<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended March 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________to_______
Commission File Number 1-10084
Resort Income Investors, Inc.
(Exact name of registrant as specified in its
certificate of incorporation)
Delaware 36-3593298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1700 Lincoln, 49th Floor, Denver, Colorado 80203
(Address of principal executive offices) (Zip Code)
(303) 863-2400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 1995, the issuer had 4,156,000 outstanding shares of common
stock.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RESORT INCOME INVESTORS, INC.
BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
Interest receivable from related parties $ 2,284,743 $ 1,233,074
Demand loans to related parties 39,855,000 39,855,000
Cash and cash equivalents 103,898 779,298
Investments at market value 582,500 560,000
Prepaid expenses and other 77,531 68,174
------------ --------------
$ 42,903,672 $ 42,495,546
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 78,448 $ 54,586
Distributions payable 1,558,500 1,558,500
Other liabilities 151,000
------------ --------------
1,787,948 1,613,086
------------ --------------
Stockholders' equity:
Common stock, $.01 par value;
authorized 6,916,000 shares;
issued and outstanding
4,156,00 shares 41,560 41,560
Additional paid-in capital:
Issuance of common stock 46,703,781 46,703,781
Distributions in excess of income (5,272,521) (5,484,131)
Reserve for unrealized losses (357,096) (378,750)
------------ --------------
41,115,724 40,882,460
------------ --------------
$ 42,903,672 $ 42,495,546
============ ==============
</TABLE>
See notes to financial statements.
2
<PAGE> 3
RESORT INCOME INVESTORS, INC
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1995 1994
<S> <C> <C>
INCOME:
Interest and net fee income on mortgage and
demand loans to related parties $ 1,887,129 $ 943,420
Other interest income 26,017 103,542
-------------- --------------
1,913,146 1,046,962
OPERATING EXPENSES 143,036 220,072
-------------- --------------
NET INCOME $ 1,770,110 $ 826,890
============== ==============
NET INCOME PER SHARE $.43 $.20
==== ====
</TABLE>
See notes to financial statements.
3
<PAGE> 4
RESORT INCOME INVESTORS, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1995 1994
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 1,770,110 $ 826,890
Adjustments to reconcile net income to net cash
used in operating activities:
Changes in operating assets and liabilities:
Interest receivable on mortgage and demand
loans to related parties (1,051,669) (522,023)
Other receivables 809
Prepaid expenses (10,203) 37,440
Accounts payable and accrued expenses 23,862 (64,998)
Due to investment manager (34,120)
-------------- --------------
Net cash provided by operating activities 732,100 242,380
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Reserve for unrealized losses (189,796)
Demand loan funded (13,700,000)
-------------- --------------
Net cash used in investing activities (13,889,796)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to stockholders (1,558,500) (1,558,500)
Loan proceeds received 151,000
-------------- --------------
Net cash used in financing activities (1,407,500) (1,558,500)
-------------- --------------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (675,400) (15,205,916)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 779,298 25,581,904
-------------- --------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 103,898 $ 10,375,988
============== ==============
</TABLE>
See notes to financial statements.
4
<PAGE> 5
RESORT INCOME INVESTORS, INC.
NOTE TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
1. ACCOUNTING POLICIES
The audited financial statements of Resort Income Investors, Inc. (the
"Company") for the year ended December 31, 1994 provide details on the
Company's accounting policies which have been applied in the
preparation of these unaudited interim financial statements. In the
opinion of management, all adjustments (consisting only of normal and
recurring accruals) considered necessary to present fairly the
financial position at March 31, 1995 and the results of operations and
cash flows for the three month period ended March 31, 1995 have been
included. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be expected for
the year ending December 31, 1995. Certain amounts in the December 31,
1994 balance sheet have been reclassified to conform to the 1995
presentation.
2. SUBSEQUENT EVENT
In April 1995, the Company sold one of its demand loans in the amount
of $6,250,000 plus accrued interest.
