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, 1997
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 12 PAGES.
<PAGE>
PART I. - FINANCIAL INFORMATION
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
BALANCE SHEETS
(Unaudited)
June 30, December 31,
1997 1996
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 610,232 $ 929,023
Accounts receivable 662,301 536,617
Prepaid insurance 23,988 -
Other current assets - 465
Property held for sale (Note 4) 2,298,147 2,336,234
------------- -------------
Total current assets 3,594,668 3,802,339
------------- -------------
$ 3,594,668 $ 3,802,339
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Trade accounts payable 460,994 437,476
Accrued compensation 204,842 168,240
Provider taxes payable 28,738 21,558
Other liabilities 129,871 106,906
------------- -------------
Total liabilities 824,445 734,180
------------- -------------
Partners' equity (deficit):
Limited partners 3,179,018 3,465,037
General partners (408,795) (396,878)
------------- -------------
Total partners' equity 2,770,223 3,068,159
------------- -------------
$ 3,594,668 $ 3,802,339
============= =============
See accompanying notes to financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
----------- ----------- ----------- ----------
Revenues:
Operating revenues $ 1,369,333 $ 1,371,712 $ 2,760,700 $2,793,880
Interest income 7,633 7,466 17,875 15,561
------------ ------------ ------------ ----------
Total revenues 1,376,966 1,379,178 2,778,575 2,809,441
------------ ------------ ------------ ----------
Expenses:
Operating expenses 1,424,721 1,423,993 2,774,973 2,836,598
Interest - - - -
Depreciation and amortization 68,564 68,566 137,131 137,132
Partnership administration
costs 115,559 21,844 164,407 68,747
------------ ------------ ------------ ----------
Total expenses 1,608,844 1,514,403 3,076,511 3,042,477
------------ ------------ ------------ ----------
Operating loss (231,878) (135,225) (297,936) (233,036)
------------ ------------ ------------ ----------
Net loss $ (231,878) $ (135,225) $ (297,936) $(233,036)
============ ============ ============ ==========
Operating loss per L.P.unit (7.60) (4.43) (9.76) (7.63)
Net loss per L.P. unit $ (7.60) $ (4.43) $ (9.76) $ (7.91)
============ ============ ============ ==========
L.P. units outstanding 29,308 29,308 29,308 29,308
============ ============ ============ ==========
See accompanying notes to financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1997 1996
------------- --------------
Operating Activities:
Cash received from residents
and government agencies $ 2,635,017 $ 2,985,100
Cash paid to suppliers and employees (2,805,290) (2,785,325)
Interest received 17,875 15,561
Interest paid - -
Property taxes paid (67,349) (46)
-------------- -------------
Cash provided by (used in) operating activities (219,747) 215,290
-------------- -------------
Investing Activities:
Payment for purchases of property
and equipment (99,044) (51,209)
-------------- ------------
Cash (used in) investing activities (99,044) (51,209)
-------------- -------------
Financing Activities:
Principal payments on long-term debt - -
Distributions to limited partners - -
-------------- -------------
Cash used in financing activities - -
-------------- -------------
Net increase(decrease) in cash and cash equivalents (318,791) 164,081
Cash and cash equivalents, beginning of period 929,023 729,876
-------------- -------------
Cash and cash equivalents, end of period $ 610,232 $ 893,957
============== =============
See accompanying notes to financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1997 1996
------------- --------------
Reconciliation of Net (Loss) to Cash
Provided by Operating Activities:
$ (297,936) $ (233,036)
Net loss
Adjustments to reconcile net (loss)
to cash provided by operating
activities: 137,131 137,132
Depreciation and amortization - -
Gain on sales
Changes in assets and liabilties: (125,684) 191,219
Accounts receivable (23,988) (61,635)
Prepaid expenses and other 465 1,633
Other assets
Accounts payable and accrued liabilities 90,265 179,977
------------- --------------
Cash provided by (used in) operating activities $ (219,747) $ 215,290
------------- --------------
See accompanying notes to financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
Total
Partners'
General Limited Equity
---------- ------------ -----------
Balance, at December 31, 1995 $(376,200) $ 3,961,300 $ 3,585,100
Distribution - - -
Net loss (9,321) (223,715) (233,036)
---------- ------------ -----------
Balance, at June 30, 1996 $(385,521) $ 3,737,585 $ 3,352,064
========== ============ ===========
Balance, at December 31, 1996 $(396,878) $ 3,465,037 $ 3,068,159
Net loss (11,917) (286,019) (297,936)
---------- ------------ -----------
Balance, at June 30, 1997 $(408,795) $ 3,179,018 $ 2,770,223
========== ============= =========
See accompanying notes to the financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
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, 1997, are not necessarily indicative of the results to be
expected for the year ending December 31, 1997.
