<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------------
For Quarter Ended June 30, 1995 Commission file number 0-11656
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
A Delaware Corporation I.R.S. No. 22-1807533
Two Nationwide Plaza, Suite 760, Columbus, Ohio 43215
Registrant's Telephone No. (614) 221-6000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
EACH OF THE FOLLOWING CLASSES ARE REGISTERED ON THE AMERICAN STOCK EXCHANGE.
<TABLE>
<CAPTION>
Class Outstanding at July 31, 1995
----- ----------------------------
<S> <C>
Common Stock, par value 6,219,758
$.01 per share
Common Stock Purchase Warrants 414,538 (1)
</TABLE>
(1) Upon exercise, represents 1,139,980 shares of The
Wendt-Bristol Health Services Corporation.
<PAGE> 2
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
I N D E X
<TABLE>
<CAPTION>
Part I Page No.
------ --------
<S> <C>
Financial Statements:
Consolidated Balance Sheets - December 31, 1994 and
June 30, 1995 (Unaudited) 3-4
Consolidated Statements of Operations (Unaudited)
Three and Six Months Ended June 30, 1995 and 1994 5
Consolidated Statements of Cash Flow (Unaudited)
Six Months Ended June 30, 1995 and 1994
6-7
Notes to Consolidated Financial Statements
8-10
Management's Discussion and Analysis of Financial Condition
and Results of Operations
11-13
Part II
-------
Other Information 14
Signatures 14
Exhibits:
Exhibit 27 EDGAR Financial Data Schedule 15
</TABLE>
2
<PAGE> 3
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 1995 AND DECEMBER 31, 1994
ASSETS
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 45,475 $ 182,042
----------- -----------
Restricted cash 160,548 407,616
----------- -----------
Receivables:
Trade, net of allowance for doubtful
accounts of $262,000 (June)
and $ 250,000 (December) 1,204,134 926,085
Notes receivable 249,915 80,710
Miscellaneous 1,697,371 3,380,655
----------- -----------
3,151,420 4,387,450
Inventories 493,130 586,395
Prepaid expenses and other 514,015 663,590
----------- -----------
Total current assets 4,364,588 6,227,093
----------- -----------
Property, plant and equipment 19,081,530 19,259,407
Less: Accumulated depreciation and
amortization (5,383,790) (4,974,847)
----------- -----------
13,697,740 14,284,560
----------- -----------
Investments and other assets:
Investment in preferred stock, at cost - 3,000,000
Notes and other receivables, net of current portion 416,628 644,084
Notes receivable from officers, employees and
related parties, net of amounts payable 835,203 242,112
Life insurance premiums receivable 348,798 300,789
Excess of cost over assets of businesses
and subsidiaries acquired, less amortization 500,433 507,540
Deferred charges 944,289 871,162
Other assets 180,088 430,701
----------- -----------
Total investments and other assets 3,225,439 5,996,388
----------- -----------
$21,287,767 $26,508,041
=========== ===========
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
AS AT JUNE 30, 1995 AND DECEMBER 31, 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Securitization program advances $ 300,000 $ 478,500
Accounts payable 2,422,919 3,003,115
Accrued expenses and other liabilities:
Salaries and wages 360,069 356,238
Taxes, other than federal income taxes 1,197,053 981,895
Interest 91,021 117,046
Other 1,387,069 1,753,861
Long-term obligations classified as current 2,622,602 3,451,989
Federal income taxes payable 179,000 320,000
----------- -----------
Total current liabilities 8,559,733 10,462,644
Long-term obligations, less amounts classified
as current 7,684,458 7,964,568
----------- -----------
Total liabilities 16,244,191 18,427,212
----------- -----------
Minority interests 278,858 881,282
----------- -----------
Stockholders' equity:
Common stock: $.01 par;
authorized: 12,000,000 shares;
issued: 8,243,480 shares (June)
and 8,240,730 (December) 82,435 82,407
Capital in excess of par 10,274,974 10,311,509
Retained earnings (deficit) (3,050,675) (3,089,543)
----------- -----------
7,306,734 7,304,373
Treasury stock, at cost, 2,023,722 shares (June)
and 45,486 shares (December) (2,542,016) (104,826)
----------- -----------
Total stockholders' equity 4,764,718 7,199,547
----------- -----------
$21,287,767 $26,508,041
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
------------------------ -----------------------
1995 1994 1995 1994
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 1,351,992 $1,818,355 $ 675,345 $ 907,288
Service income 9,268,790 7,802,353 4,732,408 3,983,879
----------- ---------- ---------- ----------
10,620,782 9,620,708 5,407,753 4,891,167
----------- ---------- ---------- ----------
Costs and expenses:
Cost of sales 920,605 1,258,039 429,547 611,870
Selling, general and administrative
