Senior Retirement Community 10QSB 2000
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
FORM 10-KSB
ANY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Three Months ended March 31, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ___ to ___
Commission file number 333-45419
Senior Retirement Communities, Inc.
Louisiana 72-1394159
(State or other jurisdiction of incorporation) I.R..S. I D
or organization)
507 Trenton Street, West Monroe, Louisiana 71291
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(318) 323-2115
Securities registered pursuant to Section 12 (b) of the Act:
First Mortgage Bonds $9,000,000
Indicate by check mark whether the 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 twelve (12) months (or for such shorter period that the registrant
was required to file such report) and (2) has subject to such filing
requirements for the past ninety (90) days.
Yes___X___ No__________
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of the Form 10-KSB ____
Revenues for fiscal year 2000 - $ 313,534
Number of share outstanding of each of the registrant's class of common shares
and preferred shares, as of March 31, 2000
Common Shares 16,588,200 par value $.10 per share:
Preferred shares 425,000 par value $1.00 per share:
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Included by reference Prospectus dated June 23, 1998, I, II, III (2)
Included by reference 10-KSB dated December 31, 1999 I, II
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SENIOR RETIREMENT COMMUNITIES, INC.
Form 10-QSB
INDEX
Senior Retirement Communities, Inc.
Form 10-QSB
TABLE OF CONTENTS
Part 1: Financial Information Page
Item 1. Financial Statements (Unaudited)
Balance Sheets as of March 31, 2000 and 1999(unaudited) 2
Statements of Income for the three months ended
March 31, 2000 (unaudited) and three months ended
March 31, 1999 (unaudited) 3
Statement of Retained Earnings for the three months
March 31, 2000 (unaudited) and March 31, 1999
(unaudited) 5
Statements of Cash Flows for the three months ended
March 31, 2000 and March 31, 1999 (unaudited). 6-7
Notes to Financial Statements 8-11
Item 2. Management Discussion and Analyses of Financial
Conditions and Results of Operations. 12-16
Part II: Other Information
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Other Matters 16
Item 7. Exhibits and reports on Form 8-K 16
Item 1. Financial Statements (Unaudited)
SENIOR RETIREMENT COMMUNITIES, INC.
FINANCIAL STATEMENT
MARCH 31, 2000
Senior Retirement Communities, Inc.
Financial Statement
March 31, 2000
Table of Contents
Page
FINANCIAL STATEMENTS:
Report 1
Balance Sheet 2
Statement of Income 4
Statement of Retained Earnings 6
Statement of Cash Flows 7
Notes to Financial Statements 9
Senior Retirement Communities, Inc
To the Board of Directors and Shareholders
Senior Retirement Communities, Inc.
West Monroe, Louisiana
The accompanying balance sheet of Senior Retirement Communities, Inc. as of
March 31, 2000 and 1999, and the related statement of income, retained earnings
and cash flows for the three months ended March 31, 2000 and 1999, were prepared
internally from the books and records of Senior Retirement Communities, Inc.
These financial statements were not audited or reviewed.
Joanne Caldwell-Bayles
/S/ Joanne M. Caldwell-Bayles
President, Senior Retirement Communities, Inc.
May 12, 2000
507 Trenton Street West Monroe, LA 71291 318 323 2115 FAX 318 323 6281
Senior Retirement Communities, Inc.
Balance Sheet
March 31, 2000
March 31
2000 1999
ASSETS
Current assets:
Cash $ 3,596 $ 10,525
Escrow cash 135,651 361,018
Sinking fund cash 4,694 172,005
Prepaid Insurance 5,436 0
Total current assets 149,377 543,548
Property, plant and equipment
Buildings 8,088,299 7,812,888
Furniture and fixtures 217,603 93,608
Land 1,508,820 1,508,820
9,814,722 9,415,316
Less: Accumulated depreciation 261,904 34,223
Net property and equipment 9,552,818 9,381,093
$ 9,702,195 $ 9,924,641
See accompanying notes.
