Five Star Quality Care, Inc. FVE today announced its financial results for the quarter and nine months ended September 30, 2015.
Five Star's President and CEO, Bruce J. Mackey Jr., made the following statement:
"Our third quarter results were highlighted by a 44.0% increase in Adjusted EBITDA and a 5.5% increase in Adjusted EBITDAR compared to the same period last year. Although growing occupancy continues to be a challenge, third quarter revenues increased on a year over year basis because of the management of additional senior living communities and increases in average monthly rates at our owned and leased senior living communities. Third quarter Adjusted EBITDA and Adjusted EBITDAR increased compared to the same period last year because of greater revenues and operating expense controls.
"We recently acquired two senior living communities for our own account. In November 2015, we closed on the acquisition of two independent living communities with 152 private pay units located in Tennessee for $26.0 million, including the assumption of approximately $17.3 million of mortgage debt."
Third Quarter 2015 Financial Results:
- Senior living revenues for the third quarter of 2015 increased 0.8% to $279.7 million from $277.4 million for the same period in 2014. Growth in senior living revenues was the result of increases in average monthly rates to residents who pay privately for services, partially offset by decreases in occupancy. Management fee revenue from managed communities for the third quarter of 2015 increased 11.4% to $2.7 million from $2.4 million for the same period in 2014. Growth in management fees was primarily due to an increase in the number of communities managed and an increase in average monthly rates to residents who pay privately for services, partially offset by decreases in occupancy at comparable managed communities.
- Earnings from continuing operations before interest, taxes, depreciation and amortization, or EBITDA, for the third quarter of 2015 were $(17.2) million compared to $5.3 million for the same period in 2014. EBITDA, excluding certain items described below, or Adjusted EBITDA, was $9.2 million and $6.4 million for the third quarter of 2015 and 2014, respectively. Adjusted EBITDA excluding rent, or Adjusted EBITDAR, was $59.0 million for the third quarter of 2015 compared to $55.9 million for the same period in 2014.
- Loss from continuing operations for the third quarter of 2015 was $26.3 million, or $0.54 per basic and diluted share, compared to loss from continuing operations of $2.4 million, or $0.05 per basic and diluted share, for the same period in 2014. Loss from continuing operations for the third quarter of 2015 included a non-cash charge for goodwill impairment described below of $25.3 million, or $0.52 per basic and diluted share.
- Net loss for the third quarter of 2015 was $27.5 million, or $0.57 per basic and diluted share, compared to net loss of $3.0 million, or $0.06 per basic and diluted share, for the same period in 2014. Net loss for the third quarter of 2015 included a non-cash charge for goodwill impairment described below of $25.3 million and a loss from discontinued operations of $1.2 million; net loss for the third quarter of 2014 included a non-cash long lived asset impairment charge of $0.6 million and a loss from discontinued operations of $0.6 million.
- EBITDA, EBITDAR, loss from continuing operations and net loss in the third quarter of 2015 included a non-cash charge for goodwill impairment described below of $25.3 million and compliance costs and professional fees of $0.9 million, primarily resulting from previously disclosed Medicare records billing deficiencies discovered and self-reported by Five Star. EBITDA, EBITDAR, loss from continuing operations and net loss in the third quarter of 2014 included $0.6 million of accounting costs incurred in connection with the restatement of certain previously issued financial statements and the delayed completion of Five Star's 2014 financial reporting and a $0.6 million non-cash long lived asset impairment charge.
- A reconciliation of loss from continuing operations determined in accordance with U.S. generally accepted accounting principles, or GAAP, to EBITDA, Adjusted EBITDA and Adjusted EBITDAR for the quarters ended September 30, 2015 and 2014 appears later in this press release.
Third Quarter 2015 Operating Results (continuing operations):
- Occupancy at owned and leased senior living communities for the third quarter of 2015 decreased by 110 basis points ("bps") to 85.0% from 86.1% for the same period in 2014.
- The average monthly rate at owned and leased senior living communities for the third quarter of 2015 increased by 1.7% to $4,567 from $4,492 for the same period in 2014.
