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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 December 31, 1998
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,
Registrants' Form 10-K filed September 26, 1996, Registrants' Form 10-Q
filed November 13, 1996, Registrants' Form 10-Q filed November 12, 1997,
Registrants' Form 10-Q filed February 11, 1998 and Registrants' Form 10-
Q filed November 12, 1998.
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Index to Exhibits is on Page 39.
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 4
Statement of Operations 5
Statement of Cash Flows 6
Notes to Financial Statement 7
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 8
Combined Statement of Operations 10
Combined Statement of Cash Flows 11
Notes to Combined Financial Statements 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Part II Other Information
- --------------------------
Item 1. Legal Proceedings 23
Item 2. Changes in Securities 23
Item 3. Defaults Upon Senior Securities 24
Item 4. Submission of Matters to a Vote of Security Holders 24
Item 5. Other Information 24
Item 6. Exhibits and Reports on Form 8-K 25
Index to Exhibits 39
- -----------------
Signatures 26
- ----------
3
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PART I. Financial Information
---------------------
Item 1. Financial Statements
<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
<CAPTION>
June 30, December 31,
Assets 1998 1998
------ -------- ------------
<S> <C> <C>
Cash $ 262 $ 263
Mortgage notes receivable, Rosewood Companies 25,561 24,188
------- -------
$25,823 $24,451
======= =======
Liabilities and Stockholders' Equity
------------------------------------
First mortgage redeemable bonds $25,666 $24,302
Accrued interest 156 148
Stockholders' equity:
Common stock, $1 par value
Authorized - 30,000 shares
Issued and outstanding - 500 shares,
at issue price 1 1
Retained earnings - -
------- -------
$25,823 $24,451
======= =======
The accompanying notes are an integral part of this financial statement.
</TABLE>
4
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<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
---------------- ----------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income $487 $451 $983 $912
Interest expense 487 451 $983 $912
---- ---- ---- ----
Net Income $ 0 $ 0 $ 0 $ 0
==== ==== ==== ====
The accompanying notes are an integral part of this financial statement.
</TABLE>
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<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
---------------- ----------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income $ 0 $ 0 $ 0 $ 0
Decrease in accrued interest receivable - - 167 0
Increase (decrease) in accrued interest (6) (6) (8) (8)
------- ------- ------- -------
Net cash provided by operating activities (6) (6) 159 (8)
------- ------- ------- -------
Cash flow from investing activities:
Collections on notes receivable 1,015 1,052 1,395 1,373
------- ------- ------- -------
Net cash used by investing activities 1,015 1,052 1,395 1,373
------- ------- ------- -------
Cash flow from financing operations:
Reduction of redeemable bonds (1,009) (1,045) (1,293) (1,364)
------- ------- ------- -------
Net cash provided by financing (1,009) (1,045) (1,293) (1,364)
------- ------- ------- -------
Net increase (decrease) in cash 0 1 261 1
Cash, beginning 262 262 1 262
------- ------- ------- -------
Cash, ending 262 263 262 263
======= ======= ======= =======
Cash paid for interest $ 487 $ 451 $ 983 $ 912
======= ======= ======= =======
The accompanying notes are an integral part of this financial statement.
</TABLE>
6
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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, 1998, and
December 31, 1998, and the results of its operations and its cash
flows for the three month and the six month periods ended December
31, 1997 and 1998. Such adjustments were of a normal recurring
nature.
The results of operations for the six months ended December 31,
1997, and 1998 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, $260,000 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.
7
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<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
June 30, December 31,
Assets 1998 1998
------ -------- ------------
<S> <C> <C>
Current assets:
Cash $ 2,866 $ 2,082
Accounts receivable - residents, net of allowance
for doubtful accounts of $168 and $169,
respectively 1,352 1,586
Accounts receivable - third party payor 2,766 2,411
Due from affiliates 327 -0-
Interest receivable 282 243
Prepaid insurance and other prepaids 44 91
Deferred income tax benefits 52 52
------- -------
Total current assets 7,689 6,465
------- -------
Property, plant and equipment:
Land 943 943
Site improvements 2,140 2,143
Building 17,830 17,830
Equipment 3,962 4,060
Leasehold improvements 389 456
------- -------
25,264 25,432
Less accumulated depreciation 8,282 8,726
------- -------
16,982 16,706
------- -------
Other assets:
Notes receivable from Rosewood Care Center
Holding Company 6,910 5,830
Amortizable Costs, Net 840 778
------- -------
7,750 6,608
------- -------
$32,421 $29,779
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
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, December 31,
Liabilities and Stockholders' Equity 1998 1998
------------------------------------ -------- ------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 2,071 $ 2,147
Accounts payable - trade 2,144 988
Accrued expenses:
Salaries and payroll taxes 576 627
Vacation and employee fringes 257 201
Real estate taxes 471 433
Accrued interest -0- -0-
Accrued Rent 43 45
Management fees - affiliate 599 585
Income taxes 4 10
Dividends payable 801 936
------- -------
Total current liabilities 6,966 5,972
------- -------
Long-term debt:
Notes payable - Rosewood Care Center
Capital Funding Corporation 25,561 24,188
------- -------
25,561 24,188
Less current maturities 2,071 2,147
------- -------
23,490 22,041
------- -------
Stockholders' equity:
Common stock 65 65
Paid-in capital 481 481
Retained earnings 1,419 1,220
------- -------
1,965 1,766
------- -------
$32,421 $29,779
======= =======
The accompanying notes are in integral part of these financial statements.
