|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: AMPHENOL CORP /DE/, 10-Q, 1996-11-14 |
Next: INTERNATIONAL META SYSTEMS INC/DE/, 10QSB, 1996-11-14 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996 Commission File Number 33-6122-02
MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP
------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 59-2726599
-------- ----------
(State of Organization) (IRS Employer Identification Number)
7000 Central Parkway, Suite 850
-------------------------------
Atlanta, Georgia 30328
----------------------
(Address of Principal Executive Office)
(770) 668-1080
--------------
Registrant's Telephone Number, Including Area Code
Indicate by check 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 for 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_______
The number of limited partnership units outstanding at September 30, 1996 was
10,907.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
PART I
<S> <C>
Item 1. Financial Information................................... 3 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 11
PART II
Signatures................................................ 12
</TABLE>
2
<PAGE> 3
PART I
ITEM 1.
FINANCIAL INFORMATION
MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Balance Sheets, September 30, 1996 and December 31, 1995................... 4
Statements of Operations for the three
months ended September 30, 1996 and 1995 and the nine months
ended September 30, 1996 and 1995........................................... 5
Statement of Partners' Capital for the nine months
ended September 30, 1996 and 1995........................................... 6
Statements of Cash Flow for the nine months ended
September 30, 1996 and 1995................................................. 7
Notes to Financial Statements............................................... 8 - 10
</TABLE>
3
<PAGE> 4
MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP
Balance Sheets
September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------------- ----------------
ASSETS
<S> <C> <C>
Current assets
Cash and equivalents $ 216,860 $ 41,363
Accounts receivable, net of allowance
for doubtful accounts of $58,342 in 1996
and $54,188 in 1995 546,082 780,238
Estimated settlements due from third parties 228,441 316,962
Prepaid expenses and other assets 49,650 42,144
---------------- ----------------
Total current assets 1,041,033 1,180,707
Investment in joint ventures 6,921,200 7,034,698
Property, plant and equipment, net of
accumulated depreciation 2,882,689 2,988,787
Deferred financing costs, net of
accumulated amortization of
$1,689 in 1996 and $1,525 in 1995 1,798 1,962
---------------- ----------------
Total assets $ 10,846,720 $ 11,206,154
================ ================
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Current portion of long term debt $ 61,793 $ 57,447
Accounts payable 210,595 235,152
Accrued payroll and payroll taxes 54,372 47,516
Accrued vacation 34,938 31,082
Accrued insurance 25,348 28,384
Accrued real estate taxes 57,769 76,143
Accrued management fees 13,906 13,371
Patient deposits and trust liabilities 47,585 37,010
Other accrued expenses 14 387
Due to affiliates 654,621 1,137,913
---------------- ----------------
Total current liabilities 1,160,941 1,664,405
Bonds payable and capital lease obligations 657,339 705,550
---------------- ----------------
Total liabilities 1,818,280 2,369,955
---------------- ----------------
Partners' capital (deficit)
Limited partners 9,066,990 8,888,206
General partners (38,550) (52,007)
---------------- ----------------
Total partners' capital 9,028,440 8,836,199
---------------- ----------------
Total liabilities and partners' capital $ 10,846,720 $ 11,206,154
================ ================
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
MEDICAL INCOME
PROPERTIES 2B LIMITED PARTNERSHIP
Statements of Operations
For the three months ended September 30, 1996 and 1995
and the nine months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------- --------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Net resident service revenue $ 822,977 $ 819,597 $ 2,609,609 $ 2,528,658
Other revenue 968 1,042 3,322 3,067
------------- ------------- ------------- -------------
Total Revenue 823,945 820,639 2,612,931 2,531,725
------------- ------------- ------------- -------------
Operating expenses:
Professional care of residents 442,978 492,676 1,401,096 1,487,626
Dietary 70,129 69,003 205,866 199,871
Household and plant 85,006 86,291 244,566 258,884
General and administrative 179,924 169,409 546,969 502,183
Employee health and welfare 36,923 48,568 140,512 146,777
Depreciation and amortization 37,714 37,299 114,213 112,159
------------- ------------- ------------- -------------
Total operating expenses 852,674 903,246 2,653,222 2,707,500
------------- ------------- ------------- -------------
Operating income (loss) (28,729) (82,607) (40,291) (175,775)
------------- ------------- ------------- -------------
Other income (expenses):
Interest expense, net (13,933) (20,717) (46,386) (71,930)
Provider fees (16,380) (16,560) (49,320) (49,140)
Partnership share of joint venture
income 274,749 151,529 680,078 504,280
------------- ------------- ------------- -------------
Total other income (expenses) 244,436 114,252 584,372 383,210
------------- ------------- ------------- -------------
Net income $ 215,707 $ 31,645 $ 544,081 $ 207,435
============= ============= ============= =============
Net income per weighted average
