<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, 1998 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)
1100 Abernathy Road, Building 500, Suite 715
--------------------------------------------
Atlanta, Georgia 30328
----------------------
(Address of Principal Executive Office)
(770) 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, 1998 was
22,895.
<PAGE> 2
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Item 1. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 9
PART II
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
2
<PAGE> 3
PART I
ITEM 1.
FINANCIAL INFORMATION
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Balance Sheets, March 31, 1998 and December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations for the three
months ended March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Partners' Capital for the three
months ended March 31, 1998 and December 31, 1997. . . . . . . . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows for the three months ended
March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 9
</TABLE>
3
<PAGE> 4
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Balance Sheets
March 31, 1998 and December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS 1998 1997
------ ---------- ----------
<S> <C> <C>
Current Assets
Cash and equivalents $ 4,531,868 $ 4,849,227
Accounts receivable, less allowance
for doubtful accounts of $191,707 in 1998
and $191,707 in 1997 61,933 157,399
Interest receivable -- 38,136
----------- -----------
Total current assets $ 4,593,801 $ 5,044,762
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities
Accounts payable $ 96,798 $ 250,638
Accrued insurance 150,576 150,576
Other accrued expenses 178,792 268,761
Estimated settlements due to third parties 1,746,891 1,979,908
----------- -----------
Total current liabilities 2,173,057 2,649,883
Due to affiliates 25,086 30,362
----------- -----------
Total liabilities 2,198,143 2,680,245
Partners' capital
Limited partners 2,395,658 2,364,517
----------- -----------
Total liabilities and partners' capital $ 4,593,801 $ 5,044,762
=========== ===========
</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, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
-------- -----------
<S> <C> <C>
Income:
Patient service revenues, net $ -- $ 4,065,294
Other revenue -- 7,421
-------- -----------
Total revenue -- 4,072,715
-------- -----------
Operating expenses:
Costs of patient service -- 2,300,061
Dietary -- 259,103
Household and plant -- 292,231
General and administrative -- 752,477
Employee health and welfare -- 176,981
Depreciation and amortization -- 119,262
-------- -----------
Total operating expenses -- 3,900,115
-------- -----------
Operating income -- 172,600
-------- -----------
Other income (expense):
Interest income 61,920 13,504
Interest expense -- (21,758)
Provider fees -- (30,999)
-------- -----------
Total other income (expense) 61,920 (39,253)
-------- -----------
Net income before recognition of gain on sales of
properties and loss on discontinued operations 61,920 133,347
Gain on sales of properties -- 7,480,586
Income (loss) from discontinued operations (30,779) (72,812)
-------- -----------
Net income $ 31,141 $ 7,541,121
======== ===========
Net income per weighted average
limited partnership unit outstanding $ 1.36 $ 329.19
======== ===========
</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 Three Months Ended March 31, 1998 and December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
Unit Amount
---- ------
<S> <C> <C>
Partners' capital,
December 31, 1997 22,895 $2,364,517
Net income 31,141
------ ----------
Partners' capital,
March 31, 1998 22,895 $2,395,658
====== ==========
</TABLE>
6
<PAGE> 7
RWB MEDICAL INCOME PROPERTIES 1 LIMITED PARTNERSHIP
Statements of Cash Flows
Three Months Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from patient care $ 95,466 $ 5,001,899
Cash paid to suppliers and employees (507,605) (3,420,737)
Interest received 100,056 13,504
Interest paid -- (21,757)
Provider fees -- (30,999)
Other operating receipts -- 7,421
----------- -----------
Net cash provided (used) by operating activities (312,083) 1,549,331
----------- -----------
Cash flows from investing activities:
Cash payments for capital expenditures -- (13,364)
----------- -----------
Net cash provided (used) by investing activities -- (13,364)
----------- -----------
Cash flows from financing activities:
Principal payment on debt obligations -- (6,268)
Net borrowings (payments) to related parties (5,276) (137,782)
Distributions to partners -- (210,732)
----------- -----------
Net cash used by financing activities (5,276) (354,782)
----------- -----------
Net increase (decrease) in cash (317,359) 1,181,185
Cash and equivalents, beginning of period 4,849,227 766,621
----------- -----------
Cash and equivalents, end of period $ 4,531,868 $ 1,947,806
=========== ===========
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 31,141 $ 7,541,121
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization -- 119,262
Gain on sale of property -- (7,480,586)
(Increase) decrease in:
Accounts receivable 95,466 589,191
Third party receivables 38,136 347,416
Prepaid expenses and other assets -- (141,338)
Increase (decrease) in:
Accounts payable and accrued expenses (243,809) 574,265
Estimated settlement due to third parties (233,017) --
----------- -----------
Net cash provided by operating activities $ (312,083) $ 1,549,331
=========== ===========
</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, 1997 audited financial statements have been omitted
from this report.
