FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the period ended
June 30, 2002
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ______ to ___________
Commission File Number: 33-18089-A
HICKORY LENDERS, LTD.
(Exact name of Registrant as specified in its charter)
|
Tennessee |
62-1336905 |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification) |
|
4400 Harding Road, Suite 500,Nashville, Tennessee |
37205 |
|
(Address of principal executive office) |
(Zip Code) |
(615) 292-1040
(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 at least the past 90 days.
YES X NO ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HICKORY LENDERS, LTD.
(A Limited Partnership)
FINANCIAL STATEMENTS
(Unaudited)
INDEX
Item 1. Financial Statements
Balance Sheets as of June 30, 2002 and December 31, 2001 3
Statements of Operations for the three and six months ended June 30, 2002 and 2001 4
Statements of Cash Flows for the six months ended June 30, 2002 and 2001 5
Notes to Financial Statements for the three and six months ended June 30, 2002 and 2001 6
Item 2: Management's discussion and analysis of financial condition and results of operations 7
PART II. Other information 8
Item 6. Exhibits and reports on Form 8-K 8
Signatures 9
Certification 10
HICKORY LENDERS, LTD.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
|
June 30, 2002 |
December 31, 2001 |
|
|
ASSETS |
||
|
Cash |
131,838 |
67,067 |
|
Restricted cash |
105,359 |
104,930 |
|
Land and improvements held for sale |
1,136,254 |
1,180,614 |
|
Total Assets |
$ 1,373,451 |
1,352,611 |
|
LIABILITIES AND PARTNERS' EQUITY |
||
|
Accounts payable |
$ 14,565 |
3,294 |
|
Property tax payable |
13,000 |
26,002 |
|
Impact fee payable |
59,000 |
59,000 |
|
Franchise and excise payable |
1,659 |
3,236 |
|
Total liabilities |
88,224 |
91,532 |
|
Partners' equity: |
||
|
Limited partners, 4,200 units outstanding |
1,285,527 |
1,261,079 |
|
General Partner |
- |
- |
|
Total partners' equity |
1,285,527 |
1,261,079 |
|
Total liabilities and partners' equity |
$ 1,373,451 |
1,352,611 |
See accompanying notes to financial statements.
HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
|
Three months ended |
Six months ended |
|||
|
June 30, |
||||
|
2002 |
2001 |
2002 |
2001 |
|
|
REVENUE: |
||||
|
Land sale: |
||||
|
Gross proceeds |
$ 70,000 |
- |
142,000 |
- |
|
Cost of land sold |
(22,180) |
- |
(44,360) |
-- |
|
Selling expenses |
(10,070) |
- |
(29,101) |
- |
|
Gain on sale |
37,750 |
- |
68,539 |
- |
|
Interest income |
246 |
649 |
429 |
1,700 |
|
Total revenues |
37,996 |
649 |
68,968 |
1,700 |
|
Expenses |
||||
|
State tax |
788 |
809 |
1,576 |
1,618 |
|
Property taxes |
6,642 |
6,402 |
13,236 |
12,848 |
|
Grounds maintenance expense |
300 |
- |
300 |
- |
|
Management fee |
1,750 |
1,750 |
3,500 |
3,500 |
|
Professional fees |
20,260 |
13,261 |
23,810 |
18,161 |
|
General and administrative expenses |
1,907 |
1,612 |
2,398 |
4,471 |
|
Total expenses |
31,647 |
23,834 |
44,820 |
40,598 |
|
Net income (loss) |
$ 6,349 |
(23,185) |
24,148 |
(38,898) |
|
Net income (loss) per limited partner unit |
1.51 |
(5.52) |
(5.75) |
(9.26) |
|
Limited partner units outstanding |
4,200 |
4,200 |
4,200 |
4,200 |
See accompanying notes to financial statements
HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
|
For the six months ended June 30, |
||
|
2002 |
2001 |
|
|
Cash flows from operating activities: |
||
|
Net income (loss) |
$ 24,148 |
(38,898) |
|
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
||
|
Increase in restricted cash |
(429) |
(17,701) |
|
Cost of land improvements |
- |
(27,480) |
|
Cost of land sold |
44,360 |
- |
|
Increase accounts payable |
11,271 |
(5,397) |
|
Decrease in property taxes payable |
(13,002) |
(12,062) |
|
Increase (decrease) in accrued state taxes payable |
(1,577) |
1,618 |
|
Net cash provided by (used) operating activities |
64,771 |
(99,920) |
|
Net increase (decrease) in cash |
64,771 |
(99,920) |
|
Cash at beginning of period |
67,067 |
104,454 |
|
Cash at end of period |
$ 131,838 |
4,534 |
See accompanying notes to financial statements.
