<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, 1997, 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)
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)
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, 1997, there were outstanding 7,073,711 shares of Just Like Home,
Inc. Common Stock, par value $.001.
<PAGE> 2
PART I
ITEM 1. FINANCIAL STATEMENTS
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1997
<TABLE>
<CAPTION>
June 30, 1997
(Unaudited)
-------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,589,911
Restricted cash 392,588
Accounts receivable - trade 245,760
Due from related parties 148,876
Other current assets 159,896
------------
Total current assets 2,537,031
------------
Property and equipment, net 5,023,263
Property held for sale 2,016,092
Intangible assets, net 513,853
-
------------
7,553,208
------------
Total Assets $ 10,090,239
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 356,157
Accrued interest 65,262
Accrued compensation 101,329
Current portion of long-term debt 682,288
150,000
Other current liabilities 93,131
------------
Total current liabilities 1,448,167
------------
Long-term debt 4,584,033
Note payable to related party 411,288
------------
4,995,321
------------
Total liabilities 6,443,488
------------
Common Stock and Options Subject to Put Options 409,443
------------
Stockholders' Equity
Preferred stock, $.01 par value; 2,000,000 shares
authorized; none issued and outstanding 0
Common stock, $.000 par value; 13,000,000 shares
authorized; 7,073,711 shares issued and outstanding 7,073
Additional paid-in capital 8,717,748
Accumulated deficit (5,487,513)
------------
Total stockholders' equity 3,237,308
------------
Total Liabilities and Stockholders' Equity $ 10,090,239
============
</TABLE>
See accompanying notes to consolidated financial statements
1
<PAGE> 3
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
JLHC JLHC
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Resident fees $ 322,629 $ 452,434 $ 499,871 873,350
Management and consulting fees 147,160 214,801 291,387 383,188
Companion care fees -- 75,758 -- 155,751
Other income 38,914 28,007 69,880 65,918
--------------------------------------------------------
Total revenue 508,703 771,000 861,138 1,478,207
--------------------------------------------------------
Expenses:
Operating, selling, general and administration 873,288 1,252,665 1,464,988 2,154,732
--------------------------------------------------------
Total expenses 873,288 1,252,665 1,464,988 2,154,732
--------------------------------------------------------
Operating Loss (364,585) (481,665) (603,850) (676,525)
--------------------------------------------------------
Non-Operating Income (Expense)
Interest expense (61,003) (119,360) (113,527) (221,785)
Interest income 26,754 24,684 51,423 35,995
--------------------------------------------------------
(34,249) (94,676) (62,104) (185,790)
--------------------------------------------------------
Loss Before Income Taxes (398,834) (576,341) (665,954) (862,315)
--------------------------------------------------------
Income Tax Expense -- -- -- --
--------------------------------------------------------
Net Loss $ (398,834) $ (576,341) $ (665,954) $ (862,315)
--------------------------------------------------------
Net Loss Per Common Share $ (0.10) $ (0.09) $ (0.17) $ (0.16)
--------------------------------------------------------
Weighted Average Common Shares Outstanding 3,904,999 6,761,554 3,904,999 5,347,364
--------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE> 4
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1997
---- ----
<S> <C> <C>
--------------------------
Cash Flows from Operating Activities: $ (338,291) $(1,068,150)
--------------------------
Cash Flows from Investing Activities:
Acquisitions of property and equipment (3,212,699) (486,172)
Loans to related parties (26,012) --
Repayments of related-party loans 23,110 --
Payments made organization costs and intangible cost (458,724) (31,273)
Payments for other assets (96,479) --
Purchase of certificate of deposit (800,000) --
Proceeds from certificate of deposit 775,000 --
Deposits into restricted cash accounts (1,347) --
--------------------------
Net cash used in investing activities (3,797,151) (517,445)
--------------------------
Cash Flows from Financing Activities:
Proceeds from mortgages and notes payable 2,500,418 1,165,808
Repayment of mortgages and notes payable (65,255) (788,872)
Borrowings from related parties -- 225,883
Repayment of related-party loans (4,166) --
Issuance of common stock 1,510,000
Issuance of common stock per merger -- --
Collection of stock subscriptions receivable-merger -- 35,750
--------------------------
Net cash provided by financing activities 2,430,997 2,148,569
--------------------------
Net increase (decrease) in cash (1,704,445) 562,974
Cash, beginning of period 1,847,974 1,026,937
--------------------------
Cash, end of period $ 143,529 $ 1,589,911
==========================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
Just Like Home, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
June 30, 1997
(Unaudited)
Note 1 - Basis of Presentation
Just Like Home, Inc. and Subsidiaries (the Company) have not changed their
accounting and reporting policies from those stated in the 1996 annual report.