(2) Sale of Properties
On March 31, 1997, RWB Medical Income Properties 1 Limited Partnership
(the "Partnership") closed the sale of its interests in its two remaining
long-term care facilities in Florida and Alabama, and the personal
property and intangible assets related to the operation of those
facilities (the "Properties"). The Properties were sold to Omega
Healthcare Investors, Inc., a Maryland corporation ("Omega"), pursuant to
the asset Purchase and Sale Agreement dated as of February 3, 1997 (the
"Sale Agreement"), by and among the Partnership, RWB Management Corp.,
the managing general partner of the Partnership, and Omega previously
reported by the Partnership.
Aggregate net proceeds from the sale of the Properties was $17,063,375,
which was held by the escrow agent at March 31, 1997. The net proceeds
and other assets of the Partnership will be distributed to the Limited
Partners of the Partnership in the anticipated liquidation of the
Partnership as described in the Partnership's Current Report on Form 8-K
dated February 18, 1997.
In connection with the closing of the sale of the Properties, the
Partnership entered into an interim lease of the Properties pursuant to
the terms of the Sale Agreement and under which the Partnership will
provide for management and operation of the Properties for an interim
period. The interim lease was terminated on May 31, 1997.
(3) Related Party Transactions
Through March 31, 1998 QualiCorp, Inc., the parent of RWB Management
Corp. (the Managing General Partner of the Partnership) charged $25,086
of administrative expense to the Partnership.
Through March 31, 1997 QualiCorp, Inc., the parent of RWB Management
Corp. (the Managing General Partner of the Partnership) charged $49,940
of property management fees and $51,278 of administrative expense to the
Partnership.
8
<PAGE> 9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash and equivalents balances totaled $4,531,868 at March 31, 1998, a decrease
of $317,359 from December 31, 1997. This decrease was due to settlement of third
party liabilities, primarily Medicare issues, and accounts payable, offset by
accounts receivable collections.
Prior to May 31, 1998, the Partnership will pay distributions to Limited
Partners totaling $1,098,960, or $48 per unit.
The Partnership will make a final distribution of any remaining funds following
the expiration of the periods within which claims for breach of representation
and warranties and claims by Medicare, Medicaid or other third parties may be
made against the Partnership either by contract or under applicable law.
Operations
The Partnership's net income for the quarter ended March 31, 1998 was $31,141,
as interest income totaled $61,920 and expenses from discontinued operations
totaled $30,779. Comparisons to the quarter ended March 31, 1997 show
substantial differences, primarily due to the fact the Partnership suspended all
business operations on May 31, 1997.
9
<PAGE> 10
PART II
Item 6. Exhibits and reports on 8K
A. Exhibits - 27 Financial Data Schedule (for SEC purposes only).
B. No reports on Form 8-K were filed during the first quarter ended
March 31, 1998.
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: May 6, 1998
---------------------------------------- -----------
John H. Stoddard
President and Chief Financial Officer
RWB Management Corp.
Managing General Partner
10
<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, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,531,868
<SECURITIES> 0
<RECEIVABLES> 253,640
<ALLOWANCES> 191,707
<INVENTORY> 0
<CURRENT-ASSETS> 4,593,801
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,593,801
<CURRENT-LIABILITIES> 2,173,057
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,395,658<F1>
<TOTAL-LIABILITY-AND-EQUITY> 4,593,801
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (61,920)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 61,920
<INCOME-TAX> 0
<INCOME-CONTINUING> 61,920
<DISCONTINUED> (30,779)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,141
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>REPRESENT TOTAL PARTNERSHIP CAPITAL INCLUDING NET INCOME NET OF
DISTRIBUTIONS.
</FN>
</TABLE>
