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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
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Commission file number 0-18042
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COMMUNITY INVESTMENT PARTNERS, L.P.
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(Exact name of registrant as specified in its charter)
MISSOURI 43-1531582
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12555 Manchester Road
St. Louis, Missouri 63131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
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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
--- ---
1
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COMMUNITY INVESTMENT PARTNERS, L.P.
INDEX
Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 3
Schedule of Portfolio Investments 4
Income Statement 5
Statement of Cash Flows 6
Statement of Changes in Partnership Capital 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. OTHER INFORMATION <F*>
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
[FN]
<F*> Items 2,3,4 and 5 are omitted as they are not applicable
2
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
BALANCE SHEET
(UNAUDITED)
<CAPTION>
September 30, December 31,
1998 1997
- ------------------------------------------------------------------------------
ASSETS
------
<S> <C> <C>
Investments at Fair Value
(cost $418,745 and $1,282,944, respectively) $479,579 $1,951,068
Cash and Cash Equivalents 148,666 146,085
Accrued Dividend and Interest Receivable -- 59,784
-------- ----------
TOTAL ASSETS $628,245 $2,156,937
======== ==========
<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
<S> <C> <C>
Liabilities:
Accounts Payable and Accrued Expenses $9,750 $ 13,000
-------- ----------
TOTAL LIABILITIES 9,750 13,000
-------- ----------
Partnership Capital:
Capital - Limited Partners 511,625 1,754,109
Capital - General Partners 106,870 389,828
-------- ----------
TOTAL PARTNERSHIP CAPITAL 618,495 2,143,937
-------- ----------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $628,245 $2,156,937
======== ==========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
3
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Initial Investment Date Investment Cost September 30, 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SAZTEC INTERNATIONAL, Provides services for database
INC. (SAZZ) construction and information
conversion
June 7, 1990 27,100 shares of Common Stock $ 78,324 $ 14,363
INTERMEDIA Organized to install and provide
COMMUNICATIONS OF private, dedicated telecommunication
FLORIDA (ICIX) lines using fiber optic cable
May 31, 1991 13,070 shares of Common Stock 18,397 320,999
CITATION COMPUTERS Provides clinical
(CITA) laboratory information
October 31, 1991 13,680 shares of Common Stock 33,578 38,441
VISION PARTNERS, L.P. Owns stock in Family Vision
Center, Inc., which operates leased
optical departments in host stores
October 19, 1992 Limited Partnership Interests 20,539 20,539
December 1, 1993 Limited Partnership Interests 5,704 5,704
ISOLYSER COMPANY, INC. Makes healthcare disposables from
(OREX) hot-water soluble polymer
August 30, 1996 68,563 shares of Common Stock 262,203 79,533
-------- --------
$418,745 $479,579
======== ========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
4
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
INCOME STATEMENT
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30 Sept. 30 Sept. 30
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------
INCOME
------
<S> <C> <C> <C> <C>
Dividend and Interest Income $ 1,122 $ 696 $ 8,723 $ 1,454
-------- -------- ---------- ---------
TOTAL INCOME 1,122 696 8,723 1,454
-------- -------- ---------- ---------
<CAPTION>
EXPENSES
--------
<S> <C> <C> <C> <C>
Professional Fees 4,813 6,516 20,706 7,816
Directors Fees -- -- 2,000 --
Other 515 548 1,266 548
-------- -------- ---------- ---------
TOTAL EXPENSES 5,328 7,064 23,972 8,364
-------- -------- ---------- ---------
Net (Loss) before Realized Gains and
Unrealized Gains (Losses) (4,206) (6,368) (15,249) (6,910)
Net Realized Gains on
Sale of Investments 672,380 312,623 1,199,587 390,797
Net Unrealized Gains (Losses) on
Investments 70,733 19,266 (607,290) (225,425)
-------- -------- ---------- ---------
NET INCOME $738,907 $325,521 $ 577,048 $ 158,462
======== ======== ========== =========
Per Unit Information:
Net Income $ 6.85 $ 3.02 $ 5.35 $ 1.47
======== ======== ========== =========
Net Asset Value
(as of September 30, 1998
and December 31, 1997) $ 5.74 $ 19.88
========== =========
Units Outstanding:
Limited Partners 87,820 87,820
General Partners 20,000 20,000
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The accompanying notes are an integral part of these financial statements.
