<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 the Quarter Ended March 31, 1995 Commission File Number 2-92396
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Louisiana 72-1007233
--------- ----------
(State of Organization) (IRS Employer Identification Number)
7000 Central Parkway, Suite 850
-------------------------------
Atlanta, Georgia 30328
----------------------
(Address of Principal Executive Office)
(404) 668-1080
---------------
Registrant's Telephone Number, Including Area Code
Indicate by check 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
----- -----
The number of limited partnership units outstanding at March 31, 1995 was
22,895.
<PAGE> 2
TABLE OF CONTENTS
PART I
Page No.
Item 1. Financial Information . . . . . . . . . . . . . . . . 4 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 10
PART II
Signatures . . . . . . . . . . . . . . . . . . . . . . 11
2
<PAGE> 3
PART I
ITEM 1.
FINANCIAL INFORMATION
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
INDEX
Page No.
Balance Sheets, March 31, 1995 and December 31, 1994 . . . . . . . . . 4
Statements of Operations for the three
months ended March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . 5
Statements of Partners' Capital for the three
months ended March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows for the three months ended
March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 8-9
3
<PAGE> 4
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Balance Sheets
March 31, 1995 and December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
ASSETS 1995 1994
------ ---------------- ---------------
<S> <C> <C>
Current Assets
Cash and equivalents $ 1,174,323 $ 1,327,313
Accounts receivable, less allowance
for doubtful accounts of $1,260,062 in 1995
and $1,233,671 in 1994 1,915,280 1,961,437
Current portion of note receivable 74,061 72,600
Prepaid expenses and other assets 262,163 183,543
---------------- ---------------
Total current assets 3,425,827 3,544,893
Notes receivable 760,375 779,447
Property, plant and equipment net of
accumulated depreciation 13,315,034 13,498,598
Deferred financing costs, less accumulated
amortization of $19,616 in 1995 and
$17,262 in 1994 27,462 29,816
---------------- ---------------
Total assets $ 17,528,698 $ 17,852,754
================ ===============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities
Current portion of long term debt $ 93,947 $ 86,679
Accounts payable 436,653 427,988
Accrued payroll and payroll taxes 195,142 227,285
Accrued vacation pay 174,725 146,113
Accrued real estate taxes 31,231 191
Accrued insurance 93,385 77,614
Accrued management fees 37,038 15,870
Patient deposits and trust liabilities 88,256 95,247
Other accrued expenses 23,657 23,531
Estimated settlements due to third parties 59,550 259,793
--------------- ---------------
Total current liabilities 1,233,584 1,360,311
Mortgage notes and capital lease obligations 957,236 984,037
Due to affiliates 187,687 202,846
--------------- ---------------
Total liabilities 2,378,507 2,547,194
--------------- ---------------
Partners' capital (deficit)
Limited partners 15,363,628 15,508,120
General partners (213,437) (202,560)
---------------- ----------------
Total partners' capital 15,150,191 15,305,560
--------------- ---------------
Total liabilities and partners' capital $ 17,528,698 $ 17,852,754
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Statements Of Operations
For The Three Months Ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---------------- ----------------
<S> <C> <C>
Revenues
Net resident service revenue $ 3,293,158 $ 3,053,852
Rental income 36,300 165,000
Other revenue 6,073 6,581
--------------- ---------------
Total revenue 3,335,531 3,225,433
--------------- ---------------
Operating expenses
Professional care of patients 1,581,474 1,330,618
Costs of rentals 5,650 7,598
Dietary 237,908 236,678
Household and plant 287,546 255,760
General and administrative 583,010 578,289
Employee health and welfare 185,687 191,426
Depreciation and amortization 196,086 243,783
--------------- ---------------
Total operating expenses 3,077,361 2,844,152
--------------- ---------------
Operating income 258,170 381,281
--------------- ---------------
Other income (expenses)
Interest income 12,740 8,572
Interest expense (26,005) (20,031)
Provider fees (30,999) (30,999)
---------------- ---------------
Total other income (expenses) (44,264) (42,458)
---------------- ---------------
Net income $ 213,906 $ 338,823
=============== ===============
Net income attributable to
limited partners (93%) $ 198,933 $ 315,105
Net income attributable to
general partners (7%) 14,973 23,718
--------------- ---------------
$ 213,906 $ 338,823
================ ===============
Net income per weighted average
limited partnership unit outstanding $ 8.69 $ 13.76
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Statements of Partners' Capital
