FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OFTHE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2000
Commission file Number 0-25430
RIDGEWOOD ELECTRIC POWER TRUST IV
(Exact name of registrant as specified in its charter.)
Delaware 22-3324608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
(201) 447-9000
Registrant's telephone number, including area code:
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 [ ]
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust IV
Consolidated Financial Statements
March 31, 2000
<PAGE>
Ridgewood Electric Power Trust IV
Consolidated Balance Sheet
- --------------------------------------------------------------------------------
March 31, December 31,
2000 1999
(unaudited)
---------- ---------
Assets:
Cash and cash equivalents .................... $ 976,737 $ 893,383
Accounts receivable, trade ................... 598,194 613,002
Due from affiliates .......................... 406,273 442,432
Other assets ................................. 50,334 60,863
---------- ---------
Total current assets ..................... 2,031,538 2,009,680
---------- ---------
Investments:
Maine Hydro Projects ......................... 5,919,022 5,663,505
Maine Biomass Projects ....................... 5,755,455 5,825,271
Santee River Rubber .......................... 4,008,753 4,090,601
Electric power equipment held for resale ..... 250,000 250,000
Plant and equipment .......................... 16,790,446 16,789,544
Accumulated depreciation ..................... (3,179,122) (2,957,855)
---------- ---------
13,611,324 13,831,689
---------- ---------
Electric power sales contract ................ 8,338,040 8,338,040
Accumulated amortization ..................... (2,196,911) (2,057,950)
---------- ---------
6,141,129 6,280,090
---------- ---------
Spare parts inventory ........................ 838,142 838,142
Debt reserve fund ............................ 672,267 666,346
---------- ---------
Total assets ............................. $ 39,227,630 $ 39,455,324
---------- ---------
Liabilities and Shareholders' Equity:
Liabilities:
Current maturities of long-term debt ......... $ 734,341 $ 716,995
Borrowings under line of credit facility ..... 500,000 --
Accounts payable and accrued expenses ........ 817,383 611,750
Due to affiliates ............................ 113,753 341,018
---------- ---------
Total current liabilities .................. 2,165,477 1,669,763
Long-term debt, less current portion ......... 3,306,586 3,479,460
Minority interest in the Providence Project .. 5,865,944 5,924,813
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (476.8875 investor
shares issued and outstanding) 28,015,793 28,502,542
Managing shareholder's accumulated deficit
(1 management share isssued and outstanding) (126,170) (121,254)
---------- ---------
Total shareholders' equity ................. 27,889,623 28,381,288
---------- ---------
Total liabilities and shareholders' equity . $ 39,227,630 $ 39,455,324
---------- ---------
See accompanying notes to consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust IV
Consolidated Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2000 1999
---------- -----------
Net sales ................................... $ 1,773,779 $ 1,701,399
Sublease income ............................. 92,250 92,250
---------- -----------
Total revenue ................. 1,866,029 1,793,649
---------- -----------
Cost of sales ............................... 1,580,798 1,521,989
---------- -----------
Gross profit ................................ 285,231 271,660
General and administrative expenses ......... 144,541 182,631
Management fee .............................. 106,430 116,817
---------- -----------
Total other operating expenses 250,971 299,448
---------- -----------
Income (loss) from operations ............... 34,260 (27,788)
---------- -----------
Other income (expense):
Interest income ....................... 8,710 23,572
Interest expense ...................... (99,339) (115,103)
Income from Maine Hydro Projects ...... 255,517 537,135
Loss from Maine Biomass Projects ...... (69,816) (168,403)
Loss from Santee River Rubber ......... (81,848) (7,432)
---------- -----------
Net other income ............. 13,224 269,769
---------- -----------
Income before minority interest ............. 47,484 241,981
Minority interest in the earnings of the
Providence Project (57,731) (65,303)
---------- -----------
Net loss .................................... $ (10,247) $ 176,678
---------- -----------
See accompanying notes to the consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust IV
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
------------ ----------- ------------
Shareholders' equity,
