<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
<TABLE>
<S> <C>
For the Quarter Ended
March 31, 1999 Commission File Number 0-21260
- ---------------------- --------------------------------
</TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3763539
---------------- ---------------------------
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 XX, L.P.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1.
Index to Financial Statements
Balance Sheets
March 31, 1999 (unaudited) 3
December 31, 1998 4
Statements of Revenue and Expenses (unaudited)
For the three months ended March 31, 1999 5
For the three months ended March 31, 1998 6
Statements of Changes in Partners' Equity
For the three months ended March 31, 1999
(unaudited) 7
Statements of Cash Flows (unaudited)
For the three months ended March 31, 1999 8
For the three months ended March 31, 1998 9
Notes to Financial Statements 10 - 11
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 12 - 13
PART II - OTHER INFORMATION
Items 1-6. 14
</TABLE>
2
<PAGE> 3
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
BALANCE SHEETS
March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 221,926 $4,384,700 $4,606,626
Net investment in direct financing
leases -- 334,560 334,560
Residual interest in CRCA -- -- --
Diverted and other assets, net 8,172 112,713 120,885
Datronic assets, net -- -- --
---------- ---------- ----------
$ 230,098 $4,831,973 $5,062,071
========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 109 $ 8,719 $ 8,828
Lessee rental deposits -- 111 111
---------- ---------- ----------
Total liabilities 109 8,830 8,939
Total partners' equity 229,989 4,823,143 5,053,132
---------- ---------- ----------
$ 230,098 $4,831,973 $5,062,071
========== ========== ==========
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
BALANCE SHEETS
December 31, 1998
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 225,068 $4,315,347 $4,540,415
Judgment receivable, net 3,405 46,964 50,369
Net investment in direct financing
leases -- 432,232 432,232
Residual interest in CRCA -- -- --
Diverted and other assets, net 8,172 112,713 120,885
Datronic assets, net -- -- --
---------- ---------- ----------
$ 236,645 $4,907,256 $5,143,901
========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 761 $ 21,351 $ 22,112
Lessee rental deposits -- 142 142
---------- ---------- ----------
Total liabilities 761 21,493 22,254
Total partners' equity 235,884 4,885,763 5,121,647
---------- ---------- ----------
$ 236,645 $4,907,256 $5,143,901
========== ========== ==========
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 5
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ----------- -----------
<S> <C> <C> <C>
Revenue:
Lease income $ 170 $ 18,898 $ 19,068
Interest income 2,423 45,166 47,589
--------- --------- ---------
2,593 64,064 66,657
--------- --------- ---------
Expenses:
General Partner's expense
reimbursement 7,684 126,728 134,412
Professional fees 939 21,548 22,487
Other operating expenses 141 2,214 2,355
Credit for lease losses (276) (23,806) (24,082)
--------- --------- ---------
8,488 126,684 135,172
--------- --------- ---------
Net loss $ (5,895) $ (62,620) $ (68,515)
========= ========= =========
Net loss - General Partner $ (59) $ (626) $ (685)
========= ========= =========
Net loss - Limited Partners $ (5,836) $ (61,994) $ (67,830)
========= ========= =========
Net loss per limited
partnership unit $ (1.14) $ (0.88)
========= =========
Weighted average number of limited
partnership units outstanding 5,100 70,396
========= =========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ----------- -----------
<S> <C> <C> <C>
Revenue:
Lease income $ 552 $ 42,995 $ 43,547
Interest income 2,777 42,920 45,697
--------- --------- ---------
3,329 85,915 89,244
--------- --------- ---------
Expenses:
General Partner's expense
reimbursement 8,922 144,890 153,812
Professional fees 6,459 89,729 96,188
Other operating expenses 353 5,152 5,505
Credit for lease losses (16,971) (234,074) (251,045)
--------- --------- ---------
(1,237) 5,697 4,460
--------- --------- ---------
Net earnings $ 4,566 $ 80,218 $ 84,784
========= ========= =========
Net earnings - General Partner $ 46 $ 802 $ 848
========= ========= =========
Net earnings - Limited Partners $ 4,520 $ 79,416 $ 83,936
========= ========= =========
Net earnings per limited
partnership unit $ 0.89 $ 1.13
========= =========
Weighted average number of limited
partnership units outstanding 5,100 70,396
========= =========
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 7
DATRONIC EQUIPMENT INCOME FUND XX, 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, 1998* $ -- $ 235,884 $ 4,885,763 $ 5,121,647
Net loss (685) (5,836) (61,994) (68,515)
Allocation of General
Partner's Equity 685 (59) (626) --
----------- ----------- ----------- -----------
Balance, March 31, 1999 $ -- $ 229,989 $ 4,823,143 $ 5,053,132
=========== =========== =========== ===========
</TABLE>
* Balances are net of $16,221 and $292,056 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 XX, 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 $ (5,895) $ (62,620) $ (68,515)
Adjustments to reconcile net earnings
to net cash used in operating
activities:
Credit for lease losses (276) (23,806) (24,082)
Changes in assets and liabilities:
Judgment receivable, net 3,405 46,964 50,369
Accounts payable and
accrued expenses (652) (12,632) (13,284)
Lessee rental deposits -- (31) (31)
----------- ----------- -----------
(3,418) (52,125) (55,543)
----------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 276 121,478 121,754
----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents (3,142) 69,353 66,211
Cash and cash equivalents:
Beginning of year 225,068 4,315,347 4,540,415
----------- ----------- -----------
End of first quarter $ 221,926 $ 4,384,700 $ 4,606,626
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 9
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 4,566 $ 80,218 $ 84,784
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (16,971) (234,074) (251,045)
Changes in assets and liabilities:
Accounts payable and
accrued expenses (133) (5,229) (5,362)
Lessee rental deposits (1,469) (32,070) (33,539)
----------- ----------- -----------
(14,007) (191,155) (205,162)
----------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 16,971 435,048 452,019
----------- ----------- -----------
Net increase in cash and
cash equivalents 2,964 243,893 246,857
Cash and cash equivalents:
Beginning of year 221,305 3,564,194 3,785,499
----------- ----------- -----------
End of first quarter $ 224,269 $ 3,808,087 $ 4,032,356
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements
9
<PAGE> 10
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(Unaudited)
NOTE 1 - ORGANIZATION:
Datronic Equipment Income Fund XX, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on April 30, 1991 for the purpose of acquiring and
leasing both high- and low-technology equipment. The offering of limited
partnership units terminated on May 1, 1992. See Notes 5, 8 and 10 to the
Partnership's financial statements included in the 1998 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 1998 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 1998 Form 10-K.
NOTE 3 - LIMITED PARTNERSHIP DISTRIBUTIONS:
In early April 1999, the Partnership made a cash distribution to Limited
Partners who were owners of record on December 31, 1998. This distribution
consisted of two components: (i) the net proceeds from the Price Waterhouse and
Weiss & Company legal actions ($15,000 and $202,000 for Liquidating and
Continuing Limited Partners respectively), and (ii) residual cash resulting from
the net cash flows of the Partnership ($94,000 and $2,116,000 for Liquidating
and Continuing Limited Partners respectively). The portion of the distribution
attributable to legal action proceeds was allocated to each Limited Partner
based on the number of units held at the rate of $2.87 per unit. See Note 8 to
the Partnership's financial statements included in the 1998 Form 10-K. Pursuant
to the Partnership Agreement, residual cash was allocated to each Limited
Partner based on their proportionate share of total partners' capital
attributable to their Class.
NOTE 4 - RESIDUAL INTEREST IN CRCA:
Residual interest in CRCA represents the Partnership's fully reserved 35% (65%
for Fund XVIII) interest in the remaining assets of Computer Rental Corp. of
America, Inc. (CRCA). These assets consisted of a $4.2 million subordinated
note receivable from Personal Computer Rental Corporation (PRC) and $136,000 of
cash. See Note 4 to the
10
<PAGE> 11
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
financial statements included in the 1998 Form 10-K. In early April, 1999, CRCA
sold the $4.2 million subordinated note to PCR's senior secured creditor for
$250,000. The Partnership's share of these proceeds along with its share of
CRCA's residual cash, after payment of expenses, will be credited to its
provision for lease losses when distributed to the Partnership.
