-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NzNMTg+uQF8c7UMI2oF6KkcEMY86W9LalhpwqWfb8B2MU63UibQ3X1+w0Ku8UrmF u44i0w3oFTcg52UZhqN9TA== 0000950114-98-000252.txt : 19980515 0000950114-98-000252.hdr.sgml : 19980515 ACCESSION NUMBER: 0000950114-98-000252 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTERS CAPITAL FUNDING CORP CENTRAL INDEX KEY: 0000909110 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431623171 STATE OF INCORPORATION: MO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948 FILM NUMBER: 98620325 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE, SUITE 315 STREET 2: STE 113 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3145760050 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF SWANSEA CENTRAL INDEX KEY: 0000909113 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431375489 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-01 FILM NUMBER: 98620326 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF GALESBURG CENTRAL INDEX KEY: 0000909114 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431375391 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-02 FILM NUMBER: 98620327 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF EAST PEORIA CENTRAL INDEX KEY: 0000909115 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446788 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-03 FILM NUMBER: 98620328 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DR STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF PEORIA CENTRAL INDEX KEY: 0000909116 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446786 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-04 FILM NUMBER: 98620329 BUSINESS ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF ALTON CENTRAL INDEX KEY: 0000909117 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446787 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-05 FILM NUMBER: 98620330 BUSINESS ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DR CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF MOLINE CENTRAL INDEX KEY: 0000909118 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453169 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-06 FILM NUMBER: 98620331 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWANSEA REAL ESTATE INC CENTRAL INDEX KEY: 0000909120 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446792 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-07 FILM NUMBER: 98620332 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALESBURG REAL ESTATE INC CENTRAL INDEX KEY: 0000909121 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453172 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-08 FILM NUMBER: 98620333 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAST PEORIA REAL ESTATE INC CENTRAL INDEX KEY: 0000909122 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453171 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-09 FILM NUMBER: 98620334 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEORIA REAL ESTATE INC CENTRAL INDEX KEY: 0000909123 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446790 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-10 FILM NUMBER: 98620335 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALTON REAL ESTATE INC CENTRAL INDEX KEY: 0000909124 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431476931 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-11 FILM NUMBER: 98620336 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOLINE REAL ESTATE INC CENTRAL INDEX KEY: 0000909125 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453170 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-12 FILM NUMBER: 98620337 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUTIE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 10-Q 1 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORP. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 33-65948 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION (Exact name of Registrant as specified in its charter) (See table of Co-Registrants) Missouri 43-1623171 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11701 Borman Drive, Suite 315 St. Louis, Missouri 63146 (Address of principal executive offices) (Zip Code) Indicate by check mark whether 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 12 months (or for such shorter period that Registrant was required to file such reports), (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares of stock of each of the issuer's classes of common stock, as of the latest practicable date: N/A Certain information called for on Item 6 of Part II of this Form 10-Q is incorporated by reference to Registrants' Registration Statement (No. 33-65948) dated July 13, 1993 which was declared effective October 14, 1993, Registrants' Form 10-Q filed November 29, 1993, Registrants' Form 10-Q filed February 11, 1994, Registrants' Form 10-K filed September 28, 1994, Registrants' Form 10-Q filed February 14, 1995, Registrants' Form 10-Q filed May 15, 1995, Registrants' Form 10-Q filed February 13, 1996, Registrants' Form 10-Q filed May 14, 1996, Registrants' Form 10-K filed September 26, 1996, Registrants' Form 10-Q filed November 13, 1996, Registrants' Form 10-Q filed November 12, 1997, and Registrants' Form 10-Q filed February 11, 1998. Index to Exhibits is on Page 37. 2 CO-REGISTRANTS Rosewood Care Center, Inc. of Swansea Rosewood Care Center, Inc. of Galesburg Rosewood Care Center, Inc. of East Peoria Rosewood Care Center, Inc. of Peoria Rosewood Care Center, Inc. of Alton Rosewood Care Center, Inc. of Moline Swansea Real Estate, Inc. Galesburg Real Estate, Inc. East Peoria Real Estate, Inc. Peoria Real Estate, Inc. Alton Real Estate, Inc. Moline Real Estate, Inc. (Exact names of Co-Registrants as specified in their charters) No separate periodic or annual reports are filed for each of the co-registrants and no separate financial statements are included for each of the co-registrants because the co-registrants are effectively jointly and severally liable with respect to the Notes and because such separate periodic or annual reports and such separate financial statements are not deemed material to investors. 2 3 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION Index
Part I Financial Information Page - ----------------------------- ---- Item 1. Financial Statements 4 Rosewood Care Centers Capital Funding Corporation: Balance Sheet 4 Statement of Operations 5 Statement of Cash Flows 6 Notes to Financial Statement 7 Rosewood Care Center Obligated Companies: Rosewood Care Center, Inc. of Swansea Rosewood Care Center, Inc. of Galesburg Rosewood Care Center, Inc. of East Peoria Rosewood Care Center, Inc. of Peoria Rosewood Care Center, Inc. of Alton Rosewood Care Center, Inc. of Moline Swansea Real Estate, Inc. Galesburg Real Estate, Inc. East Peoria Real Estate, Inc. Peoria Real Estate, Inc. Alton Real Estate, Inc. Moline Real Estate, Inc. Combined Balance Sheet 8 Combined Statement of Operations 10 Combined Statement of Cash Flows 11 Notes to Combined Financial Statements 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Part II Other Information - -------------------------- Item 1. Legal Proceedings 22 Item 2. Changes in Securities 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Submission of Matters to a Vote of Security Holders 22 Item 5. Other Information 22 Item 6. Exhibits and Reports on Form 8-K 23 Index to Exhibits 37 - ----------------- Signatures 24 - ----------
3 4 Part I Financial Information --------------------- Item 1. Financial Statements ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION BALANCE SHEET (Dollars in Thousands) (Unaudited)
June 30, March 31, Assets 1997 1998 ------ -------- --------- Cash $ 1 $ 262 Mortgage notes receivable, Rosewood Companies 27,581 25,876 Accrued interest receivable 167 - ------- ------- $27,749 $26,138 ======= ======= Liabilities and Stockholders' Equity ------------------------------------ First mortgage redeemable bonds $27,581 $25,980 Accrued interest 167 157 Stockholders' equity: Common stock, $1 par value Authorized - 30,000 shares Issued and outstanding - 500 shares, at issue price 1 1 Retained earnings - - ------- ------- $27,749 $26,138 ======= ======= The accompanying notes are an integral part of this financial statement.