</TABLE>
9<PAGE>
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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 Six Months
Ended Ended
December 31, December 31,
---------------- ------------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Patient service revenue:
Private $4,824 $4,958 $ 9,654 $ 9,872
Medicare 2,444 2.924 4,695 5,452
Medicaid 376 388 750 812
Other patient revenues, net of expenses 78 43 144 88
------ ------ ------- -------
7,722 8,313 15,243 16,224
------ ------ ------- -------
Operating expenses:
Facility expenses:
Administrative expense 270 342 523 618
Employee fringe benefits 510 551 983 1,103
Dietary 506 543 979 1,070
Nursing 1,890 2,271 3,712 4,490
Ancillary services 1,443 1,180 2,854 2,221
Plant utilities and maintenance 284 291 597 645
Housekeeping and laundry 254 298 491 600
Social services and activities 188 143 358 330
------ ------ ------- -------
5,345 5,619 10,497 11,077
------ ------ ------- -------
Income after facility expenses 2,377 2,694 4,746 5,147
------ ------ ------- -------
Nonfacility expenses:
Real estate taxes 139 157 278 297
Rent -0- 209 -0- 320
Base management fees 198 231 396 445
Illinois Medicaid assessments 98 115 197 222
Depreciation and amortization 266 251 532 506
------ ------ ------- -------
701 963 1,403 1,790
------ ------ ------- -------
Income before incentives 1,676 1,731 3,343 3,357
------ ------ ------- -------
Incentive management fees (471) (479) (897) (838)
Officers' bonuses - - - -
Income from operations 1,205 1,252 2,446 2,519
Other income (expense):
Interest income 168 148 337 295
Interest expense (487) (452) (983) (913)
------ ------ ------- -------
(319) (304) (646) (618)
------ ------ ------- -------
Income before income taxes 886 948 1,800 1,901
Income tax expense (71) (84) (154) (155)
------ ------ ------- -------
Net income 815 864 1,646 1,746
Retained earnings, beginning 1,430 1,293 1,388 1,419
Dividends declared (823) (937) (1,612) (1,945)
------ ------ ------- -------
Retained earnings, ending $1,422 $1,220 $ 1,422 $ 1,220
====== ====== ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
10<PAGE>
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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 Six Months
Ended Ended
December 31, December 31,
----------------- -------------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income $ 815 $ 865 $ 1,646 $ 1,747
Adjustments:
Depreciation 234 220 468 444
Amortization 32 30 64 61
Decrease (increase) in:
Accounts receivable - residents (26) (160) (288) (234)
Accounts receivable - third party payors (92) 1,094 878 355
Other receivables and prepaids (303) 217 (443) 319
Increase (decrease) in:
Accounts payable - trade (176) (1,188) (107) (1,156)
Accrued salaries, taxes and fringes 189 222 71 (5)
Accrued real estate taxes 90 91 (59) (38)
Accrued management fees 45 221 206 (14)
Other payables and accruals (85) (63) (122) 7
------- ------- ------- -------
Net cash provided by operating activities 723 1,549 2,314 1,486
------- ------- ------- -------
Cash flow from investing activities:
Purchase of property and equipment (36) (68) (62) (168)
Loans and deposits with affiliate 475 1,910 817 1,080
------- ------- ------- -------
Net cash (provided) by investing activities 439 1,842 755 912
------- ------- ------- -------
Cash flow from financing activities:
Reduction of long-term debt (1,015) (1,052) (1,395) (1,373)
Dividends paid (789) (1,008) (1,332) (1,809)
------- ------- ------- -------
Net cash (used) by financing activities (1,804) (2,060) (2,727) (3,182)
------- ------- ------- -------
Net increase (decrease) in cash (642) (1,331) 342 (784)
Cash, beginning 3,304 751 2,320 2,866
------- ------- ------- -------
Cash, ending $ 2,662 $ 2,082 $ 2,662 $ 2,082
======= ======= ======= =======
Cash paid for:
Interest $ 564 $ 451 $ 1,150 $ 912
======= ======= ======= =======
Income taxes $ 104 $ 127 $ 154 $ 107
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
11
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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, 1998 and
December 31, 1998, and the results of their operations and their
cash flows for the three and six month periods ended December 31,
1997 and 1998. Such adjustments were of a normal recurring
nature.
The results of operations for the six month periods ended December
31, 1997 and 1998 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, and
employment claims. 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 from October to December
2000.
12
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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 $1,945,100 were declared during the six
months ended December 31, 1998.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
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
Three Months Ended December 31, 1998 Compared With
Three Months Ended December 31, 1997
Forward Looking Statements
--------------------------
This quarterly report contains certain "forward looking"
statements, as that term is defined by the Private Securities Litigation
Reform Act of 1995. All statements regarding expected future financial
performance of the Companies, including ability to service debt
obligations, response to changes in government regulations, and similar
statements including without limitation, those containing words such as
"believes," "anticipates," "expects," and other similar expressions are
forward looking statements. Forward looking statements involve risks
and uncertainties, both known and unknown, that may cause the Companies'
actual performance in future periods to differ materially from those
projected or contemplated in the forward looking statements. Actual
results could differ materially from those in the forward looking
statements as a result of, but not limited to, the following factors:
national and local economic conditions and occupancy levels, especially
with respect to newly added beds; changes in Medicare and Medicaid
reimbursement policies and other government regulation affecting
healthcare; the ability to attract and retain qualified employees; Year
2000 problems, both within the Companies and at the operations of
suppliers and third party payors, especially the United States
government.