11
<PAGE> 12
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, 1998
through March 31, 1999. The discussion and analysis of results of operations is
for the three month period ended March 31, 1999 as compared to the corresponding
period in 1998. Any capitalized term not defined herein has been defined or
discussed in the Partnership's 1998 Form 10-K.
Liquidity and Capital Resources
During the three months ended March 31, 1999, Partnership assets continued to
be converted to cash in order to pay Partnership operating expenses and to
provide for the ultimate liquidation of the Partnership. During the three
months ended March 31, 1999, Partnership cash and cash equivalents increased by
$66,000 to $4,606,000 at March 31, 1999 from $4,540,000 at December 31, 1998.
This increase is primarily due to cash receipts from collections on leases of
$122,000 partially offset by cash used in operations of $56,000.
In early April 1999, the Partnership made a cash distribution to Limited
Partners who were owners of record on December 31, 1998. This distribution
consisted of two components: (i) the net proceeds from the Price Waterhouse and
Weiss & Company legal actions ($15,000 and $202,000 for Liquidating and
Continuing Limited Partners respectively), and (ii) residual cash resulting from
the net cash flows of the Partnership ($94,000 and $2,116,000 for Liquidating
and Continued Limited Partners respectively). The portion of the distribution
attributable to legal action proceeds was allocated to each Limited Partner
based on the number of units held at the rate of $2.87 per unit. See Note 8 to
the Partnership's financial statements included in the 1998 Form 10-K. Pursuant
to the Partnership Agreement, residual cash was allocated to each Limited
Partner based on their proportionate share of total partners' capital
attributable to their Class.
The Partnership's sources of future liquidity are expected to come from
remaining cash-on-hand after the April 1999 distribution, the cash receipts
from leases owned by the Partnership as well as the disposition of Diverted
Assets (consisting primarily of an office building in Schaumburg, Illinois).
The lease portfolio is scheduled to be fully liquidated by March 2001. The
general partner expects the Diverted Assets to be converted to cash during 1999
thereby enabling the Partnership to pay an additional distribution in early
2000. After all assets are disposed of and the proceeds are 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 the year 2001.
12
<PAGE> 13
Results of Operations
The Partnership had a net loss of $69,000 for the three month period ended
March 31, 1999, in the aggregate for all classes of partners. This compares to
net earnings of $85,000 for the same period in 1998. Differences in operating
results between Liquidating and Continuing Limited Partners are attributable to
lease income, acquisition costs, and expenses associated with new 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 three month period ended
March 31, 1999 as compared to the corresponding period in 1998 include the
following:
Lease income:
Since January 1997, 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 1999 was higher than 1998 because of higher 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 in excess of those covered by its partner
distributions. These expenses include expenses incurred by LRC in its
management of the day-to-day operations of the Partnership.
Professional fees:
Professional fees for the three months ended March 31, 1999 reflect a
decreasing level of professional services required as a result of the decrease
in the Partnership's lease portfolio and related activities. Included in the
1998 amount are fees paid in connection with the litigation against the
Partnership's former accountants.
Credit for lease losses:
This credit reflects recovery of previously reserved balances. The 1998 amount
also includes a $207,000 recovery against the Master Lease agreement with CRCA.
See Note 4 to the Partnership's financial statements included in the 1998 Form
10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for in this disclosure is not applicable to the
Registrant.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 - Legal Proceedings in the Partnership's December
31, 1998 Form 10-K for a discussion of material legal proceedings involving the
Partnership.
ITEM 2. CHANGES IN SECURITIES
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.
14
<PAGE> 15
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 10th day of May 1999.
DATRONIC EQUIPMENT INCOME FUND XX, 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 XX, L.P.
By: /s/ ROBERT P. SCHAEN
-----------------------------------
Robert P. Schaen
Vice-Chairman and Chief Financial Officer,
Lease Resolution Corporation,
General Partner of Datronic Equipment Income Fund XX, L.P.
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for Information
only and not filed.
</TABLE>
<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-K.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 4,606,626
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,062,071
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,053,132
<TOTAL-LIABILITY-AND-EQUITY> 5,062,071
<SALES> 0
<TOTAL-REVENUES> 66,657
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,355
<LOSS-PROVISION> (24,082)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,515)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
