SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
Commission file number 0-18727
CARC, Inc.
(Exact name of registrant as specified in its charter)
South Carolina 57-0641693
(State or other jurisdiction (I.R.S. Employer
of incorporation of organization) Identification No.)
500 Downs Loop
Clemson, SC 29631
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (864) 654-1155
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) or the Securities Exchange Act of
1934 during the preceding 1-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 the number of shares outstanding of each issuer's classes of common
stock, as of the latest practical date.
Class Outstanding at June 30, 1996
Common stock, $1,000 par value 536,000<PAGE>
CARC, INC.
Quarterly Report on Form 10-QSB
For the Quarterly Periods Ended June 30, 1996
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following financial statements of the Center are incorporated
herein by reference and included in Exhibit A:
A. Unaudited Balance Sheet at June 30, 1996
B. Unaudited Statements of Operations for the Three Months Ended
June 30,1996 and 1995
C. Unaudited Statement of Cash Flows for the Three Months ended
June 30,1996 and 1995
D. Note to Interim Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition
There have been no significant changes in the Center's financial
condition since March 31, 1996.
Results of Operations
Net income for the three months ended June 30, 1996 and 1995 was
$37 thousand and $75 thousand, respectively.
Operating Revenues
Operating revenues for the three months ended June 30, 1996 and
1995 were $750 thousand and $756 thousand, respectively. The
overall decrease in operating revenues for the three months ended
June 30, 1996 over the same period in 1995 is due primarily to a
decrease in apartment occupancy of 3%; also the Center changed
the billing procedures for beauty shop services from a percentage
of total fees billed to a standard fee.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (Continued)
Operating Expenses
Operating expenses for the three months ended June 30, 1996 and
1995 were $720 thousand and $683 thousand, respectively. The net
increase was primarily attributable to increases in health care
center and administrative and general expenses which were offset by
a decrease in interest. Interest expense decreased $8 thousand due
to reduction of the principal balance of the mortgage.
Administrative and general expenses increased approximately $14
thousand due primarily to increased wages and professional fees.
Health care center expenses increased approximately $28 thousand
due primarily to an increase in wages and the use of temporary
employees. Other operating expenses remained relatively stable.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings, other than
ordinary routine litigation incidental to its business, to which
the CARC, Inc. is a party or of which any of its property is the
subject.
Item 2. Changes in Securities
There have been no changes in securities during the reporting period.
Under South Carolina law CARC, Inc. may pay dividends unless after
giving effect to the dividend the corporation would not be able to
pay its debts as they become due in the usual course of business or
the corporation's total assets would be less than the sum of its
total liabilities.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Please refer to the following minutes of the shareholders' meeting
held June 13, 1996 for the information requested for this item.
CARC. INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 13, 1996
The Annual Meeting of the shareholders of CARC, Inc. was held at
2:00 PM June 13, 1996, in the East Clemson Baptist Church, Clemson,
SC Directors present: Helen Gregory, Eleanor BUrley, Edward
Macholl, William Monroe, Bill Bowen, Robert Watson, Marvin Owings,
and Elizabeth Martin, Cobb was absent.
Mrs. Gregory called the meeting to order and announced that a quorum
was present to conduct business. Mr. Ken Flint, Chairman of the
nominating committee was called to the floor. Mr Flint introduced
the four new members elected for this year. They were Elizabeth
Seefeld, Julia Wise, Luther Honaker and Wencel Neumann. Mrs.
Gregory then asked the entire board for next year to stand. Members
from the previous year were Burley, Monroe, Macholl, Watson, and
Bowen. These five (5) plus our four (4) new members constitute the
96-97 CARC board.
Eleanor Burley, secretary was asked to read the minutes from the
July 1995 meeting. Mr. Flint made a motion to accept these minutes.
Mrs. Brandt seconded.
Mrs. Anita Davis, CARC Administrator then reported on the progress
made during the previous year. She attributed much of their success
to the experience of her present staff. All of who have been with
her over five (5) years. These last four (4) years have all shown
profits with the mortgage principal having decreased over a million
dollars. The apartments remain full with a waiting list; the HCC
bed occupancy has increased by a small percentage; and dietary
profits have stayed marginal. Volunteers continue their dedicated
service giving much time and money to the Downs.
Ms. Claire Wagner was then called to give the election committee
results. There were 286 votes for the directors and 280 to ratify
the appointment of Crisp Hughes and Company as independent accounts.
Edward Macholl, Treasurer was asked to give his report. There was
a small increase in profits this year but increased expenses may
necessitate a rate increase in the future.
Mendel Sherman then presented to the departing board members'
Certificates of Appreciation to Gregory, Owings, Martin and Cobb
for their time and service.