expenses, net 8,461,234 7,228,065 4,270,679 3,628,517
----------- ---------- ---------- ----------
9,381,839 8,486,104 4,700,226 4,240,387
----------- ---------- ---------- ----------
Operating income before depreciation 1,238,943 1,134,604 707,527 650,780
Depreciation 581,828 569,762 276,620 285,827
----------- ---------- ---------- ----------
Operating income 657,115 564,842 430,907 364,953
----------- ---------- ---------- ----------
Other income (expense):
Minority interests in (earnings) losses, net (9,782) 4,008 (10,960) 8,546
Interest expense (600,048) (635,160) (294,554) (324,040)
Gain on sale of stock of subsidiaries - 46,744 - 3,136
Gain on sale of investments - 92,498 - -
Other, net 36,583 120,523 13,787 33,847
----------- ---------- ---------- ----------
(573,247) (371,387) (291,727) (278,511)
----------- ---------- ---------- ----------
Income before income taxes 83,868 193,455 139,180 86,442
Income tax provision (45,000) (108,000) (45,000) (54,000)
----------- ---------- ---------- ----------
Net income $ 38,868 $ 85,455 $ 94,180 $ 32,442
=========== ========== ========== ==========
Income per common share $ 0.01 $ 0.01 $ 0.02 $ -
=========== ========== ========== ==========
Weighted average shares outstanding 6,882,102 8,141,796 6,219,758 8,141,796
=========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 38,868 $ 85,455
----------- ---------
Adjustments required to reconcile net income
to net cash provided by operating activities:
Amortization, depreciation and other, net 588,935 582,505
Loss on sale of property, plant & equipment - 214
Gain on sale of stock of subsidiary - (46,744)
Minority interest in earnings of consolidated subsidiaries 9,782 (4,008)
Changes in assets and liabilities, exclusive of
assets sold (Note 4):
Receivables (299,433) 152,049
Merchandise inventories (33,438) 56,580
Prepaid expenses and other current assets 166,182 (61,502)
Accounts payable (409,862) (57,482)
Accrued expenses and other liabilities (40,374) (260,106)
Federal income taxes payable (141,000) 100,000
Deferred charges and other (63,283) 89,055
----------- ---------
Total adjustments (222,491) 550,561
----------- ---------
Net cash provided by (used in) operating activities (183,623) 636,016
----------- ---------
Cash flows from investing activities:
Proceeds from sale of property, plant & equipment - 35,050
Decrease or (increase) in notes receivable 58,251 (61,469)
Collection of miscellaneous receivable 1,700,000 -
Receipts from (advances to) related parties
and former affiliates, net (122,087) (43,959)
Utilization of or (deposit to) restricted cash 247,068 (5,090)
Capital expenditures (235,103) (211,335)
----------- ---------
Net cash provided by (used in) investing activities 1,648,129 (286,803)
----------- ---------
Cash flows from financing activities:
Termination distribution to real estate limited partners (150,000) -
Other distributions to limited partners, net - (138,189)
Proceeds from stock offering of subsidiary - 156,397
Proceeds from warrants exercised 3,750 -
Principal payments of long-term obligations (1,276,323) (500,437)
Net advances from or (payments to) securitization program (178,500) 28,500
----------- ---------
Net cash used in financing activities (1,601,073) (453,729)
----------- ---------
Net decrease in cash (136,567) (104,516)
Cash at beginning of period 182,042 309,820
----------- ---------
Cash at end of period $ 45,475 $ 205,304
=========== =========
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED
JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Supplemental disclosures of cash flow information
Cash paid during the six months for:
Interest $ 626,073 $ 669,039
Income taxes $ 178,705 $ 21,656
Supplemental disclosures of noncash
investing and financing activity:
A subsidiary of the Company has reached an agreement in
principle to sell the operating assets, net of associated liabilities
to a related party in exchange for an interest bearing note. (Note 4)
Increase in notes receivable from officers, employees
and related parties, net of amounts payable:
Note arising in transaction $ 574,949
Other (55,936)
Decrease in accounts payable 48,624
Decrease in accrued expenses and other liabilities 83,006
Decrease in trade and miscellaneous receivables (4,668)
Decrease in inventories (126,703)
Decrease in prepaid expenses and other current assets (38,409)
Decrease in property, plant and equipment, net (240,079)
Decrease in deferred charges (500)
Decrease in other assets (240,284)
Common stock of the Company (2,000,000 shares) and common
stock of a subsidiary (300,000 shares) were exchanged for 30,000
shares of preferred stock, par value $100 per share, owned by the
Company in Life Holdings, Inc.