These unaudited interim consolidated condensed financial statements should be
read in conjunction with the audited financial statements and related
disclosures included in the Companys annual report on Form 10-KSB for the year
ended December 31, 1996, and also the restated audited financial statements and
footnotes included in the Companys 8-K filing dated April 14, 1997, and amended
June 23, 1997. The June 30, 1996 financial statements have been restated to
give retroactive effect to the pooling-of-interests business combination with
Community Assisted Living Centers, Inc. (Community).
In the opinion of the management of the Company, the accompanying unaudited
consolidated condensed financial statements contain all adjustments, consisting
only of normal recurring accruals, necessary to present fairly the Companys
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.
Note 2 - Net Loss Per Common Share
Primary net loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding during each period.
Common stock equivalents are not included in the calculation as their impact
would be anti-dilutive.
Note 3 - Business Combination
On April 10, 1997, Community was merged into the Company. At December 31, 1996
Community had approximately $913,000 in assets and approximately $9,000 in
liabilities. This business combination was accounted for as a pooling of
interests.
For the six months ended June 30, 1996 the Company reported $861,138 of
revenues and a net loss of ($665,954). Community was not in operation during
this same period. In 1997, prior to consummation of the business combination
with the Company, Community recorded $12,990 of revenue and a net loss of
($132,246).
Note 4 - Future Accounting Requirements
Comprehensive Income: In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No. 130, Reporting of
Comprehensive Income, which established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of financial statements. This statement also requires that all
items that are required to be recognized under accounting standards as
components of comprehensive
4
<PAGE> 6
income be reported in a financial statement that is displayed with the same
prominence as other financial statements.
This statement is effective for fiscal years beginning after December 15, 1997.
Earlier application is permitted. Reclassification of financial statements for
earlier periods provided for comparative purposes is required. Management does
not believe that adoption of SFAS No. 130 will have a material impact on the
Companys financial statements.
Disclosures About Segments of an Enterprise: In June 1997, the financial
Accounting Standards Board also issued SFAS No. 131, Disclosures about Segments
of an Enterprise and Related Information, which establishes standards for the
way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. This statement also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. This statement requires the reporting of financial and descriptive
information about an enterprises reportable operating segments.
This statement is effective for financial statements for periods beginning
after December 15, 1997. In the initial year of application, comparative
information for earlier years is to be restated. The Company has not yet
determined the impact adoption of SFAS No. 131 will have on its financial
statements.
Note 5 - Subsequent Events and Liquidity
Private Placement: On March 27, 1997, the Company issued a private placement
memorandum offering up to 2,500,000 shares of its common stock at a purchase
price of $1.00 per share. The Company will use the proceeds of the offering to
pay certain existing liabilities of the Company, to pay anticipated and future
operating expenses, to fund development and start-up costs, and for general
corporate purposes. The private placement closed on April 10, 1997, and the
Company received approximately $1,510,000 in proceeds.
REIT Financing: The Company entered into an agreement on April 30, 1997, with
Health Care REIT, Inc., a real estate investment trust (the REIT), for up to
$41,800,000 in operating lease financings for assisted living facilities. The
initial financing was completed on July 18, 1997, and involved the
sale-leaseback of four assisted living facilities owned by the Company for an
aggregate sale price of $2,700,000.
Going Concern: The Company has experienced recurring losses and at December
31, 1996 had limited resources. On April 10, 1997, the management of Community
(New Management) took effective control of the Company. In addition to the
events described above, New Management has plans to dispose of the property
held for sale at its carrying value, sell certain operating assets to an
assisted-living facility real estate investment trust and lease them back,
significantly improve operating results at facilities owned by the Foundation
and utilize Communitys existing resources. Current projections and plans
indicate that the Company will have sufficient resources to continue as a going
concern.
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDITIONS AND RESULTS OF
OPERATIONS.
This discussion and analysis contains both historical and
forward-looking information. The forward-looking statements may be significantly
affected by risks and uncertainties and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. There can be
no assurance that anticipated future results will be achieved. Readers are
cautioned that a number of factors, which are described in this report, the
Company's report on Form 10-KSB and below, could adversely affect the Company's
ability to obtain these results.