Overview
--------
The Companies' operating strategy focuses on the average daily
rate as well as on occupancy levels in order to maximize revenues from
the facilities. The Companies principally market their services to
private paying patients. Revenues from this market continued to grow in
1998. However, the underperformance of the facility in East Peoria,
where occupancy has decreased appreciably due to administrative turnover
and operational difficulties, will continue into the next fiscal year.
Marketing
---------
The Companies' attempt to increase admissions through marketing
programs. The Companies' marketing programs are executed under the
direction of a full time marketing staff member employed by HSM
Management. Marketing is done through direct mail, community programs
and television. Although the Companies provide
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long-term nursing home care, their marketing strategy emphasizes short-
term nursing home care for rehabilitative purposes. The Companies
believe this emphasis has an appeal to a much larger private payor
market than exists for strictly long-term care oriented nursing homes.
Governmental Regulation and Reimbursement
-----------------------------------------
The Companies' nursing facilities are required to comply with
various federal and state health care regulations and statutes. The
Illinois Department of Public Health ("IDPH") and other agencies with
whom the IDPH contracts to assist it in its reviews and investigations,
continually assess the facilities for compliance. Compliance with the state
licensing regulations is a prerequisite for the operation of the
facilities and for participation in government sponsored health care
programs such as Medicaid and Medicare. Any of these on-going
investigations, if determined adversely to the Companies, could have
an impact on the continued participation of one or more of the
facilities in the Medicare and Medicare programs.
All six facilities participate in the federally administered
Medicare and Medicaid programs. Medicare is a health insurance program
for the aged and certain other disabled individuals, operated by the
federal government and administered by an insurance intermediary. As a
result of the Companies' emphasis on short-term rehabilitative nursing
care, which is covered by Medicare, the percentage of patient service
revenue attributable to Medicare continues to be a significant sector of
the Companies' total revenue.
Health care reform continues to be a high priority concern at both
the Federal and State government levels. In August 1997, the Balanced
Budget Act of 1997 was signed into law. Included in the law are program
changes directed at balancing the federal budget. The legislation
changes Medicare and Medicaid policy in a number of ways as follows:
a) Development of new Medicare and Medicaid health plan options;
b) Creation of additional safeguards designed to prevent fraud
and abuse;
c) A 10% reduction in Part B therapy costs for the period
January 1, 1998 through July 1, 1998. As of July 1, 1998, reimbursement
for services is based on fee schedules established by the United States
Department of Health and Human Services Health Care Financing
Administration ("HCFA");
d) Phase-in of a Medicare Prospective Payment System ("PPS")
for skilled nursing facilities effective July 1, 1998; and
e) Limitations in Part B therapy charges per beneficiary per
year.
The new legislation will force skilled nursing facilities to
contain costs as well as place further focus on patient outcomes. At
this time, the Companies have not completed their assessment of the full
impact of the changes due to the uncertainty of the interpretation of
the legislation by HCFA and, therefore, no assurances can be made as to
the impact of this legislation or any future health care legislation on
the Companies' financial position, results of operations or cash flows.
However, future and current federal legislative changes may have a
negative impact on the operations of the Companies.
PPS was effective for all of the Companies on July 1, 1998. This
has changed the manner in which the facilities are paid for inpatient
services provided to Medicare beneficiaries.
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PPS will have a four year phase-in period. For the fiscal year
ending June 30, 1999, the Medicare reimbursement rate will be based 75%
on the June 30, 1995 facility-specific Medicare costs, as adjusted for
inflation, and 25% will be federally determined based on the acuity
level of the Medicare patients. For the fiscal year ending June 30,
2000, the rate will be based 50% on the 1995 facility-specific costs and
50% on the federally determined acuity rate. For the fiscal year ending
June 30, 2001, the Medicare reimbursement will be based 25% on the 1995
facility-specific costs and 75% on the federally determined acuity rate.
For the fiscal year ending June 30, 2002, the Medicare reimbursement
rate will be based entirely on the federally determined rate based on
the acuity level of the patients.
The Companies are analyzing their 1995 facility rates and the
acuity level of the Medicare patients in the facilities. Based on this
analysis, the Companies are attempting to implement changes to lower the
cost of providing services to their Medicare residents. Should the
Companies be unable to execute the changes to reduce costs, PPS could
have a material negative effect on the Companies' financial position and
results of operations.
Under reimbursement regulations effective through June 30, 1998,
funds received under Medicare programs are subject to audit by the third
party payor responsible for administering the facility account. This
results either in amounts due to or from the facilities based on the
actual costs of participating in the Medicare program during the year.
Past audits of the Companies' reimbursements through the fiscal year
ending June 30, 1996, have not resulted in any material adjustments for
any of the Companies that were not otherwise indemnified for by private
vendors to the Companies.
Year 2000
- ---------
Many computers currently in use in business and government use
only two digits, rather than four, to identify the year where
information about the date is entered into or automatically added to
computer files. These computers automatically add the "19" prefix to
the last two digits the computer reads for the year when date
information becomes part of a computer file. Thus, when "2000" is
entered, the computer will only read the "00" and interpret the date as
"1900", rather than "2000". This is becoming known as the Year 2000
("Y2K") problem. This issue is more of a problem for systems employing
large mainframe computers and other similar or older systems.