Senior Retirement Communities, Inc. -3-
Balance Sheets
March 31, 2000
March 31
2000 1999
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 41,525 $ 21,448
Bank Overdraft 6,969 0
Current Maturities of Bonds 555,000 0
603,484 21,448
Long-term debt:
Bonds payable 7,856,728 7,986,887
Other liabilities:
Due to stockholders and affiliates 968,709 588,641
Stockholders Equity
Common stock, No par value, 90,000,000
shares authorized, 16,588,200 shares
issued and outstanding 1,658,820 1,248,820
Preferred stock, $ 1 par value, 20,000,000
shares authorized, 425,000 shares issued
and outstanding 425,000 425,000
Retained earnings (deficit) (1,807,556) (346,155)
Total stockholders equity 276,264 1,327,665
$ 9,705,195 $9,924,641
See accompanying notes.
Senior Retirement Communities, Inc.
Statements of Income
For the three months ended March 31
2000 1999
Revenues $ 313,534 $ 32,639
Expenses
Accounting 12,000 12,000
Activities 1,048 885
Advertising 10,999 6,231
Automobile 83 713
Bank Charges 333 104
Bond Agent Fees 0 10,630
Cable Expense 0 88
Carpet Cleaning 25 0
Casual labor 486 0
Construction 3,000 0
Consulting 2,600 15,000
Decorations 349 620
Depreciation 54,690 28,232
Dues & subscripts. 697 370
Employee Education 456 0
Employee Screening 864 0
Employee training 0 3,308
Equipment rental 2,813 238
Food Costs 27,689 6,247
Gloves 434 0
Housekeeping 1,486 1,615
Insurance 28,768 6,614
Interest 239,672 128,182
Kitchen supplies 134 0
Laundry 535 0
Lawn Care 3,533 0
Licenses & permits 479 264
Light Bulbs 99 0
Linens 13 0
Management Fees 21,560 2,124
Miscellaneous 200 618
Office 0 1,429
Office Supplies 692 0
Paper Goods 977 0
Payroll Expenses 177,113 54,164
Pest Control 982 0
Pet Supplies 201 0
Postage & Delivery 762 797
Printing 3,893 4,736
Professional fees 11,945 150
Promotion 1,455 1,490
Rental Bonus 400 0
Repairs 2,475 1,822
Resident Gifts 103 0
Taxes 39,573 1,506
Telephone 4,235 4,401
Training & Education 20 0
Travel & Entertain 1,048 2,794
Uniforms 94 182
Utilities 25,545 14,283
Van Expense 5,259 2,799
Waste Removal 1,128 0
Wellness 116 0
Total Expenses 688,891 314,636
Net Income (Loss) $ (375,357) $ ( 281,997)
Earnings (Loss) Per Share $ (.02) $ (.02)
See accompanying notes
Senior Retirement Communities, Inc.
Statement of Retained Earnings ( Deficit )
For the three months ended March 31
2000 1999
Beginning retained earnings $(1,432,199) $( 59,908)
Net income (loss) ( 375,357) ( 281,997)
Preferred dividends paid ( 0) ( 4,250)
Ending retained earnings
(deficit) $(1,807,556) $( 346,155)
See accompanying notes.
Senior Retirement Communities, Inc.
Statement of Cash Flows
For the three months ended March 31
2000 1999
Cash flows from operating activities:
Revenues received $ 313,534 $ 32,639
Cash paid to suppliers & employees ( 645,381) (259,152)
Net cash provided (used) by operations ( 331,847) (226,513)
Cash flows from investing activities
Purchase of equipment ( 4,639) ( 18,506)
Payments towards construction 0 (773,655)
Purchase of land 0 ( 991,500)
Payments of deposits 0 2,000
Payment of deferred charges 0 (154,750)
Sale of Land 0 203,739
Net cash provided by (applied to)
Investing activities _ ( 4,639) ( 946,911)
Cash flows from financing activities
Interim construction loans (1,002,535) (1,002,535)
Issuance of bonds 2,171,053 1,462,500
Payment of bonds ( 243,822) ( 239,750)
Payment of Preferred dividends 0 ( 4,250)
Loans from stockholders and affiliates 96,634 164,424
Net cash provided by (applied to)
financing activities (150,188) 380,389
Net increase (decrease) in cash ( 486,674) (793,035)
Cash at the beginning of the period 623,646 1,336,583
Cash at the end of the period 136,972 543,548
See accompanying notes
Senior Retirement Communities, Inc.