With no other business the meeting was adjourned at 2:35 PM.
Eleanor Burley, Corporate Secretary
Item 5. Other Information
None.
<PAGE>
PART II - OTHER INFORMATION, (Continued)
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit A Selected Financial Statements
B. There were no reports on Form 8-K filed for the three months
ended June 30, 1996.
<PAGE>
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.
CARC, Inc.
Clemson, South Carolina
Date: July 22, 1996 /S/Anita M. Davis
Anita M. Davis
Administrator
<PAGE>
EXHIBIT A<PAGE>
<TABLE>
<CAPTION>
CARC, INC.
Balance Sheet
June 30, 1996
(unaudited)
Assets
<S> <C>
Current assets:
Cash $ 319,342
Investments 112,926
Accounts receivable, net of allowance for
contractual adjustments of $5,000 113,652
Accrued interest receivable 2,790
Prepaid expenses 50,143
Inventory 14,924
Total current assets 613,777
Assets whose use is limited:
By stockholders for expansion of facilities 109,336
Property, buildings, and equipment, net 3,919,934
Entrance fees in escrow 97,736
Other assets - principally loan refinancing costs 111,998
$ 4,852,781
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 252,021
Accounts payable 61,757
Accrued payroll 20,465
Accrued payroll and property taxes 44,817
Accrued interest 19,265
Other accrued liabilities 4,534
Unearned revenue 90,931
Total current liabilities 493,790
Refundable entrance fees 97,736
Long-term debt, excluding current installments 2,665,824
Total liabilities 3,257,350
Stockholders' equity:
Common stock $1 par value. Authorized 600,000
shares; issued 536,000 shares in 1996 and 1995 536,000
Additional paid-in capital 2,111,886
Accumulated deficit (1,052,455)
Total stockholders' equity 1,595,431
$ 4,852,781
See accompanying note to interim financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Operations
For the Three Months Ended June 30, 1996 and 1995
(Unaudited)
<S> <C>
Three Months Ended
June 30, 1996 June 30, 1995
Operating revenues:
Apartments $ 368,228 $ 372,678
Health Care Center 364,881 362,391
Dietary 13,005 12,530
Residential services 3,871 7,682
Miscellaneous - 651
Total operating revenues 749,985 755,932
Operating expenses:
Apartments 51,786 47,043
Health Care Center 194,769 166,962
Dietary 144,238 140,959
Residential services 3,830 7,802
Maintenance and repair 27,810 27,670
Housekeeping 26,417 24,893
Administrative and general 80,141 65,897
Depreciation and amortization 71,445 70,399
Utilities 42,337 42,350
Interest 56,750 64,317
Property taxes 20,528 24,439
Total operating expenses 720,051 682,731
Income from operations 29,934 73,201
Nonoperating revenue (expense):
Interest and investment income 6,831 7,158
Loss on disposal of equipment - (5,233)
Nonoperating revenue (expense) 6,831 1,925
Net income $ 36,765 $ 75,126
Per share information:
Net income $ .07 $ .14
Weighted average number of shares
outstanding during the period 536,000 536,000
See accompanying note to interim financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Cash Flows
For the Three Months Ended June 30, 1996 and 1995
(Unaudited)
<S> <C>
1996 1995
Cash flows from operating activities:
Net income $ 36,765 $ 75,126
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 71,445 70,399
Loss on disposal of equipment - 5,233
Decrease (increase) in:
Cash - funds held for others 1,327 (2,049)
Accounts receivable 3,481 8,419
Accrued interest receivable 4,440 4,406
Prepaid expenses (29,530) 8,566
Other assets 3,000 2,999
Increase (decrease) in:
Accounts payable 55,876 13,559
Accrued expenses (9,025) (325)
Unearned revenue 69,847 (30,285)
Deposits held for others (1,327) 2,049
Net cash provided by operating activities 206,299 158,097
Cash flows from investing activities:
Capital expenditures (47,538) (33,874)
Cash flows from financing activities:
Principal payments of long-term debt (65,128) (57,562)
Net increase in cash 93,633 66,661
Cash at beginning of period 225,709 221,627
Cash at end of period $ 319,342 $ 288,288
See accompanying note to interim financial statements.
</TABLE>
<PAGE>
CARC, INC.
Notes to Interim Financial Statements
June 30, 1996
(1) Basis of Presentation
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-Q and, therefore, do not
include all information or footnotes necessary for a complete
presentation of financial condition, results of operations, and
increases (decreases) in cash flows in conformity with generally
accepted accounting principles. However, all adjustments which, in the
opinion of management, are necessary for a fair presentation of the
financial statements have been included. The results of operations
for the three month period ended June 30, 1996 and 1995 are not
necessarily indicative of the results which may be expected for the
entire year.