OVERVIEW
The historical financial statements represent the consolidated results
of operations and financial condition of Just Like Home, Inc. and its
subsidiaries (JHL or the Company). On April 10, 1997, Community Assisted Living
Centers, Inc. (Community) merged into a newly formed subsidiary of the Company.
All financial information reflects the combined operations of JLH and Community
since January 1, 1997.
The following table sets forth the number of facilities owned or
managed and the total beds and occupancy as of the end of each of the periods
presented.
<TABLE>
<CAPTION>
December 31, June 31,
-------------- --------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Facilities owned.................................................2 6 6
Facilities managed...............................................3 3 3
Total beds.....................................................100 184 184
Occupancy percentage at end of period........................97.0% 81.0% 84.7%
</TABLE>
- ----------------
Revenues
Six Months
Revenues for the six month period ended June 30, 1997 increased by 72% from
approximately $861,000 in 1996 to approximately $1,478,000 in 1997. Resident
fees increased due to the inclusion of newly acquired and constructed facilities
adding 84 additional rental units. Resident fee income increased 75% from $
500,000 in 1996 to $873,000 in 1997. Management and Consulting Fees increased
32% from $291,000 in 1996 to $383,000 in 1997 due to the increased revenues from
Project Market Decisions, Inc. In addition, Just Like Family, the Company's
companion care service, reflected revenues of $3,000 during its start up
phase and posted revenues of $156,000 in 1997.
Three Months
Revenues for the three month period ended June 30, 1997 increased by 52% from
approximately $509,000 in 1996 to approximately $771,000 in 1997. The same
factors affecting the six-month revenues combine to affect the second quarter
mostly due to the timing of the acquisitions and start up operations.
6
<PAGE> 8
Operating, Selling, General and Administrative Expenses
Six Months
Operating and other expenses for the six month period ended June 30, 1997
increased by 47% from approximately $1,465,000 in 1996 to approximately
$2,155,000 in 1997 primarily due to start up costs of the two newly constructed
facilities and the acquisition of Charis Place, the start up of the companion
care services, and the merger of Community. The acquisition of Community
resulted in overlapping management and home office expenses. Management's
efforts to eliminate duplicative costs and to realize other savings from the
combination of the Company and Community were not reflected in the second
quarter results.
Three Months
Operating and other expenses for the three month period ended June 30, 1997
increased by 43% from approximately $873,000 in 1996 to approximately $1,253,000
in 1997. The same factors effecting the six-month Expenses combine to impact the
third quarter.
Interest Expense
Six Months
Interest expense for the six month period ended June 30, 1997 increased from
approximately $114,000 in 1996 to approximately $222,000 in 1997 due to the
inclusion of the Charis Place, Inc. acquisition with its associated debt and the
opening of two additional facilities with their associated debt. Also, the
Company incurred debt for working capital totaling $850,000 during late 1996.
Three Months
Interest expense for the three month period ended June 30, 1997 increased from
approximately $61,000 in 1996 to approximately $119,000 in 1997. The same
factors effecting the six-month Interest Expense combine to affect the second
quarter.
Loss Before Income Taxes
As a result of the above, the Company incurred a loss before taxes of
approximately ($862,000) for the 1997 period as compared to a loss of
approximately ($666,000) for the 1996 period.
Liquidity and Capital Resources
For the six months ended June 30, 1997 the Company sustained a loss of
approximately $862,000. This resulted primarily from the Company not having a
sufficient number of facilities in operation to generate necessary income to
cover home office overhead costs and the carrying costs associated with
non-income producing properties. The Company's merger with Community has
resolved the immediate short-term cash requirements of the Company.
