UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2004
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: 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 16-1309987
-------- ----------
(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 35B,Getzville, New York 14068
- -----------------------------------------------------------
(Address of principal executive offices)
(716) 636-0280
- --------------
(Registrant's telephone number)
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 [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
Condensed Consolidated Balance Sheets
-------------------------------------
(Unaudited)
June 30, December 31,
2004 2003
-------------- --------------
Assets
- --------------------------------------------------
Cash and equivalents $ 982,824 1,214,336
Receivable from affiliates 140,546 --
Other assets 5,000 66,520
-------------- --------------
Total assets $ 1,128,370 1,280,856
============== ==============
Liabilities and Partners' Equity
- --------------------------------------------------
Accounts payable and accrued expenses 69,309 78,669
Payable to affiliates -- 24,408
Equity in losses of unconsolidated joint venture
in excess of investment 48,860 85,952
Partners' equity 1,010,201 1,091,827
-------------- --------------
Total liabilities and partners' equity $ 1,128,370 1,280,856
============== ==============
Condensed Consolidated Statements of Operations
-----------------------------------------------
(Unaudited)
Three months ended June 30, Six months ended June 30,
---------------------------- ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Rental income $ -- 598,266 -- 1,145,972
Other income 3,833 119,376 7,930 192,785
---------- ---------- ---------- ----------
Total income 3,833 717,642 7,930 1,338,757
---------- ---------- ---------- ----------
Property operating costs 26,321 450,248 63,384 874,480
Administrative expense - affiliates -- 70,262 9,000 145,300
Other administrative expense 15,965 60,253 54,264 129,480
Interest -- 174,522 -- 365,015
---------- ---------- ---------- ----------
Total expenses 42,286 755,285 126,648 1,514,275
---------- ---------- ---------- ----------
Loss before equity in joint venture and gain
on sale of property (38,453) (37,643) (118,718) (175,518)
Equity in earnings of joint venture 21,805 22,912 37,092 61,450
Gain on sale of property -- 924,091 -- 924,091
---------- ---------- ---------- ----------
Net income (loss) $ (16,648) 909,360 (81,626) 810,023
========== ========== ========== ==========
Net income (loss) per limited partnership unit $ (.10) 5.02 (.50) 4.41
========== ========== ========== ==========
Weighted average limited partnership units
outstanding 157,378 157,378 157,378 157,378
========== ========== ========== ==========
2
Condensed Consolidated Statements of Cash Flows
-----------------------------------------------
(Unaudited)
Six months ended June 30,
--------------------------
2004 2003
------------ -----------
Cash provided (used) by:
Operating activities:
Net income (loss) $ (81,626) 810,023
Adjustments:
Gain on sale of property -- (924,091)
Other, principally changes in other assets and liabilities (149,886) (36,336)
----------- -----------
Net cash used in operating activities (231,512) (150,404)
----------- -----------
Investing activities:
Net proceeds from sale of property -- 2,715,340
Distributions from joint venture -- 53,000
Additions to property and equipment -- (6,132)
----------- -----------
Net cash provided by investing activities -- 2,762,208
----------- -----------
Financing activities - principal payments on mortgage loans -- (1,801,445)
----------- -----------
Net increase (decrease) in cash and equivalents (231,512) 810,359
Cash and equivalents at beginning of period 1,214,336 260,089
----------- -----------
Cash and equivalents at end of period $ 982,824 1,070,448
=========== ===========
Notes to Consolidated Financial Statements
Six months ended June 30, 2004 and 2003
(Unaudited)
Organization
- ------------
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
- ---------------------
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, 2003 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, 2003 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.
3
Property and Equipment
- ----------------------
At June 30, 2004, the Partnership had an interest in a joint venture, as
described below. The joint venture property is being actively marketed for sale
and, therefore, is not being depreciated. The Partnership sold its remaining
wholly-owned property in 2003. Depreciation expense not recorded for the three
and six month periods ended June 30, 2003 was approximately $105,000 and
$210,000, respectively.