4 5 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION STATEMENT OF OPERATIONS (Dollars in Thousands) (Unaudited)
Three Months Nine Months Ended Ended March 31, March 31, ------------------------ ------------------------ 1997 1998 1997 1998 ------ ------ ------ ------ Interest Income $505 $473 $1,576 $1,456 Interest expense 505 473 $1,576 $1,456 ---- ---- ------ ------ Net Income $ 0 $ 0 $ 0 $ 0 ==== ==== ====== ====== The accompanying notes are an integral part of this financial statement.
5 6 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION STATEMENT OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Three Months Nine Months Ended Ended March 31, March 31, ------------------------ ------------------------ 1997 1998 1997 1998 ------ ------ ------ ------ Cash flow from operating activities: Net income $ 0 $ 0 $ 0 $ 0 Decrease in accrued interest receivable (2) 0 (10) 167 Increase (decrease) in accrued interest - (2) 0 (10) ----- ----- ------- ------- Net cash provided by operating activities (2) (2) (10) 157 ----- ----- ------- ------- Cash flow from investing activities: Collections on notes receivable 276 310 1,512 1,705 ----- ----- ------- ------- Net cash used by investing activities 276 310 1,512 1,705 ----- ----- ------- ------- Cash flow from financing operations: Reduction of redeemable bonds (274) (308) (1,502) (1,601) ----- ----- ------- ------- Net cash provided by financing (274) (308) (1,502) (1,601) ----- ----- ------- ------- Net increase (decrease) in cash 0 0 0 261 Cash, beginning 262 262 262 1 ----- ----- ------- ------- Cash, ending 262 262 262 262 ===== ===== ======= ======= Cash paid for interest $ 505 $ 473 $ 1,576 $ 1,456 ===== ===== ======= ======= The accompanying notes are an integral part of this financial statement.
6 7 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION NOTES TO FINANCIAL STATEMENTS 1. Interim Financial Statements ---------------------------- In the opinion of the Company, these unaudited financial statements include all adjustments necessary for a fair presentation of its financial position as of June 30, 1997, and March 31, 1998, and the results of its operations and its cash flows for the three month and the nine month periods ended March 31, 1998 and 1997. Such adjustments were of a normal recurring nature. The results of operations for the nine months ended March 31, 1998, and 1997 are not necessarily indicative of the results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Form 10K Annual Report (No. 33-65948), which has previously been filed with the Commission. 2. Issuance of Bonds ----------------- On October 21, 1993, the Company issued $33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November 1, 2013. Of the ending cash balance, $260,000 represents the note receivable payment on the 25th of the month which is held in the Bond Payment Fund - Principal and Interest accounts until it is disbursed to the Bond Holders on the 1st of the following month. 7 8 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
June 30, March 31, Assets 1997 1998 ------ -------- --------- Current assets: Cash $ 2,320 $ 3,290 Accounts receivable - residents, net of allowance for doubtful accounts of $224 and $117, respectively 1,178 1,456 Accounts receivable - third party payor 3,409 2,055 Due from affiliates -0- 272 Interest receivable 256 152 Prepaid insurance and other prepaids 43 66 Deferred income tax benefits 75 75 ------- ------- Total current assets 7,281 7,366 ------- ------- Property, plant and equipment: Land 943 943 Site improvements 2,140 2,140 Building 17,830 17,830 Equipment 3,702 3,801 Leasehold improvements 322 358 ------- ------- 24,937 25,072 Less accumulated depreciation 7,370 8,055 ------- ------- 17,567 17,017 ------- ------- Other assets: Notes receivable from Rosewood Care Center Holding Company 7,034 6,136 Amortizable Costs, Net 965 871 ------- ------- 7,999 7,007 ------- ------- $32,847 $31,390 ======= ======= The accompanying notes are an integral part of these financial statements.
8 9 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
June 30, March 31, Liabilities and Stockholders' Equity 1997 1998 ------------------------------------ -------- --------- Current liabilities: Current portion of long-term debt $ 2,021 $ 2,034 Accounts payable - trade 1,083 1,096 Accrued expenses: Salaries and payroll taxes 470 454 Vacation and employee fringes 244 278 Rent - Affiliate -0- 43 Real estate taxes 510 564 Accrued interest 167 -0- Management fees - affiliate 265 319 Income taxes 50 45 Dividends payable 543 747 ------- ------- Total current liabilities 5,353 5,580 ------- ------- Long-term debt: Notes payable - Rosewood Care Center Capital Funding Corporation 27,581 25,876 ------- ------- 27,581 25,876 Less current maturities 2,021 2,034 ------- ------- 25,560 23,842 ------- ------- Stockholders' equity: Common stock 65 65 Paid-in capital 481 481 Retained earnings 1,388 1,422 ------- ------- 1,934 1,968 ------- ------- $32,847 $31,390 ======= ======= The accompanying notes are in integral part of these financial statements.
