1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
----------------------------------
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 1997
-----------------
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-11656 22-1807533
- --------------------------------------------------------------------------------
(State or other jurisdiction) (Commission File Number) (I.R.S. EIN)
Two Nationwide Plaza, Suite 760, Columbus, Ohio 43215
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 221-6000
--------------
NO CHANGE
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
2
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 8-K CURRENT REPORT
DECEMBER 31, 1997
Item 2. Acquisition or Disposition of Assets
- ------- ------------------------------------
On December 31, 1997, The Wendt-Bristol Health Services Corporation
closed two simultaneous and inter-dependent transactions to sell two of
its nursing homes in Columbus, Ohio.
In one transaction, 72 Ventures, Ltd., an Ohio limited liability
company ("Buyer") entered into an asset purchase agreement with
American Care Center, Inc., (ACC) an Ohio corporation (subsidiary of
Registrant) to purchase a 147-bed long term health care facility known
as Bristol House Columbus (BHC). Terms of the sale provided for a
purchase price of $6,080,000, payable with cash of $600,000 at closing,
assumption of a mortgage (approximately $2,934,000) real estate taxes
(approximately $47,000) and the issuance of cognovit promissory notes
by the Buyer for the balance. Such notes (approximately $2,499,000) are
personally guaranteed by the principals of the Buyer, secured by the
assets sold and are payable to ACC, with interest at 8% per annum,
within 180 days (approximately $1,499,000) and in 24 months
(approximately $1,000,000).
In the other transaction, 54 Realty, Ltd., an Ohio limited liability
company ("Buyer") entered into an asset purchase agreement with Health
America, Inc., (HA) an Ohio corporation (majority-owned subsidiary of
Registrant) to purchase a 75-bed long term health care facility known
as The Wendt-Bristol Alzheimer's Center. Terms of the sale provided for
a purchase price of $3,800,000, payable with cash of $150,000 at
closing, assumption of a mortgage (approximately $3,179,000) real
estate taxes (approximately $46,000) and the issuance of a cognovit
promissory note by the Buyer for the balance. Such note (approximately
$425,000) is personally guaranteed by the principals of the Buyer,
secured by the assets sold and is payable to HA, with interest at 8%
per annum, within 180 days.
Item 7. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro-Forma Financial Information
The following unaudited Pro-Forma Financial Statements are filed with
this report:
Pro-Forma Consolidated Balance Sheet as at September 30, 1997................Page F-1, 2
Pro-Forma Consolidated Statements of Operations:
Year Ended December 31, 1996 .......................................Page F-3
Nine Months Ended September 30, 1997 ...............................Page F-4
-2-
3
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 8-K CURRENT REPORT
DECEMBER 31, 1997
The Unaudited Pro Forma Consolidated Balance Sheet of Registrant as at
September 30, 1997 reflects the financial position of Registrant and
its subsidiaries after giving effect to the disposition of the assets
including the assumption of the liabilities discussed in Item 2 and
assumes the disposition took place on September 30, 1997. The Pro Forma
Consolidated Statements of Operations for the fiscal year ended
December 31, 1996 and the nine months ended September 30, 1997 assume
that the disposition occurred on January 1, 1996 and are based on the
operations of Registrant and its subsidiaries for the year ended
December 31, 1996 and the nine months ended September 30, 1997. A
combined gain of approximately $1,500,000 has not been reflected in
these Pro Forma Statements of Operations.
The unaudited pro forma consolidated financial statements have been
prepared by Registrant based upon assumptions deemed appropriate by its
Management. The unaudited pro forma consolidated financial statements
presented herein are shown for illustrative purposes only and are not
necessarily indicative of the future financial position or future
results of operations of Registrant, or of the financial position or
results of operations of Registrant that would have actually occurred
had the transaction been in effect as of the date or for the periods
presented. In addition, it should be noted that Registrant's financial
statements will reflect the disposition based upon the actual closing
date.
