<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 September 30, 1999
-------------------
[ ] 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)
<TABLE>
<CAPTION>
<S> <C> <C>
California 33-0363181
- ------------------------------------------------------------- ---------------------------------
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
6160 So. Syracuse Way, Greenwood Village, Colorado 80111
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(Address of principal executive offices)
(303) 741-3707
------------------------------------
(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 ( )
----- -----
Transitional small business disclosure format (check one): Yes [ ] No [X]
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TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 2
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 11
SIGNATURE 12
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PART I
------
Certain matters discussed under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Quarterly
Report on Form 10-QSB may constitute forward-looking statements for purposes of
Section 21E of the Securities Exchange Act of 1934, as amended, and as such
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Windsor Park Properties 7, A
California Limited Partnership, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.
1
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Item 1. Financial Statements
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
BALANCE SHEET
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(unaudited)
<TABLE>
<CAPTION>
September 30, 1999
-----------------------------------
ASSETS
- ------
<S> <C> <C>
Property held for investment:
Land $ 2,735,100
Buildings and improvements 11,075,400
Fixtures and equipment 209,000
-----------------------------------
14,019,500
Less accumulated depreciation (3,587,400)
-----------------------------------
10,432,100
Investments in joint ventures and limited partnerships 4,503,400
Cash and cash equivalents 276,700
Deferred financing costs 121,700
Other assets 115,700
-----------------------------------
$ 15,449,600
===================================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage notes payable $ 7,220,000
Accounts payable 100
Accrued expenses 315,800
Tenant deposits and other liabilities 46,100
Due to General Partners and affiliates 69,200
-----------------------------------
7,651,200
-----------------------------------
Partners' equity:
Limited partners 7,853,100
General partners (54,700)
-----------------------------------
7,798,400
-----------------------------------
$ 15,449,600
===================================
</TABLE>
See accompanying notes to financial statements
2
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------------------------
1999 1998
---------------------------- ------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 698,300 $ 663,500
Equity in earnings of joint ventures and limited 57,000 40,900
partnerships
Interest 400 2,600
Other 7,500 8,200
---------------------------- ------------------------
763,200 715,200
---------------------------- ------------------------
COSTS AND EXPENSES
- ------------------
Property operating 324,700 289,500
Interest 160,800 166,900
Depreciation and amortization 158,200 150,800
General and administrative:
Related parties 6,300 10,500
Other 44,100 12,300
---------------------------- ------------------------
694,100 630,000
---------------------------- ------------------------
Net income $ 69,100 $ 85,200
============================ ========================
Net income - general partners $ 700 $ 900
============================ ========================
Net income - limited partners $ 68,400 $ 84,300
============================ ========================
Basic and diluted earnings per limited partnership
unit $ 0.45 $ 0.54
============================ ========================
</TABLE>
See accompanying notes to financial statements
3
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WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------
1999 1998
---------------------------- ------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 2,059,100 $ 1,949,300
Equity in earnings of joint ventures and limited 173,900 97,200
partnerships
Interest 1,100 13,200
Other 21,400 22,800
---------------------------- ------------------------
2,255,500 2,082,500
---------------------------- ------------------------
COSTS AND EXPENSES
- ------------------
Property operating 887,500 838,800
Interest 477,100 501,000
Depreciation and amortization 467,000 452,500
General and administrative:
Related parties 19,000 31,800
Other 75,500 47,000
---------------------------- ------------------------
1,926,100 1,871,100
---------------------------- ------------------------
Net income $ 329,400 $ 211,400
============================ ========================
Net income - general partners $ 3,300 $ 2,100
============================ ========================
Net income - limited partners $ 326,100 $ 209,300
============================ ========================
Basic and diluted earnings per limited partnership
unit $ 2.11 $ 1.34
============================ ========================
</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>
Nine Months Ended September 30,
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1999 1998
--------------------------- ------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 329,300 $ 211,400
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 467,000 452,500
Equity in earnings of joint ventures and
limited partnerships (173,900) (97,200)
Joint ventures' and limited partnerships cash
distributions 173,900 97,200
Amortization of deferred financing costs 31,800 31,900
Changes in operating assets and liabilities:
Other assets (72,900) (107,200)
Accounts payable (1,500) (19,800)
Accrued expenses 94,400 228,000
Due to General Partners and affiliates 41,400 (66,700)
Tenant deposits and other liabilities (200) (68,900)
--------------------------- ------------------------
Net cash provided by operating activities 889,300 661,200
--------------------------- ------------------------
Cash flows from investing activities:
Joint ventures' and limited partnerships cash
distributions 283,200 315,800
Increase in property held for investment (91,700) (68,100)
Investment in joint venture and limited
partnerships (30,300) 100
--------------------------- ------------------------
Net cash provided by investing activities 161,200 247,800
--------------------------- ------------------------
Cash flows from financing activities:
Distributions (877,200) (889,800)
Repayment of mortgage note payable 0 (200,000)
Repurchase of limited partnership units (80,200) (123,800)
--------------------------- ------------------------
Net cash used in (provided by) financing activities (957,400) (1,213,600)
--------------------------- ------------------------
Net (decrease) increase in cash and cash equivalents 93,100 (304,600)
Cash and cash equivalents at beginning of period 183,600 478,700
--------------------------- ------------------------
Cash and cash equivalents at end of period $ 276,700 $ 174,100
=========================== ========================
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
WINDSOR PARK PROPERTIES 7
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP
Windsor Park Properties 7, A California Limited Partnership (the "Partnership"),
was formed in June 1989 for the purpose of acquiring and holding existing
manufactured home communities for investment. The General Partners of the
Partnership are The Windsor Corporation, a California corporation ("TWC"), and
John A. Coseo, Jr. In September 1998, Chateau Communities, Inc., a publicly
held real estate investment trust ("Chateau"), purchased 100% of the shares of
TWC.
