-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WrGWZvOn/c2PY9unTqh1+98ohtORuAiI6o2MxuKRdZ6t9Qj9ypD1BKj7IqG1yZx+ JhdsUWQRduhrmkCjj6Zb2w== 0000930661-95-000130.txt : 19950517 0000930661-95-000130.hdr.sgml : 19950516 ACCESSION NUMBER: 0000930661-95-000130 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDICAL RESOURCE COMPANIES OF AMERICA CENTRAL INDEX KEY: 0000105744 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 952928577 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-08187 FILM NUMBER: 95538210 BUSINESS ADDRESS: STREET 1: 4265 KELLWAY CIRCLE CITY: ADDISON STATE: TX ZIP: 75244 BUSINESS PHONE: 2144078400 MAIL ADDRESS: STREET 1: 4265 KELLWAY CIRCLE CITY: ADDISON STATE: TX ZIP: 75244 FORMER COMPANY: FORMER CONFORMED NAME: WESPAC INVESTORS TRUST DATE OF NAME CHANGE: 19900605 10QSB 1 FORM 10QSB UNITED STATES 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 Exchange Act of 1934 For the period ended March 31, 1995 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: 0-8187 MEDICAL RESOURCE COMPANIES OF AMERICA (Name of Small Business Issuer in its Charter) NEVADA 75-2399477 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 4265 KELLWAY CIRCLE, ADDISON, TEXAS 75244 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (214) 407-8400 Securities registered pursuant to Section 12(b) of the Act: Common stock, par value $.01 Check whether the issuer (1) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO___ --- At May 10, 1995, the issuer had outstanding 17,541,000 shares of par value $.01 common stock. 1 Medical Resource Companies of America PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements -------------------- The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310 of Regulation S-B. These financial statements have not been examined by independent certified public accountants, but in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of consolidated results of operations, consolidated financial position and consolidated cash flows at the dates and for the periods indicated, have been included. These financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the three month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994. 2 Medical Resource Companies of America CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data)
March 31, December 31, 1995 1994 ----------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash $ 7,820 $ 8,376 Accounts receivable - trade, less allowance of $81 in 1995 and $630 in 1994 1,289 2,079 Loan receivable 3,100 - Inventories 357 370 Deferred income tax benefit 587 2,185 Real estate under contract of sale 594 14,889 Due from affiliates 178 185 Other current assets 1,295 1,274 --------- --------- Total current assets 15,220 29,358 REAL ESTATE 3,186 3,204 INVESTMENT IN SECURITIES, AT COST 1,678 1,678 MORTGAGE NOTE RECEIVABLE 6,700 6,700 PROPERTY, PLANT AND EQUIPMENT, AT COST Land 100 100 Buildings and improvements 767 767 Equipment and furnishings 394 388 Rental equipment 1,755 1,663 --------- --------- 3,016 2,918 Less accumulated depreciation 1,101 993 --------- --------- 1,915 1,925 OTHER ASSETS Excess of cost of purchased companies over net assets acquired, net of accumulated amortization of $448 and $426 in 1995 and 1994, respectively 1,325 1,347 Patents, net of accumulated amortization of $262 and $249 in 1995 and 1994, respectively 586 598 Other 438 414 --------- --------- 2,349 2,359 --------- --------- $ 31,048 $ 45,224 ========= =========
3 Medical Resource Companies of America CONSOLIDATED BALANCE SHEETS - CONTINUED (Amounts in thousands, except share data)
March 31, December 31, 1995 1994 ----------- ------------- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Note payable $ - $ 5,022 Current maturities of long-term debt 269 379 Long-term debt collateralized by properties under contract of sale - 8,933 Accounts payable - trade 956 1,319 Accrued expenses 1,290 1,755 Other current liabilities 220 1,479 --------- --------- Total current liabilities 2,735 18,887 LONG-TERM DEBT 1,108 1,110 DEFERRED GAIN 3,083 3,083 STOCKHOLDERS' EQUITY Series A cumulative preferred stock, $.10 par value; liquidation value of $1,085 in 1995 and 1994; authorized, 10,000 shares; issued and outstanding, 1,085 shares in 1995 and 1994 108 108 Series B cumulative convertible preferred stock, $.10 par value; liquidation value of $1,351 in 1995 and 1994; authorized, 100 shares; issued and outstanding, 14 shares in 1995 and 1994 1 1 Series C cumulative convertible preferred stock, $.10 par value; liquidation value of $2,000; authorized, 20 shares; issued and outstanding, 20 shares in 1995 and 1994 2 2 Common stock, $.01 par value; authorized, 100,000 shares; issued, 17,541 and 18,542 shares in 1995 and 1994, respectively 176 185 Additional paid-in capital 35,462 36,442 Accumulated deficit (9,112) (12,156) -------- -------- 26,637 24,582 Less stock purchase notes receivable (2,515) (2,438) -------- -------- 24,122 22,144 -------- -------- $ 31,048 $ 45,224 ======== ========