9 10 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Dollars in Thousands) (Unaudited)
Three Months Nine Months Ended Ended March 31, March 31, --------------------- --------------------- 1997 1998 1997 1998 ------ ------ ------ ------ Patient service revenue: Private $4,382 $4,792 $13,470 $14,446 Medicare 2,646 2,564 7,623 7,259 Medicaid 418 380 1,104 1,130 Other patient revenues, net of expenses 16 89 62 233 ------ ------ ------- ------- 7,462 7,825 22,259 23,068 ------ ------ ------- ------- Operating expenses: Facility expenses: Administrative expense 240 270 705 793 Employee fringe benefits 456 522 1,376 1,505 Dietary 470 504 1,427 1,483 Nursing 1,780 1,964 5,316 5,676 Ancillary services 1,268 1,663 3,797 4,517 Plant utilities and maintenance 283 282 887 879 Housekeeping and laundry 226 257 690 748 Social services and activities 160 192 483 550 ------ ------ ------- ------- 4,883 5,654 14,681 16,151 ------ ------ ------- ------- Income after facility expenses 2,579 2,171 7,578 6,917 ------ ------ ------- ------- Nonfacility expenses: Real estate taxes 138 143 422 421 Rent -0- 43 -0- 43 Base management fees 198 209 594 605 Illinois Medicaid assessments 99 105 296 302 Depreciation and amortization 264 247 798 779 ------ ------ ------- ------- 699 747 2,110 2,150 ------ ------ ------- ------- Income before incentives 1,880 1,424 5,468 4,767 Incentive management fees (566) (308) (1,583) (1,205) Officers' bonuses - - - - ------ ------ ------- ------- Income from operations 1,314 1,116 3,885 3,562 ------ ------ ------- ------- Other income (expense): Interest income 157 157 515 494 Interest expense (504) (474) (1,553) (1,457) ------ ------ ------- ------- (347) (317) 1,038 (963) ------ ------ ------- ------- Income before income taxes 967 799 2,847 2,599 Income tax expense (84) (52) (245) (206) ------ ------ ------- ------- Net income 883 747 2,602 2,393 Retained earnings, beginning 1,348 1,422 1,288 1,388 Dividends declared (823) (747) (2,482) (2,359) ------ ------ ------- ------- Retained earnings, ending $1,408 $1,422 $ 1,408 $ 1,422 ====== ====== ======= ======= The accompanying notes are an integral part of these financial statements.
10 11 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Three Months Nine Months Ended Ended March 31, March 31, --------------------- --------------------- 1997 1998 1997 1998 ------ ------ ------ ------ Cash flow from operating activities: Net income $ 882 $ 748 $ 2,602 $ 2,394 Adjustments: Depreciation 232 217 701 685 Amortization 32 31 97 95 Decrease (increase) in: Accounts receivable - residents (90) 10 (264) (278) Accounts receivable - third party payors 297 476 (152) 1,354 Other receivables and prepaids 178 252 177 (191) Increase (decrease) in: Accounts payable - trade (44) 120 (412) 13 Accrued salaries, taxes and fringes 202 (54) 236 17 Accrued real estate taxes 111 113 88 54 Accrued rent - affiliates -0- 43 -0- 43 Accrued management fees 74 (152) 102 54 Other payables and accruals (7) (50) (1) (172) ------- ------- ------- ------- Net cash provided by operating activities 1,867 1,754 3,174 4,068 ------- ------- ------- ------- Cash flow from investing activities: Purchase of property and equipment (39) (73) (117) (135) Loans and deposits with affiliate (115) 81 904 898 ------- ------- ------- ------- Net cash (used) by investing activities (154) 8 787 763 ------- ------- ------- ------- Cash flow from financing activities: Reduction of long-term debt (276) (311) (1,511) (1,706) Dividends paid (819) (823) (2,273) (2,155) ------- ------- ------- ------- Net cash (used) by financing activities (1,095) (1,134) (3,784) (3,861) ------- ------- ------- ------- Net increase (decrease) in cash 618 628 177 970 Cash, beginning 1,796 2,662 2,237 2,320 ------- ------- ------- ------- Cash, ending $ 2,414 $ 3,290 $ 2,414 $ 3,290 ======= ======= ======= ======= Cash paid for: Interest $ 504 $ 473 $ 1,553 $ 1,623 ======= ======= ======= ======= Income taxes $ 40 $ 95 $ 246 $ 249 ======= ======= ======= ======= The accompanying notes are an integral part of these financial statements.
11 12 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES NOTES TO COMBINED FINANCIAL STATEMENTS 1. Interim Financial Statements ---------------------------- In the opinion of the Companies, these unaudited combined financial statements include all adjustments necessary for a fair presentation of their financial position as of June 30, 1997 and March 31, 1998, and the results of their operations and their cash flows for the three and nine month periods ended March 31, 1998 and 1997. Such adjustments were of a normal recurring nature. The results of operations for the nine month periods ended March 31, 1998 and 1997 are not necessarily indicative of the results for the full years. It is suggested that these financial statements be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Form 10K Annual Report (No. 33-65948), which has previously been filed with the Commission. 2. Litigation ---------- The Companies, from time to time, are involved in litigation in the ordinary course of business including disputes involving management contracts, patient services, employment services, and employment claims. The Companies are also involved in routine administrative and judicial proceedings regarding permits and expenses. The Companies are not a party to any lawsuit or proceeding which the companies have not provided for, which in the opinion of management, is individually or in the aggregate, likely to have a material adverse effect on the combined financial position or results of operations of the Companies. 3. Refinancing of Long-Term Debt ----------------------------- On October 21, 1993, the Companies refinanced their long-term debt with Rosewood Care Centers Capital Funding Corporation, which issued $33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November 1, 2013. Remaining loan proceeds were loaned to Rosewood Care Center Holding Company under unsecured promissory notes bearing interest at 7-1/4% per annum and having maturities from October to December 1999. 12 13 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES NOTES TO COMBINED FINANCIAL STATEMENTS 3. Refinancing of Long-Term Debt (Continued) ----------------------------------------- Loan costs of $609,000 and underwriter's discount of $841,500 are being amortized over the term of the long-term debt, on the interest method. 4. Dividends --------- Dividends in the amount of $2,359,800 were declared during the nine months ended March 31, 1998. 13 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION The Corporation is a pass through entity. Interest income and expenses offset, resulting in no income or loss. THE COMBINED FACILITY COMPANIES AND REAL ESTATE COMPANIES THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31, 1997 Overview -------- The Companies have continued their marketing emphasis on short-term convalescent care while continuing to provide long-term care. The number of short-term care patients and demand for ancillary rehabilitative and therapy services has continued to increase. Revenues and expenses associated with rehabilitative and therapy services have continued to increase through March 31, 1998. The Medicare program and various forms of private payment are principal payors for short-term nursing home care and rehabilitative services. All six of the facilities participate in the federally administered Medicare program. All six of the facilities also participate in the Medicaid program for a distinct number of beds in each facility. The Companies will continue to be affected by the government's attempts to control Medicare costs and by market issues facing the nursing home industry as a whole. The Balanced Budget Act of 1997 has put into effect the managed care model for most health care services reimbursed under the Medicare program. All long term care companies will need to increase efficiencies in management and lower costs in order to remain profitable and continue to increase growth under the Medicare prospective payment system ("MPPS"). Labor costs continue to increase while staffing levels have not changed significantly for any of the facilities. The Companies have found it necessary to raise wage rates to attract qualified personnel. The ability of the Companies to control the cost of labor, which represents one of the largest components of the Companies' operating expenses, will significantly impact the future operating results. On January 23, 1998 the facility located in Alton, Illinois opened its sixty bed addition, which results in the facility now being licensed for 180 beds. The financial statements and other disclosures for the nine months ended March 31, 1998 reflect this additional capacity. The following table sets forth the effect on the occupancy and patient day disclosures specific to the addition of the sixty licensed beds at the Alton facility: 14 15
