<PAGE> 1
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 SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-65948
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
(Exact name of Registrant as specified in its charter)
(See table of Co-Registrants)
MISSOURI 43-1623171
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11701 BORMAN DRIVE, SUITE 315
ST. LOUIS, MISSOURI 63146
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether 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
Registrant was required to file such reports), (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OF STOCK OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: N/A
CERTAIN INFORMATION CALLED FOR ON ITEM 6 OF PART II OF THIS FORM 10-Q IS
INCORPORATED BY REFERENCE TO REGISTRANTS' REGISTRATION STATEMENT (NO. 33-65948)
DATED JULY 13, 1993 WHICH WAS DECLARED EFFECTIVE OCTOBER 14, 1993, REGISTRANTS'
FORM 10-Q FILED NOVEMBER 29, 1993, REGISTRANTS' FORM 10-Q FILED FEBRUARY 11,
1994, REGISTRANTS' FORM 10-K FILED SEPTEMBER 28, 1994, REGISTRANTS' FORM 10-Q
FILED FEBRUARY 14, 1995, REGISTRANTS' FORM 10-Q FILED MAY 15, 1995, REGISTRANTS'
FORM 10-Q FILED FEBRUARY 13, 1996, REGISTRANTS' FORM 10-Q FILED MAY 14, 1996 AND
REGISTRANTS' FORM 10-K FILED SEPTEMBER 26, 1996 AND REGISTRANTS' FORM 10-Q
FILED NOVEMBER 13, 1996.
Index to Exhibits is on Page 33.
1
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CO-REGISTRANTS
Rosewood Care Center, Inc. of Swansea
Rosewood Care Center, Inc. of Galesburg
Rosewood Care Center, Inc. of East Peoria
Rosewood Care Center, Inc. of Peoria
Rosewood Care Center, Inc. of Alton
Rosewood Care Center, Inc. of Moline
Swansea Real Estate, Inc.
Galesburg Real Estate, Inc.
East Peoria Real Estate, Inc.
Peoria Real Estate, Inc.
Alton Real Estate, Inc.
Moline Real Estate, Inc.
(Exact names of Co-Registrants as specified in their charters)
No separate periodic or annual reports are filed for each of the
co-registrants and no separate financial statements are included for each of
the co-registrants because the co-registrants are effectively jointly and
severally liable with respect to the Notes and because such separate periodic
or annual reports and such separate financial statements are not deemed
material to investors.
2
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ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
INDEX
PART I FINANCIAL INFORMATION PAGE
- ----------------------------- ----
Item 1. Financial Statements 4
Rosewood Care Centers Capital Funding Corporation:
Balance Sheet 5
Statement of Operations 6
Statement of Cash Flows 7
Notes to Financial Statement 8
Rosewood Care Center Obligated Companies:
Rosewood Care Center, Inc. of Swansea
Rosewood Care Center, Inc. of Galesburg
Rosewood Care Center, Inc. of East Peoria
Rosewood Care Center, Inc. of Peoria
Rosewood Care Center, Inc. of Alton
Rosewood Care Center, Inc. of Moline
Swansea Real Estate, Inc.
Galesburg Real Estate, Inc.
East Peoria Real Estate, Inc.
Peoria Real Estate, Inc.
Alton Real Estate, Inc.
Moline Real Estate, Inc.
Combined Balance Sheet 9
Combined Statement of Operations 11
Combined Statement of Cash Flows 12
Notes to Combined Financial Statements 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
PART II OTHER INFORMATION
- --------------------------
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
- ----------
INDEX TO EXHIBITS 33
- -----------------
3
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PART I FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
4
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<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, Sept. 30,
ASSETS 1997 1997
------ -------- --------
<S> <C> <C>
Cash $ 1 $ 262
Mortgage notes receivable, Rosewood Companies 27,581 27,201
Accrued interest receivable 167 -
------- -------
$27,749 $27,463
======= =======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
First mortgage redeemable bonds $27,581 $27,297
Accrued interest 167 165
Stockholders' equity:
Common stock, $1 par value
Authorized - 30,000 shares
Issued and outstanding - 500 shares,
at issue price 1 1
Retained earnings - -
------- -------
$27,749 $27,463
======= =======
The accompanying notes are an integral part of this financial statement.
</TABLE>
5
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<TABLE>
ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION
STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months
Ended
September 30,
-------------------
1996 1997
---- ----
<S> <C> <C>
Interest income $529 $496
Interest expense $529 $496
---- ----
Net Income $ 0 $ 0
==== ====
The accompanying notes are an integral part of this financial statement.
</TABLE>
6
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<TABLE>
ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION
STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months
Ended
September 30,
----------------
1996 1997
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net income $ 0 $ 0
Decrease in accrued interest receivable - 167
Increase (decrease) in accrued interest payable (2) (2)
---- ----
Net cash provided by operating activities (2) 165
---- ----
Cash flow from investing activities:
Collections on notes receivable 254 380
---- ----
Net cash used by investing activities 254 380
---- ----
Cash flow from financing operations:
Reduction of redeemable bonds (252) (284)
---- ----
Net cash provided by financing (252) (284)
---- ----
Net increase (decrease) in cash 0 261
Cash, beginning 262 1
---- ----
Cash, ending 262 262
==== ====
Cash paid for interest $529 $496
==== ====
The accompanying notes are an integral part of this financial statement.
</TABLE>
7
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ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. Interim Financial Statements
----------------------------
In the opinion of the Company, these unaudited financial statements
include all adjustments necessary for a fair presentation of its
financial position as of June 30, 1997, and September 30, 1997, and the
results of its operations and its cash flows for the three month periods
ended September 30, 1996 and 1997. Such adjustments were of a normal
recurring nature.
The results of operations for the three months ended September 30, 1996
and 1997 are not necessarily indicative of the results for the full
year.
It is suggested that these financial statements be read in conjunction
with the financial statements, accounting policies and financial notes
thereto included in the Form 10K Annual Report (No. 33-65948), which has
previously been filed with the Commission.
2. Issuance of Bonds
-----------------
On October 21, 1993, the Company issued $33,000,000 of its 7-1/4% First
Mortgage Redeemable Bonds due November 1, 2013.
Of the ending cash balance, $ 261,000 represents the note receivable
payment on the 25th of the month which is held in the Bond Payment Fund
- Principal and Interest accounts until it is disbursed to the Bond
Holders on the 1st of the following month.
8
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<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, Sept. 30,
ASSETS 1997 1997
------ -------- ---------
<S> <C> <C>
Current assets:
Cash $ 2,320 $ 3,304
Accounts receivable - residents, net of
allowance for doubtful accounts of $224 and
$224 respectively 1,178 1,440
Accounts receivable - third party payor 3,409 2,439
Interest receivable 256 129
Prepaid insurance and other prepaids 43 310
Deferred income tax benefits 75 75
------- -------
Total current assets 7,281 7,697
------- -------
Property, plant and equipment:
Land 943 943
Site improvements 2,140 2,140
Building 17,830 17,830
Equipment 3,702 3,724
Leasehold improvements 322 327
------- -------
24,937 24,964
Less accumulated depreciation 7,370 7,604
------- -------
17,567 17,360
------- -------
Other assets:
Notes receivable from Rosewood Care Center
Holding Company 7,034 6,692
Amortizable Costs, Net 965 933
------- -------
7,999 7,625
------- -------
$32,847 $32,682
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
9
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<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, Sept. 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997
------------------------------------ -------- ---------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 2,021 $ 1,962
Accounts payable - trade 1,083 1,152
Accrued expenses:
Salaries and payroll taxes 470 379
Vacation and employee fringes 244 217
Real estate taxes 510 361
Accrued interest 167 77
Management fees - affiliate 265 426
Income taxes 50 104
Dividends payable 543 789
------- -------
Total current liabilities 5,353 5,467
------- -------
Long-term debt:
Notes payable - Rosewood Care Center
Capital Funding Corporation 27,581 27,201
------- -------
27,581 27,201
Less current maturities 2,021 1,962
------- -------
25,560 25,239
------- -------
Stockholders' equity:
Common stock 65 65
Paid-in capital 481 481
Retained earnings 1,388 1,430
------- -------
1,934 1,976
------- -------
$32,847 $32,682
======= =======
The accompanying notes are in integral part of these financial statements.
</TABLE>
10
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<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months
Ended
Sept. 30,
-----------------
1996 1997
------ ------
<S> <C> <C>
Patient service revenue:
Private $4,561 $4,830
Medicare 2,477 2,251
Medicaid 328 374
Other patient revenues, net of expenses 15 66
------ ------
7,381 7,521
------ ------
Operating expenses:
Facility expenses:
Administrative expense 211 253
Employee fringe benefits 454 473
Dietary 464 473
Nursing 1,728 1,822
Ancillary services 1,251 1,411
Plant utilities and maintenance 319 313
Housekeeping and laundry 228 237
Social services and activities 153 170
------ ------
4,808 5,152
------ ------
Income after facility expenses 2,573 2,369
------ ------
Nonfacility expenses:
Real estate taxes and insurance 145 139
Base management fees 198 198
Illinois Medicaid assessments 99 99
Depreciation and amortization 266 266
------ ------
708 702
------ ------
Income before incentives 1,865 1,667
Incentive management fees (526) (426)
Officers' bonuses - -
------ ------
Income from operations 1,339 1,241
------ ------
Other income (expense):
Interest income 188 169
Interest expense (529) (496)
------ ------
(341) (327)
------ ------
Income before income taxes 998 914
Income tax expense (97) (83)
------ ------
Net income 901 831
Retained earnings, beginning 1,288 1,388
Dividends declared (840) (789)
------ ------
Retained earnings, ending $1,349 $1,430
====== ======
The accompanying notes are an integral part of these financial statements.
</TABLE>
11
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<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months
Ended
September 30,
-------------------
Cash flow from operating activities: 1996 1997
------- ------
<S> <C> <C>
Net income $ 901 $ 831
Adjustments:
Depreciation 233 234
Amortization 32 32
Decrease (increase) in:
Accounts receivable - residents (428) (262)
Accounts receivable - third party payors (510) 970
Other receivables and prepaids 154 (140)
Increase (decrease) in:
Accounts payable - trade (407) 69
Accrued salaries, taxes and fringes 180 (118)
Accrued real estate taxes (114) (149)
Accrued management fees 62 161
Other payables and accruals 30 (37)
------- ------
Net cash provided by operating activities 133 1,591
------- ------
Cash flow from investing activities:
Purchase of property and equipment (27) (26)
Loans and deposits with affiliate (385) 342
------- ------
Net cash (used) by investing activities (412) 316
------- ------
Cash flow from financing activities:
Reduction of long-term debt (253) (380)
Dividends paid (614) (543)
------- ------
Net cash (used) by financing activities (867) (923)
------- ------
Net increase (decrease) in cash (1,146) 984
Cash, beginning 2,237 2,320
------- ------
Cash, ending $ 1,091 $3,304
======= ======
Cash paid for:
Interest $ 529 $ 586
======= ======
Income taxes $ 88 $ 50
======= ======
The accompanying notes are an integral part of these financial statements.
</TABLE>
12
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ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
1. Interim Financial Statements
----------------------------
In the opinion of the Companies, these unaudited combined financial
statements include all adjustments necessary for a fair presentation of
their financial position as of June 30, 1997 and September 30, 1997 and
the results of their operations and their cash flows for the three month
periods ended September 30, 1996 and 1997. Such adjustments were of a
normal recurring nature.
The results of operations for the three month periods ended September
30, 1996 and 1997, are not necessarily indicative of the results for the
full years.
It is suggested that these financial statements be read in conjunction
with the financial statements, accounting policies and financial notes
thereto included in the Form 10K Annual Report (No. 33-65948), which has
previously been filed with the Commission.
2. Litigation
----------
The Companies, from time to time, are involved in litigation in the
ordinary course of business including disputes involving management
contracts, patient services, employment services, employment claims and
construction matters. The Companies are also involved in routine
administrative and judicial proceedings regarding permits and expenses.
The Companies are not a party to any lawsuit or proceeding which, in the
opinion of management, is individually or in the aggregate, likely to
have a material adverse effect on the combined financial position or
results of operations of the Companies.
3. Refinancing of Long-Term Debt
-----------------------------
On October 21, 1993, the Companies refinanced their long-term debt with
Rosewood Care Centers Capital Funding Corporation, which issued
$33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November
1, 2013.
Remaining loan proceeds were loaned to Rosewood Care Center Holding
Company under unsecured promissory notes bearing interest at 7-1/4% per
annum and having maturities of December 1999.
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ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
3. Refinancing of Long-Term Debt (Continued)
-----------------------------------------
Loan costs of $609,000 and underwriter's discount of $841,500 are being
amortized over the term of the long-term debt, on the interest method.
4. Dividends
---------
Dividends in the amount of $ 789,200 were declared during the three
months ended September 30, 1997.
14
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH
THREE MONTHS ENDED SEPTEMBER 30, 1996
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
The Corporation is a pass through entity. Interest income and expenses
offset, resulting in no income or loss.
THE COMBINED FACILITY COMPANIES AND REAL ESTATE COMPANIES
Overview
--------
The Companies have continued their marketing emphasis on short-term
convalescent care while continuing to provide long-term care. The number of
short-term care patients and demand for ancillary rehabilitative and therapy
services has continued to increase. Revenues and expenses associated with
rehabilitative and therapy services have continued to increase through
September 30, 1997.
The Medicare program and various forms of private payment are principal
payors for short-term nursing home care and rehabilitative services. All six
of the facilities participate in the federally administered Medicare program.
All six of the facilities also participate in the Medicaid program for a
distinct number of beds in each facility.
Operating Results
-----------------
NET REVENUES. Net revenues increased to $7,521,000 for the three
months ended September 30, 1997, from $7,381,000 for the same period in 1996,
an increase of $140,000 or 1.9%. Private pay revenue increased $269,000 from
$4,561,000 for the three months ended September 30, 1996, to $4,830,000 for
the three months ended September 30, 1997. Revenue generated from ancillary
services for private paying patients increased $113,000, while revenue from
room charges increased $156,000 when compared to the same period last year.
Private census has decreased from 42,484 patient days for 1996 to 40,022
patient days for the current three months ended September 30, 1997. The
average room rate for the three months ended September 30, 1997 has increased
to $114 per day compared to $104 per day for the three months ended September
30, 1996.
Medicare revenues decreased from $2,477,000 for the three months ended
September 30, 1996, to $2,251,000 for the three months ended September 30,
1997, a decrease of $226,000 or 9.1%. The Medicare census has decreased from
10,333 patient days for the three months ended September 30, 1996, to 8,616
patient days for the three months ended September 30, 1997.
Medicaid revenue has increased from $328,000 for the three months ended
September 30, 1996, to $374,000 for the three months ended September 30,
1997. The increase is the result of an increase in patient census from 5,070
patient days for the three months ended September 30, 1996, compared to 5,491
patient days for the three months ended September 30, 1997.
The occupancy of the facilities remains strong with an occupancy rate
of 86.3% of available beds for the current three months ended September 30,
1997, compared to an occupancy rate of 91.1% of available beds for the three
months ended September 30, 1996.
15
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FACILITY OPERATING EXPENSES. Facility operating expenses
increased to $5,152,000 for the three months ended September 30, 1997 (or
$95.17 per patient day) from $4,808,000 (or $83.06 per patient day for the
three months ended September 30, 1996, an increase of $344,000 (or $12.11 per
patient day).