Decrease in investment in preferred stock, at cost $(3,000,000)
Decrease in minority interests 512,653
Increase in treasury stock 2,487,347
A partnership, of which a subsidiary of the Company is the
managing general partner, refinanced a mortgage on its Diagnostic
and Radiology Center building and has capitalized certain costs
relating to the transaction.
Increase in deferred charges $ 9,735
Increase in long-term obligations (9,735)
A subsidiary of the Company incurred costs for the construction
of an Alzheimer's and related disorders facility with draws
against a HUD-insured financing agreement.
Increase in prepaid expenses and other current assets $ 45,116 $ -
Increase in property, plant and equipment - 997,594
Decrease in accounts payable 121,710 -
Increase in long-term obligations (166,826) (997,594)
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. MANAGEMENT'S REPRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of
normal adjustments and recurring accruals) necessary to present fairly
The Wendt-Bristol Health Services Corporation ("Wendt-Bristol" or
"Company") and subsidiaries consolidated financial position as at June
30, 1995 and December 31, 1994 and the consolidated results of its
operations for the three and six months ended June 30, 1995 and 1994
as well as the cash flows for the respective six months. The results
of operations for any interim period are not necessarily indicative of
results for the full year. These financial statements should be read
in conjunction with the financial statements and notes thereto
contained in the Wendt-Bristol Annual Report filed as Form 10-K for
the year ended December 31, 1994, which is hereby incorporated by
reference.
2. INCOME TAXES
Effective January 1, 1992, the Company implemented the provisions of
SFAS No. 109, which modified the requirements of previously issued
SFAS No. 96. As a result, the Company recorded a deferred tax
liability, a deferred tax asset and a valuation allowance against the
deferred tax assets, resulting in a net deferred tax asset of $94,860
at December 31, 1994. The expense for income taxes consists of the
following:
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
-------------------------- ---------------------------
1995 1994 1995 1994
---------- --------- ------------ -----------
<S> <C> <C> <C> <C>
Federal Income Taxes:
Current expense $35,000 $100,000 $35,000 $50,000
State and local taxes:
Current expense 10,000 8,000 10,000 4,000
------- -------- ------- -------
Total tax expense $45,000 $108,000 $45,000 $54,000
======= ======== ======= =======
</TABLE>
Through December, 1992 the Wendt-Bristol Diagnostics Company, ("WBDC")
was a wholly-owned indirect subsidiary of the Company. As such it was
included in the consolidated Federal income tax return of the Company.
Ownership of WBDC has been reduced to less than 80% as a result of
sales of its common stock by the Company; therefore, WBDC can no
longer be included in the Company's consolidated tax returns. WBDC
has been required to file separate
8
<PAGE> 9
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. INCOME TAXES CONT'D.
returns since January 1, 1993. On a separate return basis the WBDC
tax provision for both the three months and six months ended June 30,
1995 that is included above is approximately $35,000; the tax
provision for the three and six months ended June 30, 1994 is
approximately $50,000 and $100,000 respectively. At June 30, 1995,
subsequent to the acquisition of 300,000 shares of WBDC as indicated
below, the Company owned 79.3% of WBDC.
3. STOCKHOLDERS' EQUITY
Reference is hereby made to Note 14 of the Company's Annual Report and
Form 10-K for the year ended December 31, 1994 concerning the March
1995 sale of its investment in Preferred Stock in exchange for two
million shares of the Company's common stock and three hundred
thousand shares of common stock of Wendt-Bristol Diagnostics Company.
At June 30, 1995 there were 414,538 Common Stock purchase warrants
outstanding, exercisable at $3.75 per warrant. Each warrant, upon
exercise, provides two and three quarters (2 3/4) shares of the
company's common stock and a Series II warrant (issuable upon
completion of appropriate Securities and Exchange Commission filings)
exercisable for two shares at $3.00/share. The Warrants' expiration
dates, as amended by the Board of Directors in April 1995, are May 1,
1996 for the initial Warrant and May 1, 1997 for the Series II
Warrants. There were no warrants exercised during the three months
ended June 30, 1995 and 1,000 warrants exercised during the six
months ended June 30, 1995.