For the Period Ended March 31, 1995 and December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Unit Amount Partners Total
---- ------ -------- -----
<S> <C> <C> <C> <C>
Partners' capital (deficit),
December 31, 1994 22,895 $15,508,120 $(202,560) $15,305,560
Distributions to partners
($15.00 per limited
partnership unit outstanding) (343,425) (25,850) (369,275)
Net income 198,933 14,973 213,906
------ ----------- --------- -----------
Partners' capital (deficit),
March 31, 1995 22,895 $15,363,628 $(213,437) $15,150,191
====== =========== ========== ===========
</TABLE>
6
<PAGE> 7
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from patient care $ 3,175,372 $ 3,305,559
Cash paid to suppliers and employees (2,893,641) (2,531,556)
Interest received 12,740 8,572
Interest paid (26,005) (20,031)
Provider fees (30,999) (30,999)
Other operating receipts 6,073 6,581
--------------- ---------------
Net cash provided by operating activities 243,540 738,126
--------------- ---------------
Cash flows from investing activities:
Loans made 0 (1,722)
Collection on loans 17,611 16,261
Cash payments for capital expenditures (10,169) (1,111)
--------------- ---------------
Net cash provided (used) by investing activities 7,442 13,428
--------------- ---------------
Cash flows from financial activities:
Principal payment on debt obligations (19,532) (26,334)
Net borrowings (payments) to related parties (15,164) 18,466
Distributions to partners (369,275) (369,275)
--------------- ---------------
Net cash (used) provided
by financing activities (403,971) (377,143)
--------------- ---------------
Net increase (decrease) in cash (152,989) 374,411
Cash and equivalents, beginning of period 1,327,312 565,622
--------------- ---------------
Cash and equivalents, end of period $ 1,174,323 $ 940,033
=============== ===============
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 213,906 $ 338,823
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 196,086 243,783
Decrease (increase) in accounts receivable 46,156 (49,502)
Decrease (increase) in third party receivables (200,243) 136,210
(Increase) in prepaid expenses and other assets (78,621) (8,283)
Increase in accounts payable and
accrued expenses 66,256 77,095
--------------- ---------------
Net cash provided by operating activities $ 243,540 $ 738,126
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE> 8
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Notes to Financial Statements
(Unaudited)
(1) Financial Statements
These financial statements have been prepared in accordance with
generally accepted accounting principles. The financial information
included in these financial statements is unaudited, however, in
management's opinion, all normal recurring adjustments necessary for a
fair presentation of the results of operations for the periods included
have been made.
Footnote disclosures which would substantially duplicate those
contained in the December 31, 1994 audited financial statements have been
omitted from this report.
(2) Mortgage Notes Payable and Capitalized Lease Obligations
Mortgage notes payable at March 31, 1995 and December 31, 1994 are
summarized as follows:
<TABLE>
<CAPTION>
1995 1994
---------------- ----------------
<S> <C> <C>
Prime plus 1% mortgage note payable
in monthly principal installments
of $6,667 plus interest, with a final
balloon principal payment due
March 1, 1998 $ 1,040,000 $ 1,056,200
Capitalized lease obligation payable monthly
with interest rates from 8% to 13.46% 11,183 14,516
---------------- ---------------
$ 1,051,183 $ 1,070,716
================ ===============
</TABLE>
The aggregate annual maturities of mortgage notes payable and capital
lease obligations for the succeeding five fiscal years are as follows:
<TABLE>
<S> <C>
1995 $ 62,946
1996 84,105
1997 84,105
1998 821,368
-----------------
$ 1,052,524
Less amounts representing interest
on capital lease obligations (1,341)
-----------------
Net present value $ 1,051,183
=================
</TABLE>
8
<PAGE> 9
(3) Land, Buildings and Related Personal Property
A summary of land, buildings, related personal property and accumulated
depreciation at March 31, 1995 and December 31, 1994 is as follows:
<TABLE>
<CAPTION>
1995 1994
--------------- ---------------
<S> <C> <C>
Land $ 1,209,226 $ 1,209,226
Buildings and improvements 16,115,557 16,115,557
Furniture and equipment 1,520,008 1,509,840
Property under capitalized leases 50,033 50,033
--------------- ---------------
Total $ 18,894,824 $ 18,884,656
Accumulated depreciation (5,579,790) (5,386,058)
--------------- ---------------
Net property, plant and equipment $ 13,315,034 $ 13,498,598
=============== ===============
</TABLE>
(4) Related Party Transactions
Through March 31, 1995, QualiCorp, Inc., the parent of RWB Management
Corp. (the Managing General Partner of the Partnership) charged $33,784
of property management fees and $40,054 of administrative expense to the
Partnership.