Administrative expenses increased $42,000 or 19.9%, from $211,000 for
the three months ended September 30, 1996, to $253,000 for the three months
ended September 30, 1997. After adjusting for inflation, the majority of the
increase can be accounted for by the increase in postage, employment ads,
professional fees, and dues and subscriptions. The cost per patient day
aggregates $4.67 per patient day for the current three month period, compared
to $3.65 per patient day for the three months ended September 30, 1996.
Employee fringe benefits increased $19,000 when compared to the same
period last year. The cost per patient day increased from $7.84 for the
three months ended September 30, 1996, to $8.74 for the period ended
September 30, 1997. The majority of the increase can be accounted for by the
increase in payroll taxes for the current period.
Dietary expense increased only $9,000 when compared to the same period
last year. Labor costs remained relatively constant between periods. The
largest percentage increase was due to an increase in the cost of raw food
purchases for preparation of patient meals, increasing from $4.02 per patient
day for the three months ended September 30, 1996 to $4.27 per patient day
for the three months ended September 30, 1997.
Plant utilities and maintenance decreased from $319,000 for the three
months ended September 30, 1996, to $313,000 for the three months ended
September 30, 1997. The majority of the decrease can be accounted for by the
decrease in the cost of repairs.
Housekeeping, and Laundry increased from $228,000 for the three months
ended September 30, 1996, to $237,000 for the three months ended September
30, 1997. The majority of the increase of $9,000 or 3.9%, is a result of the
increased labor costs of these departments.
Nursing service increased $94,000 or 5.4% when compared to the same
period last year. Nursing payroll has remained stable when compared to the
same period last year despite the decrease in census. The number of
employees has not changed since, in management's opinion, the shift in census
is only temporary. Thus, staffing patterns have not changed when compared to
the same period last year. The majority of the increase can be accounted for
by the increase in medical supplies utilization due to a change in the acuity
level of the patients to whom services were provided for the three months
ended September 30, 1997, compared to the same period last year.
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Social Services and Activities increased from $153,000 for the three
months ended September 30, 1996, to $170,000 for the three months ended
September 30, 1997. The increase can be accounted for by staffing increases
in the Social Services department.
Ancillary services costs (comprised of physical therapy, occupational
therapy, speech therapy, drugs and medical supplies) increased $160,000 from
$1,251,000 for the three months ended September 30, 1996, to $1,411,000 for
the three months ended September 30, 1997. The increases in cost are the
result of the continued increase in therapy utilization by the residents of
the facilities.
NONFACILITY EXPENSE. Real estate taxes and insurance decreased
slightly from $145,000 for the three months ended September 30, 1996, to
$139,000 for the three months ended September 30, 1997.
Depreciation and amortization are unchanged from the same period last
year.
INCENTIVE FEES. Incentive management fees decreased $100,000 when
compared to the same period last year as a result of the decrease in the
income from operations of the nursing facilities.
OTHER INCOME AND EXPENSE. Interest Income decreased $19,000 when
compared to the same period last year as a result of the decrease in the
notes receivable outstanding with the affiliated company Rosewood Care Center
Holding Co.
Interest Expense decreased $33,000 compared to the same period last
year. The decrease is the result of the decrease in long term debt of the
facilities.
INCOME TAXES. Income taxes decreased $14,000 when compared to the
same period last year.
The Facility Companies file a consolidated income tax return with their
parent company, Rosewood Care Center Holding Co. The income of the Real
Estate Companies is taxed at the individual shareholder level, as each Real
Estate Company is an S corporation. The amount reflected as income taxes is
the Facility Companies' portion of federal and state taxes, calculated for
the three months ended September 30, 1997, and September 30, 1996, on an
annualized basis.
Liquidity and Capital Resources
-------------------------------
As of September 30, 1997, the Companies had approximately $3,304,000 in
cash and cash equivalents and net working capital of approximately
$2,230,000. There was a net increase in cash of $984,000 since June 30,
1997. For the three months ended September 30, 1997, net cash provided by
operations was $1,591,000. Net cash from investing activities was $316,000,
of which $342,000 was received from Rosewood Care Center Holding Co. and
$26,000 was used by the Companies for the purchase of personal property and
equipment. Net cash used in financing activities aggregated $923,000, of
which $380,000 was used to retire debt and $543,000 was used for the payment
of dividends. The Companies believe they have adequate capital for
operations and replacements for the coming year and the foreseeable future.
Accounts receivable from private paying patients increased to
$1,440,000 as of September 30, 1997, compared to $1,178,000 as of June 30,
1997. These accounts receivable increased significantly due to delayed
billing and collection procedures at four (4) of the facilities. Accounts
receivable from the third party payors decreased
17
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from $3,409,000 as of June 30, 1997 to $2,439,000 as of September 30, 1997. Of
this amount, $812,064 is due from Medicare for unsettled cost reports through
September 30, 1997, which are subject to audit. With the Medicare program
facing intense scrutiny and significant cutbacks, the companies have
experienced closer review of the Medicare cost reports and delays with regard
to payment of claims. An additional effect of Medicare's delay has been the
delay of co-payment amounts received from private payors. Management does not
anticipate any cash flow shortages during the next year, despite the increase
in the amounts due from Medicare, unless Medicare administration and payment
terms significantly further deteriorate.
18
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Part II OTHER INFORMATION
- --------------------------
ITEM 1. LEGAL PROCEEDINGS.