Statement of Cash Flows
For the three months ended March 31
2000 1999
Reconciliation of net income to net cash provided by operations:
Net income (loss) from operations $ (375,357) $( 136,826)
Adjustments to reconcile net income to cash
Provided by operations
Depreciation 54,690 5,991
Decrease (increase) in prepaid expenses (5,436) 0
Increase in accrued expenses (5,744) $ 29,481
Net cash provided (used) by
Operations $ (331,847) $ (101,354)
See accompanying notes.
Note 1 - Summary of Significant Accounting Policies
Nature of Business
The Company is a Louisiana corporation established to develop assisted
living Centers and dementia facilities for the housing and care of senior
citizens in Ruston, Bossier City and Shreveport, Louisiana.
Basis of Accounting
The Company uses the accrual basis of accounting and a calendar
Year for all reporting purposes.
Income Taxes
The company is treated as a corporation for federal income tax purposes.
Property, Buildings, Equipment, and Depreciation
Buildings and equipment are stated at cost and are to be depreciated by the
straight- line method over their estimated economic lives. Buildings include
capitalized construction period interest which will be treated as a component
cost of the building and depreciated over the same economic life as the
building.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affects certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
Deferred Charges
Deferred charges represents the costs associated with obtaining long- term
financing for the care facilities of the Company. These costs are to be
amortized over the life of the bonds using the effective interest rate method.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-QSB and Article 10 of Regulations
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In managements opinion, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
unaudited interim financial statements have been included. Operating results for
interim periods reflected are not necessarily indicative of the results that may
be expected for a full fiscal year. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Companys Form 10-KSB.
Certain reclassifications have been made to previously reported amounts to
conform with the current presentation.
Note 2 Related Party Transactions
Due to stockholders and affiliates consist of amounts advanced by
stockholders and other related entities. This amount accrues interest at the
current market rate.
Note 3 Preferred Stock
The Preferred Stock issued accrues dividends at the rate of four percent
per year for each of the first two years, then six percent per year for the next
two years then at eight percent per year for the final two years. The Preferred
Stock is callable at the Companys option and shall be redeemed at the end of
the sixth year, if still outstanding. The preferred shareholders have an option
to purchase common stock at a twenty percent discount at any time within eight
years of the Preferred stock issue dates, if the Company issues additional
common stock through a public offering.
Note 4 Bonds Payable
On June 23, 1998, the Companys issue of $ 9,000,000 of bonds became
effective. These bonds are the permanent financing for the projects reflected in
this financial statement.
These bonds have varying interest rates from 7.5 percent per annum to 11
percent per annum. The maturity of these bonds is from one to twenty years.
Bonds payable on the balance sheet reflects the accrued interest due and is
reflected net after the deferred charges incurred is issuing and selling the
bonds.
During the fie three months ended March 31, 2000, the Company incurred $
239,672 of interest expense all of which has been charged to operations.
OVERVIEW
General
Senior Retirement Communities, Inc. (the "Company" or SRC) was organized as
a Corporation under the laws of the State of Louisiana on September 10, 1997.
The Corporate charter has been amended twice, once on November 6, 1997and then
again on June 17, 1999. The Company is in the business of developing and owning
housing for seniors. SRC primary interests are in the Development of Assisted
Living Facilities ("ALFs"). ALF's contain one or more facilities for seniors who
are independent, require some assistance or suffer from Dementia. Dementia units
are primarily for the support of individuals suffering from Alzheimers and
related disorders.
Independent Living
Independent Living facilities are anticipated to make up a small amount of the
Company's business. It is anticipated as the Independent Living group of seniors
age, they will convert to Assisted Living within the community thereby reducing
their impact upon the communities. The Company has maintained excess land in
each of the communities in order to meet the demands of seniors, no matter which
direction senior care evolves.
Assisted Living
Assisted Living will make up the largest impact upon The Company's success.
Assisted Living continues to evolve with State and Federal interest in this form
of Senior Care. It is anticipated that political pressure will continue to grow,
because of the impact that Assisted Living is having on other forms of senior
care. In Louisiana the Nursing Home industry, which has strong political support
in the Louisiana Legislature, has introduced a bill, which would have a negative
impact upon the industry. SRC along with other Assisted Living Communities are
aware of the proposed legislation. It the Company's intent to resist these
efforts.
