<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13
or 15 (d) of the Securities
Exchange Act of 1934
----------------------------------
For the Quarter Ended
March 31, 2000 Commission File Number 0-19466
- ---------------------- ---------------------- -------
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3684373
-------------- ---------------------------
State or other IRS Employer Identification
jurisdiction of Number
incorporation or
organization
1300 E. Woodfield Road, Suite 312 Schaumburg, Illinois 60173
- --------------------------------- --------------------------
Address of principal City, State, Zip Code
executive offices
Registrant's telephone number: (847) 240-6200
--------------
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.
(1) Yes x No
--- ---
(2) Yes x No
--- ---
<PAGE> 2
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000
PART I - FINANCIAL INFORMATION
Item 1.
Index to Financial Statements
Balance Sheets
March 31, 2000 (unaudited) 3
December 31, 1999 4
Statements of Revenue and Expenses (unaudited)
For the three months ended March 31, 2000 5
For the three months ended March 31, 1999 6
Statements of Changes in Partners' Equity
For the three months ended March 31, 2000
(unaudited) 7
Statements of Cash Flows (unaudited)
For the three months ended March 31, 2000 8
For the three months ended March 31, 1999 9
Notes to Financial Statements (unaudited) 10
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 12
Item 3.
Quantitative and Qualitative Disclosures about
Market Risk 12
PART II - OTHER INFORMATION
Items 1-6. 13
2
<PAGE> 3
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
BALANCE SHEETS
March 31, 2000
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ----------
ASSETS
Cash and cash equivalents $ 343,994 $3,690,477 $4,034,471
Investments in commercial lease
paper, net -- -- --
Net investment in direct financing
leases -- 237,320 237,320
Diverted and other assets, net 262,119 1,284,305 1,546,424
Datronic assets, net -- -- --
---------- ---------- ----------
$ 606,113 $5,212,102 $5,818,215
========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 3,488 $ 42,592 $ 46,080
Lessee rental deposits 13,215 64,750 77,965
---------- ---------- ----------
Total liabilities 16,703 107,342 124,045
Total partners' equity 589,410 5,104,760 5,694,170
---------- ---------- ----------
$ 606,113 $5,212,102 $5,818,215
========== ========== ==========
See accompanying notes to financial statements
3
<PAGE> 4
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
BALANCE SHEETS
December 31, 1999
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ----------
ASSETS
Cash and cash equivalents $ 292,607 $3,247,374 $3,539,981
Investments in commercial lease
paper, net -- -- --
Net investment in direct financing
leases -- 391,584 391,584
Diverted and other assets, net 402,546 1,972,358 2,374,904
Datronic assets, net -- -- --
---------- ---------- ----------
$ 695,153 $5,611,316 $6,306,469
========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 2,229 $ 22,163 $ 24,392
Lessee rental deposits 14,172 69,439 83,611
---------- ---------- ----------
Total liabilities 16,401 91,602 108,003
Total partners' equity 678,752 5,519,714 6,198,466
---------- ---------- ----------
$ 695,153 $5,611,316 $6,306,469
========== ========== ==========
See accompanying notes to financial statements
4
<PAGE> 5
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended March 31, 2000
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ----------
Revenue:
Lease income $ 3,094 $ 34,673 $ 37,767
Interest income 2,293 35,818 38,111
--------- --------- ---------
5,387 70,491 75,878
--------- --------- ---------
Expenses:
General Partner's expense
reimbursement 93,524 470,196 563,720
Professional fees 3,937 40,742 44,679
Other operating expenses 1,458 8,038 9,496
Credit for lease losses (4,190) (33,531) (37,721)
--------- --------- ---------
94,729 485,445 580,174
--------- --------- ---------
Net loss $ (89,342) $(414,954) $(504,296)
========= ========= =========
Net loss - General Partner $ (893) $ (4,150) $ (5,043)
========= ========= =========
Net loss - Limited Partners $ (88,449) $(410,804) $(499,253)
========= ========= =========
Net loss per limited
partnership unit $ (2.61) $ (2.48)
========= =========
Weighted average number of limited
partnership units outstanding 33,858 165,901
========= =========
See accompanying notes to financial statements
5
<PAGE> 6
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended March 31, 1999
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ----------
Revenue:
Lease income $ 1,777 $ 68,953 $ 70,730
Interest income 9,471 56,338 65,809
--------- --------- ---------
11,248 125,291 136,539
--------- --------- ---------
Expenses:
General Partner's expense
reimbursement 36,069 232,957 269,026
Professional fees 7,593 47,065 54,658
Other operating expenses 494 2,920 3,414