There were no material developments with respect to legal proceedings
during the quarter ended September 30, 1997.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
In the last fiscal year, a related company, Rosewood Therapy Services,
Inc. began providing therapy services to the facilities owned and operated by
the Companies. Therapy services are provided to the facilities at prevailing
market rates, on the same terms and conditions as would be entered into with
unrelated therapy companies. During the 1997 fiscal year, the Companies' paid
$3,016,000 to unrelated companies for physical and occupational therapy
services and an additional $236,000 for speech therapy services. Amounts paid
by the Companies to Rosewood Therapy Services during the 1997 fiscal year
were negligible. During the first quarter of the 1998 fiscal year, the
Companies' paid $530,344 to unrelated companies for physical, occupational
therapy services and speech therapy services. Amounts paid by the Companies
to Rosewood Therapy Services during the first quarter of the 1998 fiscal
year, aggregated $532,529. The Companies intend to obtain most therapy
services from Rosewood Therapy Services for the 1998 fiscal year.
The construction of the 60 bed expansion wing at the Alton Rosewood
Care Center was nearing completion at September 30, the end of the first
fiscal quarter. Before the expansion wing can open, certain architectural and
state inspections must be performed and a license and a certificate of
occupancy must be obtained from the appropriate state and local authorities.
The Companies expect to obtain these items in the ordinary course, although
the schedule of the inspecting and licensing authorities is not within the
control of the Companies.
The construction of the 60 bed expansion wing at the Galesburg Rosewood
Care Center continues on schedule as of the end of the first quarter. Opening
of the Galesburg facility expansion wing is projected for the second half of
fiscal 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) See Index to Exhibits on Page 33.
(b) Reports on Form 8-K.
None.
19
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTERS CAPITAL
FUNDING CORPORATION, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
SWANSEA, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
21
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
GALESBURG, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer
22
<PAGE> 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
PEORIA, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
EAST PEORIA, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
24
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
ALTON, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
25
<PAGE> 26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROSEWOOD CARE CENTER, INC. OF
MOLINE, Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-----------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
26
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SWANSEA REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal & Executive Officer and
Principal Financial and Accounting
Officer
27
<PAGE> 28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GALESBURG REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
28
<PAGE> 29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PEORIA REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
29
<PAGE> 30
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
EAST PEORIA REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
30
<PAGE> 31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ALTON REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
31
<PAGE> 32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MOLINE REAL ESTATE, INC., Registrant
Dated: November 12, 1997 By: /s/ Larry D. Vander Maten
-------------------------------------
Larry D. Vander Maten
President and Director
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
32
<PAGE> 33
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K
Exhibit
- ------
Number Description
- ------ -----------
4.1 Reference is made to Article III of the Articles of Incorporation of
Rosewood Care Centers Capital Funding Corporation filed on September
28, 1994 as Exhibit 3.1 (and referenced in Exhibit 4.1) of the Form
10-K.
4.2 Reference is made to the Trust Indenture filed on November 29, 1993 as
Exhibit 4.2 of the Form 10-Q of Registrants.
4.3 Reference is made to the Bond filed on November 29, 1993 as Exhibit 4.3
of the Form 10-Q of Registrants.
4.4 Reference is made to the Loan Guaranty Agreement between Rosewood Care
Centers Capital Funding Corporation and Rosewood Care Center, Inc. of
Alton and the additional Loan Guaranty Agreements listed on the
Schedule filed on November 29, 1993 as Exhibit 4.4 of the Form 10-Q of
Registrants.
4.5 Reference is made to the Note executed by Alton Real Estate, Inc. and
the additional Notes listed on the Schedule filed on November 29, 1993
as Exhibit 4.5 of the Form 10-Q of Registrants.
10.1 Reference is made to the Trust Indenture filed on November 29, 1993 as
Exhibit 4.2 of the Form 10-Q of Registrants.
10.2 Reference is made to the Collateral Pledge and Security Agreement
between Rosewood Care Centers Capital Funding Corporation and Alton
Real Estate, Inc. and the additional Collateral Pledge and Security
Agreements listed on the Schedule filed on November 29, 1993 as Exhibit
10.2 of the Form 10-Q of Registrants.
10.3 Reference is made to the Mortgage Between Alton Real Estate, Inc. and
Rosewood Care Centers Capital Funding Corporation and the additional
Mortgages listed on the Schedule filed on November 29, 1993 as Exhibit
10.3 of the Form 10-Q of Registrants.
10.4 Reference is made to the Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Rosewood Care Center, Inc. of
Alton and the additional Security Agreements listed on the Schedule
filed on November 29, 1993 as Exhibit 10.4 of the Form 10-Q of
Registrants.
10.5 Reference is made to the Assignment of Rents and Leases between
Rosewood Care Centers Capital Funding Corporation and Alton Real
Estate, Inc. and the additional Assignments of Rents and Leases listed
on the Schedule filed on November 29, 1993 as Exhibit 10.5 of the Form
10-Q of Registrants.
10.6 Reference is made to the Subordination and Attornment Agreement between
Rosewood Care Centers Capital Funding Corporation and Alton Real
Estate, Inc. and the additional Subordination and Attornment Agreements
listed on the Schedule filed on November 29, 1993 as Exhibit 10.6 of
the Form 10-Q of Registrants.
