SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X]QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR TRANSITION
PERIOD FROM TO .
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
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[ ]
The number of shares outstanding of the Issuer's Shares of Common
Stock as of September 30, 2000 was
536,000.
Transitional Small Business Disclosure Format:
Yes [ ] No[ X ]
CARC, INC.
Form 10-QSB Index
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Balance Sheet at September 30, 2000
1
Unaudited Statements of Operations for the
Three Months and Six Months Ended
September 30, 2000 and 1999 2
Unaudited Statement of Stockholders'
Equity for the Six Months
Ended September 30, 2000 3
Unaudited Statements of Cash Flows for
the Six Months Ended
September 30, 2000 and 1999 4
Notes to Unaudited Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6 - 7
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security
Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
CARC, INC.
Balance Sheet
September 30, 2000
(unaudited)
Assets
Current assets:
Cash $ 604,654
Accounts receivable, net of allowance for
contractual adjustments of $5,000 150,857
Inventory 9,756
Prepaid expenses 10,057
Deferred tax asset 62,400
Total current assets 837,724
Property, plant, and equipment, net 5,738,876
Entrance fees in escrow 140,654
Deferred tax asset 27,500
Other assets - principally loan refinancing costs
102,962
$ 6,847,716
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $
358,669
Accounts payable 54,123
Accrued liabilities 166,869
Unearned revenue 44,186
Total current liabilities 623,847
Deferred tax liability 15,000
Refundable entrance fees 140,654
Long-term debt, excluding current installments
3,431,564
Total liabilities 4,211,065
Stockholders' equity:
Common stock $1 par value. Authorized 600,000
shares; issued and outstanding 536,000 shares
536,000
Additional paid-in capital 2,111,886
Accumulated deficit (11,235)
Total stockholders' equity 2,636,651
$ 6,847,716
CARC, INC.
Statements of Operations
For the Three and Six Months Ended September 30, 2000 and
1999
(Unaudited)
Three Months Ended,
Six Months Ended,
September 30
September 30
2000
1999
2000
1999
Operating revenues:
Apartments
$ 287,005
$ 310,740
$ 583,553
$ 629,426
Health Care Center
327,323
333,443
645,245
679,557
Dietary
217,814
183,426
420,956
379,813
Assisted living
47,689
-
76,793
-
Miscellaneous
7,370
497
7,670
1,100
Total operating revenues
887,201
828,106
1,734,217
1,689,896
Operating expenses:
Apartments
26,605
51,663
66,571
129,291
Health Care Center
189,118
233,429
367,629
446,380
Dietary
174,440
151,894
351,884
305,768
Assisted living
69,594
-
117,506
-
Maintenance and repair
31,226
24,388
60,706
60,541
Housekeeping
42,750
36,646
80,093
70,797
Administrative and general
71,646
79,789
155,081
173,877
Depreciation and amortization
92,155
92,802
184,830
185,842
Utilities
45,656
45,929
87,369
85,933
Interest
80,327
82,317
162,420
163,222
Property taxes
20,407
21,098
40,814
42,197
Total operating expenses
843,924
819,955
1,674,903
1,663,848
Income from operations
43,277
8,151
59,314
26,048
Nonoperating revenue (expense):
Interest and investment income
11,107
7,743
17,741
14,098
Nonoperating revenue (expense)
11,107
7,743
17,741
14,098
Income before income taxes
54,384
15,894
77,055
40,146
Income tax expense
(12,500)
(3,050)
(17,100)
(9,550)
Net income
$ 41,884
$ 12,844
$ 59,955
$ 30,596
Basic earnings per share
$ .08
$ .02
$ .11
$ .06
Weighted average number of shares
outstanding during the period
536,000
536,000
536,000
536,000
CARC, INC.
Statement of Stockholders' Equity
For the Six Months Ended September 30, 2000
(Unaudited)
Additional
Total
Common
Paid-In
Accumulated
Stockholders'
Stock
Capital
Deficit
Equity
Balances at March 31, 2000
$ 536,000
$ 2,111,886
$ (71,190)
$ 2,576,696
Net income
-
-
59,955
59,955
Balances at September 30,
2000
$ 536,000
$ 2,111,886
$ (11,235)
$ 2,636,651
CARC, INC.
Statements of Cash Flows
For the Six Months Ended September 30, 2000 and 1999
(Unaudited)
2000
1999
Cash flows from operating activities:
Net income
$ 59,955
$ 30,596
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
184,830
185,842
Deferred income tax expense
17,100
9,550
Decrease (increase) in:
Cash - funds held for others
(18,839)
(6,731)
Accounts receivable
(20,762)
5,973
Accrued interest receivable
-
654
Prepaid expenses
(3,788)
10,815
Increase (decrease) in:
Accounts payable
1,449
(26,869)
Accrued liabilities
34,253
(17,589)
Unearned revenue
30,889
26,848
Deposits held for others
18,839
6,731
Net cash provided by operating activities
303,926
225,820
Cash flows from investing activities:
Capital expenditures
(21,712)
(6,063)
Cash flows from financing activities:
Principal payments of long-term debt
(153,168)
(228,698)
Net increase (decrease) in cash
129,046
(8,941)
Cash at beginning of period
475,608
521,472
Cash at end of period
$ 604,654
$ 512,531
CARC, INC.
Notes to Interim Financial Statements
September 30, 2000
(1) Basis of Presentation
The accompanying unaudited financial statements, which are for
interim periods, do not include all
disclosures provided in the annual financial statements. These
unaudited interim financial statements
should be read in conjunction with the audited financial
statements and the footnotes thereto
contained in the Annual Report on Form 10-KSB for the year ended
March 31, 2000 of CARC, Inc., (the
"Center") as filed with the Securities and Exchange Commission.
(2) Interim Periods
In the opinion of the Center, the accompanying unaudited interim
financial statements contain all
adjustments(which are of a normal recurring nature) necessary for
a fair presentation of the
financial statements. The results of operations for the three and
six months ended September 30, 2000
are not necessarily indicative of the results to be expected for
the entire year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition
The balance sheet of the Center has not materially changed from
March 31, 2000 to September 30,
2000.The Center has completed renovations necessary to provide
assisted living to residents. Twenty
apartments were renovated at a cost of $119,000, which was
financed by liquidating the Center's
investments. The Center received a license to operate the
assisted living program in April 2000. All
other assets and liabilities remained relatively unchanged.
Results of Operations - For the six months ended September 30,
2000 compared to the six months ended
September 30, 1999.
Operating Revenues
Operating revenues for the six months ended September 30, 2000
and 1999 were approximately $1,734,000
and $1,690,000, respectively. The overall increase in operating
revenues of approximately $44,000 is
due to an influx of revenues from the new assisted living
facility, which was at maximum occupancy at
September 30, 2000.
Operating Expenses
Operating expenses for the six months ended September 30, 2000
and 1999 were approximately $1,675,000
and $1,664,000, respectively. The net increase of $11,000 in
expenses was primarily demonstrated in
the following areas of operations. Apartment expenses decreased
$63,000 and health care center
expenses decreased $79,000 through reduced payroll costs due to
decreased occupancy. Administrative
expenses decreased $19,000 due to the replacement of two staff at
lower salary rates. Expenses of
$117,000 were incurred for the assisted living services which
started in April 2000. Other operating
expenses remained relatively stable.
Nonoperating revenue
Nonoperating revenues, which consists of interest and investment
income, for the six months ended
September 30, 2000 remained relatively stable.
Liquidity
The Center generated approximately $304,000 in cash flows from
operating activities for the six
months ended September 30, 2000. The cash flows were used
primarily to repay $153,000 of long-term
debt and to finance capital expenditures of approximately
$22,000.
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 to which any
of its property is the subject.
Item 2. Changes in Securities
There have been no changes in securities during the reporting period.
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 27.1 Financial Data Schedule
B. There were no reports on Form 8-K filed for the quarter
ended September 30, 2000.
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: November 1, 2000 By: /s/ Susan Davis
Susan Davis
Administrator
(Principal executive officer)
Date: November 1, 2000 By: /s/ Lynn Shook
Lynn Shook
Accountant
(Principal Financial and Accounting
Officer)
Exhibit 27.1
CARC, INC.
EDGAR - FINANCIAL DATA SCHEDULES
Article 5 of Regulation S-X
Commercial and Industrial Companies
Item
Financial Data as of
Number
Item Description
September 30, 2000
5-02(1)
Cash and cash items
$ 604,654
5-02(2)
Marketable securities
-
5-02(3)(a)(1)
Notes and accounts receivable - trade
155,857
5-02(4)
Allowances for doubtful accounts
5,000
5-02(6)
Inventory
9,756
5-02(9)
Total current assets
837,724
5-02(13)
Property, plant and equipment
10,551,497
5-02(14)
Accumulated depreciation
4,812,621
5-02(18)
Total assets
6,847,716
5-02(21)
Total current liabilities
623,847
5-02(22)
Bonds, mortgages and similar debt
3,431,564
5-02(28)
Preferred stock-mandatory redemption
-
5-02(29)
Preferred stock-no mandatory redemption
-
5-02(30)
Common stock
536,000
5-02(31)
Other stockholders' equity
2,100,651
5-02(32)
Total liabilities and stockholders' equity
6,847,716
5-03(b)(1)(a)
Net sales of tangible products
-
5-03(b)(1)
Total revenues
1,734,217
5-03(b)2(a)
Cost of tangible goods sold
-
5-03(b)2
Total costs and expenses applicable to sales and revenues
1,674,903
Exhibit 27.1 (continued)
CARC, INC.
EDGAR - FINANCIAL DATA SCHEDULES
Article 5 of Regulation S-X (continued)
Commercial and Industrial Companies
Item
Financial Data as of
Number
Item Description
September 30, 2000
5-03(b)3
Other costs and expenses
$ -
5-03(b)5
Provision for doubtful accounts and notes
-
5-03(b)(8)
Interest and amortization of debt discount
162,420
5-03(b)(10)
Income before taxes and other items
77,055
5-03(b)(11)
Income tax expense
17,100
5-03(b)(14)
Income/loss continuing operations
59,955
5-03(b)(15)
Discontinued operations
-
5-03(b)(17)
Extraordinary items
-
5-03(b)(18)
Cumulative effect-changes in accounting principles
-
5-03(b)(19)
Net income or loss
59,955
5-03(b)(20)
Earnings per share - basic
.11
5-03(b)(20)
Earnings per share - diluted
.11
4
The accompanying notes are an integral part of these financial
statements.
8