Additional problems come from microprocessors embedded in machinery.
The Companies do not utilize mainframes and have updated their computer
systems recently, including accounting and clinical software and
hardware. The Companies are in the process of upgrading all of the
Companies computers to insure microprocessor compatibility.
Investigation of readiness of all mechanical systems and other
equipment in the Companies' facilities has begun and equipment upgrades
and readiness are scheduled to continue over the course of the next
year. The Companies believe their internal accounting and patient
management systems will not be materially disrupted or adversely
affected by the Y2K problem because of software upgrades. Internal
software and hardware systems have undergone extensive upgrading in the
last two years, in part to address the Y2K issues. The Companies will
not be making any significant expenditures for computer equipment or
software upgrades, since the cost is being paid for by the affiliated
management company.
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The Companies have had communications with their principal
suppliers to determine the extent to which the Companies' systems and
operations are vulnerable to third party failure to remedy their own
year 2000 issues. There can be no assurance that the systems of other
companies or those of the State and Federal governments, on which the
Companies' operations rely, will be timely converted and will not have
an adverse effect on the Companies' operations.
The Companies receive substantial payments from insurance
companies and Federal and State agencies. The Y2K readiness of
individual insurance companies is not uniform. The Federal government
has reported that it is struggling with the Y2K problem. Accordingly,
the Companies can not make any assurances that these third party payors
will be in compliance by January 1, 2000, and if they are not, there
would be a significant impact on the Companies' cash flow. Since under
the terms of the bond documents, the Companies are not allowed
additional borrowings, they have not established any lines of credit and
currently have no other contingency plans in place to normalize cash
flow in the event of a significant disruption of payments from third
party payors.
The Companies will continue to use internal and external sources
to insure that the operations of the Companies are not disrupted.
However, there can be no assurance that the goals will be achieved and
actual results could be materially different from those anticipated.
Factors that may cause problems include, but are not limited to,
availability and cost of personnel trained in this area, the ability to
locate and correct all computer codes, third party readiness and other
uncertainties.
Operating Results
-----------------
Net revenues increased to $8,313,000 for the three months ended
December 31, 1998 from $7,722,000 for the three months ended December 31
1997, an increase of $591,000 or 7.6%. Private pay revenues increased
$134,000 from $4,824,000 for the three months ended December 31, 1997 to
$4,958,000 for the three months ended December 31, 1998. Revenue
generated from ancillary services increased $72,000 while revenue from
room charges increased $62,000 when compared to the same three month
period last year. The average room rate has increased from $114 per day
for the three month period ended December 31, 1997 to $117 per day for
the current three month period. Private census has decreased from
40,576 patient days for 1997 to 39,838 patient days for the current
three month period ended December 31, 1998.
Net revenues for Medicare increased from $2,444,000 for the three
months ended December 31, 1997 to $2,924,000 for the three months ended
December 31, 1998, an increase of $480,000 or 19.6%. The Medicare
census has increased to 11,458 patient days from 9,230 patient days for
the same period last year. The average Medicare reimbursement rate has
decreased approximately $10 per patient day when compared to the same
three month period last year. The decrease in the reimbursement rate is
the direct result of the implementation of the new PPS reimbursement
program previously discussed. The Companies are closely monitoring the
cost associated with providing service to Medicare qualified residents
in an effort to offset any decrease in the Medicare reimbursement
program. The Companies have reduced the cost of drugs provided to the
Medicare residents from an average of $40 per patient day for the three
month period ended December 31,
17
<PAGE>
<PAGE>
1997 to an average of $11 per patient day for the three month period
ended December 31, 1998. In addition to the decrease in drug costs, the
Companies were able to decrease the average cost of therapy by $11 per
patient day.
Medicaid revenue has increased from $376,000 to $388,000 when
compared to the same three month period last year. The facilities have
received an increase in the Medicaid reimbursement rate of approximately
3%, effective July 1, 1998. The Medicaid census has decreased from 5,536
patient days for the three months ended December 31, 1997 to 5,410
patient days for the three months ended December 31, 1998.
The facilities have an average occupancy rate of 76.1% for the
three months ended December 31, 1998, compared to 86.8% for the same
period last year. The East Peoria facility is the only facility which
continues to have an occupancy level significantly lower than the other
five locations. Management is of the opinion that this trend will
continue. The Alton facility reflects a decline in occupancy level as a
result of a 60 bed addition which was opened during January 1998. The
Galesburg facility reflects a decline in occupancy level as a result of
a 60 bed addition that was opened October 9, 1998. Due to uncertainties
presented by the effects of PPS on occupancy and current market
conditions, management is unable to forecast when occupancy at the Alton
and Galesburg facilities will return to pre-expansion levels. The
occupancy level of the facilities for the three months ended December
31, 1998 and 1997 are as follows:
DECEMBER 31
1998 1997
Swansea 98.8 98.7
Galesburg 55.3 83.6
Moline 92.3 94.2
Alton 79.9 98.8
Peoria 81.2 92.3
East Peoria 62.7 62.3
AVERAGE 76.1 88.2
Facility operating expenses increased to $5,619,000 (or $99.09 per
patient day) for the current three month period ended December 31, 1998,
from $5,345,000 (or $96.58 per patient day) for the three months ended
December 31, 1997.