Earnings per share were computed using the weighted average number of
shares outstanding (net of Treasury shares) during each period. The
common stock equivalents (warrants and options) are anti-dilutive,
thereby yielding similar primary and fully diluted per share amounts.
4. SALE OF ASSETS OF SUBSIDIARY
The Company has reached an agreement in principle with MHK Corp., a
company owned by certain of its officers and directors, for the sale,
effective January 1, 1995, of the operating assets of a subsidiary's
retail liquor store and two lounges in Palm Beach County, Florida.
Terms of the sale include a purchase price equivalent to the net book
value of the assets (no gain or loss to be recognized) which at
January 1, 1995 was $575,000, as adjusted for certain 1995
transactions. An interest-bearing 9% note will be executed providing
for interest only for the first year and level payments thereafter.
9
<PAGE> 10
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. LEGAL PROCEEDINGS
Ethan Allen Care Center, Inc., ("Ethan Allen") a wholly owned
subsidiary of the Company operates a 100 bed nursing home under the
name "Bristol House of Springfield". Ethan Allen leases the real
property from American Health Care Centers, Inc. ("AHCC"). AHCC filed
a complaint for Declaratory Judgement against Ethan Allen on June 26,
1995, in the Court of Common Pleas, Clark County, Ohio. AHCC is
seeking to have the court declare that Ethan Allen is in default under
the lease and that AHCC is entitled to repurchase the nursing home
license pursuant to the terms of the lease. AHCC alleges that Ethan
Allen is in default with respect to the payment of rent and late
charges. Ethan Allan has tendered all rent for the nursing home and
the amount it believes is due for late charges. An Answer to the
Complaint is not due until August 22, 1995, and Ethan Allen intends to
vigorously defend the action.
10
<PAGE> 11
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NOTE: REFERENCE SHOULD BE MADE TO THE NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS HEREIN.
FINANCIAL CONDITION
Management believes that the Company's financial condition has been
strengthened through the concentration of efforts to develop its
Health Care Services business. As a result of the emphasis on health
services, rather than manufacture or distribution, Management believes
that the Company has established a focused growth plan that is
evidenced by the increase in operating income for the first six months
from $564,842 (1994) to $657,115 (1995) and the increase in the
quarter ended June 30 from $364,953 (1994) to $430,907 (1995) . It
should be noted that the operating income for the first six months in
1995 includes the results of the Alzheimer's Center which opened in
October, 1994. This special-needs nursing facility had initial costs
that had to be absorbed approximating $300,000 in 1994 and $255,000 in
1995. The facility had an operating loss for the six months ended
June 30, 1995 of approximately $117,000 but contributed approximately
$14,000 to operating income in the second quarter of 1995. Now that
occupancy has reached normal capacity (95% in June), Management
expects the facility to favorably impact the Company's expansion,
profit and cash flows.
In addition to the aforementioned, the mortgage on the Company's New
Jersey property related to its former manufacturing division
(approximate balance at June 30, 1995 of $1,697,000) continues to be
classified as current due to a balloon payment due in October, 1995.
However, Management believes, based upon discussions, that it will
achieve either an extension or refinancing of the existing mortgage.
Working capital increased approximately $40,000 during the six months
ended June 30, 1995. While current assets decreased approximately
$1,863,000, due mostly from the collection of miscellaneous receivables
of $1,683,000, current liabilities declined approximately $1,903,000.
This decrease was due mostly from reductions in current portion of
long-term debt ($829,000), accounts payable ($580,000), other
liabilities ($367,000), and securitization program advances ($179,000).
11
<PAGE> 12
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
During the initial stage of the startup of the Alzheimer's Center, the
Company has experienced the expected adverse cash impact as a result
of the need for staffing at disproportionate levels during the period
of orderly introduction of patients to the facility as well as the
expected processing delays attributable to Medicaid reimbursement.
However, as indicated above, the facility has achieved approximately
95% occupancy in June 1995 and therefore is projected to be a
contributor of both cash and profits to the Company for the remainder
of 1995.
The Company is obtaining additional imaging techniques such as
angiography and fluoroscopy, during 1995, at the Diagnostic and
Radiology Center operated by a limited partnership of which a
subsidiary is general partner. The costs of such additional
equipment, approximately $800,000, will be financed through the
Partnership by respective vendor programs.