February March -------- ----- 1997 1998 1997 1998 ---- ---- ---- ---- Residents 114 124 113 131 === === === === Increase in Patient Days 838 ===
Operating Results ----------------- Net revenues have increased to $7,825,000 for the three months ended March 31, 1998 from $7,462,000 for the three months ended March 31, 1997, an increase of $363,000 or 4.6%. Private revenues have increased $410,000 from $4,382,000 for the three months ended March 31, 1997 to $4,792,000 for the three months ended March 31, 1998. Revenue generated from ancillary services for private paying patients increased $270,000, while revenue from room charges increased $140,000 when compared to the same three month period last year. Private census has decreased from 39,818 patient days for 1997 to 39,636 patient days for the current three month period ended March 31, 1998. The majority of the increase in ancillary revenue can be accounted for by the change in the method of billing and collecting for drugs sold to private paying residents. Prior to July 1, 1997, drugs supplied to private paying residents were billed by an unrelated third party pharmacy company directly to the private paying residents and not reflected as revenues or expenses of the Companies. Effective July 1, 1997, the Companies began directly billing residents for drugs. The drugs, which continue to be supplied to the private paying residents by the unrelated pharmacy company, are billed to the residents by the Companies at the same cost as previously charged to the residents by the unrelated pharmacy company in prior periods. As compensation for performing the billing and collecting for the drugs, the Companies retain a portion of the drug billings. For the three months ended March 31, 1998, this aggregated $63,000, which is reflected in Other Patient Revenues for the current period. Net revenues for Medicare have decreased from $2,646,000 for the three months ended March 31, 1997 to $2,564,000 for the three months ended March 31, 1998, a decrease of $82,000 or 3.1%. The Medicare census has decreased to 9,384 from 9,476 compared to the same period last year. Medicaid revenue has decreased from $418,000 to $380,000 when compared to the same three month period last year. The decrease is the result of a decrease in census from 6,223 patient days for the three months ended March 31, 1997 to 5,505 patient days for the three months ended March 31, 1998. The occupancy of the facilities was 84.1% for the current three month period, compared to 89.5% for the same three month period last year. Facility operating expenses increased to $5,654,000 (or $103.70 per patient day) for the current three month period ended March 31, 1998, from $4,883,000 (or $87.96 per patient day) for the three months ended March 31, 1997, an increase of $15.74 per patient day. 15 16 Administrative expenses have increased $30,000 when compared to the same three month period last year. The majority of the increase can be accounted for by the increase in professional fees, advertising for new employees, education, seminars and mileage reimbursement. The cost of employee fringe benefits has increased from $456,000 for the three months ended March 31, 1997 to $522,000 for the three months ended March 31, 1998. The majority of the increase can be accounted for by the increase in workers' compensation insurance premiums and payroll taxes. Dietary expenses have increased approximately $34,000 when compared to the same three month period last year. Wages have increased approximately $24,000 while the cost of food and supplies has increased $10,000 when compared to the same three month period last year. Nursing costs have increased from $1,780,000 for the three months ended March 31, 1997 to $1,964,000 for the three months ended March 31, 1998, an increase of $184,000 or 10.3%. Labor costs have increased $154,000, while the cost of medical supplies has increased $30,000 when compared to the same period last year. Ancillary services costs have increased from $1,268,000 for the three months ended March 31, 1997 to $1,663,000 for the three months ended March 31, 1998, an increase of $395,000 or 31.1%. The increase in costs aggregating $171,000 is the result of the increase in ancillary revenue and services provided to both the private pay and Medicare residents of the facilities. The cost of drugs has increased $224,000 when compared to the same period last year. This increase was the result of the change in billings for drugs to private residents previously discussed. In the fiscal quarter ending March 31, 1998, the last two facilities which had contracts with unrelated third party therapy providers terminated those contracts. Therapy services for speech, occupational and physical therapy are now provided at all of the facilities by a related company, Rosewood Therapy Services, Inc., and are billed to the Companies at cost, which has resulted in substantial savings to the Companies over contracting with unrelated third party therapy providers. The cost savings associated with this arrangement aggregated $223,000 for the three month period ended March 31, 1998 when compared to the three month period ended March 31, 1997. Plant utilities and maintenance for the quarter ended March 31, 1998 aggregated $282,000 which is virtually unchanged when compared to the $283,000 expended for the three month period ended March 31, 1997. Housekeeping and laundry costs have increased $31,000 when compared to the same three month period last year. Labor costs have increased $35,000 while the cost of supplies has decreased $4,000. Social Services and Activities costs have increased $32,000 when compared to the same three month period last year. The increase can be accounted for by the increase in staffing for these departments. Interest income is unchanged and aggregated $157,000 for each of the three month periods ended March 31, 1998 and 1997. 16 17 Interest expense decreased $30,000 when compared to the same three month period last year. The decrease is the result of the decrease in the long term debt of the facility. NINE MONTHS ENDED MARCH 31, 1998 COMPARED WITH NINE MONTHS ENDED MARCH 31, 1997 Operating Results ----------------- Net revenues have increased to $23,068,000 for the nine months ended March 31, 1998 from $22,259,000 for the nine months ended March 31, 1997, an increase of $809,000 or 3.6%. Private revenues have increased $976,000 from $13,470,000 for the nine months ended March 31, 1997, to $14,446,000 for the nine months ended March 31, 1998. Revenue generated from ancillary services for private paying patients increased $514,000, while revenue from room charges increased $462,000 when compared to the same period last year. The average private room rate for the current period aggregated $114 per patient day compared to $106 per patient day for the same period last year. Private census has decreased from 123,989 patient days for 1997 to 120,234 patient days for the current period ended March 31, 1998. As previously discussed, effective July 1, 1997, the Companies began billing the private paying residents for drugs previously billed directly to the residents by an unrelated third party pharmacy company. This change has resulted in an increase in ancillary revenue aggregating $364,000 for the current nine month period. Other ancillary revenues, comprised of occupational, physical and speech therapy, increased $150,000 when compared to the same period last year. The portion of the drug billings retained by the Companies as compensation for the billing and collecting for drugs aggregated $167,000 for the nine months ended March 31, 1998, compared to $0 for the nine months ended March 31, 1997 and is reflected in other Patient Revenues for the current nine month period. Net revenues for Medicare have decreased from $7,623,000 for the nine months ended March 31, 1997 to $7,259,000 for the nine months ended March 31, 1998, a decrease of $364,000 or 4.8%. The Medicare census has decreased to 27,230 patient days for 1998 from 30,176 patient days for the same period last year. The Medicare reimbursement rate has increased approximately $13 per day which is the result of an increase in ancillary services provided to Medicare qualified residents. Medicaid revenue has increased from $1,104,000 to $1,130,000 when compared to the same period last year. The facilities have received a minor increase of approximately $2 per day in the reimbursement rate paid to the facilities for residents covered under the Medicaid program. The Medicaid census has decreased from 16,701 patient days for the nine months ended March 31, 1997 to 16,532 patient days for the nine months ended March 31, 1998. The facilities have an average occupancy rate of 86% for the current nine month period, compared to 90% for the same period last year. The East Peoria facility is the only facility with an average occupancy significantly below levels achieved by the majority of the Companies' facilities. The East Peoria facility continues to have a low occupancy and management is of the opinion that this trend may continue. The occupancy for the six facilities 17 18 for the current nine month period compared to the same period last year is as follows:
