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 June 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 404-698-9040
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 12 PAGES.
PART I. - FINANCIAL INFORMATION
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
BALANCE SHEETS
(Unaudited)
June 30, December 31,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 893,957 $ 729,876
Accounts receivable 655,180 846,399
Prepaid insurance 64,104 2,469
Other current assets - 1,633
Property held for sale (Note 5) 2,462,161 2,548,084
Total current assets 4,075,402 4,128,461
$ 4,075,402 $ 4,128,461
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Trade accounts payable 269,424 133,002
Accrued compensation 147,865 150,396
Provider taxes payable 17,456 19,279
Other liabilities 288,593 240,684
Total liabilities 723,338 543,361
Partners' equity (deficit):
Limited partners 3,737,585 3,961,300
General partners (385,521) (376,200)
Total partners' equity 3,352,064 3,585,100
$ 4,075,402 $ 4,128,461
See accompanying notes to financial statements. 2
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
Revenues:
Operating revenues $1,371,712 $1,254,275 $2,793,880 $2,897,345
Interest income 7,466 12,804 15,561 28,675
Total revenues 1,379,178 1,267,079 2,809,441 2,926,020
Expenses:
Operating expenses 1,423,993 1,359,427 2,836,598 2,974,712
Interest - - - 69,604
Depreciation and
amortization 68,566 71,150 137,132 182,849
Partnership administration
costs 21,844 22,264 68,747 66,391
Total expenses 1,514,403 1,452,841 3,042,477 3,293,556
Operating loss (135,225) (185,762) (233,036) (367,536)
Gain on sales of
properties (Note 4) - - - 2,933,678
Net income(loss) $ (135,225) $ (185,762) $ (233,036) $2,566,142
Net income(loss)
per L.P. unit $ (4.43) $ (6.08) $ (7.63) $ 87.56
L.P. units outstanding 29,308 29,308 29,308 29,308
See accompanying notes to financial state 3
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
Distributions - (750,000) (750,000)
Net income 14,635 2,551,507 2,566,142
Balance, at June 30, 1995 $ (375,070) $ 3,988,429 $ 3,613,359
Balance, at December 31, 1995 $ (376,200) $ 3,961,300 $ 3,585,100
Net loss (9,321) (223,715) (233,036)
Balance, at June 30, 1996 $ (385,521) $ 3,737,585 $ 3,352,064
See accompanying notes to financial statements. 4
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1996 1995
Operating Activities:
Cash received from residents
and government agencies $ 2,985,100 $ 3,052,889
Cash paid to suppliers and employees (2,785,325) (3,134,509)
Interest received 15,561 28,675
Interest paid - (97,240)
Property taxes paid (46) (55,487)
Cash provided by (used in) operating activities 215,290 (205,672)
Investing Activities:
Payment for purchases of property
and equipment (51,209) (61,855)
Proceeds from sales of properties - 8,858,536
Cash provided by (used in) investing activities (51,209) 8,796,681
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 (decrease) in cash
and cash equivalents 164,081 (44,433)
Cash and cash equivalents, beginning of period 729,876 776,254
Cash and cash equivalents, end of period $ 893,957 $ 731,821
See accompanying notes to financial statements. 5
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1996 1995
Reconciliation of Net Income (Loss) to Cash
Provided by (Used in) Operating Activities:
Net income (loss) $ (233,036) $ 2,566,142
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating
activities:
Depreciation and amortization 137,132 182,849
Gain on sales - (2,933,678)
Changes in assets and liabilties:
Accounts receivable 191,219 155,544
Prepaid expenses and other (61,635) 30,206
Other assets 1,633 48,739
Trade accounts payable and
accrued liabilities 179,977 (255,475)
Cash provided by (used in) operating activities$ 215,290 $ (205,672)
See accompanying notes to financial statements. 6
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
NOTES TO FINANCIAL STATEMENTS
June 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 six months ended June 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:
Six Months Ended
June 30,
1996 1995
Charged to costs and expenses:
Property management and oversight
management fees $167,633 $171,708
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services $66,186 $66,391
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 in
the first quarter of 1995.
NOTE 5.
Property held for sale at June 30, 1996 and December 31, 1995,
consisted of the Partnership's two nursing home facilities:
Grandview Manor Nursing Home
Heritage Manor of Westwood
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 June 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 increase of $117,437 for the quarter
ended June 30, 1996, as compared to the second quarter of the
prior year. This increase is due to increased reimbursement rates
at the Partnership's two remaining facilities. The increase is
also due to an increase in patient days in the HIV unit at
Heritage Manor of Westwood. Daily rates for this unit are
substantially higher than amounts charged to the facility's other
residents.
Expenses:
Operating expenses showed a increase of $64,566 for the quarter
ended June 30, 1996, as compared to the second quarter of the
prior year. The increase in expenses is due to the increased
patient days in the HIV unit at Heritage Manor of Westwood as
compared to the same period in the prior year. The HIV unit
requires higher staffing hours than normal skilled and
intermediate services. The increase is also due to inflationary
increases at both facilities.
Liquidity and Capital Resources:
At June 30, 1996, the Partnership held cash and cash equivalents
of $893,957 an increase of $164,081 from the amount held at
December 31, 1995. Cash is being held in reserve for working
capital and operating contingencies.
As discussed in 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 June 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 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: August 19, 1996 By: /s/ J. Stephen Eaton
J. Stephen Eaton,
President
Date: August 19, 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
filing.
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