limited partnership unit outstanding $ 18.39 $ 2.70 $ 46.39 $ 17.69
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP
Statements of Partners' Capital
For the Nine Months Ended September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partners Total
----- ------ -------- -----
<S> <C> <C> <C> <C>
Partners' capital (deficit),
December 31, 1995 10,907 $8,888,206 $(52,007) $8,836,199
Distributions to partners
($30.00 per limited
partnership unit outstanding) (327,211) (24,629) (351,840)
Net income 505,995 38,086 544,081
------ ---------- -------- ----------
Partners' capital (deficit),
September 30, 1996 10,907 $9,066,990 $(38,550) $9,028,440
====== ========== ======== ==========
</TABLE>
6
<PAGE> 7
MEDICAL INCOME
PROPERTIES 2B LIMITED PARTNERSHIP
Statements of Cash Flows
Nine months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash received from patient care $ 2,932,284 $ 2,649,885
Cash paid to suppliers and employees (2,571,033) (2,655,559)
Interest paid, net (46,386) (71,930)
Provider fees (49,320) (49,140)
Cash from other operating activities 3,322 3,067
------------- ---------------
Net cash provided (used) by operating activities 268,867 (123,677)
------------- ---------------
Cash flows from investing activities:
Distributions from joint ventures 793,579 298,179
Purchase of property (7,950) (39,425)
------------- ---------------
Net cash provided by investing activities 785,629 258,754
------------- ---------------
Cash flows from financing activities:
Principal payments of long term debt (43,865) (38,522)
Net borrowings (payments) to related parties (483,294) 138,670
Distributions to partners (351,840) (351,840)
------------- ---------------
Net cash used by financing activities (878,999) (251,692)
------------- ---------------
Net increase (decrease) in cash and equivalents 175,497 (116,615)
Cash and equivalents, beginning of period 41,363 125,450
------------- ---------------
Cash and equivalents, end of period $ 216,860 $ 8,835
============= ===============
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 544,081 $ 207,435
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 114,213 112,159
Partnership share of joint venture (income) (680,078) (504,280)
Decrease in accounts receivable 234,156 337,734
Decrease (increase) in estimated settlements 88,521 (216,507)
(Increase) decrease in prepaid expenses
and other assets (7,507) 22,585
Decrease in accounts payable and
accrued expenses (24,519) (82,803)
------------- ---------------
Net cash provided (used) by operating activities $ 268,867 $ (123,677)
============= ===============
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE> 8
MEDICAL INCOME
PROPERTIES 2B LIMITED PARTNERSHIP
Notes to Financial Statements
(Unaudited)
(1) Financial Statements
The financial statements have been prepared in accordance with generally
accepted accounting principles. The financial information included in
these financial statements is unaudited, however, in management's
opinion, all normal recurring adjustments necessary for a fair
presentation of the results of operations for the periods included have
been made.
Footnote disclosures which would substantially duplicate those contained
in the December 31, 1995 audited financial statements have been omitted
from this report.
(2) Property, Plant and Equipment
Property, plant and equipment consisted of the following at September
30, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Land $ 90,000 $ 90,000
Building and improvements 3,812,869 3,817,099
Furniture and equipment 297,860 285,680
-------------- ---------------
Total property, plant and equipment 4,200,729 4,192,779
Accumulated depreciation (1,318,040) (1,203,992)
-------------- ---------------
Net property, plant and
equipment $ 2,882,689 $ 2,988,787
============== ===============
</TABLE>
(3) Debt Obligations
Debt obligations consisted of the following at September 30, 1996 and
December 31, 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Industrial Revenue Bonds payable at a variable
rate of interest with monthly principal and
interest payments of $8,749 through April 1,
2005. The interest rate is adjusted every
May 1 and November 1. $ 719,132 $ 762,997
Less amounts due in one year or less 61,793 57,447
-------------- ---------------
$ 657,339 $ 705,550
============== ===============
</TABLE>
8
<PAGE> 9
The aggregate annual maturities for the succeeding five fiscal years are
as follows:
<TABLE>
<S> <C> <C>
1996 $ 13,582
1997 62,355
1998 67,681
1999 73,463
2000 79,738
Thereafter 422,313
-------------
$ 719,132
=============
</TABLE>
(4) Investment in Joint Venture
The condensed financial information for the investments in joint ventures
as of September 30, 1996 and December 31, 1995 is as follows:
<TABLE>
<CAPTION>
KATY (owned 50% by Partnership)
1996 1995
---------------- ----------------
<S> <C> <C>
Current assets $ 2,195,080 $ 1,684,094
Long term assets 4,840,582 5,048,138
---------------- ----------------
Total assets $ 7,035,662 $ 6,732,232
================ ================
Current liabilities $ 667,220 $ 684,328
Equity 6,368,442 6,047,904
---------------- ----------------
Total liabilities and equity $ 7,035,662 $ 6,732,232
================ ================
Partnership's investment at September 30, 1996
and December 31, 1995 $ 3,184,221 $ 3,023,952
================ ================
Revenues $ 3,733,695 $ 4,985,129
Expenses 3,193,443 4,362,005
---------------- ----------------
Net income $ 540,252 $ 623,124
================ ================