Credit for lease losses (1,676) (58,212) (59,888)
Credit for loss on
commercial lease paper (479) (5,062) (5,541)
--------- --------- ---------
42,001 219,668 261,669
--------- --------- ---------
Net loss $ (30,753) $ (94,377) $(125,130)
========= ========= =========
Net loss - General Partner $ (307) $ (944) $ (1,251)
========= ========= =========
Net loss - Limited Partners $ (30,446) $ (93,433) $(123,879)
========= ========= =========
Net loss per limited
partnership unit $ (0.90) $ (0.56)
========= =========
Weighted average number of limited
partnership units outstanding 33,858 165,901
========= =========
See accompanying notes to financial statements
6
<PAGE> 7
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
General Limited Limited Total
Partner's Partners' Partners' Partners'
Equity Equity Equity Equity
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1999* $ -- $ 678,752 $ 5,519,714 $ 6,198,466
Net loss (5,043) (88,449) (410,804) (504,296)
Allocation of General
Partner's Equity 5,043 (893) (4,150) --
----------- ----------- ----------- -----------
Balance, March 31, 2000 $ -- $ 589,410 $ 5,104,760 $ 5,694,170
=========== =========== =========== ===========
</TABLE>
*Balances are net of $76,894 and $685,472 of General Partner's equity previously
allocated to Liquidating and Continuing Limited Partners' Equity.
See accompanying notes to financial statements
7
<PAGE> 8
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (89,342) $ (414,954) $ (504,296)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (4,190) (33,531) (37,721)
Changes in assets and liabilities:
Accounts payable and
accrued expenses 1,259 20,429 21,688
Lessee rental deposits (957) (4,689) (5,646)
----------- ----------- -----------
(93,230) (432,745) (525,975)
----------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 4,190 187,795 191,985
Distribution of Diverted and
other assets 140,427 688,053 828,480
----------- ----------- -----------
144,617 875,848 1,020,465
----------- ----------- -----------
Net increase in cash and
cash equivalents 51,387 443,103 494,490
Cash and cash equivalents:
Beginning of year 292,607 3,247,374 3,539,981
----------- ----------- -----------
End of first quarter $ 343,994 $ 3,690,477 $ 4,034,471
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 9
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (30,753) $ (94,377) $ (125,130)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (1,676) (58,212) (59,888)
Credit for loss on
commercial lease paper (479) (5,062) (5,541)
Changes in assets and liabilities:
Judgment receivable, net 22,590 110,684 133,274
Accounts payable and
accrued expenses (2,454) (11,874) (14,328)
Lessee rental deposits (3,239) (16,312) (19,551)
----------- ----------- -----------
(16,011) (75,153) (91,164)
----------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 1,676 298,471 300,147
Repayments of commercial lease paper 479 5,062 5,541
----------- ----------- -----------
2,155 303,533 305,688
----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents (13,856) 228,380 214,524
Cash and cash equivalents:
Beginning of year 1,476,467 4,489,249 5,965,716
----------- ----------- -----------
End of first quarter $ 1,462,611 $ 4,717,629 $ 6,180,240
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements
9
<PAGE> 10
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
NOTE 1 - ORGANIZATION:
Datronic Equipment Income Fund XIX, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on December 22, 1989 for the purpose of acquiring and
leasing both high-and low-technology equipment. See Notes 5, 8, and 10 to the
Partnership's financial statements included in the 1999 Form 10-K for a
discussion of the alleged diversion of Partnership assets in 1991 and 1992 and
the subsequent litigation and settlement, change in general partner, new classes
of limited partners established and amendments to the Partnership Agreement
which occurred.
NOTE 2 - BASIS OF FINANCIAL STATEMENTS:
The accompanying financial statements should be read in conjunction with the
Partnership's financial statements included in the 1999 Form 10-K. The financial
information furnished herein is unaudited but in the opinion of Management
includes all adjustments necessary (all of which are normal recurring
adjustments) for a fair presentation of financial condition and results of
operations. See Note 2 to the Partnership's financial statements included in the
1999 Form 10-K.
10
<PAGE> 11
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of liquidity and capital resources covers
material changes in the Partnership's financial condition from December 31, 1999
through March 31, 2000. The discussion and analysis of results of operations is
for the three month period ended March 31, 2000 as compared to the corresponding
period in 1999. Any capitalized term not defined herein has been defined or
discussed in the Partnership's 1999 Form 10-K.
