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 JUNE 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
June 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 June 30, 2000 1
Unaudited Statements of Operations
for the Three Months Ended
June 30, 2000 and 1999 2
Unaudited Statement of Stockholders'
Equity for the Three Months
Ended June 30, 2000 3
Unaudited Statements of Cash Flows for
the Three Months Ended
June 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
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
[CAPTION]
<TABLE>
CARC, INC.
Balance Sheet
June 30, 2000
(unaudited)
Assets
<S> <C>
Current assets:
Cash and cash equivalents $ 554,999
Accounts receivable, net of allowance for
contractual adjustments of $5,000 132,655
Inventory 9,756
Prepaid expenses 26,114
Deferred income tax asset 74,900
Total current assets 798,424
Property, buildings, and equipment, net 5,823,724
Entrance fees in escrow 139,975
Deferred income tax asset 27,500
Other assets 106,518
$ 6,896,141
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 324,087
Accounts payable 30,924
Accrued liabilities 154,410
Unearned revenue 93,363
Total current liabilities 602,784
Deferred tax liability 15,000
Refundable entrance fees 139,975
Long-term debt, excluding current installments 3,543,613
Total liabilities 4,301,372
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 (53,117)
Total stockholders' equity 2,594,769
$6,896,141
</TABLE>
[CAPTION]
<TABLE>
CARC, INC.
Statements of Operations
For the Three Months Ended June 30, 2000 and 1999
(Unaudited)
2000 1999
Operating revenues:
<S> <C> <C>
Apartments $ 296,548 $ 318,686
Health Care Center 317,922 346,115
Dietary 203,142 196,387
Assisted living 29,105 -
Miscellaneous 301 603
Total operating revenues 847,018 861,791
Operating expenses:
Apartments 39,966 77,627
Health Care Center 178,511 212,951
Dietary 177,443 153,874
Assisted living 47,912 -
Maintenance and repair 29,480 36,153
Housekeeping 37,343 34,151
Administrative and general 83,436 94,088
Depreciation and amortization 92,675 93,041
Utilities 41,713 40,005
Interest 82,093 80,905
Property taxes 20,407 21,098
Total operating expenses 830,979 843,893
Income from operations 16,039 17,898
Nonoperating revenue (expense):
Interest and investment income 6,634 6,354
Nonoperating revenue (expense) 6,634 6,354
Income before income taxes 22,673 24,252
Income tax expense 4,600 6,500
Net income $ 18,073 $ 17,752
Basic earnings per share $ .03 $ .03
Weighted average number of shares
outstanding during the period 536,000 536,000
</TABLE>
[CAPTION]
<TABLE>
CARC, INC.
Statement of Stockholders' Equity
For the Three Months Ended June 30, 2000
(Unaudited)
Additional Total
Common Paid-In Accumulated Stockholders'
Stock Capital Deficit Equity
<S> <C> <C> <C> <C>
Balances at
March 31, 2000 $ 536,000 $ 2,111,886 $ (71,190) $ 2,576,696
Net income - - 18,073 18,073
Balances at
June 30, 2000 $ 536,000 $ 2,111,886 $ (53,117) $ 2,594,769
</TABLE>
[CAPTION]
<TABLE>
CARC, INC.
Statements of Cash Flows
For the Three Months Ended June 30, 2000 and 1999
(Unaudited)
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net income $ 18,073 $ 17,752
Adjustment to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 92,675 93,041
Deferred income tax expense 4,600 6,500
Decrease (increase) in:
Cash - funds held for others (18,160) (296)
Accounts receivable (2,560) (16,902)
Accrued interest receivable - 654
Prepaid expenses (19,845) 10,815
Increase (decrease) in:
Accounts payable (21,750) (19,528)
Accrued liabilities 21,793 (8,847)
Unearned revenue 80,066 59,135
Deposits held for others 18,160 296
Net cash provided by
operating activities 173,052 142,620
Cash flows from investing activities:
Capital expenditures (17,961) -
Cash flows from financing activities:
Principal payments of long-term debt (75,701) (113,519)
Net increase in cash 79,391 29,101
Cash at beginning of period 475,608 521,472
Cash at end of period $ 554,999 $ 550,573
</TABLE>
CARC, INC.
Notes to Interim Financial Statements
June 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 financial statements should be read in conjunction
with the 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 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 months ended June 30, 2000 are not necessarily indicative of the
results to be expected for the full 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 June 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 three months ended June 30, 2000 compared to
the three months ended June 30, 1999.
Operating Revenues
Operating revenues for the three months ended June 30, 2000 and 1999 were
$847,000 and $862,000, respectively. The overall decrease in operating
revenues of approximately $15,000 is due to decreases in apartment and
healthcare occupancy due to an increase in the number of local competitors.
Assisted living revenues increased with the start up of the services in
April 2000.
Operating Expenses
Operating expenses for the three months ended June 30, 2000 and 1999 were
approximately $831,000 and $844,000, respectively. The net decrease of $13,000
in expenses was primarily demonstrated in the following areas of operations.
Apartment expenses decreased $38,000 and health care center expenses decreased
$34,000 through reduced staffing due to decreased occupancy. Administrative
expenses decreased $11,000 due to the replacement of two staff at lower salary
rates. Expenses of $48,000 were incurred with the start-up of the assisted
living services in April 2000. Other operating expenses remained relatively
stable.
Nonoperating revenue
Nonoperating revenues, which consist primarily of interest and investment
income, for the three months ended June 30, 2000 remained relatively stable.
Liquidity
The Center generated $179,000 in cash flows from operating activities for the
three months ended June 30, 2000. The cash flows were used primarily to repay
$76,000 of long-term debt and to finance capital expenditures of approximately
$24,000.
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
The Annual Meeting of Stockholders of the Center ("Meeting") was held on June
14, 2000. The results of the vote on the matters presented at the Meeting
were as follows:
1. The following individuals were elected as trustees, each for a one-year
term:
Vote For Withheld Abstain
Thomas Lynch 268 4 0
Anna Forbis 268 4 0
Broy Moyer 268 4 0
Fred Martin 268 4 0
Dorothy D. Dent 268 4 0
Robert Downing 268 4 0
James Fanning, Jr. 268 4 0
D. Greg Hughes 268 4 0
Bill Senn 268 4 0
2. Ratification of the appointment of Crisp Hughes Evans LLP as the Center's
independent audit firm was approved by stockholders by the following vote:
Vote for: 272 Withheld: 0
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits 27 Financial Data Schedule
B. There were no reports on Form 8-K filed for the quarter ended
June 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: August 9, 2000 By: /s/ Susan Davis
Susan Davis
Administrator
(Principal executive officer)
Date: August 9, 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
[CAPTION]
<TABLE>
<S> <S> <C>
Item Financial Data as of
Number Item Description June 30, 2000
5-02(1) Cash and cash items $ 554,999
5-02(2) Marketable securities -
5-02(3)(a)(1) Notes and accounts receivable - trade 137,655
5-02(4) Allowances for doubtful accounts 5,000
5-02(6) Inventory 9,756
5-02(9) Total current assets 798,424
5-02(13) Property, plant and equipment 10,547,745
5-02(14) Accumulated depreciation 4,724,021
5-02(18) Total assets 6,896,141
5-02(21) Total current liabilities 602,784
5-02(22) Bonds, mortgages and similar debt 3,543,613
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 2,058,769
5-02(32) Total liabilities and stockholders' equity 6,896,141
5-03(b)(1)(a) Net sales of tangible products -
5-03(b)(1) Total revenues 847,018
5-03(b)2(a) Cost of tangible goods sold -
5-03(b)2 Total costs and expenses applicable
to sales and revenues 830,979
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 June 30, 1999
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 82,093
5-03(b)(10) Income before taxes and other items 22,673
5-03(b)(11) Income tax expense 4,600
5-03(b)(14) Income/loss continuing operations 18,073
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 18,073
5-03(b)(20) Earnings per share-primary .03
5-03(b)(20) Earnings per share-fully diluted .03
</TABLE>
The accompanying notes are an integral part of these financial statements.
