Five Star Quality Care, Inc. Reports Fourth Quarter and Year End 2012 Results
NEWTON, Mass.--(BUSINESS WIRE)--
Five Star Quality Care, Inc. (NYSE: FVE) today announced its financial
results for the quarter and year ended December 31, 2012.
Fourth Quarter 2012 Financial Highlights:
Total revenues for the fourth quarter of 2012 increased 14.4% to
$359.1 million from $314.0 million for the same period in the previous
year.
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, for the fourth quarter of 2012 were $12.0 million compared to
$8.4 million for the same period in the previous year. EBITDA for the
fourth quarter of 2011 included impairment of long-lived assets of
$3.5 million and acquisition related costs of $229,000, partially
offset by a gain on sale of available for sale securities of $3.5
million. EBITDA excluding these and certain other items was $12.1
million and $8.7 million in the fourth quarters of 2012 and 2011,
respectively. A reconciliation of income from continuing operations
determined in accordance with U.S. generally accepted accounting
principles, or GAAP, to EBITDA and EBITDA excluding certain items for
the quarters ended December 31, 2012 and 2011 appears later in this
press release.
Income from continuing operations for the fourth quarter of 2012 was
$3.5 million, or $0.07 per basic and diluted share, compared to $52.7
million, or $1.11 and $1.05 per share, basic and diluted,
respectively, for the same period in the previous year. Income from
continuing operations for the fourth quarter of 2011 included certain
items that, in aggregate, increased our earnings by $51.8 million, or
$1.09 and $1.03 per share, basic and diluted, respectively. These
items were a $50.7 million income tax benefit related to the reversal
of our valuation allowance, a $1.4 million income tax benefit related
to impairment of long-lived assets and a $3.5 million gain on sale of
available for sale securities, partially offset by impairment of
long-lived assets of $3.5 million and acquisition related costs of
$229,000.
Net income for the fourth quarter of 2012 was $3.5 million, or $0.07
per basic and diluted share, compared to $55.4 million, or $1.16 and
$1.10 per share, basic and diluted, respectively, for the same period
in the previous year. Net income in the 2012 period included income
from discontinued operations of $6,000 compared to $2.7 million of
income from discontinued operations in the 2011 period.
Fourth Quarter 2012 Operating Highlights:
Occupancy at our owned and leased senior living communities for the
fourth quarter of 2012 was 85.7% compared to 86.2% for the same period
in the previous year.
The average monthly rate at our owned and leased senior living
communities for the fourth quarter of 2012 increased by 2.5% to $4,516
from $4,408 for the same period in the previous year.
The percentage of revenues derived from residents’ private resources
for the fourth quarter of 2012 at our owned and leased senior living
communities modestly decreased to 74.5% from 74.7% for the same period
in the previous year.
Our fee revenues from managed senior living communities in the fourth
quarter of 2012 were $2.2 million compared to $515,000 in the fourth
quarter of 2011.
Fiscal Year Financial Highlights:
Total revenues for the year ended December 31, 2012 increased 12.1% to
$1.4 billion from $1.2 billion for the year ended December 31, 2011.
EBITDA for the year ended December 31, 2012 was $49.5 million compared
to $39.3 million for the year ended December 31, 2011. EBITDA for the
year ended December 31, 2012 included a gain on settlement of our
litigation with Sunrise Senior Living, Inc., or Sunrise, which
increased EBITDA by $3.4 million. EBITDA for the year ended December
31, 2011 included impairment of long-lived assets of $3.5 million and
acquisition related costs of $1.8 million, partially offset by a gain
on sale of available for sale securities of $4.1 million. EBITDA
excluding these and certain other items was $46.2 million and $40.4
million for the year ended December 31, 2012 and 2011, respectively. A
reconciliation of income from continuing operations determined in
accordance with GAAP to EBITDA and EBITDA excluding certain items for
the years ended December 31, 2012 and 2011 appears later in this press
release.
Income from continuing operations for the year ended December 31, 2012
was $13.4 million, or $0.28 per basic and diluted share, compared to
$67.5 million, or $1.60 and $1.52 per share, basic and diluted,
respectively, for the year ended December 31, 2011. Income from
continuing operations for the year ended December 31, 2012 included a
gain on settlement of our litigation with Sunrise of $1.9 million (net
of taxes), or $0.04 per basic and diluted share. Income from
continuing operations for the year ended December 31, 2011 included
certain items that, in aggregate, increased our earnings by $51.0
million, or $1.21 and $1.13 per share, basic and diluted,
respectively. These items were a $50.7 million income tax benefit
related to the reversal of our valuation allowance, a $1.4 million
income tax benefit related to impairment of long-lived assets, a $4.1
million gain on sale of available for sale securities and a $1,000
gain on early extinguishment of debt, partially offset by impairment
of long-lived assets of $3.5 million and acquisition related costs of
$1.8 million.
Net income for the year ended December 31, 2012 was $24.9 million, or
$0.52 per basic and diluted share, compared to $64.2 million, or $1.52
and $1.45 per share, basic and diluted, respectively, for the year
ended December 31, 2011. Net income for the 2012 period included
income from discontinued operations, including the sale of our
pharmacy business, of $11.5 million. Net income for the 2011 period
included a loss from discontinued operations of $(3.3) million.
Other Highlights:
During the fourth quarter of 2012, we began to manage nine senior living
communities with a combined 2,233 living units for Senior Housing
Properties Trust (NYSE: SNH). All of these communities are focused on
providing independent and/or assisted living services and generate a
large majority of their revenues from residents’ private resources, not
from Medicare or Medicaid government funded programs.