December 31, 1999 .... $ 28,502,542 (121,254) $ 28,381,288
Cash distributions .... (476,604) (4,814) (481,418)
Net loss for the period (10,145) (102) (10,247)
------------ ----------- ------------
Shareholders' equity,
March 31, 2000 ....... $ 28,015,793 $ (126,170) $ 27,889,623
------------ ----------- ------------
See accompanying notes to consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust IV
Consolidated Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, 2000 March 31, 1999
------------ ---------
Cash flows from operating activities:
Net (loss) income ........................... $ (10,247) $ 176,678
------------ ---------
Adjustments to reconcile net income to net
cash flows from operating activities
Depreciation and amortization .............. 360,228 369,597
Minority interest in earnings of the
Providence Project ........................ 57,731 65,303
Income from unconsolidated Maine Hydro
Projects .................................. (255,517) (537,135)
Loss from unconsolidated Maine Biomass
Projects .................................. 69,816 168,403
Loss from unconsolidated Santee River Rubber 81,848 7,432
Changes in assets and liabilities:
Decrease in accounts receivable, trade ..... 14,808 38,360
Decrease in other assets ................... 10,529 3,456
Increase (decrease) in accounts payable and
accrued expenses .......................... 205,633 (131,166)
(Decrease) increase in due from
affiliates, net ........................... (191,106) 99,943
------------ ---------
Total adjustments ........................ 353,970 84,193
------------ ---------
Net cash provided by operating activities 343,723 260,871
------------ ---------
Cash flows from investing activities:
Loans to Maine Biomass Projects ............ -- (100,250)
Distributions from Santee River Rubber ..... -- 104,501
Capital expenditures ....................... (902) (114,027)
------------ ---------
Net cash used in investing activities .... (902) (109,776)
------------ ---------
Cash flows from financing activities:
Borrowings under line of credit ............ 500,000 --
Cash distributions to shareholders ......... (481,418) (722,425)
Payments to reduce long-term debt .......... (155,528) (157,110)
Increase in debt reserve fund .............. (5,921) (7,977)
Distribution to minority interest .......... (116,600) (129,312)
------------ ---------
Net cash used in financing activities .... (259,467) (1,016,824)
------------ ---------
Net increase (decrease) in cash and
cash equivalents ............................ 83,354 (865,729)
Cash and cash equivalents, beginning of year . 893,383 2,021,168
------------ ---------
Cash and cash equivalents, end of period ..... $ 976,737 $ 1,155,439
------------ ---------
See accompanying notes to consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust IV
Notes to Consolidated Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which consist of normal recurring adjustments,
necessary for the fair presentation of the results for the interim periods.
Additional footnote disclosure concerning accounting policies and other matters
are disclosed in Ridgewood Electric Power Trust IV's financial statements
included in the 1999 Annual Report on Form 10-K, which should be read in
conjunction with these financial statements. Certain prior year amounts have
been reclassified to conform to the current year presentation.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
2. Summary Results of Operations for Selected Investments
Summary results of operations for the Maine Hydro projects, which are accounted
for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $1,346,000 $1,861,000
Depreciation and amortization 280,000 274,000
Net income .................. 511,000 1,074,000
Summary results of operations for the Maine Biomass projects, which are
accounted for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $ 582,000 $ 166,000
Depreciation and amortization 13,000 13,000
Net loss .................... (140,000) (348,000)
Summary results of operations for the Santee River Rubber project, which is
accounted for under the equity method, were as follows:
Three Months Ended March 31,
2000 1999
Total revenue ............... $ 242,000 --
Depreciation and amortization -- --
Net loss .................... (1,387,000) (494,000)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are rounded to the nearest $1,000.
Introduction
The consolidated financial statements include the accounts of the Trust and the
limited partnerships owning the Providence Project and the California Pumping
project. The Trust uses the equity method of accounting for its investments in
the Maine Hydro Projects, the Maine Biomass Projects and the Santee River Rubber
Project, which are owned 50% or less by the Trust.