Investment in Research Triangle Industrial Park Joint Venture
- -------------------------------------------------------------
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
-------------------------
June 30, December 31,
2004 2003
----------- -----------
Assets:
Net property, held for sale $ 1,697,152 1,684,255
Cash and equivalents 31,343 26,667
Escrow deposits 745,764 871,080
Other assets 199,225 245,242
----------- -----------
Total assets $ 2,673,484 2,827,244
=========== ===========
Liabilities:
Mortgage loan payable 5,007,843 5,060,888
Accounts payable and accrued expenses 104,238 288,337
----------- -----------
Total liabilities 5,112,081 5,349,225
----------- -----------
Partners' deficit:
The Partnership (1,318,714) (1,360,406)
RPILP - II (1,119,883) (1,161,575)
----------- -----------
Total partners' deficit (2,438,597) (2,521,981)
----------- -----------
Total liabilities and partners' deficit $ 2,673,484 2,827,244
=========== ===========
4
Operating Information
---------------------
Three months ended June 30, Six months ended June 30,
-------------------------- ---------------------------
2004 2003 2004 2003
--------- -------- -------- --------
Rental income $199,500 199,500 399,000 399,000
Other 46,062 50,773 92,512 98,717
-------- -------- -------- --------
Total income 245,562 250,273 491,512 497,717
-------- -------- -------- --------
Property operating costs 55,784 73,900 146,614 115,996
Interest 105,675 106,856 210,909 213,149
Administrative 35,893 19,093 50,605 36,472
-------- -------- -------- --------
Total expenses 197,352 199,849 408,128 365,617
-------- -------- -------- --------
Net income $ 48,210 50,424 83,384 132,100
======== ======== ======== ========
Allocation of net income:
The Partnership 24,105 25,212 41,692 66,050
RPILP - II 24,105 25,212 41,692 66,050
-------- -------- -------- --------
$ 48,210 50,424 83,384 132,100
======== ======== ======== ========
Current Accounting Pronouncements
- ---------------------------------
In January 2003, the Financial Accounting Standards Board (FASB) issued
Financial Interpretation (FIN) No. 46, "Consolidation of Variable Interest
Entities." In December 2003, the FASB reissued FIN No. 46R with certain
modifications and clarifications. This pronouncement became effective for the
Partnership on March 31, 2004 and did not have any effect on its consolidated
financial statements.
5
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations
-------------------------
Liquidity and Capital Resources
- -------------------------------
Effective January 1, 2001, management began formally marketing all remaining
properties in the Partnership for sale. The Partnership sold two of its
properties (Beaver Creek and Countrybrook) during 2002, and in 2003 sold its
remaining three properties (Pomeroy Park, Inducon Columbia, and Stonegate
Townhouses). The sales proceeds enabled the Partnership to make a distribution
to the limited partners in the last quarter of 2003 in the amount of $2,500,000.
Assets consisted primarily of cash, which amounted to approximately $983,000, at
June 30, 2004. In accordance with the settlement of the lawsuit (Part II, Item
1), it is anticipated that with the sale of the remaining joint venture, the
Partnership may be in a position to make distributions to the limited partners.
Results of Operations
- ---------------------
As a result of the sale of its remaining wholly-owned properties, the
Partnership's rental operations ceased in 2003. Operations for the three and six
months ended June 30, 2004 consisted primarily of ownership of the joint venture
investment, administrative costs and professional fees.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Partnership's cash equivalents are short-term, interest-bearing bank
accounts. It has not entered into any derivative contracts. Therefore, it has no
market risk exposure.
PART I - Item 4. Controls and Procedures
-----------------------
Disclosure Controls and Procedures: The Partnership's management, with the
participation of the Partnership's Individual General Partner and Principal
Financial Officer, has evaluated the effectiveness of the Partnership's
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934, as amended) as of the end of the
period covered by this report. Based on such evaluation, the Partnership's
Individual General Partner and Principal Financial Officer have concluded that,
as of the end of such period, the Partnership's disclosure controls and
procedures are effective.
Internal Control Over Financial Reporting: There have been no changes in the
Partnership's internal control over financial reporting (as defined in Rule
13a-15(f) under the Securities Exchange Act of 1934, as amended) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
6
PART II - OTHER INFORMATION
Item 1. Legal Proceeding
----------------
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, 2003.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
31. Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None.
7
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.
REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - VI A
August 16, 2004 /s/ Joseph M. Jayson
--------------- ------------------------------
Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
8