UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
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 March 31, 2003
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 1-14151
CLC HEALTHCARE, INC.
(Exact name of Registrant as specified in its charter)
| Nevada |
91-1895305 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| incorporation or organization) |
Identification No) |
7610 N. Stemmons Freeway, Suite 500
Dallas, Texas 75247
(Address of principal executive offices)
(214) 905-9033
(Registrant’s telephone number, including area code)
Indicate by check mark whether Registrant (1) has filed all reports 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), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Company is an accelerated filer. Yes ¨ No x
Shares of Registrant’s common stock, $.01 par value, outstanding at May 11, 2003 – 2,132,826 (excludes Treasury Shares of 1,203,056).
FORM 10-Q
March 31, 2003
INDEX
| Page | ||||
| PART I—Financial Information |
||||
| Item 1. |
Financial Statements |
|||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| Item 3. |
14 | |||
| Item 4. |
14 | |||
| Item 5. |
Other Information |
|||
| Item 6. |
15 | |||
2
CLC HEALTHCARE, INC.
(Unaudited)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (In thousands, except share and per share amounts) |
||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ |
1,692 |
|
$ |
1,796 |
| ||
| Accounts receivable, net of allowance for doubtful accounts: 2003—$4,367; 2002 – $4,371 |
|
7,210 |
|
|
7,774 |
| ||
| Prepaid expenses and other current assets |
|
4,122 |
|
|
1,078 |
| ||
| Total current assets |
|
13,024 |
|
|
10,648 |
| ||
| Property and Equipment: |
||||||||
| Land |
|
100 |
|
|
100 |
| ||
| Buildings and improvements |
|
1,576 |
|
|
1,576 |
| ||
| Furniture, fixtures and equipment |
|
4,342 |
|
|
4,312 |
| ||
| Accumulated depreciation |
|
(2,327 |
) |
|
(1,484 |
) | ||
| Property and equipment, net |
|
3,691 |
|
|
4,504 |
| ||
| Other Assets: |
||||||||
| Investment in unconsolidated affiliate |
|
3,095 |
|
|
2,843 |
| ||
| Debt securities |
|
1,417 |
|
|
1,410 |
| ||
| Other assets |
|
217 |
|
|
217 |
| ||
| Total other assets |
|
4,729 |
|
|
4,470 |
| ||
| Total assets |
$ |
21,444 |
|
$ |
19,622 |
| ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable |
$ |
7,187 |
|
$ |
7,574 |
| ||
| Accrued salaries and benefits |
|
2,766 |
|
|
2,822 |
| ||
| Resident trust fund balances |
|
485 |
|
|
516 |
| ||
| Current portion of mortgage loans payable |
|
43 |
|
|
41 |
| ||
| Accrued rent payable to LTC |
|
2,400 |
|
|
2,400 |
| ||
| Current portion of accrued self insurance risk |
|
4,152 |
|
|
2,443 |
| ||
| Other accrued liabilities |
|
8,677 |
|
|
5,000 |
| ||
| Total current liabilities |
|
25,710 |
|
|
20,796 |
| ||
| Deferred rent to LTC |
|
2,069 |
|
|
1,917 |
| ||
| Accrued self insurance risk, less current portion |
|
10,156 |
|
|
10,156 |
| ||
| Mortgage loans payable, less current portion |
|
1,098 |
|
|
1,109 |
| ||
| Notes payable— Medicare |
|
— |
|
|
149 |
| ||
| Notes payable— LTC |
|
7,936 |
|
|
7,850 |
| ||
| Line of credit from LTC |
|
6,759 |
|
|
5,813 |
| ||
| Total liabilities |
|
53,728 |
|
|
47,790 |
| ||
| Commitments and Contingencies |
||||||||
| Stockholders’ Deficit: |
||||||||
| Preferred stock $0.01 par value; 10,000,000 shares authorized |
|
— |
|
|
— |
| ||
| Common stock $0.01 par value; 40,000,000 shares authorized; |
|
33 |
|
|
33 |
| ||
| Capital in excess of par value |
|
10,224 |
|
|
10,224 |
| ||
| Treasury stock: shares 2003—1,193,056; 2002—1,190,056 |
|
(2,656 |
) |
|
(2,654 |
) | ||
| Unearned stock compensation |
|
(112 |
) |
|
(130 |
) | ||
| Accumulated deficit |
|
(39,387 |
) |
|
(35,259 |
) | ||
| Accumulated comprehensive loss |
|
(386 |
) |
|
(382 |
) | ||
| Total stockholders’ deficit |
|
(32,284 |
) |
|
(28,168 |
) | ||
| Total liabilities and stockholders’ deficit |
$ |
21,444 |
|
$ |
19,622 |
| ||
See accompanying notes
3
CLC HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| (In thousands, except share and |
||||||||
| Revenues: |
||||||||
| Net resident revenue |
$ |
21,580 |
|
$ |
22,308 |
| ||
| Interest and other income |
|
233 |
|
|
328 |
| ||
| Total revenues |
|
21,813 |
|
|
22,636 |
| ||
| Costs and Expenses: |
||||||||
| Salaries and benefits |
|
16,697 |
|
|
16,776 |
| ||
| Supplies |
|
2,472 |
|
|
2,544 |
| ||
| Rent—LTC |
|
819 |
|
|
763 |
| ||
| Interest on mortgages payable |
|
36 |
|
|
37 |
| ||
| Interest on notes payable to LTC |
|
127 |
|
|
121 |
| ||
| Interest expense on line of credit from LTC |
|
147 |
|
|
132 |
| ||
| Depreciation |
|
165 |
|
|
154 |
| ||
| Provision for bad debts |
|
221 |
|
|
197 |
| ||
| Impairment charge |
|
677 |
|
|
— |
| ||
| Insurance expense |
|
1,813 |
|
|
1,039 |
| ||
| Other operating and administrative |
|
3,019 |
|
|
2,874 |
| ||
| Total expenses |
|
26,193 |
|
|
24,637 |
| ||
| Operating Loss |
|
(4,380 |
) |
|
(2,001 |
) | ||
| Equity and earnings from investment in unconsolidated affiliate |
|
253 |
|
|
(301 |
) | ||
| Loss before provision for state income taxes |
|
(4,127 |
) |
|
(2,302 |
) | ||
| Provision for income taxes |
|
— |
|
|
125 |
| ||
| Net loss |
$ |
(4,127 |
) |
$ |
(2,427 |
) | ||
| Weighted Average Shares Outstanding: |
|
2,143,359 |
|
|
2,139,826 |
| ||
| Basic and Diluted Net Loss Per Share: |
$ |
(1.93 |
) |
$ |
(1.13 |
) | ||
| Comprehensive loss: |
||||||||
| Net loss |
$ |
(4,127 |
) |
$ |
(2,427 |
) | ||
| Unrealized loss on available-for-sale debt securities |
|
(4 |
) |
|
(3 |
) | ||
| Total comprehensive loss |
$ |
(4,131 |
) |
$ |
(2,430 |
) | ||
See accompanying notes
4
CLC HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| (In thousands) |
||||||||
| OPERATING ACTIVITIES: |
||||||||
| Net loss | ||||||||