SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 1995
Commission File Number: 0-16415
CUMBERLAND HEALTHCARE, L.P. I-A
(Exact name of Registrant as specified in its Charter)
Delaware 59-2660778
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
880 Carillon Parkway, St. Petersburg, Florida, 33716
(Address of principal executive offices)
(813) 573-3800
(Registrant's telephone number, including area code)
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
and Exchange Act of 1934 during the preceding 12 months (or 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
Number of Units at
Title of Each Class September 30, 1995
Units of Limited Partnership
Interest: $1,000 per unit 30,000
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1994 Form 10-K, filed with the
Securities and Exchange Commission on April 12, 1995,
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-4301
<PAGE>
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1995 1994
ASSETS (Audited)
Cash and Cash Equivalents $ 1,289,291 $ 1,202,175
Restricted Cash 60,871 52,780
Accounts Receivable (Net of Allowance of
$63,866 and $63,866) 714,341 1,008,629
Prepaid Expenses 84,358 44,683
Construction in Progress 32,754 0
Investment Properties, at Cost (Net of
Accumulated Depreciation and Amortization
of $11,407,024 and $10,874,938) 18,976,244 19,471,007
Deferred Debt Costs (Net of Accumulated
Amortization of $53,825 and $39,247) 75,953 102,777
Intangible Assets (Net of Accumulated
Amortization of $30,511 and $22,190) 413,287 421,608
Total Assets $ 21,647,099 $ 22,303,659
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 1,110,544 $ 1,067,429
Accrued Payroll 232,653 219,284
Interest Payable - Affiliate 0 6,582
- Other 34,807 33,569
Payable to Related Parties
- General Partner 11,047 26,435
- Affiliates 332,529 312,528
Mortgage Notes Payable
- Affiliate 0 500,000
- Other 8,023,591 8,282,947
Minority Interest 674,603 630,570
Total Liabilities 10,419,774 11,079,344
Partners' Equity:
Limited Partners (30,000 units outstanding
at September 30, 1995
and December 31, 1994) 11,528,860 11,525,910
General Partner (301,535) (301,595)
Total Partners' Equity 11,227,325 11,224,315
Total Liabilities and Partners' Equity $ 21,647,099 $ 22,303,659
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED
September 30, September 30,
1995 1994
Revenues:
Net Resident Service Revenues $ 4,089,700 $ 3,629,066
Rental Income 2,482,321 2,383,509
Interest Income 47,839 29,558
Total Revenues 6,619,860 6,042,133
Expenses:
Resident Service Expenses 3,555,560 3,222,014
Interest Expense - Affiliate 637 87,592
- Other 534,143 522,070
Rent Expense 225,212 219,824
Property Management Fees - General Partner 30,726 29,502
General and Administrative - Affiliates 20,095 21,473
- Other 118,735 75,544
Depreciation and Amortization 557,097 946,862
Total Expenses 5,042,205 5,124,881
Net Operating Income $ 1,577,655 $ 917,252
Minority Interest in Net (Income) Loss
of Consolidated Subsidiary (44,033) 45,231
Net Income $ 1,533,622 $ 962,483
Allocation of Net Income
Limited Partners $ 1,502,950 $ 943,233
General Partner 30,672 19,250
Total Income $ 1,533,622 $ 962,483
Net Income Per $1,000 Limited Partnership Unit $ 50.10 $ 31.44
Number of Limited Partnership Units 30,000 30,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
September 30, September 30,
1995 1994
Revenues:
Net Resident Service Revenues $ 1,288,563 $ 1,247,431
Rental Income 855,851 811,420
Interest Income 19,908 14,149
Total Revenues 2,164,322 2,073,000
Expenses:
Resident Service Expenses 1,183,603 1,122,328
Interest Expense - Affiliate 0 19,126
- Other 176,179 174,269
Rent Expense 75,070 80,448
Property Management Fees - General Partner 10,614 10,038
General and Administrative - Affiliates 5,977 3,109
- Other 57,076 20,155
Depreciation and Amortization 185,785 320,971
Total Expenses 1,694,304 1,750,444
Net Operating Income $ 470,018 $ 322,556
Minority Interest in Net (Income) Loss
of Consolidated Subsidiary (2,558) 15,928
Net Income $ 467,460 $ 338,484
Allocation of Net Income
Limited Partners $ 458,111 $ 331,714
General Partner 9,349 6,770
Total Income $ 467,460 $ 338,484
Net Income Per $1,000 Limited Partnership Unit $ 15.27 $ 11.06
Number of Limited Partnership Units 30,000 30,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
September 30, September 30,
1995 1994
Cash Flows from Operating Activities:
Net Income $ 1,533,622 $ 962,483
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 557,097 946,862
Minority Interest in Net Income (Loss)
of Consolidated Subsidiary 44,033 (45,231)
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 294,288 (87,219)
(Increase) Decrease in Prepaid Expenses (39,675) 5,097
(Increase) Decrease in Restricted Cash (8,091) 1,381
Increase (Decrease) in Payable to Related
Parties 4,613 29,035
Increase (Decrease) in Payables
and Accruals 51,140 14,676
Net Cash Provided by Operating
Activities 2,437,027 1,827,084
Cash Flows from Investing Activities:
(Additions) to Investment Properties (39,435) (43,372)
(Additions) to Construction in Progress (32,754) (64,132)
Net Cash Provided by (Used in)
Investing Activities (72,189) (107,504)
Cash Flows from Financing Activities:
Payments of Notes Payable (759,356) (2,559,386)
(Increase) Decrease in Deferred Debt Cost 12,246 (11,724)
Distribution to Partners:
Limited Partners (1,500,000) (1,050,000)
General Partner (30,612) (21,430)
Net Cash Provided by (Used in)
Financing Activities (2,277,722) (3,642,540)
Increase (Decrease) in Cash and Cash Equivalents 87,116 (1,922,960)
Cash and Cash Equivalents at Beginning
of Period 1,202,175 3,011,916
Cash and Cash Equivalents at End of Period $ 1,289,291 $ 1,088,956
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 540,124 $ 637,735
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Preparation
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included in the Partnership's Form 10-K for the
year ended December 31, 1994. In the opinion of management, such financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Partnership's financial
position and results of operations. The results of operations for the
period may not be indicative of results to be expected for the year.
Reclassification
Certain items in the 1994 financial statements have been reclassified
for comparative purposes to conform with the financial statement presentation
used in the 1995 statements.
Consolidation
The accompanying consolidated financial statements include the accounts
of the company and all of its subsidiaries. Intercompany transactions and
balances have been eliminated. Minority interest is accounted for by using
the equity method.
NOTE 2 - COMPENSATION, REIMBURSEMENTS, AND ACCRUALS FOR
GENERAL PARTNERS AND AFFILIATES:
The General Partner and affiliates are entitled to the following types
of compensation and reimbursement for costs and expenses incurred for the
Partnership for the nine months ended September 30, 1995:
Property Management Fees $ 30,726
General and Administrative Costs and Fees 20,095
Cash Distributions 30,612
Interest Expense 637
<PAGE>
NOTE 3 - INVESTMENT PROPERTIES
As of September 30, 1995, the Partnership owned, directly or through
limited partnership investments, an interest in eleven nursing home
properties.
A summary of the Partnership's investment properties is as follows:
September 30,
1995
Land $ 4,682,743
Buildings 19,606,940
Furniture and Fixtures 5,243,927
Leasehold Interest 849,658
Investment Properties, at Cost 30,383,268
Less: Accumulated Depreciation
and Amortization (11,407,024)
Net Book Value $ 18,976,244
The Partnership, directly or through a manager, operates two skilled
nursing facilities. Paramount Chateau, a 99 bed facility located in
California, for the nine months ended September 30, 1995, had an average
occupancy rate of 88.5% that was comprised of 9.5% private, 21.2% Medicare
and 69.3% Medicaid. The average reimbursement rates were $80.48, $321.61
and $74.70 per day for private, Medicare and Medicaid, respectively. The
average monthly revenue was 239,023. Olympic Healthcare, a 60 bed skilled
nursing facility with a 24 bed assisted living wing located in Sequim,
Washington, for the nine months ended September 30, 1995, had an average
occupancy of 88.7% that was comprised of 26.6% private, 25.9% Medicare and
47.5% Medicaid. The average reimbursement rates were $98.38, $246.79
and $96.84 per day for private, Medicare and Medicaid, respectively. The
average monthly revenue was $186,468. The 24 bed assisted living wing
which opened July 1, 1994, maintained an average occupancy of 58.3% that
was comprised of 62% private and 38% Medicaid. The average reimbursement
rates were $50.61 and $52.37 per day for private and Medicaid, respectively.