The unaudited pro forma consolidated financial statements should be
read in conjunction with the historical financial statements and
related notes of Registrant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
The Wendt-Bristol Health Services Corporation
Dated January 14, 1998 By:/s/ SHELDON A. GOLD
------------------------------
Sheldon A. Gold, its President
-3-
4
PRO FORMA FINANCIAL INFORMATION
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS AT SEPTEMBER 30, 1997
ASSETS
(UNAUDITED)
Pro Forma
Adjustments
---------------------------------
Historical BHC & HA (a) Other (b) Pro Forma
------------- -------------- -------------- --------------
Current assets:
Cash $ 316,380 $ $ 545,000 (c) $ 861,380
------------- -------------- -------------- --------------
Restricted cash 524,829 524,829
------------- -------------- -------------- --------------
Receivables:
Trade, net of allowance for doubtful
accounts of $173,000 3,062,346 3,062,346
Notes receivable 308,847 1,924,000 2,232,847
Miscellaneous 972,180 (48,000) 924,180
------------- -------------- -------------- --------------
4,343,373 1,876,000 6,219,373
------------- -------------- -------------- --------------
Inventories 342,580 342,580
Prepaid expenses and other 214,942 (87,000) 127,942
------------- -------------- -------------- --------------
Total current assets 5,742,104 2,334,000 8,076,104
------------- -------------- -------------- --------------
Property, plant and equipment, at cost 21,499,814 8,717,000 12,782,814
Less: Accumulated depreciation and
amortization (6,560,352) (1,786,000) (4,774,352)
------------- -------------- -------------- --------------
14,939,462 6,931,000 0 8,008,462
------------- -------------- -------------- --------------
Investments and other assets:
Notes and other receivables, net of current portion 332,116 1,000,000 1,332,116
Notes receivable from officers, employees and
related parties, net of amounts payable 942,631 942,631
Life insurance premiums receivable 949,546 949,546
Investment in unconsolidated affiliates 667,187 667,187
Excess of cost over assets of businesses
and subsidiaries acquired, less amortization 575,368 (190,000) 385,368
Deferred charges 1,007,115 (392,000) 615,115
Other assets 381,939 (2,000) 379,939
------------- -------------- -------------- --------------
Total investments and other assets 4,855,902 0 416,000 5,271,902
------------- -------------- -------------- --------------
25,537,468 6,931,000 2,750,000 21,356,468
============= ============== ============== ==============
(Continued)
(a) To eliminate assets and liabilities disposed per the sale agreements.
(b) To reflect sale proceeds net of mortgages assumed by buyer, writeoff of
certain prepaid expenses and deferred charges, accrual of sale expenses
and unrealized gain on sale.
(c) Cash received at closing is reduced by $205,000 used to payoff equipment
loans.
F-1
5
PRO FORMA FINANCIAL INFORMATION
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET (Continued)
AS AT SEPTEMBER 30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
(UNAUDITED)
Pro Forma
Adjustments
------------------------------------
Historical BHC & HA (a) Other (b) Pro Forma
--------------------- --------------- ---------------- ------------------
Current liabilities:
Accounts payable $ 2,952,576 $ $ $ 2,952,576
Accrued expenses and other liabilities:
Salaries and wages 455,440 455,440
Workers' compensation 80,782 80,782
Taxes, other than federal income taxes 326,393 (93,000) 233,393
Interest 160,692 45,000 115,692
Other 246,974 730,000 976,974
Long-term obligations classified as current 844,471 32,000 (55,000)(c) 757,471
--------------------- ---------------- ---------------- ----------------
Total current liabilities 5,067,328 77,000 582,000 5,572,328
--------------------- ---------------- ---------------- ----------------
Long-term obligations, less amounts classified
as current 15,398,135 6,036,000 (150,000)(c) 9,212,135
--------------------- ---------------- ---------------- ----------------
Total liabilities 20,465,463 6,113,000 432,000 14,784,463
--------------------- ---------------- ---------------- ----------------
Unrealized gain on sale 1,500,000 1,500,000
------------------- ---------------- ---------------- ----------------
Minority interests 165,951 165,951
--------------------- ---------------- ---------------- ----------------
Stockholders' equity:
Common stock: $.01 par;
authorized: 12,000,000 shares
issued: 8,248,480 shares 82,485 82,485
Capital in excess of par 10,244,805 10,244,805
Retained earnings (deficit) (2,899,491) (2,899,491)
--------------------- ---------------- ---------------- ----------------
7,427,799 -- -- 7,427,799
Treasury stock, at cost, 2,051,154 shares (2,521,745) (2,521,745)
--------------------- ---------------- ---------------- ----------------
Total stockholders' equity 4,906,054 -- -- 4,906,054
--------------------- ---------------- ---------------- ----------------
$ 25,537,468 $ 6,113,000 $ 1,932,000 $ 21,356,468
===================== ================ ================ ================
(a) To eliminate assets and liabilities disposed per the sale agreements.
(b) To reflect sale proceeds net of mortgages assumed by buyer, writeoff of
certain prepaid expenses and deferred charges, accrual of sale expenses
and unrealized gain on sale.
(c) Cash received at closing is reduced by $205,000 used to payoff equipment
loans.