- The percentage of revenues derived from residents' private resources at owned and leased senior living communities for the third quarter of 2015 increased by 30 bps to 78.0% from 77.7% for the same period in 2014.
Year to Date Financial Results:
- Senior living revenues for the nine months ended September 30, 2015 increased 1.0% to $832.8 million from $824.6 million for the same period in 2014. Growth in senior living revenues was the result of increases in average monthly rates to residents who pay privately for services, partially offset by decreases in occupancy and a revenue reserve recorded in the 2015 period described below. Management fee revenue from managed communities for the nine months ended September 30, 2015 increased by 8.8% to $7.9 million from $7.3 million for the same period in 2014. Growth in management fees was primarily due to an increase in the number of communities managed and an increase in average monthly rates to residents who pay privately for services, partially offset by decreases in occupancy at comparable managed communities.
- EBITDA for the nine months ended September 30, 2015 was $(6.6) million compared to $12.9 million for the same period in 2014. Adjusted EBITDA was $26.0 million and $18.1 million for the nine months ended September 30, 2015 and 2014, respectively. Adjusted EBITDAR was $175.0 million for the nine months ended September 30, 2015 compared to $165.8 million for the same period in 2014.
- Loss from continuing operations for the nine months ended September 30, 2015 was $34.4 million, or $0.71 per basic and diluted share, compared to loss from continuing operations of $9.2 million, or $0.19 per basic and diluted share, for the same period in 2014. Loss from continuing operations for the nine months ended September 30, 2015 included a non-cash charge for goodwill impairment described below of $25.3 million, or $0.52 per basic and diluted share.
- Net loss for the nine months ended September 30, 2015 was $36.7 million, or $0.76 per basic and diluted share, compared to net loss of $11.7 million, or $0.24 per basic and diluted share, for the same period in 2014. Net loss for the nine months ended September 30, 2015 included a non-cash charge for goodwill impairment described below of $25.3 million and a loss from discontinued operations of $2.3 million; net loss for the nine months ended September 30, 2014 included a non-cash long lived asset impairment charge of $0.6 million and a loss from discontinued operations of $2.4 million.
- EBITDA, EBITDAR, loss from continuing operations and net loss in the nine months ended September 30, 2015 included a non-cash charge for goodwill impairment described below of $25.3 million, a revenue reserve of $2.4 million and estimated penalties, compliance costs and professional fees of $5.3 million primarily resulting from previously disclosed Medicare records billing deficiencies discovered and self-reported by Five Star, partially offset by a gain of $0.7 million on early extinguishment of debt. EBITDA, EBITDAR, loss from continuing operations and net loss in the nine months ended September 30, 2014 included $4.7 million of accounting costs incurred in connection with the restatement of certain previously issued financial statements and the delayed completion of Five Star's 2014 financial reporting and a $0.6 million non-cash long lived asset impairment charge.
- A reconciliation of loss from continuing operations determined in accordance with GAAP to EBITDA, Adjusted EBITDA and Adjusted EBITDAR for the nine months ended September 30, 2015 and 2014 appears later in this press release.
Expansion and Disposition Activities:
In July and August 2015, Five Star and Senior Housing Properties Trust, or SNH, sold two skilled nursing facilities located in Iowa and Wisconsin with a combined 51 living units that were owned by SNH and leased by Five Star for approximately $1.0 million. As a result of these sales, Five Star's annual rent payable to SNH decreased by $0.1 million in accordance with the terms of the applicable lease.
In November 2015, Five Star acquired two private pay independent living communities with a combined 152 living units located in Tennessee for $26.0 million, excluding closing costs. Five Star funded this acquisition with cash on hand and by assuming $17.3 million of mortgage debt.
As of the date of this press release, Five Star continues to market for sale one community it owns with 32 living units and Five Star and SNH continue to jointly market for sale one community that Five Star leases from SNH with 116 living units, each of which are reported as held for sale and are included in discontinued operations in Five Star's financial statements.