Through March 31, 1994, QualiCorp, Inc., the parent of RWB Management
Corp. (the Managing General Partner of the Partnership) charged $33,279
of property management fees and $49,161 of administrative expense to the
Partnership.
9
<PAGE> 10
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash balances declined from December 31, 1994 by $152,990 due to lower
reimbursement from the Medicare program and slower collections on accounts
receivables. Although the day to day operations of the Partnership's
Merrillville Indiana nursing facility continues to show slow improvement, the
present lessee has not as yet applied for the facility's Medicare license which
the Partnership believes is necessary for the future economic viability of the
facility.
The Managing General Partner continues to evaluate the facility. If the
facility can not achieve breakeven with the present lessee, the Partnership may
cancel the lease and either operate the facility itself or sell the facility.
The Partnership continued to make improvement in its Southpoint Manor and Merry
Wood Lodge facilities during the quarter. Capital improvement expenditures for
these facilities will total approximately $120,000 over the next twelve months.
The Partnership paid a distribution to its limited partners in February 1995 of
$15.00 per unit, which equals a 6% return on the initial investment of
$1,000.00 per unit. The Partnership expects to make distributions to its
limited partners based upon cash flow generated from operations after
considering cash required for debt obligations, necessary improvements to its
properties and working capital reserves.
Operations
Net income for the quarter was $213,906, $124,917 lower than the same quarter
of 1994. Revenue from net resident services rose to $3,293,158, an increase of
7.8% while professional care of residents expenses increased $250,856. The
increase in expenses was due to the expansion of the Southpoint Manor therapy
program, which started in the third quarter of 1994, along with annual employee
salary adjustments. Household and plant expenses include costs of some of the
scheduled facility improvements.
Rental income for 1995 includes the Merrillville property rent for the quarter
of $165,000, less a reserve of $128,700, which reflects the operating loss of
the facility during the first quarter of 1995.
10
<PAGE> 11
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. 27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. There were no reports on Form 8-K filed for the
quarter ended March 31, 1995.
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.
RWB MEDICAL INCOME PROPERTIES 1
LIMITED PARTNERSHIP
Registrant
By: /s/ John H. Stoddard Date: April 28, 1995
-------------------- --------------
John H. Stoddard
President and Chief Financial Officer
RWB Management Corp.
Managing General Partner
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP FOR
THE QUARTER ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,174,323
<SECURITIES> 0
<RECEIVABLES> 3,175,342
<ALLOWANCES> 1,260,062
<INVENTORY> 0
<CURRENT-ASSETS> 3,425,827
<PP&E> 18,894,824
<DEPRECIATION> 5,579,790
<TOTAL-ASSETS> 17,528,698
<CURRENT-LIABILITIES> 1,233,584
<BONDS> 957,236
<COMMON> 0
0
0
<OTHER-SE> 15,150,191
<TOTAL-LIABILITY-AND-EQUITY> 17,528,698
<SALES> 0
<TOTAL-REVENUES> 3,335,531
<CGS> 0
<TOTAL-COSTS> 3,077,361
<OTHER-EXPENSES> 18,259
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,005
<INCOME-PRETAX> 213,906
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 213,906
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
