Assisted Living Concepts, Inc. Announces Second Quarter 2012 Results
(firmenpresse) - MENOMONEE FALLS, WI -- (Marketwire) -- 08/03/12 -- Assisted Living Concepts, Inc. ("ALC") (NYSE: ALC) reported a net loss of $25.1 million in the second quarter of 2012 as compared to net income of $6.3 million in the second quarter of 2011.
During the second quarters of both 2012 and 2011, ALC recorded One-Time Items described below. Excluding the One-Time Items, net income in the second quarter of 2012 and 2011 would have been $4.2 million and $5.8 million, respectively.
Revenues in the second quarter of 2012 were $56.9 million as compared to revenues of $58.6 million in the second quarter of 2011. Occupancy declined from 5,587 units in the second quarter of 2011 to 5,365 units in the second quarter of 2012. This 222 unit decline includes our planned reduction in residents paying through Medicaid of 78 units.
"The second quarter of 2012 was filled with challenges leading to a decline in both our occupancy and net income," commented Dr. Charles "Chip" Roadman, President and Chief Executive Officer. "Beginning in the second quarter, we have taken swift and decisive actions to address the quality of service delivered to our residents including the engagement of outside advisors. Progress is being made in this area and we believe such changes will enhance shareholder value in the longer term."
For the first six months of 2012, ALC reported a net loss of $19.5 million as compared to net income of $11.3 million in the first six months of 2011.
Excluding the One-Time Items described below, net income in the first six months of 2012 and 2011 would have been $9.8 million and $10.3 million, respectively.
Effective May 20, 2011, ALC implemented a two-for-one stock split of its Class A and Class B Common Stock. All references to share amounts and per share data have been adjusted to reflect this stock split.
Diluted earnings per common share for the second quarter and the first six months ended June 30, 2012 and 2011 were:
One-Time Items, net of tax in the quarter and six months ended June 30, 2012 included:
1. Charges related to the purchase of 12 previously leased properties from Ventas Realty, Limited Partnership and MLD Delaware Trust resulting in the write off of $22.7 million related to litigation settlement and a lease termination fee, $5.3 million write-off of operating lease intangible, and $0.6 million of deal costs, partially offset by $0.6 million of rental savings for both the quarter and six months ended June 30, 2012.
2. The write-off of construction costs associated with expansion projects that management has determined will not be completed. ($0.3 million for both the quarter and six months ended June 30, 2012).
3. Expenses incurred in connection with an ongoing internal investigation, litigation related to the Ventas transaction, public relations and quality committee projects. ($1.0 million for both the quarter and six months ended June 30, 2012).
One-Time Items, net of tax in the quarter and six months ended June 30, 2011 included:
1. A reduction in tax expense associated with the settlement of all issues associated with a tax allocation agreement with a subsidiary of our former parent Extendicare Inc. (now Extendicare Real Estate Investment Trust) ($0.0 million and $0.8 million for the quarter and six months ended June 30, 2011, respectively)
2. Charges associated with a mark to market adjustment for interest rate swap agreements ($0.0 million and $0.2 million for the quarter and six months ended June 30, 2011, respectively)
3. The write-off of deferred financing fees associated with our refinanced debt ($0.0 million and $0.2 million for the quarter and six months ended June 30, 2011, respectively)
4. Gains on sales of equity investments ($0.5 million and $0.6 million for the quarter and six months ended June 30, 2011, respectively)
Certain non-GAAP financial measures are used in the discussions in this release in assessing the performance of the business. See attached tables for definitions of Adjusted EBITDA and Adjusted EBITDAR, reconciliations of net income (loss) to Adjusted EBITDA and Adjusted EBITDA, calculations of Adjusted EBITDA and Adjusted EBITDA as a percentage of total revenues, and non-GAAP financial measure reconciliation information.
As of June 30, 2012, ALC operated 211 senior living residences comprising 9,325 units. ALC owns 82% of the residences it operates.
The following discussions include the impact of the One-Time Items unless otherwise specified.
Revenues of $56.9 million in the second quarter ended June 30, 2012 decreased $1.8 million or 3.0% from $58.6 million in the second quarter of 2011 and decreased $2.1 million or 3.6% from the first quarter of 2012.
Adjusted EBITDAR for the second quarter of 2012 was $17.0 million or 29.8% of revenues and
decreased $4.7 million or 21.8% from $21.7 million and 37.0% of revenues in the second quarter of 2011; and
decreased $4.3 million or 20.1% from $21.2 million and 36.0% of revenues in the first quarter of 2012.
Adjusted EBITDA for the second quarter of 2012 was $13.7 million or 24.0% of revenues and
decreased $3.6 million or 20.9% from $17.3 million and 29.5% of revenues in the second quarter of 2011; and
decreased $3.0 million or 18.1% from $16.7 million and 28.3% of revenues in the first quarter of 2012.