</TABLE>
5
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
Sept. 30, 1998 Sept. 30, 1997
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<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net Income $ 577,048 $ 158,462
Adjustments to reconcile Net Income to Net
Cash Provided by Operating Activities -
Purchase of Portfolio Investments -- (1,197)
Sale of Portfolio Investments 2,063,786 522,239
Net Realized Gain on Sale of Portfolio Investments (1,199,587) (390,797)
Unrealized Loss on Investments 607,290 225,425
Decrease (Increase) in Accrued Interest
Receivable 59,784 (1,454)
Decrease in Accounts Payable
and Accrued Expenses (3,250) (5,800)
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Total Cash Provided by
Operating Activities 2,105,071 506,878
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CASH FLOWS USED BY FINANCING ACTIVITIES:
Capital Distribution (2,102,490) (539,100)
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Total Cash Used by Financing Activities (2,102,490) (539,100)
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Net Increase (Decrease) in Cash and Cash Equivalents 2,581 (32,222)
CASH AND EQUIVALENTS, Beginning of period 146,085 80,365
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CASH AND EQUIVALENTS, End of period $ 148,666 $ 48,143
=========== =========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
6
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL
(UNAUDITED)
<CAPTION>
Nine Months Ended September 30, 1998 and 1997
Limited Partners General Partners Total
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<S> <C> <C> <C>
Balance, December 31, 1996 $ 1,973,575 $ 439,807 $ 2,413,382
Net Income $ 129,067 $ 29,395 $ 158,462
Distribution (439,100) (100,000) (539,100)
----------- --------- -----------
Balance, September 30, 1997 $ 1,663,542 $ 369,202 $ 2,032,744
=========== ========= ===========
Balance, December 31, 1997 $ 1,754,109 $ 389,828 $ 2,143,937
Net Income 470,006 107,042 577,048
Distribution (1,712,490) (390,000) (2,102,490)
----------- --------- -----------
Balance, September 30, 1998 $ 511,625 $ 106,870 $ 618,495
=========== ========= ===========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
7
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
COMMUNITY INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
Community Investment Partners, L.P. (CIP) is a limited partnership
which has elected to be a business development company under the
Investment Company Act of 1940, as amended. As a business development
company, the partnership is required to invest at least 70% of its total
assets in qualifying investments as specified in the Investment Company
Act. CIP Management, L.P., LLLP (Management), a limited liability
limited partnership, is the Managing General Partner of CIP. Management
is responsible for making all decisions regarding CIP's investment
portfolio. CIP is no longer making initial investments.
All portfolio investments are carried at cost until significant
developments affecting an investment provide a basis for revaluation.
Thereafter, portfolio investments are carried at fair value as obtained
from outside sources or at a value determined quarterly by the Managing
General Partner under the supervision of the Independent General
Partners. Due to the inherent uncertainty of valuation, those estimated
values for portfolio investments carried at cost may differ
significantly from the values that would have been used had a ready
market for the investment existed, and the differences could be material
to the financial statements. Investments in securities traded on a
national securities exchange are valued at the latest reported sales
price on the last business day of the period. If no sale has taken
place, the securities are valued at the last bid price. If no bid price
has been reported, or if no exchange quotation is available, the
securities are valued at the quotation obtained from an outside broker.
Investment transactions are recorded on a trade date basis. Income is
recorded on an accrual basis.
8
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Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMMUNITY INVESTMENT PARTNERS, L.P.
MANAGEMENT'S FINANCIAL DISCUSSION
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1998 VERSUS QUARTER ENDED SEPTEMBER 30, 1997
Net income for the three months ended September 30, 1998 and 1997,
was $738,907 and $325,521, respectively. Income for the three months
ended September 30, 1998, was attributable to net realized and
unrealized gains on investments. The net realized gain of $672,380 for
the three months ended September 30, 1998, was comprised of a realized
gain of $1,106,627 on the liquidation of the Partnership's investment in
Innovation Medical Technologies, Inc. and a realized loss of $434,247 on
the sale of Vision Partners, L.P.
The net unrealized gain of $70,733 relates primarily to the
reversal of prior period unrealized losses on the sale of Vision
Partners, L.P. This unrealized gain was offset by unrealized losses
recorded on shares of Intermedia Communications of Florida (down 41%),
Isolyser Company, Inc. (down 56%), Saztec International, Inc. (down 23%)
and Citation Computers (down 41%), as their share prices decreased
significantly from the second quarter.