March 31 1997 1998 Swansea 96.3 98.5 Galesburg 87.0 81.6 Moline 91.5 93.1 Alton 98.6 89.7 Peoria 90.0 90.6 East Peoria 76.9 62.9 Average 90.0 86.0
The Alton facility had an occupancy of 98.6% for the nine months ended March 31, 1997 compared to 89.7% for the nine months ended March 31, 1998. The decline in occupancy is the result of a 60 bed addition to the facility which was opened and licensed on January 23, 1998. As of May 5, 1998, the facility has 136 of the 180 beds occupied. Management is of the opinion that it could take as long as eighteen months to two years to achieve an occupancy in excess of 95% at the Alton location. Facility operating expenses increased to $16,151,000 (or $98.48 per patient day) for the current nine month period ended March 31, 1998, from $14,681,000 (or $85.92 per patient day) for the nine months ended March 31, 1997. Administrative expenses have increased $88,000 when compared to the same period last year. The majority of the increase can be accounted for by the increase in advertising, telephone, advertising for and training new employees, professional fees, and the increase in the cost of continuing education of employees reimbursed by the Companies. The cost of employee fringe benefits increased approximately $129,000 when compared to the same nine month period last year. The majority of the increase can be accounted for by the increase in workmen's compensation insurance premiums, payroll taxes, vacation pay and the cost of health insurance premiums. Dietary expenses have increased approximately $56,000 when compared to the same period last year. Wages have increased approximately $48,000, with the balance of the increase accounted for by the increase in raw food costs. Nursing costs have increased from $5,316,000 for the nine months ended March 31, 1997 to $5,676,000 for the nine months ended March 31, 1998, an increase of $360,000 or 6.8%. Labor costs have increased $261,000 when compared to the same period last year, with the balance of the increase accounted for by the increase in the cost of medical supplies. Even though the patient census has declined, labor hours have remained constant when compared to the same period last year. As previously discussed, labor costs continue to increase due to increased pressure on the availability of qualified personnel. Management is of the opinion that this trend will continue as long as unemployment remains at record low levels. The Companies 18 19 will attempt to adjust daily rates to account for the increase in the cost of labor, while at the same time remaining competitive within the nursing home industry. Ancillary services costs have increased from $3,797,000 for the nine months ended March 31, 1997 to $4,517,000 for the nine months ended March 31, 1998, an increase of $720,000 or 19.0%. This increase in costs is the direct result of the increase in ancillary revenue and services provided to the Medicare and private paying residents of the facilities. The cost of drugs has increased $584,000 when compared to the same period last year. This increase was the result of the change in billings for drugs to private residents previously discussed. The remainder of the increase, or $138,000, is the result of the increase in the cost of speech, physical and occupational therapy provided to both private paying and Medicare residents because of the increased utilization of these services. In the fiscal quarter ending March 31, 1998, the last two facilities which had contracts with unrelated third party therapy providers terminated those contracts. Therapy services for speech, occupational physical therapy are now provided at all of the facilities by a related company, Rosewood Therapy Services, Inc., and are billed to the Companies at cost, which has resulted in substantial savings to the Companies over contracting with unrelated third party therapy providers, aggregating $487,000 over the nine month period ending March 31, 1997. Even though the company was able to realize substantial savings by contracting with the related company, the overall cost of therapy has increased as a result of the increase in ancillary services utilization by the private paying and Medicare residents of the facilities. Plant utilities and maintenance costs have decreased $8,000 from $887,000 for the nine months ended March 31, 1997 to $879,000 for the nine month period ended March 31, 1998. Housekeeping and laundry costs have increased $58,000 when compared to the same nine month period last year. Labor costs have increased $69,000, while the cost of supplies has decreased $11,000 when compared to the same period last year. Social Services and Activities costs have increased from $483,000 for the nine months ended March 31, 1997 to $550,000 for the nine months ended March 31, 1998. The increased cost is the result of the increase in staffing at all six of the facilities for these departments. Rent, base management fees and the Illinois Medicaid Assessments have increased when compared to the same nine month period in 1997 as a result of opening the sixty bed addition in Alton. The rent on the sixty bed addition was paid to an affiliated company which is not one of the reporting Companies. Interest income has decreased $21,000 when compared to the same period last year as a result of the decrease in the notes receivable outstanding 19 20 during the nine month period from the affiliated company, Rosewood Care Center Holding Co. Interest expense decreased $96,000 when compared to the same period last year. The decrease is the result of the decrease in the long term debt of the facility from $27,581,000 on March 31, 1997 to $25,876,000 as of March 31, 1998. The Facility Companies file a consolidated income tax return with their parent company, Rosewood Care Center Holding Co. The income of the Real Estate Companies is taxed at the individual shareholder level, as each real estate company is an S corporation. The amount reflected as income taxes is the facility companies' portion of federal and state taxes calculated for the nine months ended March 31, 1998 and 1997, on an annualized basis. Liquidity and Capital Resources ------------------------------- As of March 31, 1998, the companies had approximately $3,290,000 in cash and cash equivalents and net working capital of approximately $1,786,000. There was a net increase in cash of $970,000 since June 30, 1997. For the nine months ended March 31, 1998, net cash provided by operations was $4,068,000. Net cash from investing activities was $763,000 of which $898,000 was received from Rosewood Care Center Holding Co. as payment on notes due from the affiliated company and $135,000 was used by the Companies for the purchase of personal property and equipment used in the operations of the facilities. Net cash used in financing activities aggregated $3,861,000, of which $1,706,000 was used to retire debt and $2,155,000 was used for the payment of dividends. The Companies believe they have adequate capital for operations and replacements for the coming year and the foreseeable future. Accounts receivable from private paying patients increased to $1,456,000 as of March 31, 1998, compared to $1,178,000 