<CAPTION>
HUMBLE (owned 50% by Partnership)
1996 1995
---------------- ----------------
<S> <C> <C>
Current assets $ 1,400,594 $ 1,140,926
Long term assets 3,440,040 3,651,762
---------------- ----------------
Total assets $ 4,840,634 $ 4,792,688
================ ================
Current liabilities $ 741,481 $ 703,933
Long term liabilities 646,400 691,850
Equity 3,452,753 3,396,905
---------------- ----------------
Total liabilities and equity $ 4,840,634 $ 4,792,688
================ ================
Partnership's investment at September 30, 1996
and December 31, 1995 $ 1,726,376 $ 1,698,453
================ ================
</TABLE>
9
<PAGE> 10
<TABLE>
<S> <C> <C>
Revenues $ 3,262,103 $ 3,664,088
Expenses 2,983,588 3,526,809
---------------- ----------------
Net income $ 278,515 $ 137,279
================ ================
<CAPTION>
MEDICAL PARK (owned 45.45% by Partnership)
1996 1995
---------------- ----------------
<S> <C> <C>
Current assets $ 1,845,928 $ 2,370,621
Long term assets 5,128,351 5,308,640
---------------- ----------------
Total assets $ 6,974,279 $ 7,679,261
================ ================
Current liabilities $ 805,597 $ 713,232
Long term liabilities 1,745,776 1,868,527
Equity 4,422,906 5,097,502
---------------- ----------------
Total liabilities and equity $ 6,974,279 $ 7,679,261
================ ================
Partnership's investment at September 30, 1996
and December 31, 1995 $ 2,010,603 $ 2,317,207
================ ================
Revenues $ 4,754,064 $ 5,907,763
Expenses 4,158,476 5,192,923
---------------- ----------------
Net income $ 595,588 $ 714,840
================ ================
</TABLE>
(5) Related Party Transactions
Through September 30, 1996 and 1995, QualiCorp, Inc. the parent of
Qualicorp Management, Inc. (the Managing General Partner of the
Partnership) charged $57,555 and $55,510 respectively, to the Partnership
for reimbursement of administrative expenses.
10
<PAGE> 11
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash and equivalents improved during the quarter ended September 30, 1996 by
$63,424 as accounts receivable due from patients decreased by $92,730. Capital
expenditures for the quarter were $1,496, which was lower than expected.
Accounts receivable balances due from the State of Illinois for Medicaid
residents decreased during the quarter. Amounts due from the Medicare program
rose sharply due to review procedures instituted by the Medicare Intermediary.
Due to the continued uncertainty of the Alabama Medicaid issues referred to in
prior quarterly reports, the prospective purchaser of the Partnership assets has
communicated it will not proceed with the proposed transaction. The Managing
General Partner, in conjunction with its investment bankers, has re-opened
discussions with other companies who had expressed an interest in the assets in
the hope of negotiating a sale of the assets to one of them.
The Partnership will make its regular distribution of $10.00 per unit on
November 15.
The Partnership will continue to make quarterly distributions to its limited
partners based upon cash flow generated by facility operations after considering
cash requirements for debt services, needed improvement to its property and cash
reserves. There can be no assurance the current distribution of $10.00 per unit
per quarter will be maintained into 1997.
Operations
The operating loss for the quarter and year to date reflected the operations of
the Edwardsville, Illinois facility. Due to delays in receiving timely rate
adjustments from the Illinois Medicaid program, the management company has been
charged to run this facility as a break-even operation. It remains to be proven
whether this operation can be made profitable in the short run. The State of
Illinois has increased the timing of payment on Medicaid receivables, and a 6.8%
rate increase is scheduled for January 1997.
Net income for the quarter was $215,707 versus $31,645 for the same quarter of
the prior year. Revenue from patient service increased between years $3,380 due
to slightly higher room rates. Expenses for the care of patients were lower in
1996 than 1995 due to lower therapy program costs.
Other income (expense) was higher than the prior year due to improved earnings
from its joint venture partners, and lower net interest expense cost.
11
<PAGE> 12
PART II
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.
MEDICAL INCOME PROPERTIES 2B
LIMITED PARTNERSHIP
Registrant
By: /s/ John H. Stoddard Date: October 31, 1996
------------------------------------- ------------------------
John H. Stoddard
President and Chief Financial Officer
QualiCorp Management, Inc.
Managing General Partner
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP FOR
THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 216,860
<SECURITIES> 0
<RECEIVABLES> 604,424
<ALLOWANCES> 58,342
<INVENTORY> 0
<CURRENT-ASSETS> 1,041,033
<PP&E> 4,200,729
<DEPRECIATION> 1,318,040
<TOTAL-ASSETS> 10,846,720
<CURRENT-LIABILITIES> 1,160,941
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,028,440 <F1>
<TOTAL-LIABILITY-AND-EQUITY> 10,846,720
<SALES> 2,609,609
<TOTAL-REVENUES> 2,612,931
<CGS> 0
<TOTAL-COSTS> 2,653,222
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46,386
<INCOME-PRETAX> 544,081
<INCOME-TAX> 0
<INCOME-CONTINUING> 544,081
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 544,081
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> REPRESENTS TOTAL PARTNERSHIP CAPITAL INCLUDING NET INCOME NET OF
DISTRIBUTIONS PAID.
</FN>
</TABLE>
|
|