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 September 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 September 30, 1996
Common stock, $1,000 par value 536,000
CARC, INC.
Quarterly Report on Form 10-QSB
For the Quarterly Periods Ended September 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 September 30, 1996
B. Unaudited Statements of Operations for the Three Months
ended September 30, 1996 and 1995
C. Unaudited Statements of Cash Flows for the Six Months
ended September 30, 1996 and 1995
D. Unaudited Statements of Cash Flows for the Six Months
ended September 30, 1996 and 1995
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Condition
During the current quarter, the Board approved removal of
Board restrictions on assets of $109,336.
There have been no other significant changes in the Center's
financial condition since March 31, 1996.
Results of Operations
Net income for the six months ended September 30, 1996 and
1995 was $99 thousand and $141 thousand, respectively.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations, (Continued)
Operating Revenues
Operating revenues for the six months ended September 30,1996
and 1995 were $1,531 thousand and $1,514 thousand,
respectively. The overall increase in operating revenues for
the six months ended September 30, 1996 over the same period
in 1995 is due primarily to an increase in health care center
revenues which were offset by a decrease in residential
services. Health care center revenues increased $29 thousand
due to an increase in occupancy.
Residential services revenue decreased $12 thousand due to a
change in the billing procedures for beauty shop services
from a percentage of total fees billed to a standard fee.
Operating Expenses
Operating expenses for the six months ended September 30,
1996 and 1995 were $1,446 thousand and $1,381 thousand,
respectively. The net increase was primarily attributable to
increases in apartment, health care center, dietary, and
administrative and general expenses which were offset by
decreases in residential services and interest expenses.
Apartment expenses increased $11 thousand due to an increase
in salary and maintenance costs. Health care center costs
increased $46 thousand due to an increase in the use of
temporary employees and salary increases. Dietary expenses
increased approximately $18 thousand due to an increase in
food and beverage costs, and administrative and general
expenses increased approximately $15 thousand due primarily
to increased wages and professional fees. Residential
services decreased approximately $12 thousand due to the
change in the billing procedures for beauty shop services
from a percentage of total fees billed to a standard fee.
Interest expense decreased $15 thousand due to a reduction of
the principal balance of the mortgage. Other operating
expenses remained relatively stable.
Nonoperating revenue
Nonoperating revenue for the six months ended September 30,
1996 increased approximately $5 thousand over the same period
in 1995 primarily due a loss on disposal of assets during
1995.
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
None.
Item 5. Other Information
None.
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 September 30, 1996.
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: October 22, 1996 /s/ Anita M. Davis
Anita M. Davis
Administrator
EXHIBIT A
<TABLE>
<CAPTION>
CARC, INC.
Balance Sheet
September 30, 1996
(unaudited)
<S> <C>
Assets
Current assets:
Cash $ 341,544
Investments 112,926
Accounts receivable, net of allowance for
contractual adjustments of $5,000 118,850
Accrued interest receivable 6,974
Prepaid expenses 35,304
Inventory 14,924
Total current assets 630,522
Property, buildings, and equipment, net 3,867,618
Entrance fees in escrow 103,287
Other assets - principally loan refinancing costs 108,998
$ 4,710,425
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 252,021
Accounts payable 26,184
Accrued payroll 49,002
Accrued payroll and property taxes 63,055
Accrued interest 19,266
Other accrued liabilities 6,322
Unearned revenue 84,184
Total current liabilities 500,034
Refundable entrance fees 103,287
Long-term debt, excluding current installments 2,449,431
Total liabilities 3,052,752
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 (990,213)
Total stockholders' equity 1,657,673
$ 4,710,425
See accompanying note to interim financial statements.
</TABLE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Operations
For the Three Months Ended September 30, 1996 and 1995
(Unaudited)
<S> <C> <C>
Three Months Ended
September 30, September 30,
1996 1995
Operating revenues:
Apartments $ 368,994 $ 368,637
Health Care Center 394,251 367,673
Dietary 10,423 10,977
Residential services 885 9,120
Miscellaneous 7,872 1,826
Total operating revenues 782,425 758,233
Operating expenses:
Apartments 57,453 51,263
Health Care Center 194,443 176,263
Dietary 156,001 141,324
Residential services 1,075 8,956
Maintenance and repairs 25,963 23,452
Housekeeping 33,183 28,485
Administrative and general 65,435 63,747
Depreciation and amortization 71,680 69,292
Utilities 45,941 47,873
Interest 55,486 63,200
Property taxes 20,404 24,439
Total operating expenses 727,064 698,294
Income from operations 55,361 59,939
Nonoperating revenue (expense):
Interest and investment income 7,408 8,126
Loss on disposal of assets (527) (1,391)
Nonoperating revenue 6,881 6,735
Net income $ 62,242 $ 66,674
Per share information:
Net income $ .12 $ .13
Weighted average number of shares
outstanding during the period 536,000 36,000
See accompanying note to interim financial statements.
