<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 March 31, 1996
--------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ________________
Commission file number 000-21722
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WINDSOR PARK PROPERTIES 7, A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0363181
- - ---------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
------------------------------------------------------------
(Address of principal executive offices)
(619) 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 [_]
1
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TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II
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Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE
2
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
March 31, 1996
-----------------
ASSETS
- - ------
<S> <C>
Property held for investment:
Land $ 2,759,700
Buildings and improvements 10,452,700
Fixtures and equipment 132,700
-----------------
13,345,100
Less accumulated depreciation (1,492,400)
-----------------
11,852,700
Investments in joint ventures 4,947,000
Cash and cash equivalents 753,700
Note receivable from general partners 679,300
Deferred financing costs 269,800
Other assets 215,500
-----------------
$ 18,718,000
=================
LIABILITIES AND PARTNERS' EQUITY
- - --------------------------------
Liabilities:
Mortgage notes payable $ 7,220,000
Accounts payable 18,400
Accrued expenses 127,700
Tenant deposits and other liabilities 64,100
Distribution payable 66,300
-----------------
7,496,500
-----------------
Partners' equity:
Limited partners 11,245,400
General partners (23,900)
-----------------
11,221,500
-----------------
$ 18,718,000
=================
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
WINDSOR PARK PROPERTIES 7
----------------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
----------------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------
1996 1995
------------- ------------
<S> <C> <C>
REVENUES
- - --------
Rent and utilities $ 575,800 $ 367,200
Equity in earnings of joint ventures 79,600 65,500
Interest 21,200 16,300
Other 6,500 13,100
------------- ------------
683,100 462,100
------------- ------------
COSTS AND EXPENSES
- - ------------------
Property operating 244,300 145,600
Interest 161,900
Depreciation and amortization 141,200 89,600
General and administrative:
Related parties 17,500 12,900
Other 10,000 15,900
------------- ------------
574,900 264,000
------------- ------------
Net income $ 108,200 $ 198,100
============= ============
Net income - general partners $ 1,100 $ 2,000
============= ============
Net income - limited partners $ 107,100 $ 196,100
============= ============
Net income per limited partnership unit $ 0.68 $ 1.23
============= ============
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
------------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 108,200 $ 198,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 141,200 89,600
Equity in earnings of joint ventures (79,600) (65,500)
Joint ventures' cash distributions 79,600 65,500
Gain on sale of property held for investment (400) (8,900)
Amortization of deferred financing costs 10,600
Changes in operating assets and liabilities:
Other assets 17,500 3,500
Accounts payable (14,600) (16,700)
Accrued expenses 21,400 7,700
Tenant deposits and other liabilities 7,800 1,000
------------- -----------
Net cash provided by operating activities 291,700 274,300
------------- -----------
Cash flows from investing activities:
Joint ventures' cash distributions 96,600 32,500
Increase in property held for investment (41,700) (4,200)
Note receivable from general partners 8,800 5,800
Proceeds on sale of property held for investment and
other assets 1,000 43,000
------------- ----------
Net cash provided by investing activities 64,700 77,100
------------- -----------
Cash flows from financing activities:
Distributions (289,500) (281,300)
Repurchase of limited partnership units (3,000)
------------- -----------
Net cash used in financing activities (292,500) (281,300)
------------- -----------
Net increase in cash and cash equivalents 63,900 70,100
Cash and cash equivalents at beginning of period 689,800 303,600
------------- -----------
Cash and cash equivalents at end of period $ 753,700 $ 373,700
============= ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ 155,600 $ ---
============= ===========
</TABLE>
See accompanying notes to financial statements.
5
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at March 31, 1996 and the related statements of operations and
of cash flows for the three months ended March 31, 1996 and 1995 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 three manufactured
home communities in 1996 and one manufactured home community in 1995. The
combined condensed results of operations of the joint ventures for the three
months ended March 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Total revenues $ 947,300 $ 310,700
----------- -----------
Expenses:
Property operating 448,900 126,100
Interest 240,100
Depreciation 133,100 67,500
----------- -----------
822,100 193,600
----------- -----------
Net income $ 125,200 $ 117,100
=========== ===========
</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 months ended March 31,
1996 and 1995 was 158,129 and 159,102, 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).
6
<PAGE>
The General Partners are entitled to receive various fees and compensation from
the Partnership which are summarized as follows:
Operational Stage
- - -----------------
Investment properties acquired subsequent to November 1994 are managed by The
Windsor Corporation. For management services, Windsor receives 5% of gross
property receipts. During the three months ended March 31, 1996, Windsor
received fees of $8,800. Windsor received no fees during the three months ended
March 31, 1995.
The 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. During the three months ended March 31, 1996 and 1995, the
General Partners received cash distributions from operations of $2,900 and
$2,800, respectively.