Results of Operations
Quarter ended March 31, 2000 compared to quarter ended March 31, 1999
In the first quarter of 2000, the Trust had total revenue of $1,866,000, which
is a 4% increase from the total revenue of $1,794,000 in the same period in 1999
due to increased production at the Providence plant. Cost of sales also
increased from $1,522,000 in the first quarter of 1999 to $1,581,000 in the same
period in 2000 as a result of higher engine maintenance costs at the Providence
Project.
General and administrative expenses in the first quarter of 2000 of $145,000
were $38,000 lower than the $183,000 incurred with the same period in 1999, due
to lower accounting and professional fees. The management fee decreased from
$117,000 in the first quarter of 1999 to $106,000 in the same period in 2000 as
a result of lower Trust net asset balances used to determine such fees.
Interest income declined by $15,000 from $24,000 in the first quarter of 1999 to
$9,000 in the first quarter of 2000 due to lower average cash balances. Interest
expense was reduced by $16,000 from $115,000 in the first quarter of 1999 to
$99,000 in the first quarter of 2000 due to lower borrowings outstanding at the
Providence project.
Equity income from the Maine Hydro Projects decreased $281,000 from $537,000 in
the first quarter of 1999 to $256,000 in the same period in 2000, due to lower
production because the above-average river flows in 1999 did not recur in 2000.
The equity loss from the shut-down Maine Biomass Projects decreased from
$168,000 in the first quarter of 1999 to $70,000 in the same period in 2000 due
to cost reductions and sales of installed capacity at the plants. The equity
loss in the Santee River Rubber project increased from $7,000 in the first
quarter of 1999 to $82,000 in the first quarter of 2000 due to the cost of
staffing the project for the current testing and modification stage of the
project.
Quarter ended March 31, 1999 compared to quarter ended March 31, 1998.
In the first quarter of 1999, the Trust had total revenue of $1,793,000, which
is comparable with total revenue of $1,795,000 in the same period in 1998. Cost
of sales increased to $1,522,000 in the first quarter of 1999 from $1,124,000 in
the same period in 1998 as a result of higher engine maintenance costs at the
Providence Project.
General and administrative expenses in the first quarter of 1999 of $183,000
were comparable with the same period in 1998. The management fee decreased from
$280,000 in the first quarter of 1998 to $117,000 in the same period in 1999
primarily as a result of the Managing Shareholder's decision to voluntarily
waive one-half of its management fee for an indefinite period.
Interest income declined by $140,000 from $164,000 in the first quarter of 1998
to $24,000 in the first quarter of 1998 due to lower average cash balances.
Interest expense was reduced by $14,000 from $129,000 in the first quarter of
1998 to $115,000 in the first quarter of 1999 due to lower borrowings
outstanding at the Providence project.
Equity income from the Maine Hydro Projects increased $210,000 from $327,000 in
the first quarter of 1998 to $537,000 in the same period in 1999 due to higher
production because of above-average river flows. The equity loss from the
shut-down Maine Biomass Projects decreased from $268,000 in the first quarter of
1998 to $168,000 in the same period in 1999 due to cost reductions and sales of
installed capacity at the plants.
Liquidity and Capital Resources
In 1997, the Trust and Fleet Bank, N.A. (the "Bank") entered into a revolving
line of credit agreement, whereby the Bank provides a three year committed line
of credit facility of $1,150,000. Outstanding borrowings bear interest at the
Bank's prime rate or, at the Trust's choice, at LIBOR plus 2.5%. The credit
agreement requires the Trust to maintain a ratio of total debt to tangible net
worth of no more than 1 to 1 and a minimum debt service coverage ratio of 2 to
1. The credit facility was obtained in order to allow the Trust to operate using
a minimum amount of cash, maximize the amount invested in Projects and maximize
cash distributions to shareholders. In the first quarter of 2000, the Trust
borrowed $500,000 under the credit facility.