</TABLE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Operations
For the Six Months Ended September 30, 1996 and 1995
(Unaudited)
<S> <C> <C>
Six Months Ended
September 30, September 30,
1996 1995
Operating revenues:
Apartments $ 737,222 $ 741,315
Health Care Center 759,132 730,064
Dietary 23,429 23,507
Residential services 4,756 16,803
Miscellaneous 6,903 2,479
Total operating revenues 1,531,442 1,514,168
Operating expenses:
Apartments 109,239 98,306
Health Care Center 389,212 343,225
Dietary 300,239 282,282
Residential services 4,906 16,759
Maintenance and repairs 53,772 51,123
Housekeeping 59,600 53,379
Administrative and general 144,607 129,644
Depreciation and amortization 143,125 139,692
Utilities 88,278 90,223
Interest 112,236 127,516
Property taxes 40,932 48,878
Total operating expenses 1,446,146 1,381,027
Income from operations 85,296 133,141
Nonoperating revenue (expense):
Interest and investment income 14,238 15,284
Loss on disposal of assets (527) (6,625)
Nonoperating revenue 13,711 8,659
Net income $ 99,007 $ 141,800
Per share information:
Net income $ .18 $ .26
Weighted average number of shares
outstanding during the period 536,000 536,000
See accompanying note to interim financial statements
</TABLE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Cash Flows
For the Six Months Ended September 30, 1996 and 1995
(Unaudited)
<S> <C> <C>
1996 1995
Cash flows from operating activities:
Net income $ 99,007 $ 141,800
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 143,125 145,691
Loss on disposal of assets 527 6,625
Decrease (increase) in:
Cash - funds held for others ( 4,224) (1,160)
Accrued interest receivable 256 (235)
Accounts receivable (1,717) 10,140
Prepaid expenses (14,691) (8,779)
Increase (decrease) in:
Accounts payable 20,303 39,138
Accrued expenses 39,539 41,618
Unearned revenue 63,100 (44,392)
Entrance fees 4,224 1,160
Net cash provided by
operating activities 349,449 331,606
Cash flows from investing activities:
Capital expenditures (61,479) (45,253)
Proceeds from sale of fixed assets 50 -
Release by Board of assets
whose use is limited 109,336 -
Net cash provided by (used in)
investing activities 47,907 (45,253)
Cash flows from financing activities:
Principal payments of long-term debt (281,521) (266,241)
Net increase in cash 115,835 20,112
Cash at beginning of period 225,709 221,627
Cash at end of period $ 341,544 $ 241,739
See accompanying note to interim financial statements.
</TABLE>
CARC, INC.
Notes to Interim Financial Statements
September 30, 1996
(1) Basis of Presentation
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-QSB 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 six month period ended September 30, 1996 and
1995 are not necessarily indicative of the results which may be
expected for the entire year.
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 341,544
<SECURITIES> 112,926
<RECEIVABLES> 123,850
<ALLOWANCES> 5,000
<INVENTORY> 14,924
<CURRENT-ASSETS> 630,522
<PP&E> 7,431,208
<DEPRECIATION> 3,563,589
<TOTAL-ASSETS> 4,710,425
<CURRENT-LIABILITIES> 500,034
<BONDS> 2,449,431
0
0
<COMMON> 536,000
<OTHER-SE> 1,121,673
<TOTAL-LIABILITY-AND-EQUITY> 4,710,425
<SALES> 0
<TOTAL-REVENUES> 782,425
<CGS> 0
<TOTAL-COSTS> 671,578
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55,486
<INCOME-PRETAX> 62,242
<INCOME-TAX> 0
<INCOME-CONTINUING> 62,242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,242
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0
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