HICKORY LENDERS, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 2002 and 2001
(Unaudited)
A.ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's Form 10-K for the year ended December 31, 2001. In the opinion of management, such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Partnership's financial position and results of operations. The results of operations for the six-month period ended June 30, 2002 may not be indicative of the results that may be expected for the year ending December 31, 2002.
B.RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved in managing the Partnership's operations. Compensation earned for these services were as follows:
|
Three months ended June 30, |
Six months ended June 30, |
|||
|
2002 |
2001 |
2002 |
2001 |
|
|
Management fee |
$1,750 |
$1,750 |
$3,500 |
$3,500 |
|
Accounting fees |
10,290 |
8,800 |
10,790 |
9,200 |
C. COMPREHENSIVE INCOME
During the three and six-month periods ended June 30, 2002 and 2001, the Partnership had no components of other comprehensive income (loss). Accordingly, comprehensive income (loss) for each of the periods was the same as net income (loss).
D. IMPAIRMENT
Effective January 1, 2002 the Financial Accounting Standards Board (FASB) issued the Statement of Financial Accounting Standard Number 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No. 144"). SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This Statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Land and improvements held for sale are reported at the lower of the carrying value or estimated fair value less estimated costs to sell (Fair Value). To determine the Fair Value, management estimates the future discounted net cash flows using a discount rate commensurate with the risk associated with the property. If this land is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets excee ds the estimated Fair Value. Inherent in the calculation of future discounted net cash flows are certain significant management judgments and estimates including, among others, liquidation period, discount rate, selling price, and costs to sell, which significantly impact the estimated Fair Value. The adoption of SFAS No. 144 did not have an impact on the artnership's financial condition or results of operations.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2002.
During the first six months of 2002, the registrant sold two lots in the Hendersonville property. Sales proceeds were retained to meet operating expenses. Expenses of the Registrant have not fluctuated significantly from the prior quarter ended June 30, 2001.
FINANCIAL CONDITION
LIQUIDITY
At June 30, 2002 the Registrant had approximately $132,000 in cash. These funds are expected to be sufficient to fund operations through 2002.
Critical Accounting Policies
Land and improvements held for sale are reported at the lower of the carrying value or estimated fair value less estimated costs to sell (Fair Value). To determine the Fair Value, management estimates the future discounted net cash flows using a discount rate commensurate with the risk associated with the property. If this land is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated Fair Value. Inherent in the calculation of future discounted net cash flows are certain significant management judgments and estimates including, among others, liquidation period, discount rate, selling price, and costs to sell, which significantly impact the estimated Fair Value.
Contractual Obligations and Commitments
At June 30, 2002, the Partnership has no capital lease obligations, operating leases, unconditional purchase obligations or other long term obligations. The Partnership does not enter into derivative transactions. Further, the Partnership does not have lines of credit, guarantees, or other commercial commitments. The Partnership has accrued $59,000 of impact fees to be paid upon the sale and development of the remaining land and improvements held for sale. At June 30, 2002, the Partnership has restricted cash balances of $105,359, to be used to fund property improvements, consisting of utility work. The restricted cash secures a letter of credit in the same amount to ensure that the required developments are made. The Partnership may borrow from the General Partner in order to meet cash flow needs and may have amounts payable to the General Partner for management fees or other services. At June 30, 2002 and December 31, 2001, the Partnership had no borrowings from the General Partner. Transactions with the General Partner and affiliates are discussed in footnote B to the financial statements.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) No 8-K's have been filed during this quarter.
HICKORY LENDERS, Ltd.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connections with the Report of Hickory Lenders, Ltd., on Form 10-Q for the quarter ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I Steven D. Ezell, Chief Executive Officer of Hickory Lenders, Ltd., certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 14, 2002 By: Steven D. Ezell
Chief Executive Officer
In connections with the Report of Hickory Lenders, Ltd., on Form 10-Q for the quarter ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I Michael A. Hartley, Chief Financial Officer of Hickory Lenders, Ltd., certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 14, 2002 By: Michael A. Hartley
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HICKORY LENDERS, LTD
By: 222 Hickory, LTD.
General Partner
By:222 PARTNERS, INC.
General Partner
|
Date: August 14, 2002 |
By:/s/ Steven D. Ezell |
|
President |
|
Date: August 14, 2002 |
By:/s/ Michael A. Hartley |
|
Secretary/Treasurer |