As previously reported, in May 2012 we reached agreement with SNH and
Sunrise whereby Sunrise would terminate its leases for 10 senior
living communities owned by SNH and we would begin to manage the 10
communities for SNH’s account. These 10 communities include 2,472
living units and are located in six states. Prior to the fourth
quarter of 2012, we began to manage three of these senior living
communities with a combined 407 living units. During the fourth
quarter of 2012, we began to manage the remaining seven of these
senior living communities with a combined 2,065 living units.
In December 2012, we began to manage two senior living communities
with a combined 168 living units located in Tennessee and Texas.
In October 2012, we entered an agreement to sell two skilled nursing
facilities, or SNFs, with a total of 271 living units that we own which
are located in Michigan for $8.0 million, including the assumption by
the buyer of $7.5 million of United States Department of Housing and
Urban Development mortgage debt. These SNFs receive the majority of
their revenues from Medicare/Medicaid reimbursements. The losses
generated at these facilities are included in our discontinued
operations. We expect the sale of these SNFs to occur before the end of
2013, but completion of this sale is subject to customary closing
conditions, including regulatory approvals, and we can provide no
assurance that a sale of these SNFs will occur before the end of 2013 or
will be completed at all.
Bruce Mackey, President & CEO, made the following statement regarding
the fourth quarter results of operations and recent activities:
“Although our occupancy rate for our owned and leased senior living
communities declined year over year, this was primarily because of
declines in occupancy from high acuity residents at our continuing care
retirement communities, or CCRC’s, and SNFs. Occupancy rates at our
owned and leased independent and assisted living communities, which
combined represent the largest number of units we operate, improved on a
year over year basis. Furthermore, our average monthly rate increased in
all property types on a year over year basis.
Through external growth, a focus on cost control and growth in our
private pay senior living business, we achieved meaningful year over
year EBITDA growth. EBITDA excluding certain items for the fourth
quarter of 2012 was 39% higher than the fourth quarter of 2011.
During the fourth quarter we completed the transition of 10 senior
living communities with 2,472 living units into our management business
that were formerly operated by Sunrise and leased from SNH. In addition,
during the fourth quarter we began to manage two other senior living
communities for SNH with a total of 168 living units. We are now
managing a total of 39 senior living communities that we expect may
generate annual management fee revenues in 2013 of approximately $9.0
million based on the current operating performance at the communities.
We continue to look for opportunities to grow our private pay senior
living business through managing, owning and leasing communities and
have ample capacity on our balance sheet with $184.4 million available
under our revolving credit facilities.”
Conference Call:
Later today, February 15, 2013, at 10:00 a.m. Eastern Time, we will host
a conference call to discuss the fourth quarter and year end financial
results. Following management’s presentation, there will be a question
and answer period.
The conference call telephone number is (800) 553-0288. Participants
calling from outside the United States and Canada should dial (612)
332-0530. 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, February 22, 2013. To hear
the replay, dial (320) 365-3844. The replay pass code is 279877.
A live audio webcast of the conference call will also be available in a
listen only mode on the Company’s website at www.fivestarseniorliving.com.
Participants wanting to access the webcast should visit the Company’s
website about five minutes before the call. The archived webcast will be
available for replay on the Company’s website for about one week after
the call. The recording and retransmission in any way of the
Company’s fourth quarter 2012 conference call is strictly prohibited
without the prior written consent of the Company. The Company’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 December 31, 2012, we operated 261 senior living
communities with 30,454 living units located in 31 states, including 31
communities (2,952 living units) that we own and operate, 191
communities (20,812 living units) that we lease and operate, and 39
communities (6,690 living units) that we manage. These communities
include independent living, assisted living, continuing care and skilled
nursing communities. We also operate two leased rehabilitation
hospitals. We are 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 WE USE
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR 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 WE CONTINUE TO LOOK FOR OPPORTUNITIES
TO GROW OUR PRIVATE PAY SENIOR LIVING BUSINESS THROUGH MANAGING,
OWNING AND LEASING COMMUNITIES. THERE CAN BE NO ASSURANCE THAT WE WILL
BE SUCCESSFUL IN IDENTIFYING OR OBTAINING SUCH OPPORTUNITIES AND WE
MAY DEPEND ON ENTITIES WITH WHICH WE CURRENTLY HAVE COMMERCIAL
RELATIONS, INCLUDING AS A TENANT OR MANAGER, ACQUIRING ADDITIONAL
SENIOR LIVING COMMUNITIES WITH SUBSTANTIAL PRIVATE PAY BUSINESS AND
LEASING THOSE COMMUNITIES TO US OR CONTRACTING WITH US TO MANAGE THOSE
COMMUNITIES.
RESIDENTS AND PATIENTS WHO PAY FOR OUR SERVICES WITH THEIR PRIVATE
RESOURCES MAY BECOME UNABLE TO AFFORD OUR SERVICES WHICH COULD RESULT
IN DECREASED OCCUPANCY AND REVENUES AT OUR SENIOR LIVING COMMUNITIES
AND REHABILITATION HOSPITALS AND INCREASED RELIANCE ON GOVERNMENT AND
OTHER PAYERS.
THIS PRESS RELEASE STATES THAT WE HAVE ENTERED AN AGREEMENT TO SELL
TWO SNFS LOCATED IN MICHIGAN THAT WE OWN AND THAT WE EXPECT THE SALE
TO OCCUR PRIOR TO THE END OF 2013. THIