-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FR0i4N/IxZH7h0AdgddYVWdCntBpAsXJdwxgcfT/ZY9OsOHYbYRcHsrMoGUFRpla 6Ac1i/dPmMou8NZ3HAyhTg== 0000898430-96-001805.txt : 19960724 0000898430-96-001805.hdr.sgml : 19960724 ACCESSION NUMBER: 0000898430-96-001805 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINDSOR REAL ESTATE INVESTMENT TRUST 8 CENTRAL INDEX KEY: 0000881443 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 336109499 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21470 FILM NUMBER: 96562438 BUSINESS ADDRESS: STREET 1: 120 WEST GRAND AVE STREET 2: STE 202 CITY: ESCONDIDO STATE: CA ZIP: 92025 BUSINESS PHONE: 6197462411 MAIL ADDRESS: STREET 1: 120 W GRAND AVE STE 202 STREET 2: 120 W GRAND AVE STE 202 CITY: ESCONDIDO STATE: CA ZIP: 92025 10QSB 1 QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 -------------------------- [_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to -------------- -------------- Commission file number 000-21470 --------------------------------------- WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- (Exact name of small business issuer as specified in its charter) California 33-6109499 - - ---------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 120 W. Grand Avenue, Suite 202, Escondido, California 92025 ------------------------------------------------------------ (Address of principal executive offices) (619) 746-2411 ------------------------------------------------------------ (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [_] 1 TABLE OF CONTENTS PART I ------
Page ---- Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II ------- Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 2 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- BALANCE SHEET -------------------------------------- (unaudited)
March 31, 1996 ------------------ ASSETS - - ------ Property held for investment: Land $ 1,799,600 Buildings and improvements 4,775,100 Fixtures and equipment 72,300 ------------------ 6,647,000 Less accumulated depreciation (632,200) ------------------ 6,014,800 Investment in joint venture 610,000 Cash and cash equivalents 225,700 Deferred financing costs 85,400 Other assets 51,300 ------------------ $ 6,987,200 ================== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ Liabilities: Mortgage notes payable $ 3,379,600 Accounts payable 10,300 Accrued expenses 72,900 Tenant deposits and other liabilities 10,900 Due to Advisor 95,100 ------------------ 3,568,800 ------------------ Shareholders' equity: Preferred shares of beneficial interest, no par value, unlimited shares authorized; 98,073 shares issued and outstanding 2,121,700 Common shares of beneficial interest, no par value, unlimited shares authorized; 90,169 shares issued and outstanding 1,922,900 Dividends paid in excess of net income (626,200) ------------------ 3,418,400 ------------------ $ 6,987,200 ==================
See accompanying notes to financial statements. 3 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- STATEMENTS OF OPERATIONS -------------------------------------- (unaudited)
Three Months Ended March 31 --------------------------- 1996 1995 ----------- ------------- REVENUES - - -------- Rent and utilities $ 282,300 $ 274,500 Equity in earnings of joint venture 9,600 Interest 2,800 6,000 Other 3,700 3,500 ----------- ------------- 298,400 284,000 ----------- ------------- COSTS AND EXPENSES - - ------------------ Property operating 130,500 121,500 Interest 75,700 56,100 Depreciation 67,200 64,100 Advisory fee 20,100 15,000 General and administrative: Related parties 6,400 7,900 Other 10,200 10,800 ----------- ------------- 310,100 275,400 ----------- ------------- Net (loss) income $ (11,700) $ 8,600 =========== ============= Net (loss) income attributable to common shares $ (5,600) $ 2,600 =========== ============= Net (loss) income per common share $ (0.06) $ 0.03 =========== ============= Dividends per common share $ 0.37 $ 0.34 =========== =============
See accompanying notes to financial statements. 4 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- STATEMENTS OF CASH FLOWS ------------------------ (unaudited)
Three Months Ended March 31 --------------------------- 1996 1995 ----------- ------------ Cash flows from operating activities: Net (loss) income $ (11,700) $ 8,600 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 67,200 64,100 Equity in earnings of joint venture (9,600) Joint venture cash distributions 9,600 Amortization of deferred financing costs 4,300 Loss on sale of property held for investment 700 Changes in operating assets and liabilities: Other assets (5,400) 3,100 Accounts payable (9,000) (7,100) Accrued expenses 7,700 6,800 Tenant deposits and other liabilities (6,300) (13,900) Due to Advisor 20,100 15,000 ----------- ------------ Net cash provided by operating activities 67,600 76,600 ----------- ------------ Cash flows from investing activities: Increase in property held for investment (35,400) (34,800) Joint venture cash