The Partnership reimburses The Windsor Corporation for certain direct expenses,
and employee, executive and administrative time, which are incurred on the
Partnership's behalf. The Partnership was charged $22,000 and $16,000 for such
costs during the three months ended March 31, 1996 and 1995, respectively.
These costs are included in property operating and general and administrative
expenses in the accompanying Statements of Operations.
Liquidation Stage
- - -----------------
During the Partnership's liquidation stage, the total compensation paid to all
persons for the sale of investment properties is limited to competitive real
estate commissions, not to exceed 6% of the contract price for the sale of the
property. The General Partners may receive up to one-half of the competitive
real estate commission, not to exceed 3%, if they provide a substantial amount
of services in the sales effort. The General Partners' commission is
subordinated to the Limited Partners receiving a 6% cumulative, non-compounded
annual return on their original invested capital.
The General Partners also receive 15% of profits, losses, and cash distributions
from the sale or financing of Partnership properties after the Limited Partners
have received a 9% cumulative, non-compounded, annual return on their invested
capital.
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 three months ended March 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
----------------------- -----------------------
Per Per
Amount Unit Amount Unit
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 107,100 $ 0.68 $ 196,100 $ 1.23
Return of capital 179,500 1.13 82,200 0.52
----------- --------- ----------- ---------
$ 286,600 $ 1.81 $ 278,300 $ 1.75
=========== ========= =========== =========
</TABLE>
7
<PAGE>
WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- - -------------------------------
March 31, 1996 as compared to December 31, 1995
- - -----------------------------------------------
The Partnership's primary sources of cash during the three months ended March
31, 1996 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 have been no significant changes in the financial condition of the
Partnership since December 31, 1995. Partners' equity decreased from
$11,405,800 at December 31, 1995 to $11,221,500 at March 31, 1996 due to cash
distributions of $289,500 and repurchased limited partnership units of $3,000,
exceeding net income of $108,200.
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,
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
- - ---------------------
Three months ended March 31, 1996 as compared to three months ended March 31,
- - -----------------------------------------------------------------------------
1995
- - ----
The results of operations for the three months ended March 31, 1996 and 1995 are
not directly comparable due to the purchases of interests in the Lucerne, Long
Lake Village, Garden Walk and Village Glen manufactured home communities in June
1995, June 1995, August 1995 and October 1995, respectively. The Partnership
realized net income of $108,200 and $198,100 for the three months ended March
31, 1996 and 1995, respectively. Net income per limited partnership unit was
$0.68 in 1996 as compared to $1.23 in 1995.
As a result of the investment property purchases described above, all major
revenue and expense categories increased in 1996, specifically, rent and
utilities revenues, equity in earnings of joint ventures, property operating
costs and depreciation and amortization.
The overall occupancy of the Partnership's five wholly owned properties was 97%
at March 31, 1996 compared to 92% for three wholly owned properties at March 31,
1995. Recent rent increases implemented at wholly owned properties include $8
per month at North Glen effective July 1995, $9 and $12 per month at Kings and
Queens and Village Glen, respectively effective January 1996, and $8 per month
at Lucerne effective March 1996.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of three joint venture properties in 1996 and one joint venture
property in 1995. Long Lake Village and Garden Walk were purchased in 1995 as
discussed previously. The overall occupancy of the three joint venture
properties was 90% at March 31, 1996. Recent rent raises implemented at joint
venture properties include $10 per month at Carefree effective September 1995,
and $10 per month at both Long Lake and Garden Walk effective January 1996.
8
<PAGE>
Interest income increased from $16,300 in 1995 to $21,200 in 1996 due mainly to
higher cash balances maintained by the Partnership.
Interest expense of $161,900 in 1996 represents interest incurred on three loans
totaling $7,220,000 obtained by the Partnership in 1995. The Partnership
incurred no interest expense in 1995.
General and administrative expenses decreased slightly from $28,800 in 1995 to
$27,500 in 1996.
9
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PART II
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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.
10
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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 7,
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: May 10, 1996
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 7 AS OF MARCH 31, 1996 AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE THREE MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 753,700
<SECURITIES> 0
<RECEIVABLES> 679,300
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,345,100
<DEPRECIATION> 1,492,400
<TOTAL-ASSETS> 18,718,000
<CURRENT-LIABILITIES> 0
<BONDS> 7,220,000
0
0
<COMMON> 0
<OTHER-SE> 11,221,500<F1>
<TOTAL-LIABILITY-AND-EQUITY> 18,718,000
<SALES> 0
<TOTAL-REVENUES> 683,100
<CGS> 0
<TOTAL-COSTS> 244,300
<OTHER-EXPENSES> 168,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 161,900
<INCOME-PRETAX> 108,200
<INCOME-TAX> 0
<INCOME-CONTINUING> 108,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,200
<EPS-PRIMARY> 0.68<F2>
<EPS-DILUTED> 0
<FN>
<F1> Limited and general partners equity.
<F2> Net income per limited partnership unit.
</FN>
</TABLE>
