<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
- --- Exchange Act of 1934
For the period ended June 30, 1996, or
___ Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
------------- ----------------
COMMISSION FILE NUMBER 0-25908
---------
JUST LIKE HOME, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 65-0568234
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3647 CORTEZ ROAD WEST 34210-3106
BRADENTON, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER AND AREA CODE: 941-756-2555
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 NASDAQ
(Title of Class) (Name of Each Exchange on
Which Registered)
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
----- -----
As of June 30, 1996, there were outstanding 3,917,461 shares of Just Like
Home, Inc. Common Stock, par value $.001.
<PAGE> 2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDITIONS AND RESULTS OF
OPERATIONS.
The following discussions and analysis contains both historical and forward
looking information. The forward looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward looking statements may be significantly impacted by certain
risks and uncertainties described herein.
Overview
The historical financial statements represent the consolidated results of
operations and financial condition of Just Like Home, Inc. (a Nevada
corporation) and its subsidiaries (JLH Series I, Inc., JLH Management, Corp.,
JLH Franchising Corp., Project Market Decisions, Inc., Just Like Home IV, Inc.,
Just Like Family, Inc. and Just Like Home Corporate Center, Inc.). Just Like
Home, Inc. (a Florida corporation) was formed in May 1994, and in April 1995,
through a stock for stock exchange, acquired JLH-Nevada and its subsidiaries.
On March 15, 1996, the Company acquired Charis Place, Inc. and the results of
its operations are included from the date of acquisition. The discussion of
the results of operations which follows is based upon the consolidated results
of operations of the Company.
The following table sets forth the number of facilities owned or managed by the
Company and the total beds and occupancy as of the end of each of the periods
presented and the average occupancy percentages for each such period.
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------ --------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Facilities owned ....................... 2 (1) 2 4 (5)
Facilities managed ..................... 4 (2) 3 (3) 3
Total beds ............................. 110 100 (3) 144 (5)
Occupancy percentage at end of period .. 93.6% 97.0% 92.4% (5)
Average occupancy percentage ........... 95.4% 89.5% (4) 92.4%
</TABLE>
________________
(1) In March 1994, the Company sold to National Foundation three of its
facilities and land on which a fourth facility was subsequently
constructed.
(2) During 1994, the National Foundation remodeled two existing facilities to
accommodate additional beds. In addition, a 32-bed managed facility
specializing in care of individuals with Alzheimer's disease was completed
in December 1994.
(3) In March 1995, the Company recommended to the National Foundation that it
close a 10-bed facility . Following such recommendation, all of the
residents of this facility were moved to the new 32-bed facility referred
to above. The National Foundation has now leased the facility to an
unaffiliated third party.
(4) The average occupancy calculation for the year ended December 31, 1995
includes the impact of the start-up of the 32-bed Alzheimer's facility
which opened on December 28, 1994 and reached 100% occupancy on March 31,
1995.
(5) On March 15, 1996 the Company acquired Charis Place, Inc., which owned
two assisted living facilities totaling 44 beds, from an unaffiliated
third party.
The unaudited results for the six month period ended June 30, 1996, of the
above mentioned owned facilities which have been in operation for more than one
year resulted in a 39.2% operating margin before corporate overhead, interest
expense, depreciation, amortization and rent.
1
<PAGE> 3
Revenues
Six Months
Revenues for the six month period ended June 30, 1996 increased by 46% from
approximately $591,000 in 1995 to approximately $861,000 in 1996. Resident
fees increased due to the inclusion of Charis Place, Inc. revenue from March
15, 1996 (date of acquisition) and fee increases effective February 1, 1996.
Management fees increased due to the February 1 fee increases and higher
occupancy in the managed facilities. Other income increased due to increased
fees generated by the Company's wholly owned subsidiary, Project Market
Decisions, Inc. and rental income due to the inclusion of Charis Place, Inc.
Three Months
Revenues for the three month period ended June 30, 1996 increased by 64% from
approximately $310,000 in 1995 to approximately $509,000 in 1996. The same
factors effecting the six-month Revenues combine to impact the second quarter.