Goodwill Impairment:
Goodwill in Five Star's balance sheets relates to senior living community acquisitions made in prior years and is required by GAAP to be evaluated for recovery annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. As part of the preparation of its 2015 third quarter financial statements, Five Star determined that, as a result of the significant decline in its stock price subsequent to the announcement of its financial and operating results for the 2015 second quarter and the overall decline in values of other comparable publicly traded senior living operating companies, potential indicators of impairment existed and an interim assessment of goodwill for impairment should be undertaken. Upon completion of this interim assessment, Five Star recorded a non-cash goodwill impairment charge of $25.3 million for the 2015 third quarter to reduce the carrying value of goodwill to zero.
Conference Call:
Later this morning, November 6, 2015, at 9:00 a.m. Eastern Time, Five Star will host a conference call to discuss its third quarter 2015 results. Following management's presentation, there will be a question and answer period.
The conference call telephone number is (877) 329-4332. Participants calling from outside the United States and Canada should dial (412) 317-5436. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. Eastern Time on Friday, November 13, 2015. To hear the replay, dial (412) 317-0088. The replay pass code is 10074255.
A live audio webcast of the conference call will also be available in a listen only mode on Five Star's website at www.fivestarseniorliving.com. Participants wanting to access the webcast should visit Five Star's website about five minutes before the call. The archived webcast will be available for replay on Five Star's website for about one week after the call. The transcription, recording and retransmission in any way of Five Star's third quarter 2015 conference call are strictly prohibited without the prior written consent of Five Star. Five Star's website is not incorporated as part of this press release.
About Five Star Quality Care, Inc.:
Five Star Quality Care, Inc. is a senior living and healthcare services company. As of September 30, 2015, Five Star operated 272 senior living communities (excluding those senior living communities it has classified as discontinued operations) with 31,310 living units located in 32 states, including 212 communities (23,099 living units) that it owns or leases and 60 communities (8,211 living units) that it manages. These communities include independent living, assisted living, continuing care retirement communities and skilled nursing communities. Five Star is headquartered in Newton, Massachusetts.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER FIVE STAR USES WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN", "ESTIMATE" OR SIMILAR EXPRESSIONS, IT IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR'S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT FIVE STAR CONTINUES TO MARKET FOR SALE ONE COMMUNITY IT OWNS AND FIVE STAR AND SNH CONTINUE TO JOINTLY MARKET FOR SALE ONE COMMUNITY THAT FIVE STAR LEASES FROM SNH. FIVE STAR AND SNH MAY NOT BE ABLE TO SELL THESE COMMUNITIES ON ACCEPTABLE TERMS OR OTHERWISE, AND THE SALES OF THESE COMMUNITIES MAY NOT OCCUR.
THE INFORMATION CONTAINED IN FIVE STAR'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR THE SEC, INCLUDING UNDER THE CAPTION "RISK FACTORS" IN FIVE STAR'S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM FIVE STAR'S FORWARD LOOKING STATEMENTS. FIVE STAR'S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, FIVE STAR DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
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FIVE STAR QUALITY CARE, INC. |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
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(in thousands, except per share data) |
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(unaudited) |
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Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Revenues: | |||||||||||||||
| Senior living revenue | $ | 279,685 | $ | 277,411 | $ | 832,793 | $ | 824,580 | |||||||
| Management fee revenue | 2,717 | 2,438 | 7,939 | 7,296 | |||||||||||
|
Reimbursed costs incurred on behalf of managed |
62,170 | 54,490 | 180,082 | 163,673 | |||||||||||
| Total revenues | 344,572 | 334,339 | 1,020,814 | 995,549 | |||||||||||