distributions 2,400 Proceeds from sale of property held for investment 200 ----------- ------------ Net cash used in investing activities (32,800) (34,800) ----------- ------------ Cash flows from financing activities: Dividends paid (70,600) (64,800) Repayment of mortgage notes payable (4,700) (12,400) ----------- ------------ Net cash used in financing activities (75,300) (77,200) ----------- ------------ Net decrease in cash and cash equivalents (40,500) (35,400) Cash and cash equivalents at beginning of period 266,200 510,300 ----------- ------------ Cash and cash equivalents at end of period $ 225,700 $ 474,900 =========== ============ Supplemental disclosure of cash flow information: Cash paid during the period for: Interest (none capitalized) $ 64,100 $ 54,600 =========== ============
See accompanying notes to financial statements. 5 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE 1. BASIS OF PRESENTATION --------------------- The balance sheet at March 31, 1996 and the related statements of operations and of cash flows for the three months ended March 31, 1996 and 1995 are unaudited. However, in the opinion of the Advisor, they contain all adjustments, of a normal recurring nature, necessary for a fair presentation of such financial statements. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented as permitted by Form 10-QSB and do not contain certain information included in the Trust's annual financial statements and notes. NOTE 2. INVESTMENT IN JOINT VENTURE --------------------------- The Trust's investment in joint venture consists of a 40% undivided interest in one manufactured home community, acquired in June 1995. The condensed results of operations of the joint venture for the three months ended March 31, 1996 follows:
1996 -------------- Total revenues $ 162,000 -------------- Expenses: Property operating 84,400 Interest 35,800 Depreciation 17,800 -------------- 138,000 -------------- Net income $ 24,000 ==============
NOTE 3. NET (LOSS) INCOME PER COMMON SHARE ---------------------------------- Net (loss) income per common share is calculated using the two class method and is based on the weighted average number of common shares outstanding during the period and the net (loss) income allocated to the common shareholders. The weighted average number of common shares outstanding during both the three months ended March 31, 1996 and 1995 was 90,169. NOTE 4. RELATED PARTY TRANSACTIONS -------------------------- The Advisor is entitled to receive various fees and compensation from the Trust which are summarized as follows: Operational Stage - - ----------------- For management of the Trust's business, the Advisor is paid an advisory fee of 1% of invested assets and .5% of uninvested assets. The fee is subject to limitation if the Trust's total operating expenses (as defined) for the year exceed the greater of 2% of the Trust's average invested assets or 25% of the Trust's net income. The fee is also subordinated to preferred shareholders receiving a minimum 6 of 6% and a maximum of 7% annual cumulative dividend, and to common shareholders receiving a 6% annual noncumulative dividend. During the three months ended March 31, 1996 and 1995, the Trust accrued advisory fees of $20,100 and $15,000, respectively, payable to the Advisor. The Trust reimburses The Windsor Corporation for certain direct expenses, and employee, executive and administrative time, which are incurred on the Trust's behalf. The Trust was charged $7,600 and $9,100 for such costs during the three months ended March 31, 1996 and 1995, respectively. These costs are included in property operating and general and administrative expenses in the accompanying Statements of Operations. 7 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Changes in Financial Condition - - ------------------------------ March 31, 1996 as compared to December 31, 1995 - - ----------------------------------------------- The Trust's primary sources of cash during the three months ended March 31, 1996 were from the operations of its investment properties and interest income. The primary uses of cash during the same period were for cash dividends, debt service and capital improvements. There have been no significant changes in the financial condition of the Trust since December 31, 1995. The Trust's cash balance decreased from $266,200 at December 31, 1995 to $225,700 at March 31, 1996, due mainly to dividends and capital improvements exceeding cash provided from operations. Shareholders' equity decreased from $3,500,700 at December 31, 1995 to $3,418,400 at March 31, 1996 due to a net loss of $11,700 for the three months ended March 31, 1996 and cash dividends of $70,600 during the same period. The future sources of cash for the Trust will be provided from property operations, interest income, cash reserves, and ultimately from the sale of property. The future uses of cash will be for property and Trust operations, debt service and cash dividends to shareholders. The