Revenues in the second quarter of 2012 decreased from the second quarter of 2011 primarily due to lower private pay occupancy ($1.5 million), the planned reduction in the number of units occupied by Medicaid residents ($0.5 million) partially offset by rate increases ($0.2 million). Average rates increased in the second quarter of 2012 by 1.0% over comparable rates for the second quarter of 2011.
Both Adjusted EBITDAR and Adjusted EBITDA decreased in the second quarter of 2012 primarily due to a decrease in revenues discussed above ($1.8 million), an increase in residence operations expenses ($1.3 million) (this excludes the gain on disposal of fixed assets and write-off of construction costs) and an increase in general and administrative expenses ($1.7 million) (this excludes non-cash equity based compensation), and for Adjusted EBITDA only, a decrease in residence lease expense ($1.1 million). Residence operations expenses increased primarily from an increase in salaries and wages resulting from quality restoration efforts initiated in June, 2012, an increase in professional fees from litigation and regulatory issues primarily in the southeast, and an increase in bad debts. General and administrative expenses increased as a result of an on-going internal investigation, an all-company conference, litigation and expenses incurred in connection with public relations and quality improvement initiatives.
Revenues in the second quarter of 2012 decreased from the first quarter of 2012 primarily due to a decrease in the number of units occupied by private pay residents ($1.1 million), lower average daily revenue as a result of promotional discounts and disproportionate decline in occupancy at residences with higher rates ($0.9 million), and the planned reduction in the number of units occupied by Medicaid residents ($0.1 million).
Decreased Adjusted EBITDA and Adjusted EBITDAR in the second quarter of 2012 as compared to the first quarter of 2012 resulted primarily from a decrease in revenues discussed above ($2.1 million), an increase in residence operations expenses ($0.6 million) (this excludes the gain on disposal of fixed assets and write-off of construction costs), and an increase in general and administrative expenses ($1.5 million) (this excludes non-cash equity-based compensation), and, for Adjusted EBITDA only, a decrease in residence lease expense ($1.2 million). Residence operations expenses increased primarily from an increase in salaries and wages resulting from quality restoration efforts initiated in June, 2012, an increase in professional fees from litigation and regulatory issues primarily in the southeast partially offset by an expected decrease in utility expenses from seasonality. General and administrative expenses increased as a result of an on-going internal investigation, an all-company conference, litigation and expenses incurred in connection with public relations and quality improvement initiatives.
Revenues of $115.8 million in the six months ended June 30, 2012 decreased $1.2 million or 1.0% from $117.0 million in the six months ended June 30, 2011.
Adjusted EBITDAR for the six months ended June 30, 2012 was $38.2 million, or 33.0% of revenues and
decreased $3.2 million or 7.8% from $41.4 million and 35.4% of revenues in the six months ended June 30, 2011.
Adjusted EBITDA for the six months ended June 30, 2012 was $30.4 million, or 26.2% of revenues and
decreased $2.3 million or 7.0% from $32.6 million and 27.9% of revenues in the six months ended June 30, 2011.
Revenues in the six months ended June 30, 2012 decreased from the six months ended June 30, 2011 primarily due to a decrease in private pay occupancy ($1.8 million) and the planned reduction in the number of units occupied by Medicaid residents ($1.0 million), partially offset by a higher average daily revenue from rate increases ($1.0 million) and one additional revenue day in the 2012 period due to leap year ($0.6 million). Average rates increased in the six months ended June 30, 2012 by 1.4% over average rates for the six months ended June 30, 2011.
Both Adjusted EBITDA and Adjusted EBITDAR decreased in the six months ended June 30, 2012 primarily from an increase in residence operations expenses ($0.5 million) (this excludes the gain on disposal of fixed assets and write-off of construction costs), a decrease in revenues discussed above ($1.2 million) and an increase in general and administrative expenses ($1.5 million) (this excludes non-cash equity based compensation) and, for Adjusted EBITDA only, a decrease in residence lease expense ($0.9 million). Residence operations expenses increased primarily from an increase in bad debts. General and administrative expenses increased as a result of an on-going internal investigation, an all-company conference, litigation and expenses incurred in connection with public relations and quality improvement initiatives. Resident operations expenses increased as a result of increased salaries and wages associated with quality restoration efforts initiated in June 2012 and an increase in professional fees from litigation and regulatory issues primarily in the southeast.
After taking into account the relevant circumstances and factors of the Company's current developments, the Board of Directors has determined not to pay a dividend this quarter. The Board of Directors has confirmed that future dividends will be dependent on a number of factors including the Company's financial condition, operating results, current and anticipated cash needs, plans for expansion, contractual restrictions, and other factors deemed relevant by the Board of Directors.