Administrative expenses have increased $72,000 when compared to
the same three month period last year. The majority of the increase can
be accounted for by the increase in wages, telephone and new employee
training.
The cost of employee benefits has increased $41,000 from $510,000
for the three months ended December 31, 1997, to $551,000 for the three
months ended December 31, 1998. The majority of the increase can be
accounted for by an increase in vacation and holiday pay of $8,500, a
$24,000 increase in payroll taxes and an $8,500 increase in the cost of
health insurance and workers' compensation insurance.
18
<PAGE>
<PAGE>
Dietary expenses increased approximately $37,000 when compared to
the same three month period last year which can be accounted for by
increased labor costs.
Nursing costs increased from $1,890,000 for the three months ended
December 31, 1997 to $2,271,000 for the three months ended December 31,
1998, an increase of $381,000 or 20.1%. Wages have increased $338,000,
while the cost of supplies has increased $43,000. Included in the
increase in wages is approximately $110,000 resulting from additional
staff hired to monitor effectively the reporting requirements under the
new PPS reimbursement program for Medicare residents previously
discussed. Labor costs continue to increase due to the increased
pressure on the availability of qualified personnel. Management is of
the opinion that this employment trend will continue as long as the
economy remains strong. The Companies continue to monitor labor cost
closely since it accounts for the major portion of the operating cost of
the facilities. The Companies will attempt to adjust daily room rates
to offset the increase in costs, while at the same time remaining
competitive in the market place.
Ancillary service costs have decreased approximately $263,000 when
compared to the same three month period last year. The decrease in
costs is the direct result of the reduction in therapy and drug costs
brought about by reduction in ancillary services provided to the
Medicare qualified residents under the new PPS guidelines.
Plant utilities and maintenance have increased $7,000 when
compared to the same three month period last year. Wages have decreased
approximately $5,200, while the cost of utilities has increased $16,000
with the remainder of the decrease accounted for by the decrease in
repairs. The utility increase is the direct result of the 60 bed
additions to the Alton and Galesburg facilities previously discussed.
Housekeeping and laundry costs have increased $44,000 when
compared to the same three month period last year. All of the increase
can be accounted for by the increase in the cost of labor for both
departments.
Social Services and Activities costs have decreased $45,000 when
compared to the same three month period last year and can be accounted
for by the decrease in labor for these departments.
Rent, base management fees, and the Illinois Medicaid Assessments
have increased when compared to the same period last year as a result of
the opening of the 60 bed additions to the Alton and Galesburg
facilities. In each case rent is paid to an affiliated company, Alton
Real Estate II, L.L.C. and Galesburg Real Estate II, L.L.C.,
respectively, which companies are not parties to the bond documents.
Incentive management fees have increased $8,000 when compared to
the same period last year.
Interest income has decreased from $168,000 for in the three
months ended December 31, 1997 to $148,000 for the three months ended
December 31, 1998 as a result of the decrease in the notes receivable
from the related party Rosewood Care Center Holding Co.
19
<PAGE>
<PAGE>
Interest expense decreased $35,000 when compared to the same three
month period last year. The decrease is the result of the decrease in
the long term debt from $26,186,000 on December 31, 1997 to $24,188,000
as of December 31, 1998.
Six Months Ended December 31, 1998 Compared With
Six Months Ended December 31, 1997
Operating Results
-----------------
Net revenues have increased to $16,224,000 for the six months
ended December 31, 1998 from $15,243,000 for the six months ended
December 31, 1997, an increase of $981,000 or 6.4%. Private revenues
have increased $218,000 from $9,654,000 for the six months ended
December 31, 1997, to $9,872,000 for the six months ended December 31,
1998. Revenue generated from ancillary services increased $97,000,
while revenue from room charges increased $121,000 when compared to the
same period last year. The average private room rates for the current
period aggregated $116 per patient day compared to $114 per patient day
for the same period last year. Private census has decreased from 80,598
patient days for the six months ended December 31, 1997, to 79,809
patient days for the period ended December 31, 1998.
Net revenues for Medicare have increased from $4,695,000 for the
six months ended December 31, 1997 to $5,452,000 for the six months
ended December 31, 1998, an increase of $757,000 or 16.1%. The Medicare
census has increased from 17,846 patient days for the six months ended
December 31, 1997 to 21,703 patient days for the six months ended
December 31, 1998. The average Medicare reimbursement rate has decreased
approximately $19 per patient day when compared to the same six month
period last year. The decrease in the reimbursement rate is the direct
result of the implementation of the new PPS reimbursement program
previously discussed. The Companies are closely monitoring the cost
associated with providing service to Medicare qualified residents in an
effort to offset any decrease in the Medicare reimbursement program.
The Companies have reduced the cost of drugs provided to the Medicare
residents from an average of $37 per patient day for the six month
period ended December 31, 1997 to an average of $12 per patient day for
the six month period ended December 31, 1998. In addition to the
decrease in drug costs, the Companies were able to decrease the average
cost of therapy by $22 per patient day.
Medicaid revenue has increased from $750,000 to $812,000 when
compared to the same period last year. The facilities have received an
increase in the Medicaid reimbursement rate of approximately 3%,
effective July 1, 1998. The Medicaid census has increased from 11,027
patient days for the six months ended December 31, 1997 to 11,337
patient days for the six months ended December 31, 1998.
