UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-15694
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
(Exact name of registrant as specified in its charter)
Georgia 58-1677247
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) (identification No.)
400 Perimeter Center Terrace, Suite 650, Atlanta, Georgia 30346
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 770-698-9040
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,
and (2) has been subject to such filing requirements for the past
90 days. Yes x No
THERE ARE NO EXHIBITS
PAGE ONE OF 11 PAGES.
PART I. - FINANCIAL INFORMATION
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 917,943 $ 729,876
Accounts receivable 540,498 846,399
Prepaid insurance 60,465 2,469
Other current assets - 1,633
Property held for sale (Note 5) 2,403,155 2,548,084
Total current assets 3,922,061 4,128,461
$ 3,922,061 $ 4,128,461
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Trade accounts payable 305,352 133,002
Accrued compensation 96,329 150,396
Provider taxes payable 18,736 19,279
Other liabilities 252,311 240,684
Total liabilities 672,728 543,361
Partners' equity (deficit):
Limited partners 3,638,964 3,961,300
General partners (389,631) (376,200)
Total partners' equity 3,249,333 3,585,100
$ 3,922,061 $ 4,128,461
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Operating revenues $1,397,669 $1,514,186 $4,191,549 $4,411,531
Interest income 8,569 4,033 24,129 30,067
Total revenues 1,406,238 1,518,219 4,215,678 4,441,598
Expenses:
Operating expenses 1,407,639 1,444,935 4,244,235 4,362,932
Interest - - - 69,604
Depreciation and amortization 68,566 66,385 205,697 249,234
Partnership administration
costs 32,766 1,949 101,513 125,055
Total expenses 1,508,971 1,513,269 4,551,445 4,806,825
Operating income (loss) (102,733) 4,950 (335,767) (365,227)
Gain on sale of
properties (Note 4) - - - 2,933,678
Net income(loss) $ (102,733) $ 4,950 $ (335,767) $2,568,451
Operating income(loss) per
L.P. unit (3.37) 0.16 (11.00) (11.96)
Gain on sale of properties
per L.P. unit - - - 99.10
Net income(loss) per L.P. unit $ (3.37) $ 0.16 $ (11.00)$ 87.13
L.P. units outstanding 29,308 29,308 29,308 29,308
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September
1996 1995
Operating Activities:
Cash received from residents
and government agencies $ 4,497,451 $ 4,657,090
Cash paid to suppliers and employees (4,205,396) (4,454,048)
Interest received 24,129 30,067
Interest paid - (97,240)
Property taxes paid (67,349) (88,344)
Cash provided by operating activities 248,835 47,525
Investing Activities:
Payment for purchases of property
and equipment (60,768) (79,492)
Proceeds from sales of properties - 8,858,536
Cash provided by (used in) investing activities (60,768) 8,779,044
Financing Activities:
Principal payments on long-term debt - (7,885,442)
Distributions to limited partners - (750,000)
Cash used in financing activities - (8,635,442)
Net increase in cash and cash equivalents 188,067 191,127
Cash and cash equivalents, beginning of period 729,876 776,254
Cash and cash equivalents, end of period $ 917,943 $ 967,381
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September
1996 1995
Reconciliation of Net Income (Loss) to Cash
Provided by Operating Activities:
Net income (loss) $ (335,767) $ 2,568,451
Adjustments to reconcile net income (loss)
to cash provided by operating
activities:
Depreciation and amortization 205,697 249,234
Gain on sales - (2,933,678)
Changes in assets and liabilties:
Accounts receivable 305,901 245,559
Prepaid expenses and other (57,996) 30,048
Other assets 1,633 48,739
Trade accounts payable and
accrued liabilities 129,367 (160,828)
Cash provided by operating activities $ 248,835 $ 47,525
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
Total
Partners'
General Limited Equity
Balance, at December 31, 1994 $ (389,705) $ 2,186,922 $ 1,797,217
Distribution - (750,000) (750,000)
Net income 14,728 2,553,723 2,568,451
Balance, at September 30, 1995 $ (374,977) $ 3,990,645 $ 3,615,668
Balance, at December 31, 1995 $ (376,200) $ 3,961,300 $ 3,585,100
Net loss (13,431) (322,336) (335,767)
Balance, at September 30, 1996 $ (389,631) $ 3,638,964 $ 3,249,333
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
NOTE 1.
The financial statements are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair
presentation of the Partnership's financial position and
operating results for the interim periods. The results of
operations for the three months ended September 30, 1996, are not
necessarily indicative of the results to be expected for the year
ending December 31, 1996.
NOTE 2.
The financial statements should be read in conjunction with the
financial statements and the notes thereto contained in the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and Exchange
Commission, a copy of which is available upon request by writing
to WelCare Service Corporation-VI (the "Managing General
Partner"), at 400 Perimeter Center Terrace, Suite 650, Atlanta,
Georgia 30346.
NOTE 3.
A summary of compensation paid to or accrued for the benefit of
the Partnership's general partners and their affiliates and
amounts reimbursed for costs incurred by these parties on the
behalf of the Partnership are as follows:
Nine Months Ended
September 30,
1996 1995
Charged to costs and expenses:
Property management and oversight
management fees $251,492 $262,558
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services $101,513 $109,822
NOTE 4.