Dementia
Independent Dementia facilities are fairly new in Louisiana. The Company has
built the first independent Dementia facility in Bossier City and Shreveport,
Louisiana. It used as a model the Terrace located in West Monroe, Louisiana
which was built by an affiliate of the Company. It is anticipated that Dementia
facilities will have a growing impact on the company success. The same political
pressures discussed above will also impact dementia.
Employees
The Company has sixty full time and nine part time employees in three locations
in north Louisiana. It is anticipated as occupancy increases the number of
employees will increase.
Source of Business
The Company's business is designed to provide secure,comfortable, and healthy
living environment for seniors with disposal income of approximately $25,000
and up, between the age of 72 and up and in the case of Independent Living
and Dementia younger.
Method of Operation
The Company's ALF's are managed by The Forsythe Group, Inc. (Forsythe)
which is owned by Joanne M. Caldwell-Bayles, President of the Company. The ALF
management staff consists of five individuals includes MS. Bayles. Two members
of the staff have Master's degrees in Gerontology. They have over 20 years of
experience in Hospitals, Nursing Homes, and Assisted Living industry. They have
direct management responsibility for each Administrator of each ALF.
The Forsythe ALF management staff has central purchasing, payroll, accounts
payable, menu planning and programming. All menus are planned with the
assistance with a registered dietitian.
Administrators are required to meet the standards set forth in the new
regulations. Employees are required to submit to drug testing before employment
as well as during employment. All employees are required to submit to a
background check by the State Police before employment.
Competition
ALF's are under ever growing competition for the senior market. Competition
is coming from additional ALF's being built in each market and Nursing home
upgrading and expansion. In Addition government regulation will continue to
increase. The one area in which competition remains at a reasonable pace is in
the area of independent Dementia units. While many ALF's are including Dementia
units it has not grown in the Company's markets as much as traditional ALF's.
Property Environmental
The Company's ALF's are all in compliance with all environmental laws.
Prior to building each site was inspected and an environmental engineer studied
pass history. Each site was not subject to any environmental problems.
Properties and Methods of Financing
As of March 31, 2000 the Company had three ("ALFs")open for business. The
Ruston ALF contains 42 Assisted/Independent and 6 Terrace units as result of
increase demand for Alzheimer's facilities in the area and an increase in
competition in Assisted Living facilities. As of March 31, 2000 The
Assisted/Independent units were 64% occupied and the Terrace was 67% occupied.
The Bossier City facility has The Arbor of Bossier consisting of 36
assisted living facility and The Terrace of Bossier 24-unit Dementia facility.
As of March 31, 2000 the assisted living units facility was 50% occupied. On
March 31, 2000 the Terrace had occupancy of 20%. Competition in the
Shreveport-Bossier market is fierce because of over building. The Arbor is
competing well, while the Terrace is slow in reaching its target occupancy. We
anticipate our strong marketing efforts will be successful in reaching
stabilized occupancy with the two year target ending March 2001.
The final facility is The Terrace of Shreveport located in Shreveport,
Louisiana consisting of a 24 unit Dementia facility.The Shreveport facility
opened for business on January 22, 1999. The occupancy of the Terrace on March
31, 2000 was 45%. The Terrace is slow in reaching its target occupancy. We
anticipate our strong marketing efforts will be successful in reaching
stabilized occupancy with the two-year target ending March 2001, which is three
months behind anticipated schedule.
The construction of the facilities were financed through the sale of
Co-First Mortgage bonds as set forth in the prospectus dated June 23, 1998 with
construction loans provided by Church Loans and Investment Trust. All of the
Construction loans have been paid in full.
We also own approximately 26 acres of land located in Ruston (20acres)
Shreveport (2 acres), and Minden (4 acres), Louisiana for future construction.