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| Operating expenses: | |||||||||||||||
| Senior living wages and benefits | 135,133 | 135,507 | 404,737 | 402,469 | |||||||||||
| Other senior living operating expenses | 72,637 | 71,217 | 216,107 | 214,368 | |||||||||||
|
Costs incurred on behalf of managed |
62,170 | 54,490 | 180,082 | 163,673 | |||||||||||
| Rent expense | 49,730 | 49,481 | 149,015 | 147,758 | |||||||||||
| General and administrative | 16,587 | 17,865 | 52,750 | 54,187 | |||||||||||
| Depreciation and amortization | 8,419 | 8,278 | 24,637 | 23,529 | |||||||||||
| Goodwill impairment | 25,344 | — | 25,344 | — | |||||||||||
| Long lived asset impairment | 145 | 589 | 145 | 589 | |||||||||||
| Total operating expenses | 370,165 | 337,427 | 1,052,817 | 1,006,573 | |||||||||||
| Operating loss | (25,593) | (3,088) | (32,003) | (11,024) | |||||||||||
| Interest, dividend and other income | 238 | 214 | 701 | 623 | |||||||||||
| Interest and other expense | (1,106) | (1,324) | (3,597) | (3,803) | |||||||||||
| Gain on early extinguishment of debt | — | — | 692 | — | |||||||||||
|
Gain on sale of available for sale securities |
— | 23 | 38 | 349 | |||||||||||
|
Loss from continuing operations before income taxes |
(26,461) | (4,175) | (34,169) | (13,855) | |||||||||||
| Benefit from (provision for) income taxes | 236 | 1,763 | (348) | 4,558 | |||||||||||
|
Equity in (loss) earnings of an investee |
(25) |
38 | 70 | 59 | |||||||||||
| Loss from continuing operations | (26,250) | (2,374) | (34,447) | (9,238) | |||||||||||
| Loss from discontinued operations | (1,238) | (634) | (2,253) | (2,420) | |||||||||||
| Net loss | $ | (27,488) | $ | (3,008) | $ | (36,700) | $ | (11,658) | |||||||
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Weighted average shares outstanding—basic and |
48,427 | 48,020 | 48,397 | 48,012 | |||||||||||
| Basic and diluted loss per share from: | |||||||||||||||
| Continuing operations | $ | (0.54) | $ | (0.05) | $ | (0.71) | $ | (0.19) | |||||||
| Discontinued operations | (0.03) | (0.01) | (0.05) | (0.05) | |||||||||||
| Net loss per share—basic and diluted | $ | (0.57) | $ | (0.06) | $ | (0.76) | $ | (0.24) | |||||||
| FIVE STAR QUALITY CARE, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS DATA | ||||||||
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(in thousands) |
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(unaudited) |
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| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 19,826 | $ | 20,988 | ||||
| Accounts receivable, net of allowance | 37,983 | 38,814 | ||||||
| Due from related persons | 9,558 | 12,641 | ||||||
| Investments in available for sale securities | 26,330 | 23,436 | ||||||
| Restricted cash | 3,018 | 2,945 | ||||||
| Prepaid and other current assets | 22,011 | 21,494 | ||||||
| Assets of discontinued operations | 961 | 1,463 | ||||||
| Total current assets | 119,687 | 121,781 | ||||||
| Property and equipment, net | 354,514 | 357,186 | ||||||
| Restricted cash | 2,514 | 2,170 | ||||||
| Restricted investments in available for sale securities | 20,674 | 19,835 | ||||||
| Goodwill, equity investment and other long term assets | 9,883 | 34,001 | ||||||
| Total assets | $ | 507,272 | $ | 534,973 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Revolving credit facilities | $ | 35,000 | $ | 35,000 | ||||
| Other current liabilities | 196,071 | 180,392 | ||||||
| Total current liabilities | 231,071 | 215,392 | ||||||
| Mortgage notes payable | 42,924 | 49,373 | ||||||
| Other long term liabilities | 42,813 | 43,426 | ||||||
| Shareholders' equity | 190,464 | 226,782 | ||||||
| Total liabilities and shareholders' equity | $ | 507,272 | $ | 534,973 | ||||
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| FIVE STAR QUALITY CARE, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
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(in thousands) |
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(unaudited) |
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| Nine Months Ended September 30, | ||||||||
| 2015 | 2014 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (36,700) | $ | (11,658) | ||||
| Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||
| Depreciation and amortization | 25,046 | 24,313 | ||||||
| Gain on early extinguishment of debt | (742) | — | ||||||
| Loss from discontinued operations before income tax | 2,253 | 3,927 | ||||||
| Gain on sale of available for sale securities | (38) | (349) | ||||||