5
<PAGE> 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
As of March 31, 1995 the Company had cash and cash equivalents and investments
at market value of $686,398 compared with $1,339,298 at December 31, 1994. The
primary use of these funds during the first quarter of 1995 was for the payment
of stockholder distributions of $1,558,500.
Interest receivable increased to $2,284,743 at March 31, 1995 from $1,233,074 at
December 31, 1994. This increase is due primarily to additional interest the
Company has begun to charge on several of its demand loans. In the fourth
quarter of 1994, the Company added the additional accrual feature to the
majority of its demand loans whereby the interest rates on the loans were
increased by rates ranging from 9.7% to 11.5%. This additional interest,
however, is not payable until the loan is paid and, consequently, will not
contribute to the Company's liquidity until such time as the related loans are
repaid.
In April 1995, the Company sold one of its demand loans, in the amount of
$6,250,000 plus accrued interest. Management anticipates that the proceeds of
this sale will be used to fund investments similar to the Company's currently
existing investments. Also, management anticipates utilizing a portion of these
proceeds to continue to pay stockholder distributions of at least 95% of taxable
income in order to maintain its real estate investment trust status under the
Internal Revenue Code.
Results of Operations
The Company had net income of $1,770,110, or $.43 per share, for the quarter
ended March 31, 1995 compared to $826,890, or $.20 per share, for the quarter
ended March 31, 1994. The increase was primarily related to increased revenues
and, to a lesser extent, reduced operating costs.
Total revenues for the first quarter of 1995 were $1,913,146 as compared to
$1,046,962 for the first quarter of 1994. This increase is due to the additional
interest accrual the Company began charging on the majority of its demand loans.
Interest income on demand loans increased $943,709 compared to the first quarter
of 1994. This increase was partially offset by a decrease in interest income on
cash and cash equivalents of $77,525, from the first quarter of 1994, due to the
Company having less invested cash during the first quarter of 1995.
Operating expenses for the quarter ended March 31, 1995 were $143,036 as
compared to $220,072 for the quarter ended March 31, 1994. This reduction is
primarily attributable to the lack of loan activity during the first quarter of
1995 which resulted in reduced professional fees and other administrative costs.
6
<PAGE> 7
PART II - OTHER INFORMATION
Items 1 through 5 of Part II are omitted because of the absence of conditions
under which they are required.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are incorporated by reference from
the Company's Registration Statement on Form S-11 (File No.:
33-23521), referencing the exhibit numbers used in such
Registration Statement.
Exhibit Number Description
3.(a) Restated Certificate on Incorporation
3.(b) Amended and Restated By-Laws
(b) Reports on Form 8-K.
None
7
<PAGE> 8
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.
RESORT INCOME INVESTORS, INC.
(REGISTRANT)
DATE: May 12, 1995 By: /s/ Christopher B. Hemmeter
---------------------------
Name: Christopher B. Hemmeter
Title: Chairman of the Board and
President
DATE: May 12, 1995 By: /s/ Mark Hemmeter
----------------------------
Name: Mark Hemmeter
Title: Executive Vice President,
Secretary, Treasurer, Chief
Financial Officer and Chief
Accounting Officer
8
<PAGE> 9
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE
- - - - ----------- ------------------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains Summary Financial Information extracted from the March
31, 1995 interim Financial Statements in Form 10-Q and is qualified in its
entirety by reference to such March 31, 1995 Form 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 103,898
<SECURITIES> 582,500
<RECEIVABLES> 42,139,743
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,903,872
<CURRENT-LIABILITIES> 1,787,948
<BONDS> 0
<COMMON> 41,560
0
0
<OTHER-SE> 41,074,184
<TOTAL-LIABILITY-AND-EQUITY> 42,903,672
<SALES> 0
<TOTAL-REVENUES> 1,913,146
<CGS> 0
<TOTAL-COSTS> 143,036
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,770,110
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,770,110
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