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, 1996, 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,
1997 1996
Charged to costs and expenses:
Property management and oversight
management fees $166,114 $167,633
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services $65,532 $66,186
NOTE 4.
Property held for sale at June 30, 1997 and December 31, 1996, consisted of the
Partnership's two nursing home facilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this Management Discussion and Analysis are not
based on historical facts, but are forward-looking statements that are based
upon numerous assumptions about future conditions that may ultimately prove to
be inaccurate. Actual events and results may materially differ from anticipated
results described in such statements. The Partnership's ability to achieve such
results is subject to certain risks and uncertainties. Such risks and
uncertainties include, but are not limited to, changes in healthcare
reimbursement systems and rates, the availability of prospective purchasers for
its facilities, and other factors affecting the Partnership's business that may
be beyond its control.
At June 30, 1997, the Partnership had three general partners (the "General
Partners"), Consolidated Associates VI, a Georgia general partnership,
Consolidated Resources VI, Inc. as the Corporate General Partner ("CR-VI" or the
"Corporate Partner"), and WelCare Service Corporation-VI, a Georgia corporation
as Managing General Partner ("WSC-VI" or the "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. 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 two remaining facilities until they
are sold. The Partnership's two remaining facilities are Grandview Manor Nursing
Home ("Grandview") and Heritage Manor of Westwood ("Westwood")which are
classified as Property held for sale in accompanying balance sheets. The
Managing General Partner anticipates that the sales of these facilities will
occur during the fourth quarter of 1997.
Results of Operations
Revenues:
Operating revenues showed a decrease of $33,180 for the quarter ended June 30,
1997 as compared to the first quarter of the prior year which was due to a
decline in census days at both of the Partnership's facilities. This decrease
was partially offset by an general rate increases at both of the Partnership's
facilities.
Expenses:
Operating expenses showed a decrease of $61,625 for the quarter ended June 30,
1997 as compared to the first quarter of the prior year. The decrease in
expenses was attributable to reduced staffing levels to accommodate the decline
in census over the same period in the prior year.
Liquidity and Capital Resources:
At June 30, 1997, the Partnership held cash and cash equivalents of $610,232 a
decrease of $318,791 from the amount held at December 31, 1996. Cash is being
held in reserve for working capital and operating contingencies.
As of June 30, 1997, 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 twelve 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. The
Partnership is currently seeking purchasers for its two remaining facilities.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K.
None
<PAGE>
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 14, 1997 By: /s/ J. Stephen Eaton
- --------------------- --------------------
J. Stephen Eaton,
President
Date: August 14, 1997 By: /s/ Alan C. Dahl
- --------------------- ----------------
Alan C. Dahl,
Vice President and Principal
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS UNAUDITED SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE JUNE 30, 1997 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 610,232
<SECURITIES> 0
<RECEIVABLES> 662,301
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,296,521
<PP&E> 2,298,147
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,594,668
<CURRENT-LIABILITIES> 824,445
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,770,223
<TOTAL-LIABILITY-AND-EQUITY> 3,594,668
<SALES> 1,369,333
<TOTAL-REVENUES> 1,376,966
<CGS> 1,608,844
<TOTAL-COSTS> 1,608,844
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (231,878)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (231,878)
<EPS-PRIMARY> (7.600)
<EPS-DILUTED> (7.600)
</TABLE>
