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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the quarterly period ended March 31, 1997
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 0-17989
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
Registrant
California 68-0166383
- ------------------------------------ ----------------------------------
State of Jurisdiction I.R.S. Employer Identification No.
2401 Kerner Boulevard, San Rafael, California 94901-5527
- --------------------------------------------------------------------------------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (415) 485-4500
--------------
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
preceding requirements for the past 90 days.
Yes _X_ No ___
7,526 Units of Limited Partnership Interest were outstanding as of March 31,
1997.
Transitional small business disclosure format:
Yes ___ No _X_
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Part I. Financial Information
Item 1. Financial Statements
PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
March 31, December 31,
1997 1996
---- ----
ASSETS
Cash and cash equivalents $ 455 $ 1,499
Accounts receivable 9 44
Net investment in financing leases 65 99
Investment in joint ventures 193 197
Capitalized acquisition fees (net of accumulated
amortization of $293 and $292 at March 31, 1997
and December 31, 1996, respectively) 3 4
Other assets 1 1
------- -------
Total Assets $ 726 $ 1,844
======= =======
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 31 $ 24
------- -------
Total Liabilities 31 24
------- -------
Partners' Capital
General Partner (2) (3)
Limited Partners, 25,000 units authorized,
7,526 units issued and outstanding at
March 31, 1997 and December 31, 1996 697 1,823
------- -------
Total Partners' Capital 695 1,820
------- -------
Total Liabilities and Partners' Capital $ 726 $ 1,844
======= =======
The accompanying notes are an integral part of these statements.
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
INCOME
Earned income, financing leases $ 4 $ 12
Gain on sale of equipment -- 12
Gain on sale of securities 50 --
Equity in earnings (losses) from joint ventures, net (4) 26
Other income 10 8
------- -------
Total Income 60 58
------- -------
EXPENSES
Amortization of acquisition fees 1 3
Management fees to General Partner 3 3
Reimbursed administrative costs to General Partner 3 4
Legal expense 3 7
General and administrative expenses 6 4
------- -------
Total Expenses 16 21
------- -------
NET INCOME $ 44 $ 37
======= =======
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 4.25 $ 3.64
======= =======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $153.79 $ 18.74
======= =======
ALLOCATION OF NET INCOME:
General Partner $ 12 $ 10
Limited Partners 32 27
------- -------
$ 44 $ 37
======= =======
The accompanying notes are an integral part of these statements.
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Operating Activities:
Net income $ 44 $ 37
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of acquisition fees 1 3
Gain on sale of equipment -- (12)
Gain on sale of securities (50) --
Equity in losses (earnings) from joint
ventures, net 4 (26)
Decrease in accounts receivable 35 9
Increase (decrease) in accounts payable
and accrued expenses 7 (7)
Decrease in other assets -- (1)
------- -------
Net cash provided by operating activities 41 3
------- -------
Investing Activities:
Principal payments, financing leases 34 58
Proceeds from sale of equipment -- 12
Proceeds from sale of securities 50 --
Distributions from joint ventures -- 64
------- -------
Net cash provided by investing activities 84 134
------- -------
Financing Activities:
Distributions to partners (1,169) (142)
------- -------
Net cash used by financing activities (1,169) (142)
------- -------
Decrease in cash and cash equivalents (1,044) (5)
Cash and cash equivalents, beginning of period 1,499 655
------- -------
Cash and cash equivalents, end of period $ 455 $ 650
======= =======
The accompanying notes are an integral part of these statements.
<PAGE>
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. General.
The accompanying unaudited condensed financial statements have been
prepared by the Partnership in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Although management believes that the disclosures are adequate to make
the information presented not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Partnership's Financial Statement, as filed with the
SEC in the latest annual report on Form 10-K.
Note 2. Reclassification.
Reclassification - Certain 1996 amounts have been reclassified to
conform to the 1997 presentation.
Note 3. Income Taxes.
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the partners in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.
Note 4. Net Income (Loss) and Distribution Per Limited Partnership Unit.
Net income and distributions per limited partnership unit were based on
the limited partners' share of net income and distributions, and the weighted
average number of units outstanding of 7,526 for the three months ended March
31, 1997 and 1996. For purposes of allocating net income (loss) and
distributions to each individual limited partner, the Partnership allocates net
income (loss) and distributions based upon each respective limited partner's net
capital contributions.
Note 5. Investment in Joint Ventures.
Foreclosed Cable System Joint Ventures
The aggregate combined financial information of the foreclosed cable
systems joint ventures is presented as follows:
March 31, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $ 1,204 $ 1,215
Liabilities 184 172
Partners' Capital 1,020 1,043
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Three Months Ended
March 31,
1997 1996
---- ----
(Amounts in Thousands)
Revenue $ 100 $ 1,385
Expenses 123 282
Net Income (Loss) (23) 1,103
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Partnership reported net income of $44,000 for the three months ended
March 31, 1997, as compared to net income of $37,000 for the same period in
1996. The increase in net income during the three months ended March 31, 1997,
as compared to the same period in 1996, is attributable to a gain on sale of
securities of $50,000.
Total revenues increased by $2,000 during the three months ended March 31,
1997, as compared to the same period in 1996. This increase was primarily the
result of a gain on sale of securities of $50,000 during the three months ended
March 31, 1997. The gain on sale of securities is due to the exercise and sale
of stock warrants held by the Partnership.
The gain on sale of securities is partially offset by declines in earned
income from financing leases, equity in earnings from joint ventures and gain on
sale of equipment for the three months ended March 31, 1997. The decrease in
earned income from financing leases during the quarter ended March 31, 1997 of
$8,000 is attributable to the declining net investment in financing leases. The
net investment in financing leases at March 31, 1997 is $65,000, as compared to
$253,000 at March 31, 1996.
