8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
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) (Zip Code)
Registrant's telephone number, including area code (813) 573-3800
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 (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 shares outstanding of each of Registrant's classes of securities:
Number of Units at
Title of Each Class March 31, 1998
Units of Limited Partnership
Interest: $1,000 per unit 30,000
There is no public market for the trading of partnership units and
therefore no market value can be determined.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1996 Form 10-K, filed with the
Securities and Exchange Commission on June 18, 1998
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No 33-4301
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page Number
Part I.Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
As of March 31, 1998 and December 31, 1997 3
Consolidated Statements of Income -
For the Three Months Ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows -
For the Three Months Ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations
7
Part II.Other Information
Item 6.Exhibits and Reports of Form 8-K 7
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1998 1997
(Audited)
ASSETS
Cash and Cash Equivalents $ 1,554,743 $ 7,268,682
Accounts Receivable (Net of Allowance
of $268,133 and $306,105) 275,642 671,683
Note Receivable 1,000,000 1,000,000
Sale Proceeds Receivable 0 764,604
Prepaid Expenses 66,337 65,940
Total Assets $ 2,896,722 $ 9,770,909
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 227,296 $ 294,664
Accrued Payroll 8,779 139,566
Payable to Affiliates 355,829 355,829
Minority Interest 43,776 57,800
Total Liabilities $ 635,680 $ 847,859
Partners' Equity:
Limited Partners (30,000 units outstanding
at March 31, 1998 and December 31, 1997) $ 2,280,770 $ 8,944,538
General Partner (19,728) (21,488)
Total Partners' Equity $ 2,261,042 $ 8,923,050
Total Liabilities and Partners' Equity $ 2,896,722 $ 9,770,909
The accompanying notes are an integral part
of these consolidated financial statements.
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
March 31, March 31,
1998 1997
Revenues:
Interest Income $ 108,398 $ 33,335
Total Revenues $ 108,398 $ 33,335
Expenses:
General and Administrative - Affiliates 6,093
7,496
- Other 25,466 7,494
Total Expenses $ 31,559 $ 14,990
Income from Continuing Operations 76,839 18,345
Discontinued Operations:
Income From Health Care Operations 11,153 109,051
Total Discontinued Operations 11,153 109,051
Net Income $ 87,992
$ 127,396
Income from Continuing Operations
Per $1,000 Limited Partnership Unit $ 2.51 $ .60
Income from Discontinued Operations
Per $1,000 Limited Partnership Unit .36 3.56
Total Income Per $1,000
Limited Partnership Unit $ 2.87 $ 4.16
Number of Limited Partnership Units Outstanding 30,000
30,000
The accompanying notes are an integral part
of these consolidated financial statements.
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
March 31, March 31,
1998 1997
Cash Flows from Operating Activities:
Net Income $ 87,992 $ 127,396
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 0 49,267
Minority Interest in Net Income (Loss)
of Consolidated Subsidiary (14,024) 8,452
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 396,041 (185,970)
(Increase) Decrease in Sale Proceeds Receivable 764,604 0
(Increase) Decrease in Prepaid Expenses (397) 21,161
(Increase) Decrease in Restricted Cash 0 (3,397)
Increase (Decrease) in Payable to Related
Parties 0 3,776
Increase (Decrease) in Payables and Accruals (198,155) 57,563
Net Cash Provided by Operating Activities 1,036,061 78,248
Cash Flows from Investing Activities:
(Additions) to Investment Properties 0 (6,564)
(Additions) to Construction in Progress 0 (4,307)
Net Cash Used in Investing Activities 0 (10,871)
Cash Flows from Financing Activities:
Payments of Mortgage Notes Payable 0 (8,386)
Distribution to Partners:
Limited Partners (6,750,000) 0
General Partner 0 0
Minority Interest 0 (15,000)
Net Cash Used in Financing Activities (6,750,000) (23,386)
Increase (Decrease) in Cash and Cash Equivalents (5,713,939) 43,991
Cash and Cash Equivalents at Beginning of Period 7,268,682 2,063,474
Cash and Cash Equivalents at End of Period $ 1,554,743 $ 2,107,465
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 0 $ 27,404
Non-cash Items:
Sale of Investment Properties
Intangible Asset Amortization 0 388,323
Total $ 0 $ 388,323
The accompanying notes are an integral part
of these consolidated financial statements.