33
<PAGE> 34
10.7 Reference is made to the Acknowledgment and Consent between Rosewood
Care Centers Capital Funding Corporation and Hovan Enterprises, Inc.
filed on November 29, 1993 as Exhibit 10.7 of the Form 10-Q of
Registrants.
10.8 Reference is made to the Administrative Services Agreement between
Hovan Enterprises, Inc. and Alton Real Estate, Inc. and the additional
Administrative Services Agreements listed on the Schedule filed on
November 29, 1993 as Exhibit 10.8 of the Form 10-Q of Registrants.
10.9 Reference is made to the Revised and Restated Management Agreement
between Rosewood Care Center, Inc. of Alton and Hovan Enterprises, Inc.
and the additional Revised and Restated Management Agreements listed on
the Schedule filed on November 29, 1993 as Exhibit 10.9 of the Form
10-Q of Registrants.
10.10 Reference is made to the Lease between Alton Real Estate, Inc. and
Rosewood Care Center, Inc. of Alton and the additional Leases listed on
the Schedule filed on November 29, 1993 as Exhibit 10.10 of the Form
10-Q of Registrants.
10.11 Reference is made to the Assignment of Management Agreement between
Rosewood Care Center, Inc. of Alton and Mercantile Bank and the
additional Assignments of Management Agreement listed on the Schedule
filed on November 29, 1993 as Exhibit 10.11 of the Form 10-Q of
Registrants.
10.12 Reference is made to the Contract between Resident and Facility filed
on July 13, 1993 as Exhibit 10.12 of the Registration Statement of
Registrants (No. 33-65948) declared effective October 14, 1993.
10.13 Reference is made to the Loan Agreement among Rosewood Care Centers
Capital Funding Corporation and Alton Real Estate, Inc., Swansea Real
Estate, Inc., Peoria Real Estate, Inc., East Peoria Real Estate, Inc.,
Moline Real Estate, Inc., and Galesburg Real Estate, Inc. filed on
November 29, 1993 as Exhibit 10.13 of the Form 10-Q of Registrants.
10.14 Reference is made to the Loan Guaranty Agreement filed on November 29,
1993 as Exhibit 4.4 of the Form 10-Q of Registrants.
10.15 Reference is made to the Letter of Credit issued by Sun Bank, National
Association to Mercantile Bank of St. Louis N.A. as Trustee under the
Trust Indenture on December 6, 1993 and substituted for the cash in the
Debt Service Reserve Fund on December 9, 1993, filed on February 11,
1994 as Exhibit 10.15 on the Form 10-Q of the Registrants.
10.16 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants,
which renewal was filed on February 14, 1995 as Exhibit 10.16 of the
Form 10-Q of the Registrants.
10.17 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants,
which renewal was filed on February 13, 1996 as Exhibit 10.17 of the
Form 10-Q of the Registrants.
10.18 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants,
which renewal was filed on November 13, 1996 as Exhibit 10.18 of the
Form 10-Q of the Registrants.
34
<PAGE> 35
10.19 Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Alton(Additional Consultant
Services Agreements listed on the Schedule).
27.1 Financial Data Schedule of Rosewood Care Center Capital Funding
Corporation.
27.2 Financial Data Schedule of Rosewood Care Center of Galesburg.
27.3 Financial Data Schedule of Rosewood Care Center of Swansea.
27.4 Financial Data Schedule of Rosewood Care Center of East Peoria.
27.5 Financial Data Schedule of Rosewood Care Center of Peoria.
27.6 Financial Data Schedule of Rosewood Care Center of Alton.
27.7 Financial Data Schedule of Rosewood Care Center of Moline.
27.8 Financial Data Schedule of Swansea Real Estate.
27.9 Financial Data Schedule of Galesburg Real Estate.
27.10 Financial Data Schedule of East Peoria Real Estate.
27.11 Financial Data Schedule of Peoria Real Estate.
27.12 Financial Data Schedule of Alton Real Estate.
27.13 Financial Data Schedule of Moline Real Estate.
99.1 Reference is made to the Amended and Restated License Agreement filed
September 28, 1994 as Exhibit 99.1 of Form 10-K of Registrants.
99.2 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Swansea filed on July 13, 1993 as Exhibit 99.2 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.3 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Alton filed on July 13, 1993 as Exhibit 99.3 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.4 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of East Peoria filed on July 13, 1993 as Exhibit 99.4 of the
Registration Statement of Registrants (No. 33-65948) declared effective
October 14, 1993.
99.5 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Peoria filed on July 13, 1993 as Exhibit 99.5 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
35
<PAGE> 36
99.6 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Galesburg filed on July 13, 1993 as Exhibit 99.6 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.7 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Moline filed on July 13, 1993 as Exhibit 99.7 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.8 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Swansea filed on July 13, 1993 as Exhibit 99.8 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.9 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Alton filed on July 13, 1993 as Exhibit 99.9 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.10 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
East Peoria filed on July 13, 1993 as Exhibit 99.10 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.11 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Peoria filed on July 13, 1993 as Exhibit 99.11 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.12 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Galesburg filed on July 13, 1993 as Exhibit 99.12 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.13 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Moline filed on July 13, 1993 as Exhibit 99.13 of the Registration
Statement of Registrants (No. 33-65948) declared effective October 14,
1993.
99.14 Reference is made to the Lease Agreement filed on September 28, 1994 as
Exhibit 99.14 of the Form 10-K of Registrants.