| Loss on disposal of property and equipment | 98 | — | ||||||
| Goodwill impairment | 25,344 | — | ||||||
| Long lived asset impairment | 145 | 589 | ||||||
| Equity in earnings of an investee | (70) | (59) | ||||||
| Stock-based compensation | 948 | 949 | ||||||
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Deferred income taxes |
— | (6,726) | ||||||
| Provision for losses on receivables | 3,520 | 1,998 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (2,689) | (790) | ||||||
| Prepaid expenses and other assets | (1,962) | (4,620) | ||||||
| Accounts payable and accrued expenses | 330 | 1,858 | ||||||
| Accrued compensation and benefits | 9,917 | 11,456 | ||||||
| Due to related persons, net | 1,026 | (1,952) | ||||||
| Other current and long term liabilities | 9,278 | 9,347 | ||||||
| Cash provided by operating activities | 35,704 | 28,283 | ||||||
| Cash flows from investing activities: | ||||||||
| (Increase) decrease in restricted cash and investment accounts, net | (417) | 11,563 | ||||||
| Acquisition of property and equipment | (40,867) | (39,189) | ||||||
| Acquisition of senior living communities, net of liabilities assumed | — | (5,926) | ||||||
| Purchases of intangible assets | (191) | — | ||||||
| Purchases of available for sale securities | (10,717) | (21,349) | ||||||
| Investment in an investee | — | (825) | ||||||
| Proceeds from sale of property and equipment to Senior Housing Properties Trust | 16,425 | 23,776 | ||||||
| Proceeds from sale of available for sale securities | 6,469 | 8,737 | ||||||
| Cash used in investing activities | (29,298) | (23,213) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from borrowings on credit facilities | 20,000 | 10,000 | ||||||
| Repayments of borrowings on credit facilities | (20,000) | (20,000) | ||||||
| Repayments of mortgage notes payable | (5,732) | (1,064) | ||||||
| Payment of deferred financing fees | (300) | — | ||||||
| Cash used in financing activities | (6,032) | (11,064) | ||||||
| Cash flows from discontinued operations: | ||||||||
| Net cash (used in) provided by operating activities | (1,512) | 7,020 | ||||||
| Net cash (used in) provided by investing activities | (24) | 293 | ||||||
| Net cash flows (used in) provided by discontinued operations | (1,536) | 7,313 | ||||||
| Change in cash and cash equivalents | (1,162) | 1,319 | ||||||
| Cash and cash equivalents at beginning of period | 20,988 | 23,628 | ||||||
| Cash and cash equivalents at end of period | $ | 19,826 | $ | 24,947 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | 3,078 | $ | 2,562 | ||||
| Cash paid for income taxes, net | $ | 805 | $ | 1,041 | ||||
| Non-cash activities: | ||||||||
| Issuance of common stock | $ | 206 | $ | 189 | ||||
| Real estate acquisition | $ | — | $ | (15,518) | ||||
| Assumption of mortgage note payable | $ | — | $ | 15,518 | ||||
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| FIVE STAR QUALITY CARE, INC. | |||||||||||||||
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SENIOR LIVING COMMUNITY FINANCIAL DATA(1) |
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(in thousands) |
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| Three months ended September 30, (2) | Nine months ended September 30, (2) | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Senior living revenue: | |||||||||||||||
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Independent and assisted living community revenue |
$ | 29,618 | $ | 29,256 | $ | 88,673 | $ | 84,811 | |||||||
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Independent and assisted living community revenue |
101,948 | 100,845 | 302,917 | 298,642 | |||||||||||
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Continuing care retirement community revenue (leased) |
98,717 | 99,062 | 298,554 | 297,761 | |||||||||||
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Skilled nursing facility revenue (leased)(3) |
45,223 | 44,699 | 130,446 | 133,274 | |||||||||||
| Other(4) | 4,179 | 3,549 | 12,203 | 10,092 | |||||||||||
| Total senior living revenue (owned and leased) | $ | 279,685 | $ | 277,411 | $ | 832,793 | $ | 824,580 | |||||||
| Senior living wages and benefits: | |||||||||||||||
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Independent and assisted living community wages and |
$ | 12,377 | $ | 12,478 | $ | 36,691 | $ | 36,009 | |||||||
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Independent and assisted living community wages and |