At June 30, 2012 ALC had availability of $10.7 million under its credit agreement. ALC owns 101 unencumbered residences that are available to secure future capital needs.
On August 2, 2012, the Board of Directors elected Alan Bell as Co-Vice Chairman of the Board of Directors.
ALC has scheduled a conference call on Friday, August 3, 2012 at 10:00 a.m. (ET) to discuss its financial results for the second quarter. The release will be posted on ALC's website at . The toll-free number for the live call is (800) 230-1951 or international (612) 288-0340. A taped rebroadcast of the conference call will be available approximately one hour following the live call until midnight on September 3, 2012, by dialing toll free (800) 475-6701, or international (320) 365-3844; and using access code 255531.
Assisted Living Concepts, Inc. and its subsidiaries operate 211 senior living residences comprising 9,325 residents in 20 states. ALC's senior living facilities typically consist of 40 to 60 units and offer residents a supportive, home-like setting and assistance with the activities of daily living. ALC employs approximately 4,600 people.
Statements contained in this release other than statements of historical fact, including statements regarding anticipated financial performance, business strategy and management's plans and objectives for future operations, including management's expectations about improving occupancy and private pay mix, are forward-looking statements. Forward-looking statements generally include words such as "expect," "point toward," "intend," "will," "indicate," "anticipate," "believe," "estimate," "plan," "strategy" or "objective." Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. In addition to the risks and uncertainties referred to in the release, other risks and uncertainties are contained in ALC's filings with United States Securities and Exchange Commission and include, but are not limited to, the following: changes in the health care industry in general and the senior housing industry in particular because of governmental and economic influences; changes in general economic conditions, including changes in housing markets, unemployment rates and the availability of credit at reasonable rates; changes in regulations governing the industry and ALC's compliance with such regulations; changes in government funding levels for health care services; resident care litigation, including exposure for punitive damage claims and increased insurance costs, and other claims asserted against ALC; ALC's ability to maintain and increase census levels; ALC's ability to attract and retain qualified personnel; the availability and terms of capital to fund acquisitions and ALC's capital expenditures; changes in competition; and demographic changes. Given these risks and uncertainties, readers are cautioned not to place undue reliance on ALC's forward-looking statements. All forward-looking statements contained in this report are necessarily estimates reflecting the best judgment of the party making such statements based upon current information. ALC assumes no obligation to update any forward-looking statement.
Adjusted EBITDA and Adjusted EBITDAR
Adjusted EBITDA is defined as net income from continuing operations before income taxes, interest expense net of interest income, depreciation and amortization, equity based compensation expense, transaction costs and non-cash, non-recurring gains and losses, including disposal of assets and impairment of long-lived assets (including goodwill and leasehold intangibles), and loss on refinancing and retirement of debt or leases. Adjusted EBITDAR is defined as Adjusted EBITDA before rent expenses incurred for leased assisted living properties. Adjusted EBITDA and Adjusted EBITDAR are not measures of performance under accounting principles generally accepted in the United States of America, or GAAP. We use Adjusted EBITDA and Adjusted EBITDAR as key performance indicators and Adjusted EBITDA and Adjusted EBITDAR expressed as a percentage of total revenues as a measurement of margin.
We understand that EBITDA and EBITDAR, or derivatives thereof, are customarily used by lenders, financial and credit analysts, and many investors as a performance measure in evaluating a company's ability to service debt and meet other payment obligations or as a common valuation measurement in the long-term care industry. Moreover, ALC's revolving credit facility contains covenants in which a form of EBITDA is used as a measure of compliance, and we anticipate EBITDA will be used in covenants in any new financing arrangements that we may establish. We believe Adjusted EBITDA and Adjusted EBITDAR provide meaningful supplemental information regarding our core results because these measures exclude the effects of non-operating factors related to our capital assets, such as the historical cost of the assets.
We report specific line items separately, and exclude them from Adjusted EBITDA and Adjusted EBITDAR because such items are transitional in nature and would otherwise distort historical trends. In addition, we use Adjusted EBITDA and Adjusted EBITDAR to assess our operating performance and in making financing decisions. In particular, we use Adjusted EBITDA and Adjusted EBITDAR in analyzing potential acquisitions and internal expansion possibilities. Adjusted EBITDAR performance is also used in determining compensation levels for our senior executives. Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for net income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. We present Adjusted EBITDA and Adjusted EBITDAR on a consistent basis from period to period, thereby allowing for comparability of operating performance.
For further information, contact:
Assisted Living Concepts, Inc.
John Buono
Sr. Vice President, Chief Financial Officer and Treasurer
Phone: (262) 257-8999
Fax: (262) 251-7562
Email:
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Datum: 03.08.2012 - 05:00 Uhr
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