99.15 Reference is made to the Revised and Restated Grant and Declaration of
Easements filed on September 28, 1994 as Exhibit 99.15 of the Form 10-K
of Registrants.
99.16 Reference is made to the Managed Care Agreement between Rosewood Care
Center, Inc. of Moline, Heritage National Health Plan, Inc., John Deere
Family Health Plan and Deere and Company filed on May 15, 1995 as
Exhibit 99.16 of the Form 10-Q of Registrants.
99.17 Reference is made to the Skilled Nursing Facility Agreement between
Health Care Service Corporation and Rosewood Care Center, et al filed
on June 30, 1996 as Exhibit 99.17 of the Form 10-K of Registrants.
36
<PAGE> 37
SCHEDULE
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS
THE CORRESPONDING EXHIBIT IN THIS 10-Q.
10.19 Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Swansea
Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Moline
Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Galesburg
37
<PAGE> 1
EXHIBIT 10.19
38
<PAGE> 2
EXHIBIT 10.19
CONSULTANT SERVICES AGREEMENT
BETWEEN
ROSEWOOD THERAPY SERVICES, INC.
AND
ROSEWOOD CARE CENTER, INC. OF ALTON
THIS CONSULTANT SERVICES AGREEMENT is made and entered into this 1st day
of September, 1997, by and between ROSEWOOD THERAPY SERVICES, INC. ("RTS") and
ROSEWOOD CARE CENTER, INC. OF ALTON ("Rosewood").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Rosewood is a skilled nursing facility that provides
comprehensive rehabilitation and long term care services to persons needing
such services, including where medically indicated physical, occupational and
speech therapy Services (collectively "the Services");
WHEREAS, RTS employs and/or contracts with persons possessing the
requisite licenses, education and training to provide the Services to
patients of Rosewood, and
WHEREAS, Rosewood and RTS desire to enter into this Agreement for RTS
to provide the Services to residents of Rosewood according to the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which is hereby expressly acknowledged, the
parties covenant and agree as follows:
1. SERVICES OF RTS. RTS shall provide the Services set forth in
---------------
Exhibits A and B, copies of which is attached hereto and incorporated herein
by reference, with the same care and attention that is customarily provided
by RTS to all RTS's patients. RTS shall provide the Services in accordance
with all applicable clinical, legal and ethical standards and within the
standards of practice for quality care generally recognized within the
community in which the Services are provided.
2. NO DISCRIMINATION. RTS shall provide the Services without
-----------------
differentiation or discrimination because of race, color, sex, national
origin, religion, political affiliation, age, disability or method of
payment.
3. REIMBURSEMENT FOR SERVICES. Rosewood shall compensate RTS for
--------------------------
the Services provided under this Agreement as set forth on Exhibits A and B.
4. RECORDS RETENTION. RTS shall keep and maintain at the Rosewood
-----------------
facility such records of the Services rendered by RTS under this Agreement as
may be required by federal, state or local governmental agencies or by
Rosewood or its auditors. Pursuant to Section 1395x(V)(1)(1) of Title 42 of
the United States Code, with respect to any Services furnished under the
terms of the Agreement, the value or cost of which is ten thousand dollars
($10,000.00) or more over a twelve (12) month period, until the expiration of
four (4) Year(s) after the termination of this Agreement, RTS shall make
available, upon written request of the Secretary of the United Sates
Department of Health and Human Services, or upon request of the Comptroller
General of the United States General Accounting Office, or any of their duly
authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to
39
<PAGE> 3
certify the nature and extent of the costs of the Services provided by RTS under
this Agreement.
5. RELATIONSHIP OF PARTIES. The relationship between Rosewood and
-----------------------
RTS is solely that of two independent parties contracting with each other at
arm's length for the purpose of effectuating the provisions of this
Agreement. None of the provisions of this Agreement are intended to create,
nor shall be deemed or construed to create, any other relationship; neither
party, nor their respective agents, employees or representative shall be
deemed the agent, employee or representative of the other (except as
expressly provided herein), and no joint venture or partnership shall result
from this Agreement. Each party shall be solely responsible for and shall
comply with all state and federal laws pertaining to employment taxes, income
withholding, unemployment compensation contributions and other
employmentrelated statutes applicable to that party.
6. INSURANCE. Each party shall, at such party's sole cost and
---------
expense, maintain general and professional liability insurance in such
amounts as are necessary to insure the other party and such other party's
agents, servants and employees, against any claim for damages arising from or
as a result of the performance by the insuring party or the failure of the
insuring party to perform any of its obligations under this Agreement.
7. TERM OF AGREEMENT. This Agreement shall become effective on
-----------------
September 15, 1997, and terminate on June 30, 1998, unless terminated as set
forth in Section 8.
8. TERMINATION. Either party may terminate this Agreement with or
-----------
without cause at any time. Upon such termination, no party shall have any
further obligations hereunder, except for obligations accruing prior to the
date of termination.
9. GOVERNING LAW. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Illinois.
10. AMENDMENTS. This Agreement may be amended or modified only by a
----------
writing signed by both parties.