Advisor believes that the future sources of cash are sufficient to meet the working capital requirements of the Trust for the foreseeable future. Results of Operations - - --------------------- Three months ended March 31, 1996 as compared to three months ended - - ------------------------------------------------------------------- March 31, 1995 - - -------------- The results of operations for the three months ended March 31, 1996 and 1995 are not directly comparable due to the purchase of an interest in the Long Lake Village manufactured home community in June 1995. The Trust incurred a net loss of $11,700 ($0.06 per common share) for the three months ended March 31, 1996 and realized net income of $8,600 ($0.03 per common share) for the three months ended March 31, 1995. Rent and utilities revenues increased from $274,500 in 1995 to $282,300 in 1996. The overall occupancy of the Trust's three wholly-owned properties increased slightly from 95% at March 31, 1995 to 97% at March 31, 1996. In addition, rent increases implemented during the past year include $8 per month at West Star effective January 1996, $7 per month at El Frontier effective August 1995, and $12 per month at Griffwood effective May 1995. Equity in earnings of joint venture represents the Trust's 40% undivided interest in the net income of the Long Lake manufactured home community, acquired in June 1995. The Long Lake community was 93% occupied at March 31, 1996 and a $10 per month rent increase was implemented in January 1996. Interest income decreased from $6,000 in 1995 to $2,800 in 1996 due mainly to lower cash balances maintained by the Trust. 8 Property operating expense increased from $121,500 in 1995 to $130,500 in 1996 due mainly to higher property taxes and utilities costs. Interest expense increased from $56,100 in 1995 to $75,700 in 1996 due mainly to approximately $570,000 of additional long-term indebtedness incurred by the Trust in connection with the refinancing of El Frontier in May 1995. Advisory fee expense represents a fee payable to the Advisor for management of the Trust's business. The fee is computed based on invested and uninvested asset levels and is subject to certain subordination provisions. Advisory fee expense increased from $15,000 in 1995 to $20,100 in 1996 due to a higher invested asset level after the acquisition of the 40% undivided interest in Long Lake Village in June 1995. General and administrative expenses decreased slightly from $18,700 in 1995 to $16,600 in 1996. 9 PART II ------- Item 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- a) Exhibits and Index of Exhibits 11) Computation of Net (Loss) Income Per Common Share 27) Financial Data Schedule b) Reports on Form 8-K There were no reports on Form 8-K filed during the period covered by this Form 10-QSB. 10 EXHIBIT 11 WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- COMPUTATION OF NET (LOSS) INCOME PER COMMON SHARE (1) -------------------------------------------------
For the Three Months Ended March 31 ----------------------------------- 1996 1995 --------------- ---------------- Net (Loss) Income $ (11,700) $ 8,600 Less: Dividends Paid - Preferred (36,800) (33,800) - Common (33,800) (31,000) Unpaid Preferred Dividends (3,100) --------------- ---------------- Overdistributed Earnings $ (82,300) $ (59,300) =============== ================ Allocation of Overdistributed Earnings (2) - - ------------------------------------------ Preferred $ (42,900) $ (30,900) Common (39,400) (28,400) --------------- ---------------- $ (82,300) $ (59,300) =============== ================ Earnings Per Common Share - - ------------------------- Dividends Paid $ 33,800 $ 31,000 Allocation of Overdistributed Earnings (39,400) (28,400) --------------- ---------------- Net (Loss) Income Attributable to Common Shares $ (5,600) $ 2,600 =============== ================ Weighted Average Common Shares Outstanding 90,169 90,169 =============== ================ Net (Loss) Income Per Common Share $ (0.06) $ 0.03 =============== ================
Note - - ---- (1) Net (loss) income per common share is computed using the two class method. (2) Overdistributed earnings are allocated evenly, on a per share basis, between common and preferred shares. 11 SIGNATURE In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WINDSOR REAL ESTATE INVESTMENT TRUST 8 -------------------------------------- (Registrant) By /s/ John A. Coseo, Jr. -------------------------------------------------- JOHN A. COSEO, JR. Chairman, Chief Executive Officer, President, Secretary Date: May 10, 1996 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET OF WINDSOR REAL ESTATE INVESTMENT TRUST 8 AS OF MARCH 31, 1996 AND THE RELATED STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 225,700 0 0 0 0 0 6,647,000 632,200 6,987,200 0 3,379,600 0 2,121,700 1,922,900 (626,200) 6,987,200 0 298,400 0 130,500 103,900 0 75,700 (11,700) 0 (11,700) 0 0 0 (11,700) (0.06) 0
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