On January 31, 1995, following the pursuit of several offers, the
Partnership sold Paradise Cove Retirement Park ("Paradise Cove")
and Highland Cove Retirement Center ("Highland Cove") to Life
Care Centers of America, Inc., an unaffiliated company that has
managed the two retirement centers since March 1991. These
centers were included in Property held for sale at December 31,
1995. The purchase prices were $6,000,000 and $2,798,574 for
Highland Cove and Paradise Cove, respectively. The Partnership
used the sales proceeds to satisfy $7,960,287 in mortgage debts
secured by Highland Cove, Paradise Cove, and Grandview Manor.
The Partnership recognized a gain on the sales of $2,933,678.
NOTE 5.
Property held for sale at September 30, 1996 and December 31,
1995, consisted of the Partnership's two nursing home facilities.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
WelCare Acquisition Corp., an affiliate of WelCare
International, Inc. ("WelCare"), acquired the stock of the parent
company of the Partnership's Corporate General Partner from
Southmark Corporation on November 20, 1990. The results of
operations for periods prior to November 20, 1990, occurred under
the direction and management of Southmark affiliates and not
under the direction and management of WelCare's affiliates.
Following the first full year of WelCare's affiliate's management
of the affairs of the Partnership, the Limited Partners
overwhelmingly elected WelCare Service Corporation-VI, a wholly-
owned subsidiary of WelCare Acquisition Corp., as Managing
General Partner of the Partnership. On January 7, 1992, WelCare
Service Corporation-VI was admitted as Managing General Partner.
Plan of Operations
A majority in interest of the Partnership's Limited Partners
approved a proposal, on October 18, 1994, which provides for the
sale of all of the Partnership's remaining assets and the
eventual dissolution of the Partnership, as outlined in a proxy
statement dated September 28, 1994. Under the approved proposal,
the Limited Partners consented for the Managing General Partner
to attempt to sell or otherwise dispose of its remaining
properties prior to October 18, 1997. Upon the disposition of
all of its assets, the approved proposal requires that the
Managing General Partner dissolve the Partnership.
The Partnership will continue to operate its remaining facilities
and plans to sell them to prospective purchasers. Accordingly,
at September 30, 1996 and December 31, 1995, the Partnership
classified its remaining facilities as Property held for sale in
the accompanying balance sheets.
Results of Operations
Revenues:
Operating revenues showed a decrease of $116,517 for the quarter
ended september 30, 1996, as compared to the third quarter of the
prior year. The decrease was due primarily to a decline patient
census as compared to the same period in the prior year at
Westwood. This decrease was partially offset by an increase in
private, Medicaid and Medicare rates charged in both facilities.
Expenses:
Operating expenses showed a decrease of $37,296 for the quarter
ended September 30, 1996, as compared to the third quarter of the
prior year. The decrease in expenses was due primarily to
reduced staffing levels to accommodate the decline in census at
Westwood. The decrease was partially offset by general
inflationary increases in staffing and other operational costs at
both facilities.
Liquidity and Capital Resources:
At September 30, 1996, the Partnership held cash and cash
equivalents of $917,943 an increase of $188,067 from the amount
held at December 31, 1995. Cash is being held in reserve for
working capital and operating contingencies.
As discussed in Item 1, Note 4, the Partnership sold its two
retirement centers on January 31, 1995. The proceeds from the
sales were used to satisfy all of the Partnership's mortgage debt
obligations which would have matured February 1, 1995. As a
result, the Partnership's two remaining nursing facilities are
owned free and clear of all debt. The sale also provided cash to
the Partnership of approximately $800,000, of which $750,000 was
distributed to the Limited Partners on February 10, 1995.
As of September 30, 1996, the Partnership was not obligated to
perform any major capital additions or renovations. No such
major capital expenditures or renovations are planned for the
next 12 months, other than necessary repairs, maintenance and
improvements which are expected to be funded by operations.
Significant changes have and will continue to be made in
government reimbursement programs and such changes could have a
material impact on future reimbursement formulas. Based on
information currently available, Management does not believe
proposed legislation will have an adverse effect on the
Partnership's operations. However, as health care reform is
ongoing, the long-term effects of such changes cannot be
accurately predicted at the present time.
Based on the Partnership's present cash balance and the
expectation of break-even or positive cash flow from operations,
management believes the Partnership will have sufficient cash
resources to meet its operating and capital requirements during
the next twelve months. The Partnership does not, however, have
existing lines of credit to draw on in the unlikely event that
present resources or cash flow from operations should be
inadequate.
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(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.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
By: WELCARE SERVICE CORPORATION - VI
Managing General Partner
Date: November 12, 1996 By: /s/ J. Stephen Eaton
J. Stephen Eaton,
President
Date: November 12, 1996 By: /s/ Alan C. Dahl
Alan C. Dahl,
Vice President and Principal
Financial Officer
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THIS SCHEDULE CONTAINS UNAUDITED SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE JUNE 30, 1996 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH 10-Q.
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