as of June 30, 1997. Accounts receivable from third party payers decreased to $2,055,000 as of March 31, 1998, compared to $3,409,000 as of June 30, 1997. $793,040 of this amount is due from Medicare for unsettled cost reports through March 31, 1998 which are subject to audit. The Medicare program continues to face intense scrutiny and significant cutbacks. As previously, noted, budget legislation passed by Congress in 1997, enacted a new Medicare prospective payment system. This new MPPS is intended to help the Medicare program achieve targeted reductions in spending growth of approximately $9.2 billion for skilled nursing facilities over the next five years. The new MPPS reimburses the provider for routine, ancillary and capital costs. The new MPPS rate will initially be a blended rate, based on previous facility costs adjusted by an inflation factor and a national rate. The first year the rate will be based on 75% facility costs and 25% national rate. The second year rate is 50% facility costs and 50% national rate. In the fourth year, 100% of the new MPPS will be based on the national rate. The national rate is subject to adjustment for the acuity of the patient mix and variation in geographic labor costs. The current system of Medicare payment is a cost reimbursement system which requires, among other things, a projection of care to be provided at the time the resident is admitted and a report of care actually given when the 20 21 resident is discharged. In addition to the changes described above, the new MPPS is to be based on units of service defined for the purpose of calculating prospective payment. This payment system requires more frequent assessment and reporting than under the current system. The Balanced Budget Act of 1997, which proposed the Medicare billing changes, required a sixty day period between the date the adjustment factors were published and the implementation of the MPPS program. Although the government failed to meet the May 1, 1998 deadline for setting the regional adjustment factors, it has notified health care providers that the MPPS will still be implemented July 1, 1998. When the MPPS program starts, the Companies will incur additional clerical and other staffing costs as a result of the additional reporting required. Until the Companies have some experience with reimbursement under the new MPPS, it is unknown whether there will be an increase in revenues sufficient to offset the additional costs associated with the new MPPS. Therefore, the effect of the new MPPS on the results of operations, financial condition and cash flow of the Companies is not yet known. Litigation Climate ------------------ Significant adverse awards and investigations involving high profile health care providers have recently been reported. Management believes these reports evidence an increasingly hostile regulatory and litigation climate in the nursing home industry. A continuation of this trend could significantly affect the Companies' future operating results. Year 2000 --------- Many computers currently in use in business and government use only two digits, rather than four, to identify the year where information about the date is entered into or automatically added to computer files. These computers automatically add the "19" prefix to the last two digits the computer reads for the year when date information becomes part of a computer file. Thus, when "2000" is entered, the computer will only read the "00" and interpret the date as "1900", rather than "2000". This is becoming known as the Year 2000 ("Y2K") problem. This issue is more of a problem for systems employing large mainframe computers and other similar or older systems. Additional problems come from microprocessors embedded in machinery. The Companies do not utilize mainframes and have updated their computer systems recently, including accounting and clinical software and hardware. The Companies have also begun investigation of machinery to determine the existence and extent of any microprocessor problems. Investigation of readiness of mechanical systems and other equipment in the Companies' facilities has begun and equipment upgrades and readiness are scheduled to continue over the course of the next year. The Companies believe their internal accounting and patient management systems will not be materially disrupted or adversely affected by the Y2K problem. Internal software and hardware systems have undergone extensive upgrading in the last two years, in part to address the Y2K issues. However, the Companies receive substantial payments from insurance companies and state and federal government entities. In the United States Office of Management and Budget's report on the government's Y2K readiness issued on March 15, the Health Care Financing Administration ("HCFA"), which handles Medicare and Medicaid funds, was found 21 22 to be struggling with Y2K readiness. At this time, the Companies do not know whether the government and other third party payors will have implemented updates and contingency plans necessary for problem-free transition to 2000. If those payors experience disruption from the Y2K, the Companies could experience software compatibility problems, delays in payment and other difficulties which could have a material adverse impact on the future operating results or financial condition of the Companies. During the next fiscal year, the Companies plan to review and analyze whether there is a significant likelihood that the Companies' major payors or vendors will experience Y2K problems, the extent of repercussions to the Companies from such problems and what steps the Companies should be taking to eliminate, minimize or otherwise address potential costs and other problems. PART II OTHER INFORMATION - -------------------------- ITEM 1. LEGAL PROCEEDINGS. There were no material developments with respect to legal proceedings during the quarter ended March 31, 1998. ITEM 2. CHANGES IN SECURITIES. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. During the period ending March 31, 1998, the construction of the 60 bed expansion wing at Rosewood Care Center of Galesburg neared completion. Opening of the expansion wing is still projected for the last quarter of fiscal 1998. There are certain restrictions on the expansion which are contained in the Loan Agreement and the Trust Indenture. In accordance with those restrictions, ownership of the expansion wing is maintained in the name of the Galesburg Real Estate II, L.L.C., a separate entity from Galesburg Real Estate, Inc. which owns the existing nursing home. Rosewood Care Center, Inc. of Galesburg, the company which leases and operates the Galesburg skilled nursing facility, will also be the lessee and operator of the expansion wing. In accordance with the terms of the Loan Agreement, and the Loan Guarantee Agreement, under certain conditions, Rosewood Care Center, Inc. of Galesburg can terminate the lease and take other actions which could be adverse to Galesburg Real Estate II, L.L.C. without penalty while the bonds are outstanding. In the 1997 fiscal year, a related company, Rosewood Therapy Services, Inc. began providing therapy services to the facilities owned and operated by the Companies. In 1997, therapy services were provided to the facilities at prevailing market rates, on the same terms and conditions as would be entered into with unrelated therapy companies. During the 1997 fiscal year, the 22 23 Companies' paid $3,016,000 to unrelated companies for physical and occupational therapy services and an additional $236,000 for speech therapy services. Amounts paid by the Companies to Rosewood Therapy Services during the 1997 fiscal year were negligible. Beginning with the 1998 fiscal year, therapy services are provided to the facilities at Rosewood Therapy Services' cost, rather than at prevailing market rates. During the first nine months of the 1998 fiscal year, the Companies' paid $1,159,178 to unrelated companies for physical, occupational and speech therapy services. Amounts paid by the Companies to Rosewood Therapy Services during the first nine months of the 1998 fiscal year, aggregated $1,323,578. The Companies intend to obtain substantially all therapy services from Rosewood Therapy Services for the 1998 fiscal year. Effective March 1998, the Companies terminated contracts with the remaining unrelated third party therapy providers. Substantially all speech, occupational