4 Medical Resource Companies of America CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data)
For the Three Month Period Ended March 31, March 31, 1995 1994 ----------- -------------- (Unaudited) REVENUE Sales and rentals of mobility products $ 310 $ 346 Long-term care facilities operating revenue 555 2,043 Real estate operations 195 1,192 Gain on sales of assets 5,149 2,764 Interest and dividends 193 91 Other 9 - ------- ------- 6,411 6,436 EXPENSES Cost of mobility products sales and rentals 334 400 Long-term care facilities operating expenses 318 1,280 Real estate operations 97 773 General and administrative 837 889 Interest 121 906 ------- ------- 1,707 4,248 ------- ------- Earnings from continuing operations before income taxes 4,704 2,188 Income tax expense 1,598 744 ------- ------- Earnings from continuing operations 3,106 1,444 Loss from discontinued operations, net of income taxes - (46) ------- ------- NET EARNINGS 3,106 1,398 Preferred stock dividend requirement (81) (80) ------- ------- Earnings allocable to common shareholders $ 3,025 $ 1,318 ======= ======= Earnings per share Continuing operations $ .17 $ .07 Net earnings $ .17 $ .07 Weighted average number of common and equivalent shares outstanding 18,274 18,395
5 Medical Resource Companies of America CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
For The Three Month Period Ended March 31, March 31, 1995 1994 ----------- ------------ (Unaudited) (Unaudited) Cash flows from operating activities Net earnings $ 3,106 $ 1,398 Adjustments to reconcile net earnings to net cash used in operating activities Depreciation and amortization 206 555 Gain on sales of assets (5,149) (1,984) Recognition of deferred gain - (780) Changes in operating assets and liabilities Due from/to affiliates 7 (68) Accounts receivable 790 (581) Deferred tax benefit 1,598 721 Inventories 13 69 Other current and noncurrent assets 1,096 360 Accounts payable and other liabilities (2,087) 241 ------- ------- Total adjustments (3,526) (1,467) ------- ------- Net cash used in operating activities (420) (69) Cash flows from investing activities Proceeds from sales of assets, net 18,276 19,161 Additions to loan receivable (3,100) - Additions to real estate (33) (177) Purchase of property and equipment (103) (353) ------- ------- Net cash provided by investing activities 15,040 18,631
6 Medical Resource Companies of America CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (Amounts in thousands)
For The Three Month Period Ended March 31, March 31, 1995 1994 --------- ---------- (Unaudited) (Unaudited) Cash flows from financing activities Proceeds from borrowings Affiliates $ - $ 1,000 Other - 766 Payments on debt (14,049) (13,960) Dividends on preferred stock (62) (29) Purchase of treasury stock (1,065) - -------- -------- Net cash used in financing activities (15,176) (12,223) -------- -------- NET INCREASE (DECREASE) IN CASH (556) 6,339 Cash at beginning of period 8,376 1,083 -------- -------- Cash at end of period $ 7,820 $ 7,422 ======== ========
7 ITEM 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations. ------------------------------------ Medical Resource Companies of America ("Medical Resource" or the "Company") is currently focusing its primary efforts on developing and managing facilities which will provide full service residential retirement and personal assistance with the Activities of Daily Living (ADLs) as needed for the elderly. The Company also provides mobility assistance services for all ages in tourist attractions and airports. Medical Resource's services are provided through a number of subsidiaries comprising two divisions: residential retirement care and mobility assistance services. Through its subsidiary, EquiVest Inc., the Company also owns commercial real estate investments. Originally founded in 1974 as a real estate investment trust organized in California, in May 1991 Medical Resource transferred all its assets to a Nevada corporation bearing the same name in order to continue operations in a more conventional incorporated form. Its primary focus was on residential retirement and healthcare services and products for the elderly and mobility impaired. During 1994 and early 1995 the Company disposed of its nursing homes and retirement center properties and changed its healthcare focus to meeting the full service residential retirement and assisted living needs of the elderly. RESIDENTIAL RETIREMENT AND ASSISTED LIVING During the past four years a basic strategy of Medical Resource was to acquire retirement, nursing and other healthcare facilities with the intention of improving the physical structure, occupancy and efficiency of those