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 December 31, 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
Clemson, SC
(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 December 31, 1996
Common stock, $1 par value 536,000
<PAGE>
CARC, INC.
Quarterly Report on Form 10-QSB
For the Quarterly Periods Ended December 31, 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 December 31, 1996.
B. Unaudited Statements of Operations for the Three Months
Ended December 31, 1996 and 1995
C. Unaudited Statements of Operations for the Nine Months
Ended December 31, 1996 and 1995
D. Unaudited Statements of Cash Flows for the Nine Months
ended December 31, 1995 and 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition
During the current year, 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 nine months ended December 31, 1996 and 1995
was $207 thousand and $217 thousand, respectively.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Operating Revenues
Operating revenues for the nine months ended December 31, 1996
and 1995 were $2,370 thousand and $2,267 thousand respectively.
The overall increase in operating revenues for the nine months
ended December 31, 1996 over the same period in 1995 is due
primarily to an increase in health care center revenues and
apartment revenues which were partially offset by a decrease in
residential services. Apartment revenues increased
approximately $18 thousand due to a five percent rate increase
and more residents needing additional services. Health care
center revenues increased approximately $98 thousand due to an
increase in apartment occupancy and a five percent rate
increase. Residential services revenue decreased $19 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 nine months ended December 31, 1996
and 1995 were $2,182 thousand and $2,066 thousand,respectively.
The net increase was primarily attributable to increases in
apartment, health care center, dietary, administrative and
general, and housekeeping expenses which were offset by
decreases in residential services and interest expenses.
Apartment expenses increased $14 thousand due to an increase in
salary and maintenance costs. Health care center costs
increased $67 thousand due to an increase in the use of
temporary employees and salary increases. Housekeeping expenses
increased approximately $18 thousand due to an additional
position added and an increase in salary and supply costs.
Dietary expenses increased approximately $33 thousand due to an
increase in both health care occupancy and the costs of food
and beverages, and administrative and general expenses
increased approximately $18 thousand due primarily to salary
increases and professional fees. Residential services
decreased approximately $18 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 $23 thousand due to a reduction of the principal
balance of the mortgage. Other operating expenses remained
relatively stable.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Nonoperating revenue
Nonoperating revenue for the nine months ended December 31,
1996 increased approximately $4 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 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 to 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 nine months
ended December 31, 1996.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of the 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: January 22, 1997 /s/ Anita M. Davis
Anita M. Davis
Administrator
<PAGE>
EXHIBIT A
<PAGE>
<TABLE>
<CAPTION>
CARC, INC.
Balance Sheet
December 31, 1996
(Unaudited)
<S> <C>
Assets
Current assets:
Cash $ 382,569
Investments 112,926
Patient accounts receivable, net of allowance for
contractual adjustments of $5,000 116,114
Accrued interest receivable 11,158
Prepaid expenses 25,855
Inventory 14,924
Total current assets 663,546
Property, buildings, and equipment, net 3,869,712
Entrances fees in escrow 104,688
Other assets - principally loan refinancing costs 108,498
$ 4,746,444
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 252,021
Accounts payable 120,606
Accrued payroll 30,253
Accrued payroll and property taxes 5,089
Other accrued liabilities 8,111
Accrued interest 19,265
Unearned revenue 61,358
Total current liabilities 496,703
Refundable entrance fees 104,688
Long-term debt, excluding current installments 2,379,039
Total liabilities 2,980,430
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 (881,872)
Total stockholders' equity 1,766,014
$4,746,444
