<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, 1998.
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.)
2440 TAMIAMI TRAIL NORTH 34275
NOKOMIS, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER AND AREA CODE: 941-966-3636
(Former Address of Principal Executive Offices) (Former Zip Code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
twelve 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, 1998, there were outstanding 6,927,601 shares of Just Like Home,
Inc. Common Stock, par value $.001.
<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 206,550
Restricted cash 81,850
Accounts receivable - trade 69,776
Other receivables 59,823
Other current assets 63,185
-----------
Total current assets 481,184
Property and equipment, net 1,371,195
Construction work in process 688,075
Property held for sale 1,311,931
Restricted cash and certificates of deposit 495,375
Due from related parties 26,966
Intangible assets, net 1,157,293
-----------
Total Assets $ 5,532,019
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 362,340
Current portion of long-term debt 1,357,914
Current portion of related party debt 230,138
Other current liabilities 36,606
-----------
Total current liabilities 1,986,998
Long-term debt 765,122
Note payable to related party 226,985
Deferred gain on sale-leaseback transaction 298,734
-----------
Total liabilities 3,277,839
-----------
Common Stock and Options Subject to Put Options 902,123
-----------
Stockholders' Equity:
Preferred stock, $.01 par value; 2,000,000 shares
authorized; none issued and outstanding 0
Common stock, $.001 par value; 13,000,000 shares
authorized; 6,927,601 shares issued and outstanding 6,927
Additional paid-in capital 8,944,743
Accumulated deficit 7,599,613
-----------
Total stockholders' equity 1,352,057
-----------
Total Liabilities and Stockholders' Equity $ 5,532,019
===========
</TABLE>
See accompanying notes to consolidated financial statements
1
<PAGE> 3
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Resident fees $ 452,434 $ 418,477 $ 873,350 $ 858,924
Management and consulting fees 214,801 -- 383,188 --
Companion care fees 75,758 146,391 155,751 332,376
Development fees -- 166,000 -- 166,000
Other income 22,066 23,782 59,977 46,008
----------- ----------- ----------- -----------
Total revenue 765,059 754,650 1,472,266 1,403,308
----------- ----------- ----------- -----------
Expenses:
General and administration 419,576 440,806 728,437 746,439
Assisted living facilities operations 315,233 522,498 620,394 912,931
Consulting expenses 164,088 -- 289,141 --
Companion care 107,421 141,648 192,842 295,297
Depreciation 54,388 26,867 108,143 57,728
Amortization 83,357 78,085 107,173 158,137
----------- ----------- ----------- -----------
Total expenses 1,144,063 1,209,904 2,046,130 2,170,532
----------- ----------- ----------- -----------
Operating Loss (379,004) (455,254) (573,864) (767,224)
----------- ----------- ----------- -----------
Non-Operating Income (Expense):
Interest expense (158,037) (62,044) (260,462) (132,440)
Interest income 17,635 7,417 28,946 17,214
----------- ----------- ----------- -----------
(140,402) 54,627 (231,516) 115,226
----------- ----------- ----------- -----------
Loss Before Income Taxes (519,406) 509,881 (805,380) 882,450
----------- ----------- ----------- -----------
Income Tax Expense -- -- -- --
----------- ----------- ----------- -----------
Net Loss $ (519,406) $ 509,881 $ (805,380) $ 882,450
=========== =========== =========== ===========
Net Loss Per Common Share $ (0.08) $ 0.07 $ (0.15) $ 0.13
=========== =========== =========== ===========
Weighted Average Common Shares Outstanding 6,761,554 6,898,086 5,347,364 6,890,708
=========== =========== =========== ===========
</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,
1997 1998
----------- -----------
<S> <C> <C>
Cash Flows used in Operating Activities: $ (742,384) $ (764,988)
----------- -----------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment -- 1,181,269
Acquisitions of property and equipment (547,709) (37,971)
Costs of property held for sale -- (6,245)
Payments made organization costs and intangible costs (877,772) --
Purchase of certificate of deposit (250,000) --
Proceeds from certificate of deposit 56,216 116,887
----------- -----------
Net cash used in investing activities (1,619,265) 1,253,940
----------- -----------
Cash Flows from Financing Activities:
Proceeds from mortgages and notes payable 1,165,808 300,000
Repayment of mortgages and notes payable (788,871) (767,363)
Borrowings from related parties 225,883 --
Issuance of common stock 3,161,605 44,272
----------- -----------
Net cash provided by financing activities 3,764,425 (423,091)
----------- -----------
Net increase in cash 1,402,776 65,861
Cash, beginning of period 187,135 140,689
----------- -----------
Cash, end of period $ 1,589,911 $ 206,550
=========== ===========
</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, 1998
(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 1997 Form 10-KSB.
These unaudited interim consolidated condensed financial statements should be
read in conjunction with the audited financial statements and related
disclosures included in the Company's annual report on Form 10-KSB for the year
ended December 31, 1997.
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 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.
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 - 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 establishes 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 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 a comparative purpose is required. For the three
and six month periods ended June 30, 1997 and 1998, there were no components of
comprehensive income other than net income.
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 enterprise's reportable operating segments.
4
<PAGE> 6
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.
SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits". In February 1998, the Financial Accounting Standards
Board issued SFAS No. 132 which is effective for periods ending after December
15, 1998. The new standard revises employers' disclosures about pensions and
other postretirement benefits. For the three and six month periods ended June
30, 1998 and 1997, there was no impact on the Company's financial statements as
the Company does not have any postretirement benefits.
SFAS No. 133, "Accounting for Derivative Investments and Hedging
Activities". SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. This statement establishes accounting and
reporting standards for derivative instruments and hedging activities. The
Company does not maintain any derivative investments nor does it conduct any
hedging activities, therefore, there is no impact on the three or six month
periods ended June 30, 1998 and 1997.
Statement of Position (SOP) 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. In March 1998, the American
Institute of Certified Public Accountants issued SOP 98-1, which is effective
for financial statements for fiscal years beginning after December 15, 1998.
This SOP provides guidance on accounting for the costs of computer software
developed or obtained for internal use and provides guidance for determining
whether computer software is for internal use. The Company does not develop any
internal use software, therefore, management does not believe that there will
be any impact on the Company's financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDITIONS AND RESULTS OF
OPERATIONS.
OVERVIEW
The historical financial statements represent the consolidated results
of operations and financial condition of Just Like Home, Inc. and its
subsidiaries (JLH or the Company).
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 30,
------------ --------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Facilities owned .................................... 6 2 1
Facilities leased (1)(2)(3) ......................... 0 4 6
Facilities managed (4) .............................. 3 3 0
Total beds .......................................... 184 184 157
Occupancy percentage at end of period (stabilized) .. 75.9% 88.8% 75.7%
</TABLE>
(1) On July 18, 1997 the Company sold 4 facilities to Health Care REIT,
Inc. and simultaneously leased the properties back under a 10 year
lease agreement.
(2) On May 1, 1998 the Company sold a facility to Health Care REIT, Inc.
and simultaneously leased the properties back under a 10 year lease
agreement.
(3) On June 28, 1998 the Company leased a new facility from Health Care
REIT, Inc. under a 10 year lease agreement.
(4) On April 1, 1998 the Company terminated its management agreements with
the National Foundation on Gerontology.
- ----------------
Revenues
Six month
Total revenues for the six-month period ended June 30, 1998 decreased by 5% from
$1,472,000 in 1997 to $1,403,000 in 1998. Resident fee income decreased 2% from
$873,000 in 1997 to $859,000 in 1998 due to decreased occupancy. Just Like
Family, Inc., the Company's companion care service subsidiary, reflected
revenues of $156,000 in 1997 and $332,000 in 1998, an increase of 113% due to
increased service hours. Management and Consulting Fees decreased from $383,000
in 1997 to $0 in 1998 due to the sale of Project Market Decisions, Inc. (PMD)
effective July 1, 1997 and the termination of the management contracts with
National Foundation on Gerontology. The Company received development fees on the
newly constructed facilities totaling $166,000 in 1998 from Health Care REIT,
Inc.
5
<PAGE> 7
Three month
Total revenues for the three-month period ended June 30, 1998 decreased by 1%
from $765,000 in 1997 to $755,000 in 1998. Resident fee income decreased 8% from
$452,000 in 1997 to $418,000 in 1998 due to decreased occupancy. Just Like
Family, Inc., the Company's companion care service subsidiary, reflected
revenues of $76,000 in 1997 and $146,000 in 1998, an increase of 93% due to
increased service hours. Management and Consulting Fees decreased from $215,000
in 1997 to $0 in 1998 due to the sale of Project Market Decisions, Inc. (PMD)
effective July 1, 1997 and the termination of the management contracts with
National Foundation on Gerontology. The Company received development fees on the
newly constructed facilities totaling $166,000 in 1998 from Health Care REIT,
Inc.
Expenses
Six month
Total expenses for the six-month period ended June 30, 1998 increased by 6%,
from $2,046,000 in 1997, to $2,171,000 in 1998. Assisted living operating
expenses increased from $620,000 in 1997 to $754,000 in 1998 due to a newly
constructed facility, and the sale-leaseback of a number of the Company's
facilities in 1998 as opposed to direct ownership of the same facilities in
1997. Companion care costs increased from $193,000 in 1997 to $295,000 in 1998
due to increased volume. General and administrative expenses were down from
$728,000 in 1997 to $746,000 in 1998. Consulting costs were eliminated in 1998
due to the sale of PMD, the Company's consulting division. Amortization was up
from $107,000 in 1997 to $158,000 in 1998 due to the goodwill booked as part of
the merger with Community Assisted Living Centers, Inc. in 1997.
Three month
Total expenses for the three-month period ended June 30, 1998 increased by 6%,
from $1,144,000 in 1997, to $1,210,000 in 1998. Assisted living operating
expenses increased from $315,000 in 1997 to $364,000 in 1998 due to a newly
constructed facility. Companion care costs increased from $107,000 in 1997 to
$142,000 in 1998 due to increased volume. General and administrative expenses
were up from $420,000 in 1997 to $441,000 in 1998. Consulting costs were
eliminated in 1998 due to the sale of PMD, the Company's consulting division.
Interest Expense
Interest expense for the six-month period ended June 30, 1998 decreased from
approximately $260,000 in 1997 to approximately $132,000 in 1998 due to the
sale-leaseback of four facilities and the related reduction in debt.
Loss Before Income Taxes
As a result of the above, the Company incurred a loss before income taxes of
approximately $882,000 for the 1998 period as compared to a loss of
approximately $805,000 for the 1997 period. As a result, no provision for income
taxes was required.
LIQUIDITY AND CAPITAL RESOURCES
The Company sustained a loss of $584,000 for the six period ended June 30, 1998.
This was due to the Company not having a sufficient number of facilities in
operation to generate the necessary income to cover home office overhead costs
and the carrying costs associated with non-income producing properties. To
alleviate this trend, the Company opened the first example of its 42-unit
prototype facility in May 1998. Two more of these facilities are presently under
construction and expect to be completed by September 1998. Three additional
facilities are in the pre-construction stages of development and expected to
start construction in the fourth quarter of 1998, assuming the Company raises
additional capital as discussed
6
<PAGE> 8
below. The Company finalized the sale-leaseback of one of its Leesburg, Florida
facilities in May 1998. This transaction generated an additional $625,000 in
working capital for the Company. A deferred gain of $299,000 is being amortized
over the 10-year lease period. Common stock (44,272 shares at a value of $1 per
share) was issued to pay salaries to two officers during the period.
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 of
financing 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. 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 the release of a $250,000 of certificate of deposit held as
collateral by the 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.
The remainder of the REIT funding will be available, subject to continuing
satisfaction of the various financial and other covenants in the agreement, to
fund newly constructed assisted living facilities in the eastern United States.
The financing commitment expires on May 1, 2000.
Although the financing for construction of additional facilities is
available to the Company under the REIT credit facility described above (subject
to continued compliance by the Company with the REIT requirements), the Company
is required to fund all start-up costs associated with each new project. The
Company estimates that it will need approximately $300,000 in cash resources
other than the REIT financing for each new facility developed by the Company.
As of July 31, 1998, the Company had negative working capital.
Operating losses are expected to continue to occur for the foreseeable future.
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 expenses until
all facilities are generating sufficient cash flow to cover those expenses.
The Company is presently pursuing financing of approximately $2,000,000
with the representative of several investors. The Company is also pursuing other
financing, equity and/or operating alternatives, including raising additional
equity capital, the sale of additional assets and the reduction of operational
expenses. However, there can be no assurance that the financing or other
alternatives will be accomplished or if they will be offered on terms acceptable
to the Company. If the Company is unable to complete the financing described
above or is unable to raise funds in another manner acceptable to it, the
Company may not have the cash to fund its anticipated continuing operating
losses.
7
<PAGE> 9
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).
SIGNATURES
8
<PAGE> 10
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 10, 1998 Just Like Home, Inc.
(John F. Robenalt)
-----------------------------------
Chief Executive Officer
(Michael W. Monahan)
-----------------------------------
Chief Financial Officer (Principal
Accounting Officer and Principal
Financial Officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 206,550
<SECURITIES> 0
<RECEIVABLES> 69,776
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 481,184
<PP&E> 1,558,311
<DEPRECIATION> 187,116
<TOTAL-ASSETS> 5,532,019
<CURRENT-LIABILITIES> 1,986,998
<BONDS> 2,979,105
0
0
<COMMON> 6,927
<OTHER-SE> 8,944,743
<TOTAL-LIABILITY-AND-EQUITY> 5,532,019
<SALES> 0
<TOTAL-REVENUES> 1,403,308
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,170,532
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 132,440
<INCOME-PRETAX> (583,716)
<INCOME-TAX> 0
<INCOME-CONTINUING> (583,716)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (583,716)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
