FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2003
Commission File Number: 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
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(Exact name of registrant as specified in its charter)
Delaware 16-1309987
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(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 12A, Getzville, New York 14068
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(Address of principal executive offices)
(716) 636-0280
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(Registrant's telephone number)
Indicate by a 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 [ ]
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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Condensed Consolidated Balance Sheets
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(Unaudited)
March 31, December 31,
2003 2002
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Assets
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Property and equipment, all held for sale $ 12,997,948 12,991,816
Less accumulated depreciation 4,918,520 4,918,520
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8,079,428 8,073,296
Cash and equivalents 118,790 260,089
Note receivable 346,879 348,234
Other assets 558,407 514,781
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Total assets $ 9,103,504 9,196,400
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Liabilities and Partners' Equity
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Mortgage loans payable 6,313,322 6,337,228
Accounts payable and accrued expenses 412,609 421,439
Payable to affiliates 1,376,708 1,341,811
Other liabilities 158,318 158,500
Equity in losses of unconsolidated joint venture
in excess of investment 150,417 145,955
Partners' equity 692,130 791,467
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Total liabilities and partners' equity $ 9,103,504 9,196,400
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Condensed Consolidated Statements of Operations
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(Unaudited)
Three months ended March 31,
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2003 2002
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Rental income $ 547,706 913,053
Other income 73,409 83,730
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Total income 621,115 996,783
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Property operating costs 424,232 706,185
Administrative expense - affiliates 75,038 109,356
Other administrative expense 69,227 60,684
Interest 190,493 284,145
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Total expenses 758,990 1,160,370
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Loss before equity in earnings of joint venture (137,875) (163,587)
Equity in earnings of joint venture 38,538 24,137
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Net loss $ (99,337) (139,450)
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Net loss per limited partnership unit $ (0.61) (0.86)
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Weighted average limited partnership units outstanding 157,378 157,378
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Condensed Consolidated Statements of Cash Flows
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(Unaudited)
Three months ended March 31,
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2003 2002
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Cash provided (used) by:
Operating activities:
Net loss: $ (99,337) (139,450)
Adjustments - other, principally changes
in other assets and liabilities (56,279) 240,813
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Net cash provided (used) by operating activities (155,616) 101,363
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Investing activities:
Distributions from joint venture 43,000 33,000
Payments on note receivable 1,355 --
Additions to property and equipment (6,132) --
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Net cash provided by investing activities 38,223 33,000
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Financing activities - principal payments on mortgage loans (23,906) (35,907)
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Net increase (decrease) in cash and equivalents (141,299) 98,456
Cash and equivalents at beginning of period 260,089 62,362
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Cash and equivalents at end of period $ 118,790 160,818
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Notes to Consolidated Financial Statements
Three months ended March 31, 2003 and 2002
(Unaudited)
Organization
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Realmark Property Investors Limited Partnership - VI A (the Partnership), a
Delaware limited partnership, was formed on September 21, 1987, to invest in a
diversified portfolio of income-producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership
agreement, the general partners and their affiliates can receive compensation
for services rendered and reimbursement for expenses incurred on behalf of the
Partnership.
Basis of Presentation
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The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the instructions to Form 10-Q. Accordingly, they do
not include all of the information and notes required by accounting principles
generally accepted in the United States of America for complete financial
statements. The balance sheet at December 31, 2002 has been derived from the
audited financial statements at that date. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. The Partnership's significant
accounting policies are set forth in its December 31, 2002 Form 10-K. The
interim financial statements should be read in conjunction with the financial
statements included therein. The interim results should not be considered
indicative of the annual results.
Property and Equipment
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At March 31, 2003, the Partnership owned and operated two apartment complexes
and one commercial property. It also has interests in a joint venture, as
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described below. All of the Partnership and venture properties are being
marketed for sale, and, therefore, are not depreciated. Depreciation expense not
recorded for the three month periods ended March 31, 2003 and 2002 was
approximately $105,000 and $168,000, respectively. As previously reported in the
Partnership's December 31, 2002 Form 10-K, the Partnership has entered into
sales agreements with unaffiliated entities, for the sale of Pomeroy Park and
Inducon Columbia. These sales, if closed, will result in an aggregate gain of
approximately $665,000 to the Partnership.
Investment in Joint Ventures
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The Partnership has a 50% interest in Research Triangle Industrial Park Joint
Venture with Realmark Property Investors Limited Partnership - II (RPILP - II),
an entity affiliated through common general partners, owning the other 50%. The
Venture owns and operates the Research Triangle Industrial Park West, an
office/warehouse facility located in Durham County, North Carolina. Summary
financial information of the Venture follows.