11. SEVERABILITY. This Agreement shall be construed to be in
------------
accordance with federal and state statutes and Medicare, Medicaid and
intermediary carrier rules, regulations, principles and interpretations
regarding reimbursement and rates charged to patients. If any provision of
this Agreement, or any portion thereof, is found to be invalid, illegal or
unenforceable, under any applicable statute or rule of law, then such
provision or portion thereof shall be deemed omitted, and the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
12. NO OBLIGATION TO THIRD PARTIES. None of the obligations and
------------------------------
duties of Rosewood or RTS under this Agreement shall in any or in any manner
be deemed to create any obligation of Rosewood or RTS to, or any rights in,
any person or entity not a party to this Agreement.
40
<PAGE> 4
IN WITNESS WHEREOF, The undersigned have executed or caused this
Agreement to be executed on the day and year first written above,
ROSEWOOD THERAPY ROSEWOOD CARE CENTER, INC. OF
SERVICES, INC. ALTON
BY: /s/ LARRY VANDER MATEN BY: /s/ LARRY VANDER MATEN
--------------------------- ----------------------------
Larry Vander Maten Larry Vander Maten
President President
41
<PAGE> 5
EXHIBIT A
---------
FEE SCHEDULE
------------
PHYSICAL THERAPY, OCCUPATIONAL THERAPY
--------------------------------------
AND SPEECH THERAPY SERVICES
---------------------------
Rosewood agrees to pay for services performed on one or more of the following
basis, as determined by agreement of the parties. Charges will Be based on
rates as set forth below:
PLEASE NOTE THAT THIS SCHEDULE COVERS ONLY PATIENTS WITH MEDICARE PART "A"
AND "B" COVERAGE FOR REHABILITATIVE THERAPY SERVICES.
1. PHYSICAL THERAPY SERVICES Service commencement date: September 15,
-------------------------
1997 Compensation:
Charges for physical therapy services shall not exceed the Medicare
Salary Equivalency Rate.
Services over fifteen (15) hours per Week (780 hours per year) at the
Medicare Salary Equivalency Rate* of
<TABLE>
<CAPTION>
Hourly Rate First Hour First Hour
----------- ---------- ----------
Travel Allowance Travel Expense
---------------- --------------
<S> <C> <C> <C>
Licensed Physical Therapist: $39.10 $19.55 $3.00
------ ------ -----
Physical Therapy Assistant: $29.33 $14.66 $3.00
------ ------ -----
Physical Therapy Aide: The prevailing Physical Rehab Aide rate
multiplied by 1.618.
Beginning date of fiscal year: JULY 1
------
</TABLE>
2. OCCUPATIONAL THERAPY SERVICES Service commencement date: September
----------------------------- ---------
15, 1997
--------
Compensation at rate of $60 per hour for an Occupational Therapist
---
Compensation at rate of $30 per hour for an Occupational Therapist
---
Assistant
3. SPEECH THERAPY AND AUDIOLOGY Service commencement date: September
---------------------------- ---------
15, 1997
--------
Compensation at rate of $60 per hour for a Speech Language
---
Pathologist
Rehab Coordinator's time shall be billed at their actual paid rate for the
hours worked multiplied by 1.618. *Medicare Salary Equivalency Rate(s) will be
increased according to Health Care Financing Administration guidelines at the
beginning of each new fiscal year of the facility and at such other times as may
be allowed by Medicare regulations. All other charges set forth above may be
changed by RTS at any time upon not less than thirty (30) days notice to
Rosewood. If Rosewood objects to such increase and RTS and Rosewood cannot
otherwise reach an agreement, notification of such increase shall constitute
"cause" for purposes of Paragraph 8 of the Agreement.
Rosewood Care Center, Inc. of Alton Rosewood Therapy Services, Inc.
By: /s/ Larry Vander Maten By: /s/ Larry Vander Maten
--------------------------------- ----------------------------
Title: President Title: President
------------------------------ -------------------------
Date: 9-1-97 Date: 9-1-97
------------------------------- -------------------------
42
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements at September 30, 1997 for the period ended September 30,
1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000909110
<NAME> ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 262
<SECURITIES> 0
<RECEIVABLES> 27,201
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 262
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,463
<CURRENT-LIABILITIES> 165
<BONDS> 27,297
<COMMON> 1
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 27,463
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909114
<NAME> ROSEWOOD CARE CENTER OF GALESBURG
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909113
<NAME> ROSEWOOD CARE CENTER OF SWANSEA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909115
<NAME> ROSEWOOD CARE CENTER OF EAST PEORIA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909116
<NAME> ROSEWOOD CARE CENTER OF PEORIA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909117
<NAME> ROSEWOOD CARE CENTER OF ALTON
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909118
<NAME> ROSEWOOD CARE CENTER OF MOLINE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909120
<NAME> SWANSEA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909121
<NAME> GALESBURG REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909122
<NAME> EAST PEORIA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909123
<NAME> PEORIA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909124
<NAME> ALTON REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at September 30, 1997 for the period ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909125
<NAME> MOLINE REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,304
<SECURITIES> 0
<RECEIVABLES> 4,103
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 7,697
<PP&E> 24,964
<DEPRECIATION> 7,604
<TOTAL-ASSETS> 32,682
<CURRENT-LIABILITIES> 5,467
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,911
<TOTAL-LIABILITY-AND-EQUITY> 32,682
<SALES> 7,455
<TOTAL-REVENUES> 7,690
<CGS> 0
<TOTAL-COSTS> 6,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 914
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> 13
<EPS-DILUTED> 0
</TABLE>