facilities. Eventually the facilities would be sold, to generate profits and provide working capital to grow the Company and increase stockholders' equity. The Company began development of a focused full service residential retirement and assisted living strategy in 1994. Medical Resource believes the overall demand for alternative lifestyles for the elderly is rapidly increasing. Providing a residential lifestyle, maximizing choices and independence while enhancing the quality of life of a growing segment of elderly, upscale consumers, particularly the frail elderly, is a "growth" industry. Medical Resource has discussed affiliations and joint ventures with several companies involved in the full service residential retirement and assisted living industry. The Company also investigated markets and development sites in several states with a view toward designing and building a chain of proprietary assisted living centers. These efforts will be continued. The Company will manage some facilities and may employ third party managers in others. 8 MOBILITY ASSISTANCE SERVICES The Company, through its subsidiary, Odyssey Mobility Systems, Inc. (Odyssey), provides electric convenience vehicles (ECVs), manual wheelchairs and children's strollers to theme parks, zoos and other attractions throughout the United States. ECVs are three and four wheel battery powered units which travel approximately 5 miles per hour and are utilized principally by the elderly and handicapped to assist in their mobility. Odyssey currently provides its products to 25 theme parks and zoos including SeaWorld, Disney World, The San Diego Zoo, Busch Gardens and the State Fair of Texas, among others. The products are supplied either under a lease agreement or by a concession contract in which Odyssey shares the revenue on an agreed upon basis. Under certain agreements, Odyssey supplies all personnel and equipment. The theme park business of Odyssey is highly seasonal. Approximately 50% of its volume occurs during the summer months when children are not in school and families tend to take vacations in greater numbers. The Company, through its subsidiary Aviation Mobility, Inc. (Aviation), provides manual wheelchairs and aisle chairs to the airline industry for use in airline terminals to transport the handicapped and elderly throughout the airport facilities. The products are provided to the airlines on a lease basis. The Company currently provides products to Continental Airlines, Delta Airlines and USAir. EQUIVEST INC. On March 24, 1993, the stockholders of Medical Resource and EquiVest Inc. ("EquiVest") approved the merger of EquiVest into a wholly owned subsidiary of Medical Resource, which then changed its name to EquiVest Inc. The then existing shareholders of EquiVest received 3,703,227 shares of Medical Resource stock. At the time of the merger, EquiVest was a REIT that owned and managed real estate properties. Medical Resource has sold and will continue to liquidate the acquired real estate and use the proceeds for acquisitions and to expand its existing operations. As of March 31, 1995, EquiVest owned four retail shopping centers: three in Georgia and one in Florida. The aggregate value of the four centers in accordance with generally accepted accounting principles was $3,780,000. The property in Florida is under contract of sale. 9 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995 current assets exceeded current liabilities by $12,485,000. During this quarter the Company continued its program of selling its existing healthcare facilities and its commercial real estate and using the proceeds to acquire additional businesses and invest in existing operations. In January 1995 the Company sold "The Fountainview", a retirement center in West Palm Beach, Florida. The net sales proceeds were approximately $18,000,000. The Company used approximately $9,000,000 of the proceeds to repay the mortgage. The balance was used to increase working capital. Also, in January 1995, the Company used approximately $5,000,000 of its cash to payoff short-term bank debt. As of March 31, 1995, the Company, through its subsidiary EquiVest Inc., owns four retail shopping centers; three in Georgia and one in Florida. The Company has entered into an agreement to sell the property in Florida and has classified its investment in that property as real estate under contract of sale. It is anticipated that this sale will occur in the second quarter of 1995. The board of directors of the Company has authorized management to re-purchase up to 1,500,000 shares of the Company's common stock at such prices and times as management deems appropriate. During the first quarter of 1995, the Company has purchased a total of 1,051,000 shares of its common stock. Odyssey, on a lease or concession basis provides ECVs, wheelchairs and children's strollers to amusement parks, zoos, and other attractions where these products are used by the public. In addition, Aviation leases and maintains wheelchairs for the airline industry for use in the airports. Odyssey and Aviation acquire their products either by producing them or purchasing them from third parties. These subsidiaries currently have a sufficient inventory of equipment to service their existing contracts. The Company anticipates any capital expenditures during 1995 will be funded by a combination of internal working capital and credit extended by suppliers. 