<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998 Commission file number 0-18042
COMMUNITY INVESTMENT PARTNERS, L.P.
- -----------------------------------------------------------------------------
(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
------------------
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
---- ----
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<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
INDEX
<CAPTION>
Page
Number
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 3
Schedule of Portfolio Investments 4
Income Statement 6
Statement of Cash Flows 7
Statement of Changes in Partnership Capital 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II. OTHER INFORMATION<F*>
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<FN>
<F*> Items 2,3,4 and 5 are omitted as they are not applicable
</TABLE>
2
<PAGE> 3
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
BALANCE SHEET
(UNAUDITED)
<CAPTION>
June 30, December 31,
1998 1997
- --------------------------------------------------------------------------------------------------
ASSETS
------
<S> <C> <C>
Investments at Fair Value
(cost $1,207,461 and $1,282,944, respectively) $1,197,562 $1,951,068
Cash and Cash Equivalents 28,985 146,085
Accrued Dividend and Interest Receivable 7,291 59,784
---------- ----------
TOTAL ASSETS $1,233,838 $2,156,937
========== ==========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
Liabilities:
Accounts Payable and Accrued Expenses $ 6,500 $ 13,000
---------- ----------
TOTAL LIABILITIES 6,500 13,000
---------- ----------
Partnership Capital:
Capital - Limited Partners 1,007,535 1,754,109
Capital - General Partners 219,803 389,828
---------- ----------
TOTAL PARTNERSHIP CAPITAL 1,227,338 2,143,937
---------- ----------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $1,233,838 $2,156,937
========== ==========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE> 4
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 June 30, 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Saztec International, Inc. Provides services for database
(SAZZ) construction and information
conversion
June 7, 1990 27,100 shares of Common Stock $ 78,324 $ 18,631
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 18,397 548,123
Innovation Medical Manufactures highly specialized
Technologies, Inc. medical instruments for use in
ophthalmic surgery
July 26, 1991 5,769 shares of 6% Class A
Cumulative Convertible
Preferred Stock 149,994 149,994
March 11, 1992 5,625 shares of 6% Class B
Convertible Preferred Stock 90,000 90,000
September 30, 1992 Warrants to purchase
14,400 shares of Common Stock
at $2.50 per share, expiring 12/31/00 0 0
May 26, 1994 Warrants to purchase 2,800 shares of
Common Stock at $5.00 per share,
expiring 12/31/02 0 0
Citation Computers Provides clinical
(CITA) laboratory information
October 31, 1991 13,680 shares of Common Stock 33,578 64,980
- ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE> 5
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (cont'd)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Initial Investment Date Investment Cost June 30, 1998
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<S> <C> <C> <C>
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 450,000 112,476
December 1, 1993 Limited Partnership Interests 124,965 31,234
Isolyser Company, Inc. Makes healthcare disposables from
(OREX) hot-water soluble polymer
August 30, 1996 68,563 shares of Common Stock 262,203 182,124
---------- ----------
$1,207,461 $1,197,562
========== ==========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE> 6
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
INCOME STATEMENT
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
===================================================================================================================
INCOME
------
<S> <C> <C> <C> <C>
Dividend and Interest Income $ 3,898 $ 697 $ 7,601 $ 758
--------- -------- --------- ---------
TOTAL INCOME 3,898 697 7,601 758
--------- -------- --------- ---------
EXPENSES
--------
Professional Fees 11,928 774 15,893 1,300
Directors Fees 1,000 -- 2,000 --
Other 730 -- 751 --
--------- -------- --------- ---------
TOTAL EXPENSES 13,658 774 18,644 1,300
--------- -------- --------- ---------
Net (Loss) before Realized Gains and
Unrealized (Losses) Gains (9,760) (77) (11,043) (542)
Net Realized Gains on
Sale of Investments -- 78,174 527,207 78,174
Net Unrealized (Losses) Gains on
Investments (466,299) 151,664 (678,023) (244,691)
--------- -------- --------- ---------
NET (LOSS) INCOME $(476,059) $229,761 $(161,859) $(167,059)
========= ======== ========= =========
Per Unit Information:
Net (Loss) Income $ (4.42) $ 2.13 $ (1.50) $ (1.55)
========= ======== ========= =========
Net Asset Value (as of June 30, 1998
and December 31, 1997) $ 11.38 $ 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>
6
<PAGE> 7
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Six Months Ended
June 30, 1998 June 30, 1997
=============================================================================================
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net Loss $(161,859) $(167,059)
Adjustments to reconcile Net Loss to Net
Cash Provided by Operating Activities -
Purchase of Portfolio Investments -- (1,197)
Sale of Portfolio Investments 602,690 86,622
Net Realized Gain on Sale of Portfolio Investments (527,207) (78,174)
Unrealized Loss on Investments 678,023 244,691
Decrease (Increase) in Accrued Interest
Receivable 52,493 (758)
Decrease in Accounts Payable
and Accrued Expenses (6,500) (12,100)
--------- ---------
Total Cash Provided by
Operating Activities 637,640 72,025
--------- ---------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Capital Distribution (754,740) --
--------- ---------
Total Cash Used by Financing Activities (754,740) --
--------- ---------
Net (Decrease) Increase in Cash and Cash Equivalents (117,100) 72,025
CASH AND EQUIVALENTS, Beginning of period 146,085 80,365
--------- ---------
CASH AND EQUIVALENTS, End of period $ 28,985 $ 152,390
========= =========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
7
<PAGE> 8
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, 1998 and 1997
Limited Partners General Partners Total
================================================================================================
<S> <C> <C> <C>
Balance, December 31, 1996 $1,973,575 $ 439,807 $2,413,382
Net Loss (136,070) (30,989) (167,059)
---------- --------- ----------
Balance, June 30, 1997 $1,837,505 $ 408,818 $2,246,323
========== ========= ==========
Balance, December 31, 1997 $1,754,109 $ 389,828 $2,143,937
Net Loss (131,834) (30,025) (161,859)
Distribution (614,740) (140,000) (754,740)
---------- --------- ----------
Balance, June 30, 1998 $1,007,535 $ 219,803 $1,227,338
========== ========= ==========
================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
8
<PAGE> 9
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.
