockholder of The Windsor
Corporation.)
7
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The General Partners are entitled to receive from the Partnership various fees
and compensation which are summarized as follows:
Operational Stage
- -----------------
The net profits, losses, and cash distributions of the Partnership during the
operational stage are allocated 99% to the Limited Partners and 1% to the
General Partners.
The Partnership reimburses The Windsor Corporation for certain direct expenses,
and employee, executive and administrative time incurred on the Partnership's
behalf. The Partnership was charged $24,300 and $21,700 for such costs during
the three months ended June 30, 1997 and 1996, respectively; and $48,000 and
$43,300 during the six months ended June 30, 1997 and 1996, respectively. These
costs are included in property operating and general and administrative expenses
in the accompanying Statements of Operations.
Liquidation Stage
- -----------------
The General Partners receive 1% of cash distributions from the sale or
refinancing of Partnership properties. This participation increases to 15%
after the Limited Partners have received their original invested capital plus a
9% cumulative, non-compounded annual return.
The General Partners generally receive 1% of profits and losses from the sale of
Partnership properties. However, if applicable, profits on sale will first be
allocated 100% to the General Partners to the extent of their negative capital
account.
The General Partners received cash distributions of $3,000 during both the six
months ended June 30, 1997 and 1996. The General Partners received no cash
distributions during the three months ended June 30, 1997 and 1996.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to limited partners for the six months ended June 30, 1997 and 1996 follows:
<TABLE>
<CAPTION>
1997 1996
--------------------- -----------------------
Per Per
Amount Unit Amount Unit
---------- ---- ---------- ----
<S> <C> <C> <C> <C>
Net income
- limited partners $ 81,800 $ 0.28 $ 107,000 $ 0.36
Return of capital 218,200 0.74 193,000 0.65
---------- ------- ---------- --------
$ 300,000 $ 1.02 $ 300,000 $ 1.01
========== ======= ========== ========
</TABLE>
8
<PAGE>
WINDSOR PARK PROPERTIES 6
----------------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
June 30, 1997 as compared to December 31, 1996
- ----------------------------------------------
The Partnership's primary sources of cash during the six months ended June 30,
1997 were from the operations of its investment properties and cash
distributions from joint ventures. The primary use of cash during the same
period was for cash distributions to partners.
There has been no significant change in the financial condition of the
Partnership since December 31, 1996. Partners' equity decreased from $7,402,400
at December 31, 1996 to $7,149,200 at June 30, 1997 due to cash distributions of
$303,000 and repurchased limited partnership units of $32,800 exceeding net
income of $82,600.
At June 30, 1997, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $7,709,600, consisting entirely
of variable rate debt. The average rate of interest on the variable rate debt
was 8.9% at June 30, 1997.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures, cash
distributions to partners and debt service. The General Partners believe that
the future sources of cash are sufficient to meet the working capital
requirements of the Partnership for the foreseeable future.
Results of Operations
- ---------------------
Six months ended June 30, 1997 as compared to six months ended June 30, 1996
- ----------------------------------------------------------------------------
The Partnership realized net income of $82,600 and $108,100 for the six months
ended June 30, 1997 and 1996, respectively. Net income per limited partnership
unit was $0.28 in 1997 and $0.36 in 1996.
Rent and utilities revenues increased from $275,600 in 1996 to $302,100 in 1997.
The overall occupancy level of the Partnership's two wholly-owned properties
increased from 93% at June 30, 1996 to 97% at June 30, 1997. Recent rent
increases implemented include $8 per month at Chisholm Creek effective both June
1997 and 1996; and $10 and $14 per month at Circle K effective May 1997 and
1996, respectively.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of five manufactured home communities. Equity in earnings of joint
ventures decreased from $143,300 in 1996 to $115,900 in 1997. The decrease is
due mainly to the Carefree Village community in Tampa, which lost occupancy due
to aggressive competition in the local market. The property has upgraded its
amenity package and is offering its own aggressive promotional package in order
to maintain and improve occupancy. The overall occupancy of the Partnership's
five joint venture properties was level at 93% at both June 30, 1997 and 1996.
Recent rent increases implemented include $8 per month at Town and Country
effective May 1996; $9 and $12 per month at Winter Haven and Rancho Margate,
respectively, effective January 1997; and $5 per month at Carefree effective
September 1996.
9
<PAGE>
Interest income decreased from $12,500 in 1996 to $8,100 in 1997 due mainly to
lower cash balances maintained by the Partnership.
Property operating expenses increased from $131,500 in 1996 to $142,000 in 1997.
The increase is due mainly to higher repairs and maintenance costs.
Interest expense increased from $61,600 in 1996 to $63,300 in 1997 due to
slightly higher interest rates.
General and administrative expense increased from $63,400 in 1996 to $66,300 in
1997, due mainly to higher employee time charges from the General Partners.
Three months ended June 30, 1997 as compared to three months ended June 30, 1996
- --------------------------------------------------------------------------------
The Partnership realized net income of $39,300 and $58,600 for the three months
ended June 30, 1997 and 1996, respectively. Net income per limited partnership
unit was $0.13 in 1997 and $0.20 in 1996.
Rent and utilities revenues increased from $140,000 in 1996 to $153,300 in 1997,
for the reasons discussed previously.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of five manufactured home communities. Equity in earnings of joint
ventures decreased from $71,900 in 1996 to $52,900 in 1997, for the reasons
discussed previously.
Interest income decreased from $5,700 in 1996 to $4,300 in 1997 due mainly to
lower cash balances maintained by the Partnership.
Property operating expenses increased from $63,100 in 1996 to $72,800 in 1997
due mainly to higher repairs and maintenance costs.
Interest expense increased from $30,900 in 1996 to $32,100 in 1997 due to
slightly higher interest rates.
10
<PAGE>
PART II
-------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period
covered by this Form 10-QSB
11
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WINDSOR PARK PROPERTIES 6,
A California Limited Partnership
---------------------------------
(Registrant)
By: The Windsor Corporation, General Partner
By /s/ John A. Coseo, Jr.
-----------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: August 11, 1997
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 6 AS OF JUNE 30, 1997 AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE SIX MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 473,600
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,963,900
<DEPRECIATION> 1,349,500
<TOTAL-ASSETS> 8,576,600
<CURRENT-LIABILITIES> 0
<BONDS> 1,340,000
0
0
<COMMON> 0
<OTHER-SE> 7,149,200<F1>
<TOTAL-LIABILITY-AND-EQUITY> 8,576,600
<SALES> 0
<TOTAL-REVENUES> 443,300
<CGS> 0
<TOTAL-COSTS> 142,000
<OTHER-EXPENSES> 155,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 63,300
<INCOME-PRETAX> 82,600
<INCOME-TAX> 0
<INCOME-CONTINUING> 82,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,600
<EPS-PRIMARY> 0.28<F2>
<EPS-DILUTED> 0
<FN>
<F1> Limited and general partners equity.
<F2> Net income per limited partnership unit.
</FN>
</TABLE>