Additionally, management is currently reviewing its existing financing
in order to secure a payment schedule that can be modified to provide
a less aggressive timeframe for repayment of its debt. Examples are
the mortgage on its New Jersey facility (leased to the buyer of its
former manufacturing division) which has a balloon payment due in
October, 1995 as well as the obligations related to its "state of the
art" high-technology equipment which retains high value. Management
believes the Company has collateral values that will enable cost
savings as well as reduced debt service. It should also be noted that
despite having experienced cash flow difficulties from time to time,
as in the circumstances indicated above, the Company has diligently
strived to maintain good working relationships with its vendors and
landlords.
Management further believes the present resources available and
anticipated through profitable operations will meet anticipated
requirements for financing the growth of the business. There are no
further material commitments for capital expenditures.
12
<PAGE> 13
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS 1995-1994
Consolidated revenues from operations for the six months ended June
30, 1995 increased approximately $1,000,000 or 10.4% while revenues
for the three months ended June 30, 1995 increased approximately
$517,000 or 10.6% over 1994. Net sales declined approximately
$466,000 for the six months and $232,000 for the three months ended
June 30, 1995 compared to 1994, due mostly to the disposition of the
liquor operations effective as of January 1, 1995 (see Note 4).
Service revenues increased approximately $1,466,000 or 18.8% for the
six months and $749,000 or 18.8% for the three months ended June 30,
1995 over the same periods in 1994. Approximately $1,219,000 of the
increase for the six months and $708,000 of the increase for the three
months ended June 30, 1995 is from the newly-opened Alzheimer's Center
while revenues at the Diagnostics Center increased approximately
$332,000 or 15.3% for the six months and $151,000 or 15.9% for the
three months ended June 30, 1995 when compared to the same periods in
1994.
Cost of sales decreased approximately $337,000 for the six months and
$182,000 for the three months ended June 30, 1995 as compared to the
corresponding periods in 1994, primarily from the disposition of the
liquor operations. Gross margin for the six months ended June 30,
1995 increased to 31.9% compared to 30.8% for the same period in 1994.
Selling, general and administrative expenses increased approximately
$1,233,000 for the six months and $642,000 for the three months ended
June 30, 1995 as compared to the same periods in 1994, mostly
attributable to additional expenses from the Alzheimer's Center.
Operating income increased approximately $92,000 or 16.3% for the six
months and $66,000 or 18.1% for the three months ended June 30, 1995
as compared to the corresponding periods in 1994. The major factors
for the increase in operating income for the first six months were
strong gains from the Diagnostics Center partially offset by operating
losses of the newly-opened Alzheimer's Center.
Earnings before income taxes for the six months ended June 30, 1995
decreased approximately $110,000 as compared to 1994. Exclusive of
the 1994 non-recurring gains from the sale of stock of subsidiaries
and investments of approximately $139,000, pre-tax earnings increased
approximately $30,000 for the six months. Exclusive of 1995 losses
attributable to the Alzheimer's Center, the increase in earnings
before income taxes would have been approximately $200,000.
13
<PAGE> 14
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Ethan Allen Care Center, Inc., ("Ethan Allen") a wholly owned
subsidiary of the Company operates a 100 bed nursing home under the
name "Bristol House of Springfield". Ethan Allen leases the real
property from American Health Care Centers, Inc. ("AHCC"). AHCC filed
a Complaint for Declaratory Judgement against Ethan Allen on June 26,
1995, in the Court of Common Pleas, Clark County, Ohio. AHCC is
seeking to have the court declare that Ethan Allen is in default under
the lease and that AHCC is entitled to repurchase the nursing home
license pursuant to the terms of the lease. AHCC alleges that Ethan
Allen is in default with respect to the payment of rent and late
charges. Ethan Allen has tendered all rent for the nursing home and
the amount it believes is due for late charges. An Answer to the
Complaint is not due until August 22, 1995, and Ethan Allen intends to
vigorously defend the action.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
______________________________
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.
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
---------------------------------------------
(Registrant)
August 10, 1995 By: /s/ Sheldon A. Gold
-----------------------------------
Sheldon A. Gold
President
(Principal Executive, Financial and
Accounting Officer)
August 10, 1995 By: /s/ Charles R. Cicerchi
-----------------------------------
Charles R. Cicerchi
Vice-President, Finance
14
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
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0
0
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