and physical therapy is now provided by Rosewood Therapy Services. The Companies anticipate that only nominal amounts will be paid to outside companies to provide specialized therapies or to cover short term staffing needs. During the second fiscal quarter of 1998, the Companies became participants in the 401 (k) Plan maintained by an affiliate, HSM Management Services, Inc. The Plan allows but does not require a matching contribution from the Companies. The Companies do not expect participation in the 401 (k) plan to have a material impact on financial performance. The Companies continue to have discussions with large providers relating to managed care options. At March 31, 1998, no new contracts had been finalized. Item 6. Exhibits and Reports on Form 8-K. (a) See Index to Exhibits on Page 37. (b) Reports on Form 8-K. None. 23 24 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 24 25 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF SWANSEA, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 25 26 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF GALESBURG, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer 26 27 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF PEORIA, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 27 28 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF EAST PEORIA, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 28 29 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF ALTON, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 29 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF MOLINE, Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 30 31 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SWANSEA REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal and Executive Officer and Principal Financial and Accounting Officer 31 32 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GALESBURG REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 32 33 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PEORIA REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 33 34 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EAST PEORIA REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 34 35 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALTON REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 35 36 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MOLINE REAL ESTATE, INC., Registrant Dated: May 14, 1998 By: /s/ Larry Vander Maten -------------------------------------------- Larry Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 36 37 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION Exhibit Index These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K
Exhibit Number Description - ------- ----------- 4.1 Reference is made to Article III of the Articles of Incorporation of Rosewood Care Centers Capital Funding Corporation filed on September 28, 1994 as Exhibit 3.1 (and referenced in Exhibit 4.1) of the Form 10-K. 4.2 Reference is made to the Trust Indenture filed on November 29, 1993 as Exhibit 4.2 of the Form 10-Q of Registrants. 4.3 Reference is made to the Bond filed on November 29, 1993 as Exhibit 4.3 of the Form 10-Q of Registrants. 4.4 Reference is made to the Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Alton and the additional Loan Guaranty Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 4.4 of the Form 10-Q of Registrants. 4.5 Reference is made to the Note executed by Alton Real Estate, Inc. and the additional Notes listed on the Schedule filed on November 29, 1993 as Exhibit 4.5 of the Form 10-Q of Registrants. 10.1 Reference is made to the Trust Indenture filed on November 29, 1993 as Exhibit 4.2 of the Form 10-Q of Registrants. 10.2 Reference is made to the Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and the additional Collateral Pledge and Security Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.2 of the Form 10-Q of Registrants. 10.3 Reference is made to the Mortgage Between Alton Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation and the additional Mortgages listed on the Schedule filed on November 29, 1993 as Exhibit 10.3 of the Form 10-Q of Registrants. 10.4 Reference is made to the Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Alton and the additional Security Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.4 of the Form 10-Q of Registrants. 10.5 Reference is made to the Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and 37 38 the additional Assignments of Rents and Leases listed on the Schedule filed on November 29, 1993 as Exhibit 10.5 of the Form 10-Q of Registrants. 10.6 Reference is made to the Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and the additional Subordination and Attornment Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.6 of the Form 10-Q of Registrants. 10.7 Reference is made to the Acknowledgment and Consent between Rosewood Care Centers Capital Funding Corporation and Hovan Enterprises, Inc. filed on November 29, 1993 as Exhibit 10.7 of the Form 10-Q of Registrants. 10.8 Reference is made to the Administrative Services Agreement between Hovan Enterprises, Inc. and Alton Real Estate, Inc. and the additional Administrative Services Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.8 of the Form 10-Q of Registrants. 10.9 Reference is made to the Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Alton and Hovan Enterprises, Inc. and the additional Revised and Restated Management Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.9 of the Form 10-Q of Registrants. 10.10 Reference is made to the Lease between Alton Real Estate, Inc. and Rosewood Care Center, Inc. of Alton and the additional Leases listed on the Schedule filed on November 29, 1993 as Exhibit 10.10 of the Form 10-Q of Registrants. 10.11 Reference is made to the Assignment of Management Agreement between Rosewood Care Center, Inc. of Alton and Mercantile Bank and the additional Assignments of Management Agreement listed on the Schedule filed on November 29, 1993 as Exhibit 10.11 of the Form 10-Q of Registrants. 10.12 Reference is made to the Contract between Resident and Facility filed on July 13, 1993 as Exhibit 10.12 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 10.13 Reference is made to the Loan Agreement among Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc., Swansea Real Estate, Inc., Peoria Real Estate, Inc., East Peoria Real Estate, Inc., Moline Real Estate, Inc., and Galesburg Real Estate, Inc. filed on November 29, 1993 as Exhibit 10.13 of the Form 10-Q of Registrants. 10.14 Reference is made to the Loan Guaranty Agreement filed on November 29, 1993 as Exhibit 4.4 of the Form 10-Q of Registrants. 10.15 Reference is made to the Letter of Credit issued by Sun Bank, National Association to Mercantile Bank of St. Louis N.A. as Trustee under the Trust Indenture on December 6, 1993 and substituted for the cash in the 38 39 Debt Service Reserve Fund on December 9, 1993, filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants. 10.16 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on February 14, 1995 as Exhibit 10.16 of the Form 10-Q of the Registrants. 10.17 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on February 13, 1996 as Exhibit 10.17 of the Form 10-Q of the Registrants. 10.18 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on November 13, 1996 as Exhibit 10.18 of the Form 10-Q of the Registrants. 10.19 Reference is made to the Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Alton (Additional Consultant Services Agreements listed on the Schedule), which was filed on November 12, 1997 as Exhibit 10.19 of the Form 10-Q of the Registrants. 10.20 Reference is made to Renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants. 27.1 Financial Data Schedule of Rosewood Care Center Capital Funding Corporation. 27.2 Financial Data Schedule of Rosewood Care Center of Galesburg. 27.3 Financial Data Schedule of Rosewood Care Center of Swansea. 27.4 Financial Data Schedule of Rosewood Care Center of East Peoria. 27.5 Financial Data Schedule of Rosewood Care Center of Peoria. 27.6 Financial Data Schedule of Rosewood Care Center of Alton. 27.7 Financial Data Schedule of Rosewood Care Center of Moline. 27.8 Financial Data Schedule of Swansea Real Estate. 27.9 Financial Data Schedule of Galesburg Real Estate. 27.10 Financial Data Schedule of East Peoria Real Estate. 27.11 Financial Data Schedule of Peoria Real Estate. 