Liquidity and Capital Resources
During the three months ended March 31, 2000, Partnership assets continued to be
converted to cash in order to pay Partnership operating expenses and provide for
the ultimate liquidation of the Partnership. During this period, the
Partnership's cash and cash equivalents increased by $494,000 to $4,034,000 at
March 31, 2000 from $3,540,000 at December 31, 1999. This increase is primarily
due to cash receipts from collections on leases of $192,000 and a distribution
of $828,000 from Diverted and other assets, partially offset by the use of cash
in operations of $526,000.
The General Partner has declared an additional distribution totaling $2.05
million, payable to Limited Partners who are owners of record on March 31, 2000.
This distribution will be allocated to the Limited Partners based on their
proportionate shares of total Partners' capital attributable to their Class.
The Partnership's sources of future liquidity are expected to come from
cash-on-hand, cash receipts from leases owned by the Partnership and the
proceeds from the sale of the remaining Diverted Assets (consisting of cash and
an office building in Schaumburg, Illinois). The lease portfolio is scheduled to
be fully liquidated by December 2000. The General Partner expects that the
building will be sold during 2000 and the proceeds included in a subsequent
distribution to Limited Partners.
The Partnership's interest in the Schaumburg office building is carried on its
books at $1.5 million (see Note 5 to the Partnership's financial statements
included in the 1999 Form 10-K). At March 1993, the date LRC was appointed
general partner, the building was approximately 40% occupied. Since then,
occupancy has increased to more than 80% and the base rental rates have
increased by 75%. Accordingly, the general partner believes that the value of
the building has increased and that this value will be realized when the
building is sold. The amount to be realized from the sale of the building,
however, cannot be determined until it is sold.
11
<PAGE> 12
After all assets are disposed of and the proceeds distributed to the Limited
Partners, the Partnership will be required to file final reports with the
Securities and Exchange Commission and the Internal Revenue Service. The general
partner expects this to occur sometime during 2001.
Results of Operations
The Partnership had a net loss of $504,000 for the three months ended March 31,
2000 in the aggregate for all classes of partners. This compares to an aggregate
net loss of $125,000 for the three months ended March 31, 1999. Differences in
operating results between Liquidating and Continuing Limited Partners are
attributable to lease income and expenses associated with lease investments made
since the March 4, 1993 Settlement. Liquidating Limited Partners do not
participate in these post Settlement activities. Significant factors affecting
overall operating results for the periods ended March 31, 2000 and 1999 include
the following:
Lease income:
Since August 1996, the Partnership has been in its Liquidating Phase which
prohibits investing in any new leases. Accordingly, the lease portfolio has
continued to decrease as collections are made, resulting in a continued decline
in lease income. This trend will continue as the Partnership liquidates its
remaining leases.
Interest income:
Interest income includes earnings on invested cash balances. Interest income for
2000 was lower than 1999 because the $2.6 million cash distribution paid to
Limited Partners in April 1999 reduced average invested cash balances.
General Partner's expense reimbursement:
General Partner's expense reimbursement includes payments to LRC for expenses it
incurred as general partner. These expenses represent expenses incurred by LRC
in its management of the day-to-day operations of the Partnership. Included in
the first quarter 2000 expense are $302,000 of insurance premiums associated
with the final wrap up of Partnership affairs and its ultimate liquidation and
dissolution.
Professional fees:
Professional fees for the three months ended March 31, 2000 reflect a decreasing
level of professional services required as a result of the decrease in the
Partnership's lease portfolio and related activities.
Credits for lease losses and commercial lease paper:
These credits reflect recoveries of previously reserved amounts.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for in this disclosure is not applicable to the
Registrant.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 - Legal Proceedings in the Partnership's December
31, 1999 Form 10-K for a discussion of material legal proceedings involving the
Partnership.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized, on the 11th day of May 2000.
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
Registrant
By: /s/ DONALD D. TORISKY
----------------------------------------
Donald D. Torisky
Chairman and Chief Executive Officer,
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XIX, L.P.
By: /s/ JEFFREY T. MCREYNOLDS
----------------------------------------
Jeffrey T. McReynolds
Vice President and Controller,
(principal accounting and financial officer)
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XIX, L.P.
14
<PAGE> 15
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only and
not filed.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND THE STATEMENTS OF REVENUE AND EXPENSES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 4,034,471
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,818,215
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,694,170
<TOTAL-LIABILITY-AND-EQUITY> 5,818,215
<SALES> 0
<TOTAL-REVENUES> 75,878
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,496
<LOSS-PROVISION> (37,721)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (504,296)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