The average monthly revenue was $22,529.
<PAGE>
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Cumberland Healthcare, L.P. I-A ("Cumberland") and Life Care Centers of
America, Inc. ("LCCA"), effective August 4, 1995, entered into a Purchase and
Sale Agreement pursuant to which LCCA agreed to acquire seven nursing homes
from Cumberland for an aggregate purchase price of $17,900,000, subject to
certain pro rations and adjustments. Cumberland owns six of these homes
and leases the seventh from an independent owner.
The purchase price consists of approximately $15,600,000 in cash at
closing, the issuance by LCCA of a $1,000,000 promissory note made payable
to Cumberland due on the fifth anniversary of its issuance, and the balance
in the form of an assumption of approximately $1,300,000 of long term debt.
The Partnership anticipates using $1,830,000 of the cash to pay off existing
debt. The nursing homes being purchased by LCCA are all located in southern
California and are currently leased from Cumberland and operated by LCCA.
LCCA deposited $100,000 earnest money with an escrow agent. Closing of
the transaction is subject to certain conditions, including approval of the
transaction by Cumberland's limited partners and LCCA obtaining financing
necessary to consummate the transaction upon terms satisfactory to LCCA. In
addition regulatory and other consents and approvals must be obtained.
The sale is scheduled for late 1995. However, due to the time which may
be necessary to obtain approval from Cumberland's limited partners, the sale is
likely to occur in early 1996. Because of the conditions to closing, neither
Cumberland nor LCCA are able to give any assurances that the sale will occur.
If the sale is consummated, this would leave Cumberland with two
ninety-nine bed skilled nursing facilities in southern California, a one
hundred bed skilled nursing facility in Ohio and a sixty bed skilled nursing
facility in Washington, which also has a twenty-four bed assisted living wing.
NOTE 5 - SUBSEQUENT EVENTS
Cumberland Healthcare, L.P. I-A and FHP, Inc. (Lessee of FHP - Norwalk
f/k/a Rancho Los Padres) have entered into a Lease Termination Agreement
effective October 1, 1995. As a condition of this Agreement, RJ Medical
Investors, Inc. has assumed the management responsibilities for Pacific Palms
Rehabilitation Hospital (f/k/a FHP, Norwalk). FHP, Inc. has placed into
escrow a lease termination settlement of $1,566,174 which will be distributed
to the Partnership upon transfer of the operating license to the Partnership
from the State of California Department of Health Services. Distributed funds
will be disbursed as follows: $1,250,000 to First Union Bank, the mortgage
holder of the Pacific Palms Rehabilitation Hospital (f/k/a FHP, Norwalk) with
the balance of the funds to be used as working capital, for retirement of
debt and for cash distributions to partners.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Resident service revenues increased by $460,634 (12.7%) for the nine
months ended September 30, 1995, as compared to the same period in 1994.
This increase is primarily due to an increase in census with the opening of
the 24 bed assisted living wing at the Sequim, Washington facility on July 1,
1994. Private census increased by 885 patient days and Medicaid census
increased by 2,284 patient days for the nine months ended September 30, 1995
compared to the same period in 1994. For the nine months ended September 30,
1995, Medicare and Medicaid revenue totaled $3,358,474 while the Medicare and
Medicaid accounts receivable balance totaled $542,287. Resident services
expenses increased $333,546 (10.4%) for the nine months ended September 30,
1995, as compared to the same period in 1994. This increase is due to an
increase in nursing expenses from the use of additional ancillary
services needed to accommodate the higher resident census and acuity
level, along with increased labor costs from the operation of the
assisted living wing at the Sequim, Washington facility.
Rental income increased by $98,812 (4.1%) for the nine months ended
September 30, 1995, as compared to the same period in 1994. This increase
is due to the annual increase in rental rates per the lease agreements.
Interest income increased $18,281 (61.8%) for the nine months ended
September 30, 1995, as compared to the same period in 1994. This increase
is due to increased average cash balances in interest bearing accounts.
Interest expense decreased by $74,882 (12.3%) for the nine months ended
September 30, 1995, as compared to the same period in 1994. This decrease
resulted from a reduction of the average level of debt.
General and Administrative - Other expense increased by $43,191 (57.2%)
for the nine months ended September 30, 1995, as compared to the same period
in 1994. This increase resulted from the increased cost of legal and
consulting fees relating to the proposed sale of seven nursing homes to
LCCA which was approximately $16,500, the refinancing costs for Paramount
Chateau Convalescent Hospital which included a due diligence retainer,
consulting and engineering services and an appraisal totaling $17,245 and
legal fees for the FHP, Inc. Lease Termination Agreement and other costs
of $9,000, approximately.