The facilities have an average occupancy rate of 78.7% for the
current six month period, compared to 87.2% for the same period last
year. The East Peoria facility is the only facility which continues to
have an occupancy level significantly lower than the other five
locations. Management is of the opinion that this trend will continue.
The Alton facility reflects a decline in occupancy
20
<PAGE>
<PAGE>
level as a result of a 60 bed addition which was opened during January
1998. The Galesburg facility reflects a decline in occupancy level as a
result of a 60 bed addition that was opened October 9, 1998. Due to
uncertainties presented by the effects of PPS on occupancy and current
market conditions, management is unable to forecast when occupancy at
the Alton and Galesburg facilities will return to pre-expansion levels.
The occupancy level of the facilities for the six months ended December
31, 1998 and 1997 are as follows:
DECEMBER 31
1998 1997
Swansea 97.2 98.7
Galesburg 65.1 80.9
Moline 93.2 94.3
Alton 80.2 97.5
Peoria 81.4 91.0
East Peoria 59.6 62.2
AVERAGE 78.7 87.2
Facility operating expenses increased to $11,077,000 (or $98.16
per patient day) for the current six month period ended December 31,
1998, from $10,497,000 (or $95.89 per patient day) for the six months
ended December 31, 1997.
Administrative expenses have increased $95,000 when compared to
the same period last year. The majority of the increase can be
accounted for by the increase in wages, telephone and advertising for
new employees.
The cost of employee benefits has increased $120,000 when compared
to the same six month period last year. The majority of the increase
can be accounted for by a $27,000 increase in sick, holiday and vacation
pay and a $61,000 increase in payroll taxes. The balance of the
increase was the result of an increase in the cost of workers'
compensation insurance.
Dietary expenses have increased approximately $91,000 when
compared to the same period last year. The increase in labor costs
aggregated $58,000, with the balance of the increase caused by the
increase in food costs.
Nursing costs increased from $3,712,000 for the six months ended
December 31, 1997 to $4,490,000 for the six months ended December 31,
1998, an increase of $778,000 or 20.9%. All of the increase can be
accounted for by the increase in wages. Included in the increase in
wages is approximately $200,000 resulting from additional staff hired to
monitor effectively the reporting requirements under the new PPS
reimbursement program for Medicare residents previously discussed.
Labor costs continue to increase due to the increased pressure on the
availability of qualified personnel. Management is of the opinion that
this employment trend will continue as long as the economy remains
strong. The Companies continue to monitor labor cost closely since it
accounts for the major portion of the operating cost of the facilities.
The Companies will attempt to adjust daily room rates to offset the
increase in costs, while at the same time remaining competitive in the
market place.
21
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<PAGE>
Ancillary service costs have decreased approximately $633,000 when
compared to the same six month period last year. The decrease in costs
is the direct result of the reduction in therapy and drug costs brought
about by reduction in ancillary services provided to the Medicare
qualified residents under the new PPS guidelines.
Plant utilities and maintenance have increased $48,000 when
compared to the same six month period last year. The cost of utilities
has increased $42,000, with the remainder of the increase a result of
the increase in the cost of disposing of medical waste. The utility
increase is the direct result of the 60 bed additions to the Alton and
Galesburg facilities previously discussed.
Housekeeping and laundry costs increased $109,000, compared to the
same six month period last year. Labor costs increased $99,000, while
the cost of supplies increased $10,000 when compared to the same period
last year.
Social Services and Activities costs have decreased $28,000 when
compared to the same period last year. The decrease is the result of
the decrease in labor costs for these departments.
Rent, base management fees, and the Illinois Medicaid Assessments
have increased when compared to the same period last year as a result of
the opening of the 60 bed additions to the Alton and Galesburg
facilities. In each case rent is paid to an affiliated company, Alton
Real Estate II, L.L.C. and Galesburg Real Estate II, L.L.C.,
respectively, which companies are not parties to the bond documents.
Incentive management fees have decreased when compared to the
same period last year because of losses generated by the low occupancy
at the East Peoria facility which was previously discussed.
Interest income has decreased $42,000 when compared to the same
period last year as a result of the decrease in the notes receivable
outstanding during the six month period from the affiliated company,
Rosewood Care Center Holding Co.
Interest expense decreased $70,000 when compared to the same
period last year. The decrease is the result of the decrease in the
long term debt from $26,186,000 on December 31, 1997 to $24,188,000 as
of December 31, 1998.
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 six months ended December 31, 1998 and 1997, on
an annualized basis.
Liquidity and Capital Resources
-------------------------------
As of December 31, 1998, the Companies had approximately
$2,082,000 in cash and cash equivalents and net working capital of
approximately $493,000. There was a net decrease in cash of $784,000
since June 30, 1998. For the six
22
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<PAGE>
months ended December 31, 1998, net cash provided by operations was
$1,486,000. Net cash from investing activities was $912,000 of which
$1,080,000 was received from Rosewood Care Center Holding Co. as payment
on notes due from the affiliated company and $168,000 was used by the
Companies for the purchase of personal property and equipment used in
the operations of the facilities. The maturity date of the notes due
from Rosewood Care Center Holding Co. was extended from December 31,
1999 to December 31, 2000. Net cash used in financing activities
aggregated $3,182,000 of which $1,373,000 was used to retire debt and
$1,809,000 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
$1,586,000 as of December 31, 1998, compared to $1,352,000 as of June
30, 1998. Accounts receivable from third party payers decreased to
$2,411,000 as of December 31, 1998, compared to $2,766,000 as of June
30, 1998. $118,000 of this amount is due from Medicare for unsettled
cost reports through December 31, 1998 which are subject to audit.