As disclosed in the Trust's Annual Report on Form 10-K for the year 1999, the
Santee River Project has experienced material design and performance
inadequacies that will require additional sequential alterations and additional
work to be paid for by the Contractor. The Contractor is continuing to make
repairs and modifications at its own cost, but the Project requires additional
capital in order for it to remain open and available to the Contractor for this
work. The Trust and Environmental Processing Services, Inc., the developer, are
discussing potential financing alternatives but no agreement has been reached
and there is no assurance that agreement will be reached before the Project
exhausts its working capital.
The Contractor is currently defraying debt service on the construction debt for
the Project and is obligated to do so until August 9, 2000, when letters of
credit securing the debt will become available
The Managing Shareholder announced a cessation of distributions in April 2000.
Obligations of the Trust are generally limited to payment of Project operating
expenses, payment of a management fee to the Managing Shareholder, payments for
certain accounting and legal services to third persons, repayment of borrowings
under the line of credit and distributions to shareholders of available
operating cash flow generated by the Trust's investments. The Trust's policy is
to distribute as much cash as is prudent to shareholders. Accordingly, the Trust
has not found it necessary to retain a material amount of working capital. The
amount of working capital retained is further reduced by the availability of the
line of credit facility.
The Trust anticipates that, during 2000, its cash flow from operations and line
of credit facility will be adequate to fund its obligations.
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with some other statements made by the
Trust from time to time, has forward-looking statements. These statements
discuss business trends and other matters relating to the Trust's future results
and the business climate and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. In order to make these statements, the Trust has had to make
assumptions as to the future. It has also had to make estimates in some cases
about events that have already happened, and to rely on data that may be found
to be inaccurate at a later time. Because these forward-looking statements are
based on assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's statements here.
The Trust therefore warns readers of this document that they should not rely on
these forward-looking statements without considering all of the things that
could make them inaccurate. The Trust's other filings with the Securities and
Exchange Commission and its Confidential Memorandum discuss many (but not all)
of the risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal or state
regulatory structures, government taxation, spending and budgetary policies,
government mandates, demand for electricity and thermal energy, the ability of
customers to pay for energy received, supplies of fuel and prices of fuels,
operational status of plant, mechanical breakdowns, availability of labor and
the willingness of electric utilities to perform existing power purchase
agreements in good faith. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
By making these statements now, the Trust is not making any commitment to revise
these forward-looking statements to reflect events that happen after the date of
this document or to reflect unanticipated future events.
<PAGE>
PART II - OTHER INFORMATION
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDGEWOOD ELECTRIC POWER TRUST IV
Registrant
May 15, 2000 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's unaudited interim financial statements for the nine month period
ended March 31, 2000 and is qualified in its entirety by reference to those
financial statements.
</LEGEND>
<CIK> 0000930364
<NAME> RIDGEWOOD ELECTRIC POWER TRUST IV
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 976,737
<SECURITIES> 15,683,230<F1>
<RECEIVABLES> 598,194
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,031,538<F2>
<PP&E> 16,790,446
<DEPRECIATION> (3,179,122)
<TOTAL-ASSETS> 39,227,630
<CURRENT-LIABILITIES> 2,165,477<F3>
<BONDS> 3,306,586
<COMMON> 0
0
0
<OTHER-SE> 27,889,623<F4>
<TOTAL-LIABILITY-AND-EQUITY> 39,227,630
<SALES> 1,773,779
<TOTAL-REVENUES> 1,866,029
<CGS> 1,580,798
<TOTAL-COSTS> 1,831,769
<OTHER-EXPENSES> 250,971
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,247)<F5>
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,247)<F5>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,247)<F5>
<EPS-BASIC> (21)
<EPS-DILUTED> (21)
<FN>
<F1>Investment in hydroelectric project, Santee River project and Biomass
project accounted for on equity method in financial statements.
<F2>Includes $406,273 due from affiliates.
<F3>Includes $113,753 due to affiliates.
<F4>Shareholders' equity of $28,015,793 less managing share-
holders' accumulated deficit of $126,170.
<F5>After deduction of minority interest in Providence Project
earnings of $57,731.
</FN>
</TABLE>