43,128 | 43,246 | 128,393 | 127,547 | |||||||||||
| Continuing care retirement community wages and benefits (leased) | 49,347 | 50,217 | 149,238 | 149,714 | |||||||||||
| Skilled nursing facility wages and benefits (leased) | 28,339 | 27,962 | 83,996 | 83,109 | |||||||||||
| Other(4) | 1,942 | 1,604 | 6,419 | 6,090 | |||||||||||
| Total senior living wages and benefits (owned and leased) | $ | 135,133 | $ | 135,507 | $ | 404,737 | $ | 402,469 | |||||||
| Senior living other operating expenses: | |||||||||||||||
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Independent and assisted living community other operating expenses (owned) |
$ | 7,620 | $ | 6,978 | $ | 22,044 | $ | 20,835 | |||||||
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Independent and assisted living community other operating expenses (leased) |
25,635 | 24,664 | 75,327 | 74,449 | |||||||||||
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Continuing care retirement community other operating expenses (leased) |
26,047 | 26,321 | 77,262 | 79,418 | |||||||||||
| Skilled nursing facility other operating expenses (leased)(5) | 12,690 | 12,286 | 39,832 | 36,871 | |||||||||||
| Other(4) | 645 | 968 | 1,642 | 2,795 | |||||||||||
| Total senior living operating expenses (owned and leased) | $ | 72,637 | $ | 71,217 | $ | 216,107 | $ | 214,368 | |||||||
(1) Excludes data for managed communities and discontinued operations.
(2) The number of owned and leased communities between July 1, 2014 and September 30, 2015 did not change; as a result, there is no separate same store comparable senior living community financial data presented.
(3) Skilled nursing facility revenue for the nine months ended September 30, 2015 is net of a $2.4 million reserve for estimated Medicare payments Five Star expects to repay.
(4) Other senior living revenue and expenses relate primarily to rehabilitation and other specialty service revenues and expenses provided at the residential communities owned and leased by Five Star.
(5) Skilled nursing facility other senior living operating expenses for the three and nine months ended September 30, 2015 includes $0.9 million and $4.5 million, respectively, of estimated penalties, compliance costs and professional fees related to the Medicare payments Five Star expects to repay.
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FIVE STAR QUALITY CARE, INC. |
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PERCENT BREAKDOWN OF SENIOR LIVING COMMUNITY REVENUES(1) |
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| Three months ended September 30, | Nine months ended September 30, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||
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Independent and assisted living communities |
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| Private and other sources | 99.5% | 99.1% | 99.5% | 99.2% | ||||||||||
| Medicaid | 0.5% | 0.9% | 0.5% | 0.8% | ||||||||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
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Independent and assisted living communities |
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| Private and other sources | 98.9% | 99.1% | 99.0% | 99.1% | ||||||||||
| Medicaid | 1.1% | 0.9% | 1.0% | 0.9% | ||||||||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
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Continuing care retirement communities (leased): |
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| Private and other sources | 74.1% | 72.9% | 73.0% | 72.3% | ||||||||||
| Medicare | 19.2% | 21.0% | 20.4% | 21.7% | ||||||||||
| Medicaid | 6.7% | 6.1% | 6.6% | 6.0% | ||||||||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
| Skilled nursing facilities (leased): | ||||||||||||||
| Private and other sources | 25.9% | 26.2% | 25.8% | 25.4% | ||||||||||
| Medicare | 22.6% | 23.1% | 23.7% | 24.4% | ||||||||||
| Medicaid | 51.5% | 50.7% | 50.5% | 50.2% | ||||||||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
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Total senior living communities (owned and |
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| Private and other sources | 78.0% | 77.7% | 77.6% | 77.2% | ||||||||||
| Medicare | 10.6% | 11.4% | 11.3% | 12.0% | ||||||||||
| Medicaid | 11.4% | 10.9% | 11.1% | 10.8% | ||||||||||
| Total | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
(1) Excludes data for managed communities and discontinued operations.