Additionally, simultaneous with the closing of the merger, the Company closed a
private placement of 1,510,000 shares of its Common Stock at a purchase price of
$1.00 per share, for an aggregate purchase price of $1,510,000. The Company also
is offering for sale two parcels of land acquired in the last two years for
future assisted living facility developments. These parcels are of a size or in
a location that is not consistent with the Company's current plans to focus on
smaller facilities in more rural communities. The Company is obligated to apply
all of the net proceeds of these sales to the reduction of certain indebtedness
of the Company. Therefore, these transactions will not directly provide
additional working capital, but they should reduce the debt burden of the
Company
7
<PAGE> 9
The Company entered into an agreement on April 30, 1997, with
Health Care REIT, Inc., a real estate investment trust (the "REIT"), for up to
$41,800,000 in sale-leaseback financings for assisted living facilities. The
initial financing was completed on July 18, 1997, and involved the
sale-leaseback of four assisted living facilities owned by the Company for an
aggregate sale price of $2,700,000. By transferring ownership of the company's
assisted living facilities to the REIT, the Company will free up capital in
existing facilities that can be used to help roll-out new facilities and will
reduce the amount of capital needed by the Company for future growth. Each
phase of the REIT financing is subject to numerous conditions, including
satisfaction of certain financial coverage tests by the Company. The initial
REIT financing provided the Company with approximately $1,000,000 ($750,000
from REIT proceeds and $250,000 of certificate of deposit held as collateral by
mortgage lender) in additional working capital after the payment of certain
long-term and short-term indebtedness related to the four facilities sold to
the REIT, which the Company intends to use to fund start-up losses associated
with opening new facilities. Financing of a fifth existing facility for a sale
price of $1,300,000 is currently in process. It is expected that an additional
$750,000 of working capital will be provided from the sale of this facility.
This initial phase of the REIT financing project will replace approximately
$3,538,000 of fixed assets and $2,414,000 of debt with $1,750,000 of working
capital.
The remaining $37,800,000 of REIT funding will be available, subject
to continuing satisfaction of the various financial and other covenants in the
agreement, to fund up to 21 assisted living facilities in the eastern United
States over a three-year period. The financing commitment expires on May 1,
2000. Currently, three development projects and one acquisition project are
being analyzed by the REIT.
As of June 30, 1997, the Company had working capital of approximately
$1,089,000. Operating losses are expected to continue to occur until sufficient
facilities are in operation. It is anticipated that these losses will be funded
by existing working capital and the sale-leaseback of existing buildings. The
primary cash needs of the Company relate to start-up costs associated with
opening new facilities, projected operating losses for those facilities until
they reach a stabilized occupancy and certain corporate office expense until
all facilities are generating sufficient cash flow to cover those expenses.
The Company has recently acquired three sites for new facilities and
has several other sites under contract. The Company expects to finance at least
one of these existing sites through a sale-leaseback financing with a private
investor, and presently intends to finance any additional sites under the REIT
financing commitment. The rate at which the Company can develop these sites and
future sites will be directly affected by the continuing availability of the
REIT financing and the Company's ability to generate or raise the cash
necessary to finance the anticipated start-up costs associated with opening new
facilities.
These development plans are part of the Company's development program
that will include construction of additional assisted living facilities which,
when matched with appropriate debt funding, are ultimately expected to generate
incremental operating cash flows sufficient to fund operations. Construction of
the first of these facilities began on August 4, 1997 and is expected to be
completed during February, 1998. The Company anticipates construction on these
additional sites by October 1997.
If the Company is unable to develop its various projects in a timely
manner, it will be required to modify or curtail its expansion plans, which
could have a material adverse effect on the Company's ability to continue its
operations.
8
<PAGE> 10
The Company's common stock is traded on NASDAQ and listed under the symbol
"JLHC".
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
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
(a) Exhibits.
The following exhibit is filed with this Form 10-QSB:
27.1 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K:
Form 8-K dated April 10, 1997, reporting merger with
Community Assisted Living Centers, Inc. as amended by
report dated June 23, 1997, reporting Financial Statements
of Business Acquired and Pro Forma Financial Information.
9
<PAGE> 11
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 14, 1997 Just Like Home, Inc.
/s/ (John F. Robenalt)
-----------------------------------
Chief Executive Officer
/s/ (Michael W. Monahan)
-----------------------------------
Chief Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,589,911
<SECURITIES> 0
<RECEIVABLES> 278,479
<ALLOWANCES> 32,719
<INVENTORY> 0
<CURRENT-ASSETS> 2,537,031
<PP&E> 5,491,109
<DEPRECIATION> 467,846
<TOTAL-ASSETS> 10,090,239
<CURRENT-LIABILITIES> 1,448,167
<BONDS> 5,827,609
0
0
<COMMON> 7,073
<OTHER-SE> 8,717,748
<TOTAL-LIABILITY-AND-EQUITY> 10,090,239
<SALES> 0
<TOTAL-REVENUES> 1,478,207
<CGS> 0
<TOTAL-COSTS> 2,154,732
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 32,719
<INTEREST-EXPENSE> 221,785
<INCOME-PRETAX> (862,315)
<INCOME-TAX> 0
<INCOME-CONTINUING> (862,315)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (862,315)
<EPS-PRIMARY> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