Operating, Selling, General and Administrative Expenses
Six Months
Operating and other expenses for the six month period ended June 30, 1996
increased by 71% from approximately $858,000 in 1995 to approximately
$1,465,000 in 1996 primarily due to the payroll, benefits, and travel costs
related to additional personnel to support the Company's growth and development
plans and due to the inclusion of Charis Place, Inc.
Three Months
Operating and other expenses for the three month period ended June 30, 1996
increased by 103% from approximately $430,000 in 1995 to approximately $873,000
in 1996. The same factors effecting the six-month Expenses combine to impact
the second quarter.
Interest Expense, Net
Six Months
Interest expense for the six month period ended June 30, 1996 increased from
approximately $54,000 in 1995 to approximately $113,000 in 1996 due to the
opening of the Company's corporate center and interest is no longer being
capitalized and due to the inclusion of Charis Place, Inc. acquisition with its
associated debt. In addition, interest income in 1996 included approximately
$30,000 from investing initial public offering proceeds in certificates of
deposit and repurchase agreements.
Three Months
Interest expense for the three month period ended June 30, 1996 increased by
approximately $34,000 from approximately $27,000 in 1995 to approximately
$61,000 in 1996. The same factors effecting the six-month Interest Expense
combine to impact the second quarter.
Loss Before Income Taxes
As a result of the above, the Company incurred a loss before taxes of
approximately ($321,000) for the 1995 period as compared to a loss of
approximately ($666,000) for the 1996 period.
Liquidity and Capital Resources
The losses incurred by the Company during the six months ended June 30, 1996
have been funded primarily through its initial public offering which occurred
in July, 1995 from which the Company realized approximately $3,212,000.
Operating losses are expected to continue to occur for the foreseeable future.
It is anticipated that such losses will be funded by either private equity or
debt financing. In this regard the
2
<PAGE> 4
Liquidity and Capital Resources (Continued)
Company has entered into a letter of agreement for the private placement of
$8,000,000 of convertible preferred stock to be carried out on a best efforts
basis. There is no assurance, however, that such private placement will be
consummated or any funds realized. In the event the Company does not obtain
financing, management believes that it will expend its available resources
during the current quarter and may be forced to curtail its operations.
Since the July 6, 1995 public stock offering, the Company has started an
aggressive development program that will include construction of additional
assisted living facilities which, when matched with appropriate additional debt
funding, are ultimately expected to generate incremental operating cash flows
sufficient to fund operations. Two of these facilities have been under
construction since late in 1995 and were completed during June, 1996. The
facilities were opened July 5, 1996. These 40 additional beds are located in
Bradenton, FL.
Currently the Company has the following projects under development: a ten acre
campus (6 - 20 bed physically frail and 2 - 64 bed Alzheimer's facilities - a
total of 248 beds) in Sarasota, FL; a second ten acre campus (5 - 20 bed
physically frail and 2 - 64 bed Alzheimer's facilities - a total of 228 beds)
in Lehigh Acres, FL; a two acre site (3 facilities totaling 77 beds) in
Springfield, OH; a 1.1 acre site (2 - 20 bed physically frail - a total of 40
beds) in Tampa, FL; and a 3.5 acre site (1 - 20 bed physically frail and 1 -
64 bed Alzheimer's facilities - a total of 84 beds) also in Tampa, FL.
Additionally, the Company is in the site selection process in several other
locations. The Company continues to evaluate possible acquisition and business
combination opportunities. Management believes that evolution of the assisted
living industry will continue to produce potential acquisition opportunities.
Management believes that financing for its various development projects is
available from various sources, including: sale/leaseback transactions with
Real Estate Investment Trusts (REIT's); construction and permanent financing
from commercial banks; and tax exempt bond financing with not-for-profit
corporations. The Company has been negotiating with various lenders to provide
financing for its development projects. However, there can be no assurance
that any such financing will be available to the Company. If the Company is
unable to obtain additional construction or permanent financing, it will be
required to modify or curtail its expansion plans, which could have a material
adverse affect on the Company's ability to generate a profit.