9
<PAGE> 10
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 JUNE 30, 1998 VERSUS QUARTER ENDED JUNE 30, 1997
Net loss for the three months ended June 30, 1998, was $476,059,
compared to net income of $229,761 for the three months ended June 30, 1997.
The loss for the three months ended June 30, 1998 was primarily attributable
to an unrealized loss of $431,000 on Vision Partners, L.P., due to the
decrease in the investment's underlying value. Additionally, there was an
unrealized loss of $63,000 on Citation Computers, due to a decline in its
share price. These unrealized losses were offset partially by unrealized
gains on Intermedia Communications of Florida and Isolyser Company, Inc.
Dividend and interest income increased approximately $3,200 from the
three months ended June 30, 1997 due to dividends accrued for Innovation
Medical Technologies, Inc. 6% Class A and 6% Class B Preferred Stock.
Expenses increased approximately $12,900 during this same period, due to
increased consulting fees, payment to the directors for attending a Board of
Directors meeting and payment of legal and trustee fees.
SIX MONTHS ENDED JUNE 30, 1998 VERSUS SIX MONTHS ENDED JUNE 30, 1997
Losses for the six months ended June 30, 1998 and 1997 were $161,859
and $167,059, respectively. Losses for the six months ended June 30, 1998,
were attributable to unrealized losses on investments offset by realized
gains on investments. The unrealized losses were primarily due to the
write-down of CIP's investment in Vision Partners, L.P., as its underlying
value declined significantly. Additionally, there were unrealized losses due
to reversals of prior period unrealized gains on stock sales. These
unrealized losses were partially offset by unrealized gains recorded on
shares of Intermedia Communications of Florida, Isolyser Company, Inc. and
Saztec International, Inc., as their share prices increased.
Dividend and interest income increased approximately $6,800 between the
six months ended June 30, 1998 and June 30, 1997 due to accrued dividends.
Expenses increased approximately $17,000, mainly due to an increase in
professional fees between the six month periods ended June 30, 1998 and 1997.
During the second quarter of 1998, the stock of Intermedia
Communications of Florida had a two-for-one stock split.
As of June 30, 1998, unrealized losses on investments totaled $9,899.
The future income or loss of the Partnership is contingent upon the
performance of the portfolio investments.
10
<PAGE> 11
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 June 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
------- -------- --------
Totals $75,483 $602,690 $527,207
======= ======== ========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The partnership's total capital of $1,227,338 as of June 30, 1998,
consisted of $1,007,535 in limited partner capital and $219,803 in general
partner capital. Net loss for the quarter was allocated to the limited
partners in the amount of $131,834 and to the general partners in the amount
of $30,025.
At June 30, 1998, the Partnership had $28,985 in cash and cash
equivalents.
SUBSEQUENT EVENTS
On July 30, 1998, Innovation Medical Technologies, Inc. merged with
Breck, Inc. and Alcon Laboratories, Inc. CIP's investment in Innovation
Medical Technologies, Inc. was liquidated and CIP received cash of
$1,346,621. Additionally, $274,315 is being held in escrow, for possible
future distribution. As a result of this transaction, a gain of $1,106,627
will be realized in the third quarter of 1998. CIP also received cash of
$8,413 for dividends due on the Innovation Medical Technologies, Inc.
Preferred Stock. CIP distributed $1,347,750, or $12.50 per unit, to unit
holders on August 3, 1998.
11
<PAGE> 12
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
June 30, 1998.
12
<PAGE> 13
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 August 14, 1998
-------------------------
Daniel A. Burkhardt
/s/ Ray L. Robbins, Jr.
Vice-President and Director August 14, 1998
-------------------------
Ray L. Robbins, Jr.
</TABLE>
13
<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 June 30, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,207,461
<INVESTMENTS-AT-VALUE> 1,197,562
<RECEIVABLES> 7,291
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,233,838
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,500
<TOTAL-LIABILITIES> 6,500
<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> 1,227,338
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,601
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 527,207
<APPREC-INCREASE-CURRENT> (678,023)
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (754,740)
<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> 18,644
<AVERAGE-NET-ASSETS> 1,685,638
<PER-SHARE-NAV-BEGIN> 19.88
<PER-SHARE-NII> (1.50)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (7.00)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.38
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