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SENIOR LIVING OTHER OPERATING DATA(1) |
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| Three months ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| Independent and assisted living communities (owned): | ||||||||||||||||||||
| Number of communities (end of period) | 31 | 31 | 31 | 31 | 31 | |||||||||||||||
| Number of units (end of period) | 3,064 | 3,064 | 3,064 | 3,061 | 3,061 | |||||||||||||||
| Occupancy | 86.3% | 87.1% | 87.9% | 88.7% | 88.2% | |||||||||||||||
| Avg. monthly rate(2) | $ | 3,596 | $ | 3,602 | $ | 3,594 | $ | 3,492 | $ | 3,472 | ||||||||||
| Independent and assisted living communities (leased): | ||||||||||||||||||||
| Number of communities (end of period) | 119 | 119 | 119 | 119 | 119 | |||||||||||||||
| Number of units (end of period)(3) | 9,909 | 9,909 | 9,909 | 9,896 | 9,858 | |||||||||||||||
| Occupancy(3) | 87.8% | 87.7% | 88.0% | 89.3% | 89.5% | |||||||||||||||
| Avg. monthly rate(2) | $ | 3,815 | $ | 3,819 | $ | 3,820 | $ | 3,734 | $ | 3,723 | ||||||||||
| Continuing care retirement communities (leased): | ||||||||||||||||||||
| Number of communities (end of period) | 31 | 31 | 31 | 31 | 31 | |||||||||||||||
| Number of units (end of period)(4) | 7,319 | 7,319 | 7,319 | 7,322 | 7,322 | |||||||||||||||
| Occupancy | 82.8% | 83.3% | 83.8% | 83.6% | 83.2% | |||||||||||||||
| Avg. monthly rate(2) | $ | 5,313 | $ | 5,384 | $ | 5,450 | $ | 5,317 | $ | 5,304 | ||||||||||
| Skilled nursing facilities (leased): | ||||||||||||||||||||
| Number of communities (end of period) | 31 | 31 | 31 | 31 | 31 | |||||||||||||||
| Number of units (end of period)(5) | 2,807 | 2,807 | 2,807 | 2,822 | 2,822 | |||||||||||||||
| Occupancy | 79.3% | 78.4% | 78.6% | 79.3% | 79.3% | |||||||||||||||
| Avg. monthly rate(2) | $ | 6,632 | $ | 6,652 | $ | 6,752 | $ | 6,535 | $ | 6,543 | ||||||||||
| Total senior living communities (owned and leased): | ||||||||||||||||||||
| Number of communities (end of period) | 212 | 212 | 212 | 212 | 212 | |||||||||||||||
| Number of units (end of period)(3) | 23,099 | 23,099 | 23,099 | 23,101 | 23,063 | |||||||||||||||
| Occupancy(3) | 85.0% | 85.1% | 85.5% | 86.2% | 86.1% | |||||||||||||||
| Avg. monthly rate(2) | $ | 4,567 | $ | 4,591 | $ | 4,623 | $ | 4,503 | $ | 4,492 | ||||||||||
| Managed communities: | ||||||||||||||||||||
| Number of communities (end of period) | 60 | 60 | 46 | 46 | 44 | |||||||||||||||
| Number of units (end of period)(6) | 8,211 | 8,168 | 7,290 | 7,278 | 7,051 | |||||||||||||||
| Occupancy | 87.5% | 88.1% | 88.0% | 88.4% | 88.2% | |||||||||||||||
| Avg. monthly rate(2) | $ | 4,151 | $ | 4,215 | $ | 4,300 | $ | 4,162 | $ | 4,152 | ||||||||||
| Other ancillary services: | ||||||||||||||||||||
| Rehabilitation and wellness inpatient clinics (end of period) | 49 | 48 | 48 | 48 | 48 | |||||||||||||||
| Rehabilitation and wellness outpatient clinics (end of period) | 61 | 60 | 58 | 56 | 55 | |||||||||||||||
| Home health communities served (end of period) | 15 | 15 | 13 | 13 | 6 | |||||||||||||||
(1) Excludes data for discontinued operations.