The Company's common stock is traded on NASDAQ and listed under the symbol
"JLHC".
3
<PAGE> 5
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS JUNE 30,
1996
Current Assets: -----------
<S> <C>
Cash $ 42,742
Certificate of deposit 375,000
Restricted Cash 100,787
Restricted certificate of deposit 250,000
Accounts receivable - trade 104,444
Due from related parties - current 126,928
Other current assets 47,714
----------
Total current assets 1,047,615
Property and Equipment, net 7,130,897
Restricted Cash - long-term 54,876
Due from Related Parties - long-term 167,592
Goodwill and Intangibles, net of accumulated amortization
of $9,737 at June 30, 1996 411,473
Organization and Debt Issuance Costs, net of accumulated amortization
of $53,771 at June 30, 1996 163,101
Other Assets 147,873
----------
Total Assets $9,123,427
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 692,783
Current portion of mortgages, notes and bonds payable 837,449
Due to related parties 150,000
----------
Total current liabilities 1,680,232
Mortgages and Notes Payable 2,560,695
Bonds Payable 735,000
Note payable to Related Party 185,405
----------
Total liabilities 5,161,332
----------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized;
none issued and outstanding -
Common stock, $.001 par value; 13,000,000 shares authorized;
3,917,461 shares issued and outstanding at June 30, 1996 3,917
Additional paid-in capital 6,135,980
Accumulated deficit (2,177,802)
----------
Total stockholders' equity 3,962,095
----------
Total Liabilities and Stockholders' Equity $9,123,427
==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 6
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------------------- ---------------------------
<S> <C> <C> <C> <C>
REVENUE:
Resident fees $ 322,629 $ 142,090 $ 499,871 $ 273,533
Management fees 25,212 26,480 50,700 43,624
Consulting fees 121,948 136,183 240,687 249,096
Other income 38,914 4,863 69,880 24,747
---------- ---------- ---------- ----------
Total revenue 508,703 309,616 861,138 591,000
EXPENSES:
Operating, selling, general
and administrative 873,288 430,002 1,464,988 857,916
---------- ---------- ---------- ----------
OPERATING LOSS (364,585) (120,386) (603,850) (266,916)
---------- ---------- ---------- ----------
NON-OPERATING INCOME (EXPENSE)
Interest expense (61,003) (27,112) (113,527) (54,435)
Interest income 26,754 - 51,423 -
---------- ---------- ---------- ----------
(34,249) (27,112) (62,104) (54,435)
---------- ---------- ---------- ----------
Loss Before Income Taxes (398,834) (147,498) (665,954) (321,351)
Income Tax Benefit (Expense) - - - -
---------- ---------- ---------- ----------
Net Loss $ (398,834) $ (147,498) $ (665,954) $ (321,351)
========== ========== ========== ==========
Net Loss per Common and
Common Equivalent Share $ 0.10 $ 0.06 $ 0.17 $ 0.13
========== ========== ========== ==========
Weighted Average Common or
Common Equivalent Shares
Outstanding 3,904,999 2,541,775 3,904,999 2,541,775
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE> 7
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1995
------------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $(665,954) $(321,351)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 86,158 37,575
Common stock issuance as compensation - 2,994
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (29,615) 361
(Increase) decrease in other current assets (32,275) 15,778
Increase in accounts payable and accrued expenses 303,395 55,653
---------- ---------
Net cash provided by (used in) operating activities (338,291) (208,990)
---------- ---------
Cash Flows from Investing Activities:
Acquisitions of property and equipment (3,212,699) (141,446)
Loans to related parties (26,012) (292,498)
Repayments of related-party loans 23,110 15,797
Payments for organization costs and Intangible costs (458,724) (4,330)
Deposits into non-current restricted cash (1,347) -
Payments for other assets (96,479) (323,812)
Purchase of certificate of deposit (800,000) -
Proceeds from certificate of deposit 775,000 -
----------- ---------
Net cash provided by (used in) investing activities (3,797,151) (746,289)
---------- ---------
Cash Flows from Financing Activities:
Proceeds from mortgages and notes payable 2,500,418 950,000
Repayment of mortgages and notes payable (65,255) (695,880)
Proceeds from common stock sales - 900,000
Repayment of related-party loans (4,166) (86,286)
----------- ---------
Net cash provided by financing activities 2,430,997 1,067,834
---------- ---------
Net Increase (Decrease) in Cash (1,704,445) 112,555
Cash - Beginning of Period 1,847,974 88,988
---------- ---------
Cash - End of Period $ 143,529 $ 201,543
========== =========
</TABLE>
Non-cash Investing and Financing Activities:
The Company issued 40,351 shares of common stock, valued at $460,000 in
connection with the acquisition of Charis Place, Inc.
