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 March 31, 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)
March 31, December 31,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $ 736,050 $ 929,023
Accounts receivable 587,962 536,617
Prepaid insurance 47,975 -
Other current assets - 465
Property held for sale (Note 4) 2,272,989 2,336,234
Total current assets 3,644,976 3,802,339
$ 3,644,976 $ 3,802,339
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Trade accounts payable 401,379 437,476
Accrued compensation 159,270 168,240
Provider taxes payable (10,494) 21,558
Other liabilities 92,719 106,906
Total liabilities 642,874 734,180
Partners' equity (deficit):
Limited partners 3,401,622 3,465,037
General partners (399,520) (396,878)
Total partners' equity 3,002,102 3,068,159
$ 3,644,976 $ 3,802,339
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1997 1996
Revenues:
Operating revenues $1,391,367 $1,422,168
Interest income 10,243 8,095
Total revenues 1,401,610 1,430,263
Expenses:
Operating expenses 1,350,252 1,412,605
Depreciation and amortization 68,567 68,566
Partnership administration
costs 48,848 46,903
Total expenses 1,467,667 1,528,074
Operating loss (66,057) (97,811)
Net loss $ (66,057) $ (97,811)
Operating loss per L.P. unit (2.16) (3.20)
Net loss per L.P. unit $ (2.16) $ (3.20)
L.P. units outstanding 29,308 29,308
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1997 1996
Operating Activities:
Cash received from residents
and government agencies $ 1,340,023 $ 1,656,774
Cash paid to suppliers and employees (1,470,568) (1,318,579)
Interest received 10,243 8,095
Interest paid - -
Property taxes paid (67,349) (88,344)
Cash provided by operating activities (187,651) 257,946
Investing Activities:
Payment for purchases of property
and equipment (5,322) (23,933)
Proceeds from sales of properties - -
Cash provided by (used in) investing activities (5,322) (23,933)
Financing Activities:
Principal payments on long-term debt - -
Distributions to limited partners - -
Cash used in financing activities - -
Net increase in cash and cash equivalents (192,973) 234,013
Cash and cash equivalents, beginning of period 929,023 776,254
Cash and cash equivalents, end of period $ 736,050 $ 1,010,267
See accompanying notes to financial statements.
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1997 1996
Reconciliation of Net Income (Loss) to Cash
Provided by Operating Activities:
Net loss $ (66,057) $ (97,811)
Adjustments to reconcile net income (loss)
to cash provided by operating
activities:
Depreciation and amortization 68,567 68,566
Gain on sales - -
Changes in assets and liabilties:
Accounts receivable (51,345) 234,606
Prepaid expenses and other (47,975) (61,635)
Other assets 465 1,633
Trade accounts payable and
accrued liabilities (91,306) 112,587
Cash provided by operating activities $ (187,651) $ 257,946
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, 1995 $ (376,200) $ 3,961,300 $ 3,585,100
Distribution - - -
Net loss (3,912) (93,899) (97,811)
Balance, at March 31, 1996 $ (380,112) $ 3,867,401 $ 3,487,289
Balance, at December 31, 1996 $ (396,878) $ 3,465,037 $ 3,068,159
Net loss (2,642) (63,415) (66,057)
Balance, at March 31, 1997 $ (399,520) $ 3,401,622 $ 3,002,102
See accompanying notes to financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND VI
NOTES TO FINANCIAL STATEMENTS
March 31, 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
three months ended March 31, 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:
Three Months Ended
March 31,
1997 1996
Charged to costs and expenses:
Property management and oversight
management fees $84,199 $58,982
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services $16,658 $46,903
NOTE 4.
Property held for sale at March 31, 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 March 31, 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 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 two remaining facilities and plans
to sell them to prospective purchasers. 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.
Results of Operations
Revenues:
Operating revenues showed a decrease of $30,801 for the quarter ended March 31,
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 increase in the Medicare rate on a per patient day
basis at Grandview.
Expenses:
Operating expenses showed a decrease of $62,353 for the quarter ended March 31,
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. This decrease in expense was partially offset by increased therapy
expense at Grandview.
Liquidity and Capital Resources:
At March 31, 1997, the Partnership held cash and cash equivalents of $736,050 an
decrease of $192,973 from the amount held at December 31, 1996. Cash is being
held in reserve for working capital and operating contingencies.
As of March 31, 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 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.
<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: May 20, 1997 By: /s/ J. Stephen Eaton
- ----------------- --------------------
J. Stephen Eaton,
President
Date: May 20, 1997 By: /s/ 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 MARCH 31, 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 736,050
<SECURITIES> 0
<RECEIVABLES> 587,962
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,371,987
<PP&E> 2,272,989
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,644,976
<CURRENT-LIABILITIES> 642,874
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,002,102
<TOTAL-LIABILITY-AND-EQUITY> 3,644,976
<SALES> 1,391,367
<TOTAL-REVENUES> 1,401,610
<CGS> 1,467,667
<TOTAL-COSTS> 1,467,667
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (66,057)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (66,057)
<EPS-PRIMARY> (2.160)
<EPS-DILUTED> (2.160)
</TABLE>