F-2
6
PRO FORMA FINANCIAL INFORMATION
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
Pro Forma
Adjustments
--------------------------------------
Historical BHC & HA (a) Other Pro Forma
---------------------- ------------------- ---------------- ------------------
Revenues:
Net sales $ 2,816,386 $ $ $ 2,816,386
Service income 18,524,816 9,254,000 9,270,816
---------------------- ------------------- ---------------- ------------------
21,341,202 9,254,000 -- 12,087,202
---------------------- ------------------- ---------------- ------------------
Costs and expenses:
Cost of sales 2,071,596 2,071,596
Selling, general and administrative
expenses, net 17,518,394 8,479,000 9,039,394
---------------------- ------------------- ---------------- ------------------
19,589,990 8,479,000 -- 11,110,990
---------------------- ------------------- ---------------- ------------------
Operating income before depreciation 1,751,212 775,000 -- 976,212
Depreciation 964,715 325,000 639,715
---------------------- ------------------- ---------------- ------------------
Operating income 786,497 450,000 -- 336,497
---------------------- ------------------- ---------------- ------------------
Other income (expense):
Minority interests in (earnings) losses, net (76,860) (3,000)(b) (79,860)
Interest expense (1,104,278) (615,000) (489,278)
Other, net 109,254 6,000 103,254
---------------------- ------------------- ---------------- ------------------
(1,071,884) (609,000) (3,000) (465,884)
---------------------- ------------------- ---------------- ------------------
Income (loss) before income taxes (285,387) (159,000) (3,000) (129,387)
Income tax benefit (expense) 39,109 (5,000) 44,109
---------------------- ------------------- ---------------- ------------------
Net income (loss) $ (246,278) $ (164,000) $ (3,000) $ (85,278)
====================== =================== ================ ==================
Income (loss) per common share $ (0.04) $ (0.01)
====================== ==================
Weighted average shares outstanding 5,825,686 5,825,686
====================== ==================
(a) To eliminate the operations of BHC & HA for the year.
(b) Minority interest in HA.
F-3
7
PRO FORMA FINANCIAL INFORMATION
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
Pro Forma
Adjustments
--------------------------------------
Historical BHC & A (a) Other Pro Forma
---------------------- ------------------- ---------------- ---------------------
Revenues:
Net sales $ 1,924,713 $ $ 1,924,713
Service income 13,722,299 $ 6,873,000 6,849,299
---------------------- ------------------- ----------------- ---------------------
15,647,012 6,873,000 -- 8,774,012
---------------------- ------------------- ----------------- --------------------
Costs and expenses:
Cost of sales 1,479,636 1,479,636
Selling, general and administrative
expenses, net 12,569,941 6,121,000 6,448,941
---------------------- ------------------- ----------------- ---------------------
14,049,577 6,121,000 -- 7,928,577
---------------------- ------------------- ----------------- ---------------------
Operating income before depreciation 1,597,435 752,000 -- 845,435
Depreciation 789,809 245,000 544,809
---------------------- ------------------- ----------------- ---------------------
Operating income 807,626 507,000 -- 300,626
Equity in earnings of unconsolidated
affiliates, net of minority interests in
consolidated affiliates 179,122 40,000 (b) 219,122
---------------------- ------------------- ----------------- ---------------------
986,748 507,000 40,000 519,748
Other income (expense):
Interest expense (926,480) (459,000) (467,480)
Other, net 176,737 3,000 173,737
---------------------- ------------------- ----------------- --------------------
(749,743) (456,000) -- (293,743)
---------------------- ------------------- ----------------- ---------------------
Income before income taxes 237,005 51,000 40,000 226,005
Income tax expense (17,400) (5,000) (12,400)
---------------------- ------------------- ----------------- ---------------------
Net income $ 219,605 $ 46,000 $ 40,000 $ 213,605
====================== =================== ================= =====================
Income per common share $ 0.04 $ 0.03
====================== =====================
Weighted average shares outstanding 6,237,303 6,237,303
====================== =====================
(a) To eliminate the operations of BHC & HA for the nine months.
(b) Minority interest in HA.
F-4
8
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
FORM 8-K CURRENT REPORT
DECEMBER 31, 1997
EXHIBIT INDEX
-------------
EXHIBIT
1 Asset Purchase Agreement effective as of and closed on
December 31, 1997 for Bristol House by and between American
Care Center, Inc. and 72 Ventures, Ltd.
2 Asset Purchase Agreement effective as of and closed on
December 31, 1997 for the Wendt-Bristol Alzheimer's Center by
and between Health America, Inc. and 54 Realty, Ltd.
-4-