Assisted Living Concepts, Inc. Announces Continued Growth in Private Pay Occupancy, Record Earnings and Strong Strategic Positioning in the Changing Economic Environment
(firmenpresse) - MENOMONEE FALLS, WI -- (Marketwire) -- 08/04/11 -- Assisted Living Concepts, Inc. ("ALC") (NYSE: ALC)
Highlights:
Posted 125% increase in earnings per share over the second quarter of 2010, 31.6% increase after adjustment for One Time Items.
Increased average private pay occupancy by 30 and 9 units over the second quarter of 2010 and the first quarter of 2011, respectively.
Increased Adjusted EBITDAR as a percent of revenues to 37.0%, up from 33.6% and 33.8% in the second quarter of 2010 and the first quarter of 2011, respectively.
Revenues derived from private pay sources as a percentage of total revenue for the second quarter of 2011 was 99.1%
Assisted Living Concepts, Inc. ("ALC") (NYSE: ALC) reported net income of $6.3 million in the second quarter of 2011 as compared to $2.9 million in the second quarter of 2010.
During the second quarters of both 2011 and 2010, ALC recorded One-Time Items described below. Excluding the One-Time Items, net income in the second quarter of 2011 and 2010 would have been $5.8 million and $4.6 million, respectively.
"In the second quarter of 2011, we continued to see upward movement in our private pay occupancy," commented Laurie Bebo, President and Chief Executive Officer. "We are particularly pleased that we were able to leverage that growth into 37.0% Adjusted EBITDAR margins, the highest we have posted since becoming a public company.
For the first six months of 2011, ALC reported net income of $11.3 million as compared to $6.5 million in the first six months of 2010.
Excluding the One-Time Items described below, net income in the first six months of 2011 and 2010 would have been $10.3 million and $8.2 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, 2011 and 2010 were:
One-Time Items 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 net of tax 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 net of tax 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 net of tax for the quarter and six months ended June 30, 2011, respectively)
One-Time Items in the quarter and six months ended June 30, 2010 included:
1. The reclassification of a decline in the fair market value of equity securities from a component of the Company's stockholders' equity to the Company's income statement ($1.3 million net of tax for both the quarter and six months ended June 30, 2010)
2. The realignment of ALC's divisional level management structure in order to better match specific operating talents with certain geographical opportunities. In connection with this realignment, ALC incurred certain expenses primarily related to personnel ($0.3 million net of tax for both the quarter and six months ended June 30, 2010)
3. The decision not to complete an expansion project due to higher than anticipated site costs. We continue to evaluate existing owned properties for expansion growth. ($0.1 million net of tax for both the quarter and six months ended June 30, 2010)
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, 2011, ALC operated 211 senior living residences comprising 9,325 units.
The following discussions include the impact of the One-Time Items unless otherwise specified.
Revenues of $58.6 million in the second quarter ended June 30, 2011 increased $0.3 million or 0.6% from $58.3 million in the second quarter of 2010 and increased $0.2 million or 0.4% from the first quarter of 2011.
Adjusted EBITDAR for the second quarter of 2011 was $21.7 million or 37.0% of revenues and
increased $2.1 million or 10.7% from $19.6 million and 33.6% of revenues in the second quarter of 2010; and
increased $2.0 million or 10.0% from $19.7 million and 33.8% of revenues in the first quarter of 2011.
Adjusted EBITDA for the second quarter of 2011 was $17.3 million or 29.5% of revenues and
increased $2.8 million or 19.2% from $14.5 million and 24.9% of revenues in the second quarter of 2010; and
increased $1.9 million or 12.5% from $15.4 million and 26.3% of revenues in the first quarter of 2011.
Revenues in the second quarter of 2011 increased from the second quarter of 2010 primarily due to higher average daily revenue as a result of rate increases ($0.6 million) and an increase in private pay occupancy ($0.3 million), partially offset by the planned reduction in the number of units occupied by Medicaid residents ($0.6 million). Average private pay rates increased in the second quarter of 2011 by 1.0% over average private pay rates for the second quarter of 2010. Average overall rates, including the impact of improved payer mix, increased in the second quarter of 2011 by 1.5% over comparable rates for the second quarter of 2010.
Both Adjusted EBITDAR and Adjusted EBITDA increased in the second quarter of 2011 primarily due to a decrease in residence operations expenses ($1.1 million) (this excludes the gain on disposal of fixed assets), a decrease in general and administrative expenses ($0.7 million) (this excludes non-cash equity based compensation), and an increase in revenues discussed above ($0.3 million), and, for Adjusted EBITDA only, a decrease in residence lease expense ($0.7 million). Residence operations expenses decreased primarily from lower labor expenses. Staffing needs in the second quarter of 2011 as compared to the second quarter of 2010 decreased primarily because of a decline in the number of units occupied by Medicaid residents who tend to have higher care needs than private pay residents. In addition, general economic conditions enabled us to hire new employees at lower wage rates. General and administrative expenses decreased as a result of expenses incurred in the second quarter of 2010 associated with an all-company conference and expenses associated with the 2010 realignment of our divisions.