The Medicare program continues to face intense scrutiny and
significant cutbacks. As previously noted, budget legislation passed by
Congress in 1997, enacted a new Medicare prospective payment system.
This new PPS is intended to help the Medicare program achieve targeted
reductions in spending growth of approximately $9.2 billion for skilled
nursing facilities over the next five years. Effective July 1, 1998 all
of the facilities are subject to the new PPS payment system previously
discussed. The Companies are analyzing their 1995 facility rates and the
acuity level of the Medicare patients in the facilities. Based on this
analysis, the Companies hope to implement changes to lower the cost of
providing services to their Medicare residents. Should the Companies be
unable to execute the changes to reduce costs, PPS could have a material
negative effect on the Companies' financial position and results of
operations.
The Companies had no open lines of credit with any financial
institution as of December 31, 1998.
The Companies continue to monitor legislative and other health
care developments and will attempt to structure contractual arrangements
to minimize the impact of reductions in government payment programs.
However, changes in the policies of Medicare and Medicaid as a result of
budget cuts by federal and state governments or other legislative
actions could have a significant adverse effect on the results of
operations and cash flow of the Companies.
Part II Other Information
- --------------------------
Item 1. Legal Proceedings.
There were no material developments with respect to legal
proceedings during the quarter ended December 31, 1998.
Item 2. Changes in Securities.
Not applicable.
23<PAGE>
<PAGE>
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
The Sun Bank Letter of Credit funding the Debt Service Reserve
Fund expired December 6, 1998 and was renewed for another one year term,
expiring December 6, 1999.
The Companies contract with a related company, Rosewood Therapy
Services, Inc. to provide speech, physical and occupational therapy
services to the residents of the facilities. Therapy services are
provided to the facilities at competitive market rates, on terms and
conditions as would be entered into with unrelated therapy companies.
Amounts paid by the Companies to Rosewood Therapy Services during the
first quarter of the 1999 fiscal year, aggregated $658,000.
The 60 bed expansion wing at the Alton Rosewood Care Center opened
January 22, 1998.
The 60 bed expansion wing at the Galesburg Rosewood Care Center
was licensed by the State of Illinois and was opened on October 9, 1998.
24
<PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) See Index to Exhibits on Page 39.
(b) Reports on Form 8-K.
None.
25
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal
Financial and Accounting Officer)
26
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
27
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer
28
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
29
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
30
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
31
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
32
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
--------------------------------
Larry Vander Maten
President and Director
(Principal and Executive Officer
and Principal Financial
and Accounting Officer
33
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
34
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
35
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
----------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
36
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
---------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
37
<PAGE>
<PAGE>
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: February 11, 1999 By: /s/ Larry Vander Maten
---------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
38
<PAGE>
<PAGE>
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
39
<PAGE>
<PAGE>
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.
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.
40
<PAGE>
<PAGE>
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.
10.19 Reference is made to the Consultant Services Agreement between
Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of
Alton (Additional Consultant Services Agreements listed on the
Schedule), which was filed on November 12, 1997 as Exhibit 10.19
of the Form 10-Q of the Registrants.
10.20 Reference is made to 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 11, 1998 as
Exhibit 10.20 of the Form 10-Q of the Registrants.
10.21 Reference is made to the Consultant Services Agreement between
Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of
Alton (Revised) filed on November 12, 1998 as Exhibit 10.21 of
the Form 10-Q of the Registrants (Additional Consultant Services
Agreements listed on the Schedule).
10.22 Renewal of the Letter of Credit filed on February 11, 1994 as
Exhibit 10.15 on the Form 10-Q of the Registrants.
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.
41
<PAGE>
<PAGE>
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.
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.
42
<PAGE>
<PAGE>
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 September 26, 1996 as Exhibit 99.17 of the Form
10-K of the Registrants.
43
<PAGE>
<PAGE>
SCHEDULE
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT
FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED
ON NOVEMBER 23, 1993 10-Q.
4.4 Loan Guaranty Agreement between Rosewood Care Centers Capital
Funding Corporation and Rosewood Care Center, Inc. of Swansea
Loan Guaranty Agreement between Rosewood Care Centers Capital
Funding Corporation and Rosewood Care Center, Inc. of Peoria
Loan Guaranty Agreement between Rosewood Care Centers Capital
Funding Corporation and Rosewood Care Center, Inc. of East Peoria
Loan Guaranty Agreement between Rosewood Care Centers Capital
Funding Corporation and Rosewood Care Center, Inc. of Moline
Loan Guaranty Agreement between Rosewood Care Centers Capital
Funding Corporation and Rosewood Care Center, Inc. of Galesburg
4.5 Note executed by Swansea Real Estate, Inc.
Note executed by Peoria Real Estate, Inc.
Note executed by East Peoria Real Estate, Inc.
Note executed by Moline Real Estate, Inc.
Note executed by Galesburg Real Estate, Inc.
10.2 Collateral Pledge and Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Swansea Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Peoria Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care
Centers Capital Funding Corporation and East Peoria Real Estate,
Inc.