See accompanying note to intrim financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Operations
For the Three Months Ended December 31, 1996 and 1995
(Unaudited)
<S> <C> <C>
Three Months Ended
December 31, December 31
1996 1995
Operating revenues:
Apartments $ 389,633 $ 367,110
Health Care Center 431,643 363,019
Dietary 13,249 13,325
Residential services 1,039 7,714
Miscellaneous 2,508 2,151
Total operating revenues 838,072 753,319
Operating expenses:
Apartments 53,713 50,614
Health Care Center 219,096 197,857
Dietary 155,071 140,186
Residential services 890 7,008
Maintenance and repairs 24,619 26,172
Housekeeping 34,852 22,879
Administrative and general 65,202 62,253
Depreciation and amortization 70,897 69,396
Utilities 39,229 39,946
Interest 51,674 59,477
Property taxes 20,774 8,795
Total operating expenses 736,017 684,583
Income from operations 102,055 68,736
Nonoperating revenue (expense):
Interest and investment income 6,286 6,980
Net income $ 108,341 $ 75,716
Per share information:
Net income $ .20 $ .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 Operations
For the Nine Months Ended December 31, 1996 and 1995
(Unaudited)
<S> <C> <C>
Nine Months Ended
December 31, December 31
1996 1995
Operating revenues:
Apartments $ 1,126,855 $ 1,108,425
Health Care Center 1,190,775 1,093,083
Dietary 36,678 36,832
Residential services 5,795 24,516
Miscellaneous 9,411 4,629
Total operating revenues 2,369,514 2,267,485
Operating expenses:
Apartments 162,952 148,920
Health Care Center 608,308 541,081
Dietary 455,310 422,468
Residential services 5,796 23,767
Maintenance and repairs 78,391 77,295
Housekeeping 94,452 76,258
Administrative and general 209,809 191,898
Depreciation and amortization 214,022 209,086
Utilities 127,507 130,170
Interest 163,910 186,993
Property taxes 61,706 57,673
Total operating expenses 2,182,163 2,065,609
Income from operations 187,351 201,876
Nonoperating revenue (expense):
Interest and investment income 20,524 22,264
Loss on disposal of assets (527) (6,625)
Nonoperating revenue 19,997 15,639
Net income $ 207,348 $ 217,515
Per share information:
Net income $ .39 $ .41
Weighted average number of shares
outstanding during the period 536,000 536,000
See accompanying note to interim financial statements
</TABLE?
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
CARC, INC.
Statements of Cash Flows
For the Nine Months Ended December 31, 1996 and 1995
(Unaudited)
<S> <C> <C>
1996 1995
Cash flows from operating activities:
Net income $ 207,348 $ 217,515
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 214,022 209,086
Loss on disposal of assets 527 6,625
Decrease (increase) in:
Cash - funds held for others (5,625) (4,295)
Accrued interest receivable (3,928) 4,608
Accounts receivable 1,019 10,701
Other receivables
Prepaid expenses (5,242) (14,029)
Other assets (2,500) -
Increase (decrease) in:
Accounts payable 114,725 10,547
Accrued expenses (35,388) (40,973)
Unearned revenue 40,274 (28,904)
Entrance fee 5,625 4,295
Net cash provided by operating activities 530,857 375,176
Cash flows from investing activities:
Capital expenditures (131,470) (50,039)
Proceeds from sale of fixed assets 50 -
Release by Board of assets whose use is limited 109,336 -
Net cash used in investing activities (22,084) (50,039)
Cash flows from financing activities:
Principal payments of long-term debt (351,913) (328,643)
Net increase (decrease) in cash 156,860 (3,506)
Cash at beginning of period 225,709 221,627
Cash at end of period $ 382,569 $ 218,121
See accompanying notes to interim financial statements.
</TABLE>
<PAGE>
CARC, INC.
Notes to Interim Financial Statements
December 31, 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 nine-month period ended December 31,
1996 and 1995 are not necessarily indicative of the results which
may be expected for the entire year.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 382,569
<SECURITIES> 112,926
<RECEIVABLES> 121,114
<ALLOWANCES> 5,000
<INVENTORY> 14,924
<CURRENT-ASSETS> 663,546
<PP&E> 7,501,199
<DEPRECIATION> 3,631,487
<TOTAL-ASSETS> 4,746,444
<CURRENT-LIABILITIES> 496,703
<BONDS> 2,379,039
0
0
<COMMON> 536,000
<OTHER-SE> 1,230,014
<TOTAL-LIABILITY-AND-EQUITY> 4,746,444
<SALES> 0
<TOTAL-REVENUES> 838,072
<CGS> 0
<TOTAL-COSTS> 684,343
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,674
<INCOME-PRETAX> 108,341
<INCOME-TAX> 0
<INCOME-CONTINUING> 108,341
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,341
<EPS-PRIMARY> 0.2
<EPS-DILUTED> 0
</TABLE>