Balance Sheet Information
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March 31, December 31,
2003 2002
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Net property, held for sale $ 1,473,368 1,473,368
Cash and equivalents 9,966 34,606
Escrow deposits 838,513 861,615
Other assets 275,495 272,481
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Total assets $ 2,597,342 2,642,070
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Liabilities:
Mortgage loan payable 5,135,938 5,161,824
Accounts payable and accrued expenses 126,115 140,633
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5,262,053 5,302,457
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Partners' deficit:
The Partnership (1,431,771) (1,429,609)
RPILP - II (1,232,940) (1,230,778)
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(2,664,711) (2,660,387)
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Total liabilities and partners' deficit $ 2,597,342 2,642,070
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Operating Information
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Three months ended March 31,
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2003 2002
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Rental income $ 199,500 161,739
Other 47,944 47,705
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Total income 247,444 209,444
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Property operating costs 42,096 38,260
Interest 106,293 108,129
Administrative 17,379 10,181
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Total expenses 165,768 156,570
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Net income $ 81,676 52,874
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Allocation of net income:
The Partnership 40,838 26,437
RPILP - II 40,838 26,437
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$ 81,676 52,874
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Current Accounting Pronouncements
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Statements of Financial Accounting Standards Nos. 145, 146, 147, and 148 which
concern accounting for gains and losses from the extinguishments of debt, exit
or disposal activities, acquisitions of certain financial institutions, and
accounting for stock-based compensation, respectively, became effective for the
Partnership on January 1, 2003 and did not have any effect on the Partnership's
consolidated financial statements.
In January 2003, the Financial Accounting Standards Board issued Interpretation
No. 46, "Consolidation of variable Interest Entities." The Partnership does not
believe that this Interpretation will have a material impact on its consolidated
financial statements.
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Liquidity and Capital Resources
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Effective January 1, 2001, management began formally marketing all remaining
properties in the Partnership for sale. Although the Partnership sold two of its
properties (Beaver Creek and Countrybrook) during 2002, it continued to have
difficulties in the first three months of 2003 generating sufficient funds to
cover its cash obligations without relying on affiliate borrowings. The total
amount payable to affiliates increased approximately $35,000 during the three
months ended March 31, 2003. There have been no distributions to the partners
for at least the past six years. In accordance with the settlement of the
lawsuit (Part II, Item 1), it is anticipated that with the sale of the remaining
properties, the Partnership may be in a position to make distributions to the
limited partners.
Results of Operations
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The Partnership's operations produced an operating loss of approximately
$138,000 for the three months ended March 31, 2003. Comparable pro forma results
for the same 2002 period (excluding Beaver Creek and Countrybrook) would be an
operating loss of $114,000.
Income at the properties (excluding Beaver Creek and Countrybrook) increased
approximately $30,000 for the first three months of 2003 as compared to 2002.
This was due mainly to decreased vacancies at Inducon Columbia of $33,000 and
Stonegate of $1,000, offset by increased vacancies at Pomeroy Park of $7,000.
Property operating costs (excluding Beaver Creek and Countrybrook) increased
$15,000 mainly due to an increase in utility costs, real estate taxes and
insurance at all properties. The $29,000 increase in other administrative
expenses (excluding Beaver Creek and Countrybrook) was primarily attributable to
an increase in legal fees. The $14,000 decrease in administrative expense to
affiliates was primarily due to a decrease in professional fees.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership invests only in short term money market instruments, in amounts
in excess of daily working cash requirements. The rates of earnings on those
investments increase or decrease in line with the general movement of interest
rates. The mortgage loan on the Partnership's property is fixed rate and
therefore, is not subject to market risk.
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PART I - Item 4. Controls and Procedures
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Within the 90 days prior to the filing date of this report, the Partnership
carried out an evaluation, under the supervision and with the participation of
the Partnership's management, including Joseph M. Jayson (the Partnership's
Individual General Partner and Principal Financial Officer), of the
effectiveness of the design and operation of the Partnership's disclosure
controls and procedures. Based upon that evaluation, the Principal Financial
Officer concluded that the Partnership's disclosure controls and procedures are
effective. There have been no significant changes in the Partnership's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation.
PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
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As previously reported, the Partnership, as a nominal defendant, the General
Partners of the Partnership and of affiliated public partnerships (the "Realmark
Partnerships") and the officers and directors of the Corporate General Partner,
as defendants, had been involved in a class action litigation in New York State
court. The Partnership's settlement of this litigation is described in its
Annual Report on Form 10-K for the year ended December 31, 2002.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
99. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
is filed herewith.
(b) Reports on Form 8-K
None.
SIGNATURES
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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.
REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - VI A
May 15, 2003 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
6
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph M. Jayson, Individual General Partner and Principal Financial Officer
of Realmark Property Investors Limited Partnership - VI A, hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ended March 31, 2003 of Realmark Property Investors Limited
Partnership - VI A;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented
in this quarterly report;
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Partnership and I have:
a. Designed such disclosure controls and procedures to ensure the
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within
those entities, particularly during the period in which this
quarterly report was being prepared;
b. Evaluated the effectiveness of the Partnership disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on
my evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
Partnership's auditors and to the board of directors of the
Corporate General Partner:
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the Partnership's
ability to record, process, summarize and report financial data
and have identified for the Partnership's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of my most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
May 15, 2003 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
7