Major changes in Financial Conditions
The major change in financial condition between December 31, 1999 and March
31, 2000 were as follows: Current assets consisted primarily of cash in the
amount of $ 143,941. Cash is restricted as follows: $4,694 to fund bond reserve
accounts and $135,651 is restricted to pay Operating Fund Payments. Reader is
encouraged to read page 13 of the Prospectus. Property, Plant, and Equipment
increased from $9,810,083 as of December 31, 1999 to $9,814,722 as of March 31,
2000. The increase is the result of completion of the construction in progress
at Ruston, Bossier City and Shreveport, Louisiana. Total current liabilities
increased from $ 602,269 as of December 31, 1999 to $ 603,494 as of March 31,
2000.Long-term debt decreased from $ 8,100,550 as of December 31, 1999 to $
7,856,728 as of March 31, 2000 due to payments of scheduled bond payments.
Liabilities due stockholders and affiliates increased from $ 651,621 as of
December 31, 1999 to $ 968,709 as of March 31, 2000. Total Stockholders Equity
decreased from $ 651,621 as of December 31, 1999 to $ 276,264 as of March 31,
2000. The decrease is the result of the net operating loss incurred for the
quarter.
Liquidity and Financial Position
The Company receives significant operating funds from its affiliate The Forsythe
Group, Inc. through short-term loans. The ability of The Forsythe Group to
continue to make available loans is necessary for the continuing success of the
company. If future conditions would create problems in Forsythe's ability to
advance funds to the Company, the Company's future success would be in doubt.
Part II: Other Information
Item 3. Legal Proceedings
The Company is not involved in any material legal
proceedings at this time
Item 2. Changes in Securities. 16
None
Item 3. Defaults Upon Senior Securities 16
None
Item 4. Submission of Matters to a Vote of Security Holders 16
None
Item 5. Other Information 16
Forward- Looking Statements:
Statements that are not historical facts, including statements about (I)
operating profits or losses as those discussed in results of operations; (II)
Impact of political decisions and new laws from the State and Federal
Government. The Company wishes to caution the reader that factors below, along
with the factors set forth in the Company's June 30, 2000 form 10QSB, September
30, 2000 form 10 QSB, and the prospectus along with the Company's other
documents filed with the SEC, have affected and could affect the Company's
actual results causing results to differ materially from those in any
forward-looking statement. These factors include: the acceptance of the Assisted
Living Concept by each of the communities in which they are located, increased
competition in each of the communities, economic outlook whether the economy
improves or slips into recession, technological changes in dealing with seniors,
change in government regulation, the success of strategic decisions to improve
financial performance, the ability of the Company to contain cost, and the
continued increase in the market acceptance of ALF's.
Item 6. Other Matters 16
Item 7. Exhibits and reports on Form 8-K 16
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of West
Monroe, State of Louisiana, on May 2, 2000.
Senior Retirement Communities, Inc.
/s/Joanne M. Caldwell-Bayles
--------------------------
By: Joanne M. Caldwell-Bayles
President, Finance and
Treasurer, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on May 2, 2000.
Signature Title
/s/ Joanne M. Caldwell-Bayles
Joanne M. Caldwell-Bayles Chairperson of the Board,
Chief Executive Officer, President,
Finance and Treasurer - Director
SUMMATION OF 10QSB
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENT OF SENIOR RETIREMENT COMMUNITIES, INC. AUDITED FINANICIAL
STATEMENT DATED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
ASSETS
MARCH 31, MARCH 31,
2000 1999
TOTAL CURRENT ASSETS $ 149,377 $ 543,548
LAND , PROPERTY, PLANT,
EQUIPMENT 9,552,818 9,381,093
TOTAL ASSETS $ 9,702,195 $ 9,924,641
LIABILITY & STOCKHOLDERS EQUITY
CURRENT LIABILITIES $ 603,494 $ 21,448
OTHER LIABILITIES 968,709 588,641
LONG TERM DEBT 7,856,728 7,986,887
STOCKHOLDERS EQUITY 276,264 1,327,665
TOTAL LIABILITIES &
STOCKHOLDERS EQUITY $ 9,705,195 $9,924,641
INFORMATION SET FORTH IN THIS SCHEDULE DOES NOT CONTAIN ALL OF
THE INFORMATION NECESSARY AND SHOULD BE READ IN CONJUNCTION WITH THE
COMPLETE UNAUDITED FINANCIAL STATEMENT DATED MARCH 31, 2000 INCLUDING
FOOTNOTES.