Revenues in the second quarter of 2011 increased from the first quarter of 2011 primarily due to one additional day in the second quarter ($0.6 million), an increase in the number of units occupied by private pay residents ($0.1 million), partially offset by lower average daily revenue as a result of promotional discounts ($0.4 million), and the planned reduction in the number of units occupied by Medicaid residents ($0.1 million).
Increased Adjusted EBITDA and Adjusted EBITDAR in the second quarter of 2011 as compared to the first quarter of 2011 resulted primarily from a decrease in residence operations expenses ($1.5 million) (this excludes the gain on disposal of fixed assets), an increase in revenues discussed above ($0.2 million), and a decrease in general and administrative expenses ($0.3 million) (this excludes non-cash equity-based compensation). Residence operations expenses decreased primarily from decreases in utility expenses resulting from normal seasonal fluctuations. General and administrative expenses increased as a result of expenses associated with an all-company conference held in the second quarter of 2011.
Revenues of $117.0 million in the six months ended June 30, 2011 increased $0.9 million or 0.8% from $116.2 million in the six months ended June 30, 2010.
Adjusted EBITDAR for the six months ended June 30, 2011 was $41.4 million, or 35.4% of revenues and
increased $3.1 million or 8.2% from $38.3 million and 33.0% of revenues in the six months ended June 30, 2010.
Adjusted EBITDA for the six months ended June 30, 2011 was $32.6 million, or 27.9% of revenues and
increased $4.5 million or 16.2% from $28.1 million and 24.2% of revenues in the six months ended June 30, 2010.
Revenues in the six months ended June 30, 2011 increased from the six months ended June 30, 2010 primarily due to higher average daily revenue from rate increases ($1.7 million) and an increase in private pay occupancy ($0.6 million), partially offset by the planned reduction in the number of units occupied by Medicaid residents ($1.4 million). Average private pay rates increased in the six months ended June 30, 2011 by 1.5% over average private pay rates for the six months ended June 30, 2010. Average overall rates, including the impact of improved payer mix, increased in the six months ended June 30, 2011 by 2.0% over the comparable rates for the six months ended June 30, 2010.
Both Adjusted EBITDA and Adjusted EBITDAR increased in the six months ended June 30, 2011 primarily from a decrease in residence operations expenses ($1.5 million) (this excludes the gain on disposal of fixed assets), and the increase in revenues discussed above ($0.9 million), partially offset by an increase in general and administrative expenses ($0.7 million) (this excludes non-cash equity based compensation) and, for Adjusted EBITDA only, a decrease in residence lease expense ($1.4 million). Residence operations expenses decreased primarily from lower labor and kitchen expenses. Staffing needs in the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 decreased primarily because of a decline in the number of units occupied by Medicaid residents who tend to have higher care needs than private pay residents. In addition, general economic conditions enabled us to hire new employees at lower wage rates. Kitchen expenses were lower due to new group purchasing plans and lower overall occupancy. General and administrative expenses decreased from non-recurring expenses associated with the realignment of our divisions in the 2010 six month period.
On August 4, 2011 the Board of Directors declared a dividend of $0.10 per share payable to shareholders of record on the close of business on August 19, 2011 and will be paid on September 15, 2011.
At June 30, 2011 ALC maintained a strong liquidity position with cash of approximately $2.8 million and undrawn lines of $95.5 million.
ALC has scheduled a conference call for tomorrow, August 5, 2011 at 10:00 a.m. (ET) to discuss its financial results for the second quarter. This earnings release will be posted on ALC's website at . The toll-free number for the live call is (800) 230-1085 or international (612) 234-9960; the conference name is "ALC Second Quarter Results." A taped rebroadcast of the conference call will be available approximately three hours following the live call until midnight on September 5, 2011, by dialing toll free (800) 475-6701, or international (320) 365-3844; the access code is 210445.
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 4,100 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 loss on refinancing and retirement of debt. 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.
The following table sets forth a reconciliation of net income to Adjusted EBITDA and Adjusted EBITDAR:
The following table sets forth the calculations of Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA before division realignment and Adjusted EBITDAR before division realignment as percentages of total revenue:
(1) Includes division realignment expenses of $453 in both the quarter and six months ended June 30, 2010. Excluding division realignment expenses, Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA as a percent of sales and Adjusted EBITDAR as a percent of sales for the quarter ended June 30, 2010 would have been $14,956, $20,067, 25.7% and 34.4%, respectively. Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA as a percent of sales and Adjusted EBITDAR as a percent of sales for the six months ended June 30, 2010 would have been $28,553, $38,747, 24.6% and 33.4%, respectively.
* Per share numbers may not add due to rounding
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: 04.08.2011 - 22:18 Uhr
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