Collateral Pledge and Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Moline Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Galesburg Real Estate,
Inc.
10.3 Mortgage Between Swansea Real Estate, Inc. and Rosewood Care
Centers Capital Funding Corporation
Mortgage Between Peoria Real Estate, Inc. and Rosewood Care
Centers Capital Funding Corporation
Mortgage Between East Peoria Real Estate, Inc. and Rosewood Care
Centers Capital Funding Corporation
44
<PAGE>
<PAGE>
Mortgage Between Moline Real Estate, Inc. and Rosewood Care
Centers Capital Funding Corporation
Mortgage Between Galesburg Real Estate, Inc. and Rosewood Care
Centers Capital Funding Corporation
10.4 Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Swansea
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Peoria
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of East Peoria
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Moline
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Galesburg
10.5 Assignment of Rents and Leases between Rosewood Care Centers
Capital Funding Corporation and Swansea Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers
Capital Funding Corporation and Peoria Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers
Capital Funding Corporation and East Peoria Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers
Capital Funding Corporation and Moline Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers
Capital Funding Corporation and Galesburg Real Estate, Inc.
10.6 Subordination and Attornment Agreement between Rosewood Care
Centers Capital Funding Corporation and Swansea Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care
Centers Capital Funding Corporation and Peoria Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care
Centers Capital Funding Corporation and East Peoria Real Estate,
Inc.
Subordination and Attornment Agreement between Rosewood Care
Centers Capital Funding Corporation and Moline Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care
Centers Capital Funding Corporation and Galesburg Real Estate,
Inc.
45<PAGE>
<PAGE>
10.8 Administrative Services Agreement between Hovan Enterprises,
Inc. and Swansea Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises,
Inc. and Peoria Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises,
Inc. and East Peoria Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises,
Inc. and Moline Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises,
Inc. and Galesburg Real Estate, Inc.
10.9 Revised and Restated Management Agreement between Rosewood Care
Center, Inc. of Swansea and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care
Center, Inc. of Peoria and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care
Center, Inc. of East Peoria and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care
Center, Inc. of Moline and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care
Center, Inc. of Galesburg and Hovan Enterprises, Inc.
10.10 Lease between Swansea Real Estate, Inc. and Rosewood Care
Center, Inc. of Swansea
Lease between Swansea Real Estate, Inc. and Rosewood Care
Center, Inc. of Peoria
Lease between Swansea Real Estate, Inc. and Rosewood Care
Center, Inc. of East Peoria
Lease between Swansea Real Estate, Inc. and Rosewood Care
Center, Inc. of Moline
Lease between Swansea Real Estate, Inc. and Rosewood Care
Center, Inc. of Galesburg
10.11 Assignment of Management Agreement between Rosewood Care Center,
Inc. of Swansea and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center,
Inc. of Peoria and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center,
Inc. of East Peoria and Mercantile Bank
46
<PAGE>
<PAGE>
Assignment of Management Agreement between Rosewood Care Center,
Inc. of Moline and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center,
Inc. of Galesburg and Mercantile Bank
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT
FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED
ON NOVEMBER 12, 1997
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
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of Peoria
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of East Peoria
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT
FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED
ON NOVEMBER 12, 1998
10.21 Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of Swansea (Revised)
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of Moline (Revised)
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of Galesburg (Revised)
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of Peoria (Revised)
Consultant Services Agreement between Rosewood Therapy Services,
Inc. and Rosewood Care Center, Inc. of East Peoria (Revised)
47
<PAGE>
EXHIBIT 10.22
November 25, 1998
Ms. Devera A. Buckley, Assistant Vice President
State Street Bank and Trust Company of Missouri, N.A.
Corporate Trust Department
P.O. Box 321
St. Louis, Missouri 63166-0321
Re: Rosewood Care Center Holding Co.
Letter of Credit No. F700564 in the amount of $3,129,889.00
Expiring December 6, 1998
Dear Ms. Buckley:
This is to advise you that SunTrust Bank, Central Florida, N.A., will
renew the above-referenced Letter of Credit in favor of State Street
Bank and Trust Company of Missouri, N.A., for a period of one year.
If you should have any questions, please call me at (407) 237-5303.
Sincerely,
/s/Glenys Blenden
Glenys Blenden
Vice President
Copies: Ms. Susan Gamble - Summers, Compton, Wells & Hamburg
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements at December 31, 1998 for the period ended December
31, 1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000909110
<NAME> ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 263
<SECURITIES> 0
<RECEIVABLES> 24,188
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 262
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 24,451
<CURRENT-LIABILITIES> 148
<BONDS> 24,302
<COMMON> 1
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 24,451
<SALES> 0
<TOTAL-REVENUES> 912
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 912
<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 December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1998 for the period ended
December 31, 1998 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,082
<SECURITIES> 0
<RECEIVABLES> 4,166
<ALLOWANCES> 169
<INVENTORY> 0
<CURRENT-ASSETS> 6,465
<PP&E> 25,432
<DEPRECIATION> 8,726
<TOTAL-ASSETS> 29,779
<CURRENT-LIABILITIES> 5,972
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,701
<TOTAL-LIABILITY-AND-EQUITY> 29,779
<SALES> 16,224
<TOTAL-REVENUES> 16,519
<CGS> 0
<TOTAL-COSTS> 13,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 1,901
<INCOME-TAX> 155
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> 27
<EPS-DILUTED> 0
</TABLE>
