SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
Amendment No. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 2, 1997
GROVE PROPERTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-13080 06-1391084
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification Number)
598 Asylum Avenue, Hartford, Connecticut 06105
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (860) 246-1126
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
Statement of Revenue and Certain Expenses of Greenfield Village Apartments for
the three months ended March 31, 1997 [Unaudited] and year ended December
31,1996.
(b) Pro Forma Financial Statements
Pro Forma Condensed Balance sheet as of March 31, 1997. Pro Forma Condensed
Consolidated Statement of Operations for the year ended December 31, 1996 and
the three months ended March 31, 1997 [Unaudited].
(c) Exhibits.
Exhibit No. Description
2.1 Purchase and Sale Agreement dated May 14, 1997 between
Highland Income Partners, L.P., as Seller, and Grove
Corporation, as Purchaser (incorporated by reference to
Exhibit 2.1 to the Company's Current Report on Form 8-K
dated July 2, 1997 (Commission File 1-13080))
<PAGE>
GROVE PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(UNAUDITED)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the acquisition of Greenfield Village Apartments had occurred on
March 31, 1997. The unaudited Pro Forma Condensed Consolidated Balance Sheet
should be read in conjunction with the consolidated financial statements of the
Company included in the Quarterly Report on Form 10-QSB for the fiscal quarter
ended March 31, 1997. In management's opinion, all adjustments necessary to
reflect this transaction have been made. The unaudited Pro Forma Condensed
Consolidated Balance Sheet is not necessarily indicative of what the actual
financial position would have been at March 31, 1997, nor does it purport to
present the future financial position of the Company.
Historical
Grove Previously
Property Acquired Pro Forma Pro Forma
Trust Properties(D) Adjustments Consolidated
----- -------------- ------------- -----------
ASSETS
Real estate, net ......... $65,667,344 $21,401,581 $4,389,000 (A)$91,457,925
Cash and cash equivalents 4,865,648 620,152 (689,000)(C) 4,796,800
Cash - resident security
deposits ........... 848,200 299,880 -- 1,148,080
Other assets ............. 1,463,527 718,169 -- 2,181,696
---------- ---------- ---------- ----------
Total assets ............ $72,844,719 $23,039,782 $3,700,000 $99,584,501
=========== =========== ========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Mortgage notes payable ... $29,149,658 $14,807,005 $ -- $43,956,663
Revolving credit facility -- 1,825,000 3,700,000 (B) 5,525,000
Other liabilities ........ 6,340,574 571,159 6,911,733
Due to affiliates ........ 669,722 21,500 691,222
----------- ----------- ----------- -----------
Total liabilities ........ 36,159,954 17,224,664 3,700,000 57,084,618
---------- ---------- --------- ----------
Minority interest ........ 33,627 3,443,278 -- 3,476,905
Shareholders' equity:
Preferred shares,
Common shares ............ 39,534 -- 39,534
Additional paid-in capital 37,013,258 2,371,840 -- 39,385,098
Distributions in excess of
earnings ............... (401,654) -- (401,654)
-------- -------- -------- ----------
Total equity ............. 36,651,138 2,371,840 -- 39,022,978
---------- --------- -------- ----------
Total liabilities and
shareholders' equity .. $72,844,719 $23,039,782 $3,700,000 $99,584,501
=========== =========== ========== ===========
<PAGE>
(A) Real estate, net:
Reflects the acquisition of Greenfield Village Apartments. $ 4,389,000
===========
(B) Revolving credit facility:
Reflects the drawdown of the credit facility for the purchase
of Greenfield Village Apartments. $ 3,700,000
===========
(C) Cash and cash equivilants:
Reflects the cash used for the purchase of Greenfield
Village Apartments. $ (689,000)
============
(D) Previously acquired properties:
Reflects properties acquired on March 14, 1997 and May 30, 1997 as dislosed in
the Company's Proxy Statement dated Febuary 13, 1997 and Form 8-K dated May 30,
1997, respectively.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31,1996 AND THE
THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
The following unaudited Pro Forma Condensed Consolidated Statements of Income
have been presented as if the acquisition of Greenfield Village Apartments had
occurred on January 1, 1996. The unaudited Pro Forma Condensed Consolidated
Statements of Income should be read in conjunction with the consolidated
financial statements of the Company filed on Form 10-KSB, and Form 10-QSB, for
the year ended December 31, 1996 and for the period ended March 31, 1997,
respectively, and the statment of revenues and certain expenses for Greenfield
Village Apartments included elsewhere herein. In management's opinion, all
adjustments necessary to reflect this transaction have been made. The unaudited
Pro Forma Condensed Consolidated Statements of Income are not necessarily
indicative of what actual results of operations of the company would have been
had these transactions actually occurred as of January 1, 1996 nor do they
purport to represent the results of operations of the Company for future
periods.
Three months ended March 31, 1997
----------------------------------------------------------
Historical
Grove Previously Green- Pro
Property Acquired field Forma Pro Forma
Trust Properties(D) Acq. Adjust. Consolidated
----- ------------- ---- ---- ------------
Revenues:
Rental income ...........$1,177,022 $3,803,748 $226,991 -- $5,207,761
Property management ...... -- 146,963 -- -- 146,963
Interest and other ....... 129,146 108,968 9,961 -- 248,075
------- ------- ----- ------- -------
Total revenue ......1,306,168 4,059,679 236,952 -- 5,602,799
---------- --------- ------- ------- ---------
Expenses:
Property operating
and maintenance ....... 487,630 1,504,761 96,697 -- 2,089,088
Real estate taxes ........ 116,018 399,205 41,757 -- 556,980
Management fees .......... 21,795 (21,795) 11,283 -- 11,283
General and administrative 69,035 185,940 8,713 -- 263,688
------ ------- ----- ------ -------
Total expenses ........... 694,478 2,068,111 158,450 -- 2,921,039
------- --------- ------- ------ ---------
611,690 1,991,568 78,502 -- 2,681,760
Interest ................. 173,121 650,745 38,197 23,833(A) 885,896
Depreciation and
amortization .......... 239,628 855,247 39,400 (2,106(B) 1,132,169
Conveyance taxes ......... 68,761 -- -- -- 68,761
------ --------- ------ -------- ------
Income before minority
interest ............... 130,180 485,576 905 (21,727) 594,934
Minority interest ........ 33,627 310,768 -- (8,842(C) 335,553
------ ------- ----- ------ -------
Net income ............... $96,553 $174,808 $ 905 $(12,885) $259,381
====== ======= === ======= =======
<PAGE>
Year Ended December 31, 1996
----------------------------------------------------------
Historical
Grove Previously Green- Pro
Property Acquired Field Forma Pro Forma
Trust Properties(D) Acq. Adjust. Consolidated
Revenues: ----- ------------- ---- ---- -----------
Rental income ...........$2,046,390 $17,164,571 $891,117 -- 20,102,078
Property management ...... -- 929,653 -- -- 929,653
Interest and other ....... 35,849 666,311 10,155 -- 712,315
------ ------- ------ ------ -------
Total revenue .......2,082,239 18,760,535 901,272 -- 21,744,046
---------- ---------- ------- ------ ----------
Expenses:
Property operating and
maintenance ........... 655,821 6,441,734 437,829 -- 7,535,384
Real estate taxes ........ 208,302 1,905,632 164,929 -- 2,278,863
Management fees .......... 108,731 (84,045) 45,417 -- 70,103
General and administrative 66,798 902,436 25,000 -- 994,234
------ ------- ------ ------ -------
Total expenses ......1,039,652 9,165,757 673,175 -- 10,878,584
---------- --------- ------- ------- ----------
1,042,587 9,594,778 228,097 -- 10,865,462
Interest ................. 394,657 2,975,612 247,911 3,684 (A) 3,621,864
Depreciation and
amortization .......... 386,641 3,958,993 157,598 (17,378)(B) 4,485,854
------- --------- ------- ------- ---------
Income before
minority interest .... 261,289 2,660,173 (177,412) 13,694 2,757,744
Minority interest ........ -- 1,240,744 (63,965)(C) 1,176,779
------- --------- ------- ------- ---------
Net income ............... $261,289 $1,419,429 $(177,412) $77,659 $1,580,965
======= ========= ======== ====== =========
<PAGE>
Three Months Ended Year Ended
March 31, 1997 December 31, 1996
-------------- -----------------
(A) Interest expense:
Represents the elimination of interest
expense associated with the mortgage of
the prior owners and the interest expense
associated with the draw of $3,700,000 on
the revolving credit facility for the purchase
of Greenfield Village Apartments. $ 23,833 $ 3,684
=========== ==========
(B) Depreciation and amortization expense:
Reflects depreciation of Greenfield Village
Apartments and the elimination of the
amortization expense. $ (2,106) $ (17,378)
=========== ==========
(C) Minority interest:
To adjust income allocated to minority
interest resulting from the net income of
Greenfield Village Apartments and
the associated Pro Forma adjustments.
Calculated as follows:
Greenfield net income (loss) $ (905) $ (177,412)
Pro forma adjustments (21,727) 13,694
-------- ------
Pro forma net income (loss) (22,632) (163,718)
-------- ---------
Minority interest (39.07%) $ (8,842) $ (63,965)
=========== ============
(D) Previously acquired properties:
Reflects properties acquired on
March 14, 1997 and May 30, 1997 as dislosed
in the Company's Proxy Statement dated
Febuary 13, 1997 and Form 8-K dated May 30,
1997, respectively.
<PAGE>
Greenfield Village Apartments
Statement of Revenues and Certain Expenses
Year Ended December 31, 1996
with Report of Independent Auditors
<PAGE>
Statement of Revenues and Certain Expenses
Year Ended December 31, 1996 and the Three Months Ended
March 31, 1997 [Unaudited]
Contents
Report of Independent Auditors..............................................1
Statement of Revenues and Certain Expenses..................................2
Notes to Statement of Revenues and Certain Expenses.........................3
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Trust Managers
Grove Property Trust
We have audited the statement of revenues and certain expenses of Greenfield
Village Apartments (the Property) for the year ended December 31, 1996. The
statement of revenues and certain expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
estimates made by management, as well as evaluating the overall presentation of
the statement of revenues and certain expenses. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion on the Current Report on Form 8-K of Grove
Property Trust described in Note 2 and is not intended to be a complete
presentation of the Property's revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses as
described in Note 2 of Greenfield Village Apartments for the year ended December
31, 1996, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Hartford, Connecticut
July 1, 1997
<PAGE>
Greenfield Village Apartments
Statement of Revenues and Certain Expenses
Three Months Year Ended
Ended March 31, December 31,
1996 1996
---- ----
(Unaudited)
Revenues:
Rental income ......................... $226,991 $891,117
Miscellaneous income .................. 9,961 10,155
------- -------
Total revenues ................... 236,952 901,272
------- -------
Certain Expenses:
Property operating and maintenance .... 96,697 437,829
Real estate taxes ..................... 41,757 164,929
Management fees ....................... 11,283 45,417
General and administrative ............ 8,713 25,000
----- ------
158,450 673,175
------- -------
Revenues in excess of certain expenses $ 78,502 $228,097
====== =======
See accompanying notes.
<PAGE>
Greenfield Village Apartments
Notes to the Statement of Revenues and Certain Expenses
December 31, 1996
1. Business
The accompanying Statement of Revenues and Certain Expenses relates to the
operation of 126 apartment units out of the total of 231 units at the Greenfield
Village Apartments (the Property). The Property was acquired on July 1, 1997 by
Grove Property Trust. The Property was previously owned by Highland Income
Partners, L.P.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying Statement of Revenues and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Accordingly, the financial statements exclude certain
expenses that may not be comparable to those expected to be incurred by Grove
Property Trust in the proposed future operations of the aforementioned property.
Items excluded consist of depreciation, amortization, interest and certain
non-operating expenses. The financial statements also excludes gains resulting
from sales of property.
The preparation of the Statement of Revenues and Certain Expenses in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the Statement of
Revenues and Certain Expenses and accompanying notes. Actual results could
differ from those estimates.
Revenue Recognition
Rental income attributable to leases is recognized on a straight-line basis over
the term of the leases, which are generally for one year.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GROVE PROPERTY TRUST
Date: September 9, 1997 By: /s/Joseph R. LaBrosse
------------------------
Joseph R. LaBrosse
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Description
2.1 Purchase and Sale Agreement dated May 14, 1997 between
Highland Income Partners, L.P., as Seller, and Grove
Corporation, as Purchaser (incorporated by reference to
Exhibit 2.1 to the Company's Current Report on Form 8-K
dated July 2, 1997 (Commission File 1-13080))