The decline in earnings from joint ventures of $30,000 for the quarter
ended March 31, 1997, compared to the same period in 1996 is due to earnings
from joint ventures being higher than usual during the three months ended March
31, 1996. The higher earnings in 1996 was a result of a sale of a cable
television system owned by one of the foreclosed cable systems joint ventures.
Such an event did not occur during the three months ended March 31, 1997.
The Partnership reported a gain on sale of equipment of $12,000 during the
three months ended March 31, 1996, compared to $0 at March 31, 1997. The absence
of a gain on sale of equipment in 1997 is a result of no sales activity during
the quarter. The Partnership sold equipment with an aggregate original cost of
$61,000 during the three months ended March 31, 1996.
Total expenses decreased by $5,000 during the three months ended March 31,
1997, as compared to the same period in 1995. The decrease in expenses during
the three months ended March 31, 1997, as compared to the same period in 1996,
is primarily due to a decline in legal expense of $4,000. The decrease in legal
expense during 1997 is due to a decline in legal costs attributable to the
Partnership's impaired note receivable.
This note receivable was paid off during 1996.
Liquidity and Capital Resources
The Partnership's primary source of liquidity comes from its contractual
obligations with lessees and borrowers to receive rental payments and payments
of principal and interest. The future liquidity of the Partnership will depend
upon the General Partner's success in collecting scheduled contractual payments
from its lessees and borrowers. Additionally, the Partnership has investments in
<PAGE>
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foreclosed cable systems joint ventures that it receives cash distributions of
the excess cash flows.
The cash generated by leasing and financing activities was $75,000 during
the three months ended March 31, 1997, as compared to $61,000 during the same
period in 1996. The increase in net cash generated by leasing and financing
activities for the three months ended March 31, 1997 is due to the receipt of an
outstanding receivable.
The Partnership did not receive cash distributions from joint ventures
during the three months ended March 31, 1997, compared to $64,000 during the
three months ended March 31, 1996. The cash received from distributions from
joint ventures during the quarter ended March 31, 1996 was attributable to a
foreclosed cable systems joint venture distributing proceeds from the sale of
its cable television system.
The Partnership owned equipment being held for lease with an original cost
of $89,000 and a net book value of $0 at March 31, 1996 and 1995. The General
Partner is actively engaged, on behalf of the Partnership, in remarketing and
selling the Partnership's equipment as it becomes available.
The cash distributed to partners was $1,169,000 and $142,000 for the three
months ended March 31, 1997 and 1996, respectively. In accordance with the
Partnership Agreement, the Limited Partners are entitled to 99% of the cash
available for distribution and the General Partner is entitled to 1%. As a
result, the Limited Partners received $1,157,000 and $141,000 in distributions
during the period ended March 31, 1997 and 1996, respectively. The cumulative
cash distributions to limited partners are $6,995,000 and $5,698,000 at March
31, 1997 and 1996, respectively. The General Partner received $12,000 and $1,000
for its share of the cash distributions during the period ended March 31, 1997
and 1996, respectively.
The increase in distributions to partners is a result of the Partnership
switching to an annual distribution method from a quarterly distribution method
with the first annual distribution being made on January 15, 1997. The
distribution on April 15, 1996 was the last scheduled quarterly distribution
made by the Partnership. An additional factor contributing to the increase in
distributions to partners during the three months ended March 31, 1997 is the
receipt of a settlement payment on an impaired note during the quarter ended
September 30, 1996, the Partnership included these proceeds in the January 15,
1997 distribution to partners. The Partnership's ability to distribute cash to
partners is dependent upon the Partnership receiving its contractual payments
from financing leases. If the cash generated by Partnership operations decrease
below expectations, the distributions to partners will be adjusted accordingly.
Cash generated from leasing and financing operations has been and is
anticipated to continue to be sufficient to meet the Partnership's continuing
operational expenses.
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PHOENIX LEASING HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
March 31, 1997
Part II. Other Information
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable
Item 3. Defaults Upon Senior Securities. Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders. Inapplicable
Item 5. Other Information. Inapplicable
Item 6. Exhibits and Reports on 8-K:
a) Exhibits:
(27) Financial Data Schedule
b) Reports on 8-K: None
<PAGE>
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
PHOENIX HIGH TECH/HIGH YIELD FUND,
----------------------------------
A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
May 13, 1997 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- ---------------------- Senior Vice President, -----------------------
Treasurer and a Director of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
May 13, 1997 Senior Vice President, /S/ BRYANT J. TONG
- ----------------------- Financial Operations of ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
May 13, 1997 Senior Vice President /S/ GARY W. MARTINEZ
- ----------------------- and a Director of ----------------------
Phoenix Leasing Incorporated (Gary W. Martinez)
General Partner
May 13, 1997 Partnership Controller of /S/ MICHAEL K. ULYATT
- ----------------------- Phoenix Leasing Incorporated ----------------------
General Partner (Michael K. Ulyatt)
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 455
<SECURITIES> 0
<RECEIVABLES> 9
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 726
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 695
<TOTAL-LIABILITY-AND-EQUITY> 726
<SALES> 0
<TOTAL-REVENUES> 60
<CGS> 0
<TOTAL-COSTS> 16
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 44
<INCOME-TAX> 0
<INCOME-CONTINUING> 44
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44
<EPS-PRIMARY> 4.25
<EPS-DILUTED> 0
</TABLE>