Depreciation and amortization expense decreased by $389,765 (41.2%)
for the nine months ended September 30, 1995, as compared to the same period
in 1994. This decrease is primarily due to certain furniture and fixture
items amounting to $4,313,724 reaching their fully depreciated life.
Resident service revenues increased by $41,132 (3.3%) for the three months
ended September 30, 1995, as compared to the same period in 1994. This
increase is primarily due to an increase in Medicaid census of nearly
1,000 patient days along with the opening of the assisted living wing at
the Sequim, Washington facility. Resident services expenses increased
$61,275 (5.5%) for the three months ended September 30, 1995, as compared
to the same period in 1994.
This increase is due to an increase in nursing expenses from the use of
additional ancillary services needed to accommodate the higher resident acuity
level and increase labor costs due to the opening of the assisted living wing
at the Sequim, Washington facility.
<PAGE>
Rental income increased by $44,431 (5.5%) for the three months ended
September 30, 1995, as compared to the same period in 1994. This increase
is due to the annual increase in rental rates per the lease agreements.
Interest income increased by $5,759 (40.7%) for the three months ended
September 30, 1995, as compared to the same period in 1994. This increase
is due to increased cash balances in interest bearing accounts.
Interest expense decreased by $17,216 (8.9%) for the three months ended
September 30, 1995, as compared to the same period in 1994. This decrease
resulted from a reduction of the average level of debt.
General and Administrative - Other expense increased by $36,921 (183.2%)
for the three months ended September 30, 1995, as compared to the same period
in 1994. This increase resulted from increased legal and consulting fees
relating to the proposed sale of seven nursing homes to LCCA which was
approximately $16,500, the refinancing costs for Paramount Chateau
Convalescent Hospital which included a due diligence retainer, consulting
and engineering services and an appraisal totaling $17,245 and legal fees
for the FHP, Inc. Lease Termination Agreements and other costs of $3,176
approximately.
Depreciation and Amortization expense decreased by $135,186 (42.1%)
for the three months ended September 30, 1995, as compared to the same
period in 1994. This decrease is primarily due to certain furniture and
fixture items amounting to $4,313,724 reaching their fully depreciated life.
The real estate rental segments net income for the nine months ended
September 30, 1995, compared to the same period in 1994 increased by $415,098.
This increase was mainly due to assets being fully depreciated and
depreciation expense decreased by $351,455. Also, total revenues increased
by $83,000 due to lease escalators while the corresponding expenses increased
only $20,000. The healthcare segments net income for the nine months ended
September 30, 1995, increased by $122,055 compared to the same period in 1994.
The increase was primarily due to increased census at the Sequim, Washington
facility's assisted living wing which increased revenues by $458,601 while
nursing home expenses increased by only $333,546 for a net increase of
$125,065. This increase along with a decrease in depreciation expense, due to
assets being fully depreciated, of $38,320, a decrease in general and
administrative expenses of $34,103 and a decrease in interest expense of
$13,831 all contributed to the increase in net income. The largest change was
due to the fact that in 1994 the minority interest was a loss and upon removal
of it income increased by $44,033 but for the same period in 1995 the minority
interest was income and the removal of it reduced net income by $45,231 for a
net effect of $89,264.
As a result of the above items, the Partnership's net income for the nine
months and three months ended September 30, 1995, is $1,533,622 and $467,460,
respectively, as compared to $962,483 and $338,484 for the same periods in
1994, representing increases of 59.3% and 38.1% respectively.
The primary sources of funds for the period ended September 30, 1995, were
rental income, revenues from nursing home operations and collection of accounts
receivable. These funds were used to pay nursing home expenses, make cash
distributions to partners and reduce the amount of outstanding indebtedness.
As of September 30, 1995, the Partnership owned eleven nursing homes with a
net book value of $18,976,244. Net book value is not necessarily
representative of market value.
<PAGE>
In the opinion of the General Partner, there are no material trends,
favorable or unfavorable, in the Partnership's capital resources. The
resources will be sufficient to meet the Partnership's needs for the next 12
to 24 months. These sources include cash flows from operations, rental
income and the Raymond James Financial, Inc. line of credit.
Short-term liquidity requirements consist of funds needed to meet
commitments for debt service and administrative and operational expenses.
These short term needs will be funded by cash at September 30, 1995, plus
1995 and 1996 rental income, interest income, and cash flows from operations.
However, if the future changes in the healthcare market would require
extensive capital expenditures by the Partnership in order for its facilities
to meet new licensure and/or marketplace standards, the Partnership may be
required to seek additional capital sources or increase its long term debt
in order to meet potential future expenditure requirements. The General
Partner is unable at this time to predict the extent of future capital
expenditure needs of the facilities resulting from future changes in
the nursing home industry.
The Partnership has entered into an agreement to terminate the lease with
FHP, Inc. on the FHP - Norwalk facility. As part of this agreement, FHP, Inc.
has put $1,566,174 into an escrow account that will be distributed to the
Partnership upon transfer of the operating licenses to the Partnership by the
State of California Department of Health Services. Distributed funds will be
disbursed as follows: $1,250,000 to First Union Bank, the mortgage holder
of the Pacific Palms Rehabilitation Hospital (f/k/a FHP - Norwalk), with
the balance of the funds to be used as working capital, retirement of debt
or for Partner cash distributions.
Should the LCCA transaction not close, the Partnership should be able
to meet its funding needs unless LCCA defaults on its lease payments.
Any discussions of rental concessions between the Partnership and LCCA
would be evaluated in regards to liquidity and capital reserves. Disputed
lease covenants are estimated at less than $50,000 and are not material.
Mortgage obligations coming due within the next three (3) years will be
reviewed prior to their due dates. Based on the Partnership's evaluation
of each property and its corresponding mortgage, current interest rates,
availability of funds and other relevant factors, each mortgage will be
either refinanced, paid off or the property abandoned. If needed for
mortgage funding, the Partnership has available income from rental
property, facility operational cash flows, the anticipated FHP, Inc.
lease termination settlement and the Raymond James Financial, Inc.
Five Million Dollar ($5,000,000) line of credit.
<PAGE>
The cash balance at September 30, 1995 was $1,289,291. The Partnership
had net income of $1,533,622. After adjusting for depreciation,
amortization, and changes in operating assets and liabilities, net cash
provided by operating activities was $2,437,027. The net cash used in
investing activities was $72,189, which includes fixed asset additions.
The net cash used in financing activities was $2,277,722 and consisted of
principal payments on notes payable, proceeds from notes payable, and
distributions to partners. Significant changes to the balance sheet
which affected the cash flow of the Partnership for the period of
September 30, 1995, are as follows: Accounts Receivable decreased by
$294,288 due to the net effect of Cumberland Healthcare, L.P. I-A's collection
of the $525,268 First Union Bank accounts receivable balance, the $151,665
increase in Paramount Chateau's accounts receivable balance due to a change in
personnel which resulted in a decreased effort towards the collection of
outstanding accounts receivable balances and Paramount Chateau's $86,714
liability to Cumberland Healthcare, L.P. I-A. Prepaid Expenses increased by
$39,675 due to three major items. The first being an increase in prepaid
property insurance of $20,448. The insurance policy period is from June 1 to
June 1 and the 1995/1996 premium increased by $9,878. The second being an
increase in Paramount Chateau's prepaid license fee of $3,615. The license
period is from June 15 to June 15. Therefore, 1994 has 6 1/2 months of
amortization compared to 3 1/2 for 1995. The third item contributing to the
prepaid expense increase is the workers compensation insurance premium for
employees of Paramount Chateau. The prepaid premium increased by $16,681 as
compared to December 31, 1994, due to the payment of the new 8/1/95-8/1/96
policy deposit of $4,510 and a $12,800 carry over from the prior year's
policy pending final audit review and settlement. Accounts Payable and
Accruals increased by $51,140 as a result of a $30,335 increase in Paramount
Chateau's accounts payable due to improved cash management and a $25,827
increase in Cumberland Healthcare, L.P. I-A's accrued payables. Cumberland
Healthcare, L.P. I-A's increase is a net result of the $75,900 accrual
increase for the real estate taxes and the $50,000 recognition of income
from the anticipated decrease in the Medicare/Medicaid liability.
Investment Properties increased by $39,435 as a result of the $25,760
purchase of a nurse call system, heavy duty dryer and various other
furniture and fixture items at Olympic Healthcare and the $13,677
purchase of beds, chairs, glass doors and various other furniture,
fixture and building improvement items at Paramount Chateau. Construction
in Progress increased by $32,754 due to the payments toward the laundry
room renovation at Paramount Chateau. Mortgage Notes Payable decreased
by $759,356 in most part due to the January 1995, final payment
of the Raymond James note balance of $500,000.
Cash distributions to Limited Partners were discontinued during the first
quarter of 1988 and resumed in February 1992. The 1993 distribution to
Limited Partners totaled $600,000 (2% of the original capital of
$30,000,000). The 1994 distribution to the Limited Partners totaled
$1,050,000 (3.5% of the original capital of $30,000,000). The February
1995 semi-annual distribution to the Limited Partners was $750,000
(2.5% of the original capital of $30,000,000) followed by the August 1995
semi-annual distribution to the Limited Partners of $750,000
(2.5% of the original capital of $30,000,000) resulting in a total
distribution to the Limited Partners of $1,500,000 (5.0% of the original
capital of $30,000,000) in 1995. None of these distributions represented
a return of capital. Future distributions will be at a level that is
warranted by the cash flow and profits of the Partnership.
<PAGE>
Item 5. Other Information
Cumberland Healthcare, L.P. I-A ("Cumberland") and Life Care Centers of
America, Inc. ("LCCA"), effective August 4, 1995, entered into a Purchase and
Sale Agreement pursuant to which LCCA agreed to acquire seven nursing homes
from Cumberland for an aggregate purchase price of $17,900,000 subject to
certain pro rations and adjustments. Cumberland owns six of these homes
and leases the seventh from an independent owner.
The purchase price consists of approximately $15,600,000 in cash at
closing, the issuance by LCCA of a $1,000,000 promissory note made payable
to Cumberland due on the fifth anniversary of its issuance, and the
balance in the form of an assumption of approximately $1,300,000 of long
term debt. The Partnership anticipates using $1,830,000 of the cash to
pay off existing debt. The nursing homes being purchased by LCCA are all
located in southern California and are currently leased from Cumberland
and operated by LCCA.
LCCA deposited $100,000 earnest money with an escrow agent. Closing of
the transaction is subject to certain conditions, including approval of the
transaction by Cumberland's limited partners and LCCA obtaining financing
necessary to consummate the transaction upon terms satisfactory to LCCA. In
addition regulatory and other consents and approvals must be obtained.
The sale is scheduled for late 1995. However, due to the time which may
be necessary to obtain approval from Cumberland's limited partners, the sale
is likely to occur in early 1996. Because of the conditions to closing,
neither Cumberland nor LCCA are able to give any assurances that the sale
will occur.
If the sale is consummated, this would leave Cumberland with two
ninety-nine bed skilled nursing facilities in southern California, a
one hundred bed skilled nursing facility in Ohio and a sixty bed skilled
nursing facility in Washington, which also has a twenty-four bed
assisted living wing.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this Report - None
(b) Reports on Form 8-K - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
CUMBERLAND HEALTHCARE, L.P. I-A
By: Medical Investments Partners
By: RJ Health Properties, Inc.
Managing General Partner
Date: 11/14/95 By: /s/Fred E. Whaley
President and Director
Date: 11/14/95 By: /s/J. Davenport Mosby, III
Vice President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1995.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-END> SEP-30-1995 SEP-30-1995
<CASH> 1,350,162 1,350,162
<SECURITIES> 0 0
<RECEIVABLES> 778,207 778,207
<ALLOWANCES> 63,886 63,886
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0<F1>
<PP&E> 30,416,022 30,416,022
<DEPRECIATION> 11,407,024 11,407,024
<TOTAL-ASSETS> 21,647,099 21,647,099
<CURRENT-LIABILITIES> 0 0<F1>
<BONDS> 8,698,194 8,698,194
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 11,227,325 11,227,325
<TOTAL-LIABILITY-AND-EQUITY> 21,647,099 21,647,099
<SALES> 0 0
<TOTAL-REVENUES> 2,164,322 6,619,860
<CGS> 0 0
<TOTAL-COSTS> 1,258,673 3,780,772
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 176,179 534,780
<INCOME-PRETAX> 467,460 1,533,622
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 467,460 1,533,622
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 467,460 1,533,622
<EPS-PRIMARY> 15.27 50.10<F2>
<EPS-DILUTED> 0 0<F2>
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>eps-is net income per $1,000 Limited Partnership unit.
</FN>
</TABLE>