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
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, 1997. In the opinion of
management, these 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 1997 financial statements have been reclassified
for comparative purposes to conform with the financial statement
presentation used in the 1998 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 three months ended March 31, 1998.
General and Administrative Costs and Fees$ 6,093
Cash Distributions $ 0
CUMBERLAND HEALTHCARE, L.P. I-A
(a Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interest income increased by $75,063 (125.2%) for the three months
ended March 31, 1998, as compared to the same period in 1997, due to
increased cash balances in interest bearing accounts.
General and Administrative - Affiliate expense decreased by $1,403
(18.7%) for the three months ended March 31, 1998, as compared to the same
period in 1997 due to the decreased need for senior management involvement
as a result of the 1997 sales of the remaining nursing facilities.
General and Administrative - Other expense increased by $17,972
(139.8%) for the three months ended March 31, 1998, compared to the same
period in 1997, due to the elimination of the monthly home office
management services cost allocation directly charged to the nursing
facilities prior to their sale. The cost allocation was calculated as a
percentage of nursing facility revenue.
Discontinued Operations - Income from Health Care Operations decreased
by $97,898 (89.8%) for the three months ended March 31, 1998, as compared
to the same period in 1997 due to the sale of the nursing facilities in
September and December 1997. As these properties were sold in the last
quarter of 1997, future entries to this account category will be
representative of audit adjustments.
Due to the 1997 sale of the nursing facility operations, primary
sources of funds for the period ended March 31, 1998, are from accounts
receivable collection, interest income and cash reserves.
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 months. These sources include cash from cash reserves, accounts
receivable collection and interest income.
Short-term liquidity requirements consist of funds needed to meet
commitments for administrative expenses. These short-term needs will be
funded by cash at March 31, 1998, plus future interest income and accounts
receivable collection.
The cash balance at March 31, 1998, was $1,554,743. The Partnership
had net income of $87,992. After adjusting for changes in operating assets
and liabilities, net cash provided by operating activities was $1,036,061.
Accounts receivable decreased by $396,041 due to continued collection
efforts. Accounts Payable decreased by $198,155 due to the payment of
nursing facility obligations. Sale Proceeds Receivable decreased by
$764,064 with the January 1998 receipt of proceeds from the December 31,
1997, sale of the Sequim, Washington nursing facility. The net cash used
in financing activities was $6,750,000 which is a result of a March 1998
distribution paid to the limited partners.
Cash distributions to limited partners were discontinued during the
first quarter of 1988 but resumed in February 1992. The March 1998
distribution to the limited partners was $6,750,000 (22.5% of the original
capital investment of $30,000,000). With the payment of the March 1998
distribution, limited partners in the initial offering have received a
104.4% return of their initial investment. Future distributions will be at
a level that is warranted by the plan of liquidation and cash flows of the
Partnership.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this Report - 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 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
ATTEST:
Date: By:
Fred E. Whaley
President and Director
Date: By:
J. Davenport Mosby, III
Vice President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED
DECEMBER 31, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,554,743
<SECURITIES> 0
<RECEIVABLES> 543,775
<ALLOWANCES> 268,133
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,896,722
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 43,766
0
0
<COMMON> 0
<OTHER-SE> 2,261,042
<TOTAL-LIABILITY-AND-EQUITY> 2,896,722
<SALES> 0
<TOTAL-REVENUES> 108,398
<CGS> 0
<TOTAL-COSTS> 31,559
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 76,839
<INCOME-TAX> 0
<INCOME-CONTINUING> 76,839
<DISCONTINUED> 11,153
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,992
<EPS-PRIMARY> 2.51<F2>
<EPS-DILUTED> 2.51<F2>
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET
<F2>EPS IS NET INCOME PER $1,000 LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>