27.12 Financial Data Schedule of Alton Real Estate. 39 40 27.13 Financial Data Schedule of Moline Real Estate. 99.1 Reference is made to the Amended and Restated License Agreement filed September 28, 1994 as Exhibit 99.1 of Form 10-K of Registrants. 99.2 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Swansea filed on July 13, 1993 as Exhibit 99.2 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.3 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Alton filed on July 13, 1993 as Exhibit 99.3 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.4 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of East Peoria filed on July 13, 1993 as Exhibit 99.4 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.5 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Peoria filed on July 13, 1993 as Exhibit 99.5 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.6 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Galesburg filed on July 13, 1993 as Exhibit 99.6 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.7 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Moline filed on July 13, 1993 as Exhibit 99.7 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.8 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Swansea filed on July 13, 1993 as Exhibit 99.8 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.9 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Alton filed on July 13, 1993 as Exhibit 99.9 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 40 41 99.10 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of East Peoria filed on July 13, 1993 as Exhibit 99.10 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.11 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Peoria filed on July 13, 1993 as Exhibit 99.11 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.12 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Galesburg filed on July 13, 1993 as Exhibit 99.12 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.13 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Moline filed on July 13, 1993 as Exhibit 99.13 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.14 Reference is made to the Lease Agreement filed on September 28, 1994 as Exhibit 99.14 of the Form 10-K of Registrants. 99.15 Reference is made to the Revised and Restated Grant and Declaration of Easements filed on September 28, 1994 as Exhibit 99.15 of the Form 10-K of Registrants. 99.16 Reference is made to the Managed Care Agreement between Rosewood Care Center, Inc. of Moline, Heritage National Health Plan, Inc., John Deere Family Health Plan and Deere and Company filed on May 15, 1995 as Exhibit 99.16 of the Form 10-Q of Registrants. 99.17 Reference is made to the Skilled Nursing Facility Agreement between Health Care Service Corporation and Rosewood Care Center, et al. filed on September 26, 1996 as Exhibit 99.17 of the Form 10-K of the Registrants. 41 42 SCHEDULE THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 23, 1993 10-Q. 4.4 Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Swansea Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Peoria Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of East Peoria Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Moline Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Galesburg 4.5 Note executed by Swansea Real Estate, Inc. Note executed by Peoria Real Estate, Inc. Note executed by East Peoria Real Estate, Inc. Note executed by Moline Real Estate, Inc. Note executed by Galesburg Real Estate, Inc. 10.2 Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.3 Mortgage Between Swansea Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between Peoria Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between East Peoria Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation 42 43 Mortgage Between Moline Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between Galesburg Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation 10.4 Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Swansea Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Peoria Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of East Peoria Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Moline Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Galesburg 10.5 Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.6 Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.8 Administrative Services Agreement between Hovan Enterprises, Inc. and Swansea Real Estate, Inc. 43 44 Administrative Services Agreement between Hovan Enterprises, Inc. and Peoria Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and East Peoria Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and Moline Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and Galesburg Real Estate, Inc. 10.9 Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Swansea and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Peoria and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of East Peoria and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Moline and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Galesburg and Hovan Enterprises, Inc. 10.10 Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Swansea Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Peoria Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of East Peoria Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Moline Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Galesburg 10.11 Assignment of Management Agreement between Rosewood Care Center, Inc. of Swansea and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of Peoria and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of East Peoria and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of Moline and Mercantile Bank 44 45 Assignment of Management Agreement between Rosewood Care Center, Inc. of Galesburg and Mercantile Bank THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 12, 1997 10.19 Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Swansea Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Moline Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Galesburg Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Peoria Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of East Peoria 45
EX-27.1 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909110 ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 262 0 25,876 0 0 262 0 0 26,138 157 25,980 1 0 0 0 26,138 0 1,456 0 0 0 0 1,456 0 0 0 0 0 0 0 0 0
EX-27.2 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909114 ROSEWOOD CARE CENTER OF GALESBURG 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.3 4 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909113 ROSEWOOD CARE CENTER OF SWANSEA 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.4 5 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909115 ROSEWOOD CARE CENTER OF EAST PEORIA 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.5 6 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909116 ROSEWOOD CARE CENTER OF PEORIA 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.6 7 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909117 ROSEWOOD CARE CENTER OF ALTON 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.7 8 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909118 ROSEWOOD CARE CENTER OF MOLINE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.8 9 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909120 SWANSEA REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.9 10 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909121 GALESBURG REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.10 11 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909122 EAST PEORIA REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.11 12 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909123 PEORIA REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.12 13 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909124 ALTON REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
EX-27.13 14 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at March 31, 1998 for the period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 0000909125 MOLINE REAL ESTATE 1000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,290 0 3,628 117 0 7,366 25,072 8,055 31,390 5,580 0 65 0 0 1,903 31,390 23,068 23,562 0 19,506 0 0 1,457 2,599 206 0 0 0 0 2,393 37 0
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