Dividend and interest income of $1,122 during the three months
ended September 30, 1998, represents additional dividends received when
the Partnership's investment in Innovation Medical Technologies, Inc.
was liquidated. Expenses of $5,328 for the three months ended September
30, 1998, deceased approximately $1,700, or 25%, compared to third
quarter 1997. This decrease is the result of lower professional fees.
During the quarter ended September 30, 1998, the Partnership made
a distribution of $12.50 per unit.
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS ENDED SEPTEMBER
30, 1997
Net income for the nine months ended September 30, 1998 and 1997,
was $577,048 and $158,462, respectively. Income for the nine months
ended September 30, 1998, was attributable to net realized gains on
investments offset by net unrealized losses on investments. The net
unrealized losses were due to both the reversal of prior period
unrealized gains on stock sales and unrealized losses recorded on shares
of Intermedia Communications of Florida (down 60%), Isolyser Company,
Inc. (down 51%) and Citation Computers (down 57%), as their share prices
decreased. These unrealized losses were partially offset by unrealized
gains on Saztec International, Inc.
Dividend and interest income increased approximately $7,300
between the nine months ended September 30, 1998 and 1997, due to
dividends received on the Innovation Medical Technologies, Inc. 6% Class
A and 6% Class B Preferred Stock. Expenses increased approximately
$15,600, mainly due to an increase in professional fees between the nine
month periods ended September 30, 1998 and 1997.
During the nine months ended September 30, 1998, the Partnership
made distributions totaling $19.50 per unit.
As of September 30, 1998, unrealized gains on investments totaled
$60,834. The future income or loss of the Partnership is contingent upon
the performance of the portfolio investments.
9
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Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
INVESTMENT TRANSACTIONS
Following is a summary of portfolio investment transactions during the
period ended September 30, 1998.
<TABLE>
<CAPTION>
Type of Realized
Company Transaction Cost Proceeds Gain (Loss)
- ------------------------- ------------------- -------- -------- -----------
<S> <C> <C> <C> <C>
Quarter 1 ended:
- ----------------
Innovation Medical Payment of
Technologies, Inc. Term Note $ 40,763 $ 40,763 $ 0
Innovation Medical Payment of
Technologies, Inc. Term Note 15,008 15,008 0
Intermedia Communications Sale of
of Florida Common Stock 19,712 546,919 527,207
Quarter 3 ended:
- ----------------
Innovation Medical Liquidation of
Technologies, Inc. Preferred Stock 239,994 1,346,621 1,106,627
Vision Partners, L.P. Liquidation of
Limited Partnership
Interests 548,722 114,475 (434,247)
-------- ---------- ----------
Totals $864,199 $2,063,786 $1,199,587
======== ========== ==========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998, the partnership's total capital of
$618,495 consisted of $511,625 in limited partner capital and $106,870
in general partner capital. Net income for the quarter was allocated to
the limited partners in the amount of $470,006 and to the general
partners in the amount of $107,042.
At September 30, 1998, the Partnership had $148,666 in cash and
cash equivalents.
SUBSEQUENT EVENTS
There were no subsequent events.
10
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Part II. OTHER INFORMATION
COMMUNITY INVESTMENT PARTNERS, L.P.
Item 1: Legal Proceedings
The partnership is not a party to any material pending legal
proceedings.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended September
30, 1998.
11
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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.
COMMUNITY INVESTMENT PARTNERS, L.P.
By: CIP Management, L.P., LLLP, Managing General Partner
By: CIP Management, Inc., its Managing General Partner
<TABLE>
<S> <C> <C>
/s/ Daniel A. Burkhardt President, Treasurer and Director November 13, 1998
-------------------
Daniel A. Burkhardt
/s/ Ray L. Robbins, Jr. Vice-President and Director November 13, 1998
-------------------
Ray L. Robbins, Jr.
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Community Investment Partners, L.P. for the
quarter ended September 30, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 418,745
<INVESTMENTS-AT-VALUE> 479,579
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 628,245
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,750
<TOTAL-LIABILITIES> 9,750
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 107,820
<SHARES-COMMON-PRIOR> 107,820
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 618,495
<DIVIDEND-INCOME> 8,723
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 1,199,587
<APPREC-INCREASE-CURRENT> (607,290)
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (2,102,490)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23,972
<AVERAGE-NET-ASSETS> 1,381,216
<PER-SHARE-NAV-BEGIN> 19.88
<PER-SHARE-NII> 5.35
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (19.50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.73
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