(2) Average monthly rate is calculated by taking the average daily rate, which is defined as total operating revenues divided by occupied units during the period, and multiplying it by 30 days.
(3) The number of units for the quarter ended September 30, 2014 excludes 38 living units in one senior living community that was temporarily closed for a major renovation during that time period.
(4) Includes 1,973 skilled nursing units in communities where assisted living and independent living services are the predominant services provided.
(5) Includes 68 assisted living and independent living units in communities where skilled nursing services are the predominant services provided.
(6) Includes 472 skilled nursing units in communities where assisted living and independent living services are the predominant services provided.
FIVE STAR QUALITY CARE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands)
Non-GAAP financial measures are financial measures that are not determined in accordance with U.S. generally accepted accounting principles, or GAAP. Five Star considers these Non-GAAP financial measures to be meaningful disclosures because it believes that the presentation of these Non-GAAP financial measures may help investors to gain a better understanding of changes in its operating results, and may also help investors who wish to make comparisons between Five Star and other companies on both a GAAP and a non-GAAP basis. These Non-GAAP financial measures are used by management to evaluate Five Star's financial performance and for comparing Five Star's performance over time and to the performance of its competitors. This information should not be considered as an alternative to income (loss) from continuing operations, net income (loss), cash flows from operating activities or any other financial operating or performance or liquidity measure established by GAAP. Non-GAAP financial measures as presented by Five Star may not be comparable to amounts calculated by other companies.
The following table presents the reconciliation of these Non-GAAP financial measures to loss from continuing operations, the most directly comparable financial measure under GAAP reported in Five Star's condensed consolidated financial statements, for the three and nine months ended September 30, 2015 and 2014.
|
For the three months ended September 30, |
For the nine months ended September 30, |
||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Loss from continuing operations | $ | (26,250) | $ | (2,374) | $ | (34,447) | $ | (9,238) | |||||||
| Add: interest and other expense | 1,106 | 1,324 | 3,597 | 3,803 | |||||||||||
| Add: income tax expense (benefit) | (236) | (1,763) | 348 | (4,558) | |||||||||||
| Add: depreciation and amortization | 8,419 | 8,278 | 24,637 | 23,529 | |||||||||||
| Less: interest, dividend and other income | (238) | (214) | (701) | (623) | |||||||||||
| EBITDA | (17,199) | 5,251 | (6,566) | 12,913 | |||||||||||
| Add (less): | |||||||||||||||
| Goodwill and other long lived asset impairments | 25,489 | 589 | 25,489 | 589 | |||||||||||
| Costs related to compliance assessment | 928 | (1) | - | 7,489 | (2) | - | |||||||||
| Financial accounting restatement and remediation costs | 21 | 599 | 249 | 4,742 | |||||||||||
| Acquisition related costs | - | - | 41 | 157 | |||||||||||
| Gain on sale of investments in available for sale securities | - | (23) | (38) | (349) | |||||||||||
| Gain on early extinguishment of debt | - | - | (692) | - | |||||||||||
| Adjusted EBITDA | 9,239 | 6,416 | 25,972 | 18,052 | |||||||||||
| Add: Rent expense | 49,730 | 49,481 | 149,015 | 147,758 | |||||||||||
| Adjusted EBITDAR | $ | 58,969 | $ | 55,897 | $ | 174,987 | $ | 165,810 | |||||||
(1) Includes compliance costs and professional fees related to estimated Medicare payments Five Star expects to repay.
(2) Includes a $2.4 million reserve for the estimated Medicare payments Five Star expects to repay and $5.1 million for estimated penalties, compliance costs and professional fees related to these Medicare repayments.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151106005137/en/
Five Star Quality Care, Inc.
Olivia Snyder, 617-796-8245
Investor
Relations Analyst
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