The Partnership was funded through a public offering of 250,000 limited
partnership units at $100 per unit, which commenced in March 1990 and terminated
in January 1992. The Partnership term is set to expire on December 31, 2005;
however, the Partnership may either be dissolved earlier or extended under
certain circumstances. The Partnership may be extended at the recommendation of
the General Partners with approval of a majority of the Limited Partners.
The Partnership was organized in March 1990 and, thus, many of our current
Limited Partners have held an investment in the Partnership for more than nine
years. The General Partners believe that many of the Limited Partners would
like to have the opportunity to achieve liquidity in their investment in the
Partnership. Accordingly, the General Partners are currently exploring possible
strategic alternatives for the Partnership with a view towards providing Limited
Partners with the opportunity to achieve liquidity in their investment. There
can, however, be no assurances that any proposal determined by the General
Partners to be in the best interests of the Limited Partners will be consummated
or that the Partnership will not continue in its current form until the end of
its stated term.
NOTE 2. BASIS OF PRESENTATION
The balance sheet at September 30, 1999 and the related statements of operations
for the three and nine months ended September 30, 1999 and 1998 and the
statements of cash flows for the nine months ended September 30, 1999 and 1998
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 on Form 10-KSB for the year ended December 31,
1998.
6
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NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
------------------------------------------------------
The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities at September 30, 1999. The
combined condensed results of operations of the joint venture and limited
partnership properties for the nine months ended September 30, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>
1999 1998
---------------------- ---------------------
<S> <C> <C>
Total revenues $ 3,423,100 $ 3,251,900
Expenses:
Property operating 1,719,700 1,657,400
Interest 891,900 970,100
Depreciation 587,000 561,500
General and administrative 14,400 12,200
---------------------- ---------------------
3,213,000 3,201,200
---------------------- ---------------------
Net income $ 210,100 $ 50,700
====================== =====================
</TABLE>
NOTE 4. BASIC AND DILUTIVE EARNINGS PER LIMITED PARTNERSHIP UNIT
--------------------------------------------------------
Basic and dilutive earnings 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
nine months ended September 30, 1999 was 153,657 and 154,198 respectively; and
155,811 and 156,123 for the three and nine months ended September 30,1998
respectively.
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 nine months ended September 30, 1999 and 1998
follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------- --------------------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C> <C>
Net income Limited Partners $ 326,100 $ 2.11 $ 209,300 $ 1.34
Return of capital 542,200 3.52 688,000 4.41
-------------- ------------- -------------- -------------
$ 868,300 $ 5.63 $ 897,300 $ 5.75
============== ============= ============== =============
</TABLE>
7
<PAGE>
Item 2.
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Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended September 30, 1999 as compared to three months ended
- -----------------------------------------------------------------------
September 30, 1998
- ------------------
The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Form 10-QSB.
Results of Operations
- ---------------------
The Partnership realized net income of $69,100 and $85,200 for the three months
ended September 30, 1999 and 1998, respectively. Net income per limited
partnership unit was $0.45 in 1999 compared to $0.54 in 1998.
Rent and utilities revenues increased from $663,500 in 1998 to $698,300 in 1999
due to rental increases recognized at the communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five joint venture and limited
partnership properties. Equity in earnings of joint ventures and limited
partnerships increased from $40,900 in 1998 to $57,000 in 1999, primarily due to
rental increases at the Carefree and Garden Walk communities.
Property operating expenses increased from $289,500 in 1998 to $324,700 in 1999
due mainly to higher property tax expenses.
Interest expense decreased from $166,900 in 1998 to $160,800 in 1999 due to
lower interest rates.
General and administrative expenses increased from $22,800 in 1998 to $50,400 in
1999 due mainly to costs incurred to appraise the Partnership's properties.
Nine months ended September 30, 1999 as compared to nine months ended September
- -------------------------------------------------------------------------------
30, 1998
- --------
Results of Operations
- ---------------------
The Partnership realized net income of $329,400 and $211,400 for the nine months
ended September 30, 1999 and 1998, respectively. Net income per limited
partnership unit was $2.11 in 1999 compared to $1.34 in 1998.
Rent and utilities revenues increased from $1,949,300 in 1998 to $2,059,100 in
1999 due to rental increases recognized in the communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five joint ventures and limited
partnership properties. Equity in earnings of joint ventures and limited
partnerships increased from $97,200 in 1998 to $173,900 in 1999, primarily due
to rental increases at the Carefree and Garden Walk Communities.
Interest income decreased from $13,200 in 1998 to $1,100 in 1999 due to lower
cash balances maintained by the partnership.
Property operating expenses increased from $838,800 in 1998 to $887,500 in 1999
due mainly to higher
8
<PAGE>
utilities and higher property tax expenses.
Interest expense decreased from $501,000 in 1998 to $477,100 in 1999 due to
lower interest rates.
General and administrative expenses increased from $78,800 in 1998 to $94,500 in
1999 due to costs incurred to appraise the Partnership's properties.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary sources of cash during the nine months ended September
30, 1999 were from the operations of its investment properties and cash
distributions from joint ventures. The primary uses of cash during the same
period were for cash distributions to partners.
No further investment property acquisitions are planned by the General Partners.
At September 30, 1999, the Partnership's total mortgage debt, including its
proportionate share of joint venture and limited partnership debt, was
$14,835,600, consisting of $1,500,000 of fixed rate debt and $13,335,600 of
variable rate debt. The average rate of interest on the fixed and variable rate
debt was 8.8% and 8.5%, respectively, at September 30, 1999.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, and ultimately from the sale of the 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.
Inflation
- ---------
All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the leases are month-
to-month and enable the Partnership to seek market rentals upon reletting the
sites. Such leases generally minimize the risk to the Partnership of any
adverse effect of inflation.
Year 2000 Compliance
- --------------------
The General Partners have assessed the impact of the year 2000 issue on its
reporting systems and operations. The year 2000 issue exists because many
computer systems and applications abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits are always "19". As a
result, date-sensitive computer programs may recognize a date using "00" as the
year 1900 rather than the year 2000. Unless corrected, the potential exists for
computer system failures or incorrect processing of financial and operational
information, which could disrupt operations.
Substantially all of the computer systems and applications and operating systems
in use in use by TWC and the properties have been, or are in the process of
being upgraded and modified. The Partnership is of the opinion that, in
connection with those upgrades and modifications, it has addressed applicable
year 2000 issues as they might affect the computer systems and applications
located in the Partnership's offices and properties. The Partnership anticipates
that implementation of solutions to any year 2000 issue which it may discover
will require the expenditure of sums which the Partnership does not expect to be
material.
The Partnership is exposed to the risk that one or more of its vendors or
service providers may experience year 2000 problems which impact the ability of
such vendor or service provider to provide goods and
9
<PAGE>
services. Due to the availability of alternative suppliers, this is not
considered as significant a risk with respect to the suppliers of goods. The
disruption of certain services, however, such as utilities, could, depending
upon the extent of the disruption, have a material adverse impact on the
Partnership's operations. To date, the Partnership is not aware of any vendor or
service provider year 2000 issue that the General Partners believe would have a
material adverse impact on the Partnership's operations. The Partnership,
however, has no means of ensuring that its vendors or service providers will be
year 2000 ready. The inability of vendors or service providers to complete the
year 2000 resolution process in a timely fashion could have an adverse impact on
the Partnership and the effect of non-compliance by vendors or service providers
is not determinable at this time. Residents who pay rent to the Partnership do
not pose year 2000 problems for the Partnership given the type and nature of the
Partnership's properties and residents.
Widespread disruptions in the national or international economy, including
disruptions affecting the financial markets, resulting from year 2000 issues, or
in certain industries, such as commercial or investment banks, could also have
an adverse impact on the Partnership. The likelihood and effect of such
disruptions is not determinable at this time.
The General Partners expect to have all systems appropriately modified before
any significant processing malfunctions could occur and does not expect the year
2000 issue will materially impact the financial condition or operations of the
Partnership.
10
<PAGE>
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
None
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 7,
A California Limited Partnership
By: The Windsor Corporation, its Managing General Partner
By /s/ Steven G. Waite
---------------------
STEVEN G. WAITE
President
Date: November 12, 1999
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 276,700
<SECURITIES> 0
<RECEIVABLES> 115,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,019,500
<DEPRECIATION> (3,587,400)
<TOTAL-ASSETS> 15,449,600
<CURRENT-LIABILITIES> 0
<BONDS> 7,220,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,449,600
<SALES> 0
<TOTAL-REVENUES> 2,255,500
<CGS> 0
<TOTAL-COSTS> 887,500
<OTHER-EXPENSES> 561,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 477,100
<INCOME-PRETAX> 329,400
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 329,400
<EPS-BASIC> 2.11
<EPS-DILUTED> 2.11
</TABLE>