10 RESULTS OF OPERATIONS Three month period ended March 31, 1995 compared to three month period ended March 31, 1994. Net earnings for the three month period ended March 31, 1995 were $3,106,000 as compared to $1,398,000 for the three month period ended March 31, 1994. Mobility Products - ----------------- Revenue from Odyssey and Aviation was $310,000 in 1995 as compared to $269,000 in 1994. Expenses associated with Odyssey and Aviation were $334,000 in 1995 as compared to $280,000 in 1994. During the first quarter of 1994 the Company was selling ECV's through the use of distributors. Sales in 1994 were $77,000 and cost of sales were $120,000. The Company's theme park operation is highly seasonal. The substantial portion of the Company's revenue occurs in the warm weather months when children are no longer in school and families tend to take vacations. Long Term Care Facilities - ------------------------- The Company sold "The Fountainview" on January 28, 1995 and recorded a gain of $5,149,000. During the month of January "The Fountainview" generated revenue of $555,000 and operating expenses of $318,000. For the comparable periods during 1994 the Company owned both The Fountainview and Rivermont Retirement Center, a facility which was sold in December 1994. The revenue and expenses reflected in long term care for 1994 reflect the operations of both The Fountainview and Rivermont for the entire three month period. Real Estate Operations - ---------------------- Revenue from real estate operations was $195,000 for the three month period ended March 31, 1995 as compared to $1,192,000 for the prior period. Costs of operating these properties were $97,000 for the three month period ended March 31, 1995 as compared to $773,000 for the comparable period in the prior year. Real estate operations reflect the revenue and expenses from the EquiVest properties. When the Company acquired EquiVest, it was the stated intention to sell the acquired assets. The reduced level of revenue and expenses for EquiVest reflects the ongoing sale of those properties. Interest Income and Expense - --------------------------- Interest and dividend income was $193,000 for the three month period ended March 31, 1995 as compared to $91,000 for the comparable period in the prior year. Interest expense was $121,000 in 1995 as compared to $906,000 for 1994. 11 Interest Income and Expense - Continued - --------------------------- Throughout 1994 the Company disposed of assets not essential to its long range healthcare strategy. The proceeds from those sales were used to reduce debt and increase working capital. The increase in interest income is the result of having more working capital to invest. The decrease in interest expense is due to the reduction in debt due both to the payoff of mortgages when real estate assets were sold and the reduction of corporate debt when the proceeds from the sale of assets were used to pay off that debt. Discontinued Operations - ----------------------- In 1994 management concluded that operations of skilled medical care facilities such as nursing homes and eating disorder clinics were not in the best interest of the Company. During 1994 the Company sold all operations associated with those businesses. The loss from discontinued operations for 1994 of $46,000 represents the loss from operations net of income taxes for those businesses for the three month period ended March 31, 1994. PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K -------------------------------- There were no Exhibits and reports on Form 8-K filed by the Company during the quarter ended March 31, 1995. 12 MEDICAL RESOURCE COMPANIES OF AMERICA SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by undersigned, thereunto duly authorized. MEDICAL RESOURCE COMPANIES OF AMERICA Date: May 10, 1995 By: Gene S. Bertcher -------------------------- Executive Vice President Chief Financial Officer 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM 10QSB CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND THE CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 7,820 0 4,470 81 357 15,220 3,016 1,101 31,048 2,735 1,108 176 0 111 23,835 31,048 0 6,411 0 749 0 0 121 4,704 1,598 3,106 0 0 0 3,106 .17 0
-----END PRIVACY-ENHANCED MESSAGE-----