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, 1998
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
-------
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,
1998.
Transitional small business disclosure format:
Yes No X
----- -----
Page 1 of 10
<PAGE>
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,
1998 1997
---- ----
ASSETS
Cash and cash equivalents $ 123 $ 496
Accounts receivable 15 37
Equipment on operating leases and held for lease
(net of accumulated depreciation of $56 at
March 31, 1998 and December 31, 1997) -- --
Investment in joint ventures 128 130
Securities, available-for-sale 25 --
Other assets 2 2
----- -----
Total Assets $ 293 $ 665
===== =====
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 21 $ 20
----- -----
Total Liabilities 21 20
----- -----
Partners' Capital (Deficit)
General Partner (19) (15)
Limited Partners, 25,000 units authorized,
7,526 units issued and outstanding at
March 31, 1998 and December 31, 1997 266 660
Unrealized gains on available-for-sale securities 25 --
----- -----
Total Partners' Capital (Deficit) 272 645
----- -----
Total Liabilities and Partners' Capital(Deficit) $ 293 $ 665
===== =====
The accompanying notes are an integral part of these statements.
2
<PAGE>
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,
1998 1997
---- ----
INCOME
Earned income, financing leases $ -- $ 4
Gain on sale of securities -- 50
Equity in losses from joint ventures, net (2) (4)
Other income 3 10
------- -------
Total Income 1 60
------- -------
EXPENSES
Amortization of acquisition fees -- 1
Management fees to General Partner -- 3
Reimbursed administrative costs to General Partner 3 3
Legal expense -- 3
General and administrative expenses 6 6
------- -------
Total Expenses 9 16
------- -------
NET INCOME (LOSS) $ (8) $ 44
======= =======
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (1.09) $ 4.25
======= =======
DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT $ 51.26 $153.79
======= =======
ALLOCATION OF NET INCOME (LOSS):
General Partner $ -- $ 12
Limited Partners (8) 32
------- -------
$ (8) $ 44
======= =======
The accompanying notes are an integral part of these statements.
3
<PAGE>
PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
1998 1997
---- ----
Operating Activities:
Net income (loss) $ (8) $ 44
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Amortization of acquisition fees -- 1
Gain on sale of equipment -- --
Gain on sale of securities -- (50)
Equity in losses (earnings) from joint
ventures, net 2 4
Decrease in accounts receivable 22 35
Increase (decrease) in accounts payable
and accrued expenses 1 7
------- -------
Net cash provided by operating activities 17 41
------- -------
Investing Activities:
Principal payments, financing leases -- 34
Proceeds from sale of securities -- 50
------- -------
Net cash provided by investing activities -- 84
------- -------
Financing Activities:
Distributions to partners (390) (1,169)
------- -------
Net cash used by financing activities (390) (1,169)
------- -------
Decrease in cash and cash equivalents (373) (1,044)
Cash and cash equivalents, beginning of period 496 1,499
------- -------
Cash and cash equivalents, end of period $ 123 $ 455
======= =======
The accompanying notes are an integral part of these statements.
4
<PAGE>
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 1997 amounts have been reclassified to
conform to the 1998 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 nine months ended March 31,
1998 and 1997. 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,
1998 1997
---- ----
(Amounts in Thousands)
Assets $ 902 $ 909
Liabilities 243 240
Partners' Capital 659 669
5
<PAGE>
Three Months Ended
March 31,
1998 1997
---- ----
(Amounts in Thousands)
Revenue $ 100 $ 100
Expenses 110 123
Net Loss (10) (23)
6
<PAGE>
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 a net loss of $8,000 for the three months ended
March 31, 1998, as compared to net income of $44,000 for the same period in
1997. The reduction in earnings for the three months ended March 31, 1998 is
attributable to the absence of a gain on sale of securities, compared to $50,000
during the same period in 1997. The gain on sale of securities, for which the
Partnership received proceeds of $50,000, during the three months ended March
31, 1997 is due to the exercise and sale of stock warrants held by the
Partnership.
The decline in other income of $7,000 also contributed to the reduction in
earnings for the three months ended March 31, 1998, compared to 1997. This
decline is attributable to a decrease in interest income earned on the
Partnership's cash balances. The Partnership experienced a decline in its cash
balance during the three months ended March 31, 1998, compared to 1997, as a
result of making an annual distribution in January 1998.
The absence of management fees and legal expense during the three months
ended March 31, 1998, compared to $3,000 for both management fees and legal
expense during the same period in 1997, partially offset the factors previously
discussed which contributed to the decline in earnings. The absence of
management fees to the General Partner for the three months ended March 31, 1998
is due to a decline in gross revenues. Legal expense for the three months ended
March 31, 1997 were attributable to the collection on a defaulted note
receivable. The net carrying value of this note at March 31, 1997 was $0.
Liquidity and Capital Resources
The cash generated by leasing and financing activities was $17,000 during
the three months ended March 31, 1998, as compared to $75,000 during the same
period in 1997. The decrease in net cash generated by leasing and financing
activities for the three months ended March 31, 1998 is due primarily to the
absence of principal payments from financing leases, compared to $34,000 during
1997, as well as a decline in accounts receivable of $13,000 for the three
months ended March 31, 1998, compared to 1997. The absence of principal payment
from financing leases during 1998 is due to the remaining equipment owned by the
Partnership being held for lease.
The Partnership owns equipment being held for lease with an original cost
of $89,000 and a net book value of $0 at March 31, 1998 and 1997. 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 $390,000 and $1,169,000 for the three
months ended March 31, 1998 and 1997, 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 $386,000 and $1,157,000 in distributions
during the period ended March 31, 1998 and 1997, respectively. The cumulative
cash distributions to limited partners are $7,381,000 and $6,995,000 at March
31, 1998 and 1997, respectively. The General Partner received $4,000 and $12,000
for its share of the cash distributions during the period ended March 31, 1998
7
<PAGE>
and 1997, respectively.
Distributions for the year ended March 31, 1997 were higher than usual as a
result of 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 term of the Partnership expires on December 31, 1999; however, the
General Partner anticipates liquidating the remaining assets by December 31,
1998. Should the Partnership be fully liquidated by December 31, 1998, the
Partnership will make a final distribution of excess cash, if any.
8
<PAGE>
PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
March 31, 1998
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
9
<PAGE>
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, 1998 Executive Vice President, /S/ GARY W. MARTINEZ
- ----------------- Chief Operating Officer --------------------
and a Director of (Gary W. Martinez)
Phoenix Leasing Incorporated
General Partner
May 13, 1998 Chief Financial Officer, /S/ HOWARD SOLOVEI
- ----------------- Treasurer and a Director of --------------------
Phoenix Leasing Incorporated (Howard Solovei)
General Partner
May 13, 1998 Senior Vice President, /S/ BRYANT J. TONG
- ----------------- Financial Operations ------------------
(Principal Accounting Officer) (Bryant J. Tong)
and a Director of
Phoenix Leasing Incorporated
General Partner
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 123
<SECURITIES> 25
<RECEIVABLES> 15
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 56
<DEPRECIATION> 56
<TOTAL-ASSETS> 293
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 272
<TOTAL-LIABILITY-AND-EQUITY> 293
<SALES> 0
<TOTAL-REVENUES> 1
<CGS> 0
<TOTAL-COSTS> 9
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8)
<EPS-PRIMARY> (1.09)
<EPS-DILUTED> 0
</TABLE>