The Company incurred construction costs totaling $71,630 which were unpaid
as of June 30, 1996.
See accompanying notes to consolidated condensed financial statements.
6
<PAGE> 8
JUST LIKE HOME, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Three-Month and Six-Month Periods Ended June 30, 1996 and 1995
1. BASIS OF PRESENTATION:
In the opinion of the management of Just Like Home, Inc. and Subsidiaries
(the "Company"), the accompanying unaudited consolidated condensed financial
statements contain all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the Company's financial position,
results of operations and cash flows for the periods presented. The results
of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.
The consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and the related
disclosures contained in the Company's Form 10-KSB dated April 13, 1996,
filed with the Securities and Exchange Commission.
2. PROPERTY AND EQUIPMENT:
Property and equipment is stated at cost and includes the following at June
30, 1996:
Land $ 654,303
Buildings 2,336,865
Furnishings and equipment 571,206
----------
3,562,374
Less: Accumulated depreciation (251,555)
---------
3,310,819
Property under development 3,820,078
----------
$7,130,897
==========
7
<PAGE> 9
JUST LIKE HOME, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - CONTINUED
Three-Month and Six-Month Periods Ended June 30, 1996 and 1995
3. MATURITY SCHEDULE FOR MORTGAGES PAYABLE, BONDS PAYABLE, NOTES PAYABLE
AND NOTE PAYABLE TO RELATED PARTY:
The following table presents principal payments required on the mortgages
payable, bonds payable, notes payable and note payable to related party for
each of the five years subsequent to June 30, 1996 and thereafter:
<TABLE>
<CAPTION>
<S> <C>
Year Ending June 30,
1997 $ 987,448
1998 279,023
1999 87,974
2000 99,123
2001 106,080
Thereafter 2,908,901
----------
$4,468,549
==========
Classified As:
Current portion of mortgages, notes and bonds payable $ 837,449
Current portion of note payable to related party 150,000
Mortgages and notes payable 2,560,695
Bonds payable 735,000
Note payable to related party 185,405
----------
$4,468,549
==========
</TABLE>
4. MORTGAGE LOANS:
On January 26, 1996, the Company closed in escrow on a 10-acre site in
Sarasota, Florida. The site will be used for a 248-resident, 8-building
campus style development providing assisted living and special care needs.
The $850,000 purchase price was paid $50,000 in cash with a corresponding
six-month bank note for $800,000. The bank note was payable interest only
monthly at the Chemical Bank prime rate plus 1% with principal due on July
1, 1996. Such bank financing was collateralized by $800,000 of certificates
of deposit. On May 22, 1996, this note was paid down to $750,000 and
replaced with a new bank note payable interest only monthly at the Chase
Manhattan Bank prime rate plus 1% with principal due on May 22, 1997. This
loan is collateralized by the land only. The closing in escrow was necessary
due to the temporary inability of the seller to secure a title insurance
policy because an easement on the property is subject to prior judgment
liens. The Company believes such liens can be exempted by judicial
determination and seller has initiated such action.
8
<PAGE> 10
JUST LIKE HOME, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - CONTINUED
Three-Month and Six-Month Periods Ended June 30, 1996 and 1995
4. MORTGAGE LOANS: (CONTINUED)
In April, 1996, the Company received a loan in the amount of $1,170,000 for
construction of certain facilities located in Bradenton, Florida. On June
30, 1996, $1,119,808 was outstanding under the construction loan. The
construction loan bears interest at the rate of prime plus 1%, payable in
monthly interest only payments for a six-month period. At the end of six
months, the construction loan will be converted into a five-year
promissory note with interest at 8.25% payable in monthly principal and
interest amounts of approximately $9,970. Additionally, the Company has
pledged a $250,000 certificate of deposit as additional collateral.
5. EMPLOYEE STOCK OPTIONS:
In March, 1995, the Company adopted a Stock Option Plan (the "Plan") under
which 200,000 shares of common stock are reserved for issuance upon exercise
of stock options. Options may be granted to all eligible employees of the
Company, including officers and non-employee directors and others who
perform services for the Company. Options are granted under the Plan on
such terms and at such prices as determined by the Board of Directors,
except that the per share exercise price of incentive stock options cannot
be less than the fair market value of the common stock on the date of the
grant. Each option is exercisable after the period or periods specified in
the option agreement, but no option may be exercisable after the expiration
of ten years from the date of grant. During the three months ended June 30,
1996, no additional options were issued.
6. LITIGATION:
On February 14, 1996, an individual filed a lawsuit against the Company in
United States District Court, Southern District of New York, alleging that
he acted as a finder in connection with the Company's initial public
offering with the Securities and Exchange Commission which occurred in July,
1995 in which the Company sold 839,000 shares to the public at $6.00 per
share. The individual is seeking damages in the approximate amount of
$1,750,000. The Company believes it has sufficient defenses to the
plaintiffs claim, plans to vigorously defend itself and believes that the
ultimate liability with respect to this litigation will not have a material
adverse effect on the Company. The parties are currently negotiating a
settlement.
9
<PAGE> 11
JUST LIKE HOME, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - CONTINUED
Three-Month and Six-Month Periods Ended June 30 1996 and 1995
6. LITIGATION: (CONTINUED)
On April 17, 1996, a corporation which is a 5.5% holder of the Company's
common stock, filed a lawsuit against the Company in the Twelfth Judicial
Circuit of Florida. The plaintiff corporation alleges that the 214,882
common shares received in December, 1994, should have been freely tradable
and not subject to Rule 144 restrictions. The plaintiff corporation is
seeking specific performance. In December, 1994, the Company converted
$429,764 of notes payable to the stockholder (including $4,764 of accrued
interest) into common stock at $2.00 per share which was fair value at the
date of conversion. This case is in the initial discovery phase. The
Company believes it has sufficient defenses to the plaintiffs claim and
plans to vigorously defend itself. Further the Company believes that any
liability with respect to this litigation will not have a material adverse
effect.
7. SUBSEQUENT EVENTS:
On July 5, 1996, the Company opened two new 20 bed facilities in Bradenton,
which had previously been under construction.
The Company has entered into a letter of agreement for the private
placement of $8,000,000 of convertible preferred stock to be carried out on
a best efforts basis.
10
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 6 - Litigation - to Consolidated Condensed Financial
Statements.
ITEM 2. CHANGE IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27 - Financial Data Schedule (for SEC use only)
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 7, 1996 Just Like Home, Inc.
(Richard T. Conard)
-----------------------
Chief Executive Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 42,742
<SECURITIES> 0
<RECEIVABLES> 104,444
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,047,615
<PP&E> 7,382,452
<DEPRECIATION> 251,555
<TOTAL-ASSETS> 9,123,427
<CURRENT-LIABILITIES> 1,680,232
<BONDS> 3,295,695
0
0
<COMMON> 3,917
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,123,427
<SALES> 0
<TOTAL-REVENUES> 861,138
<CGS> 0
<TOTAL-COSTS> 1,464,988
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113,527
<INCOME-PRETAX> (665,954)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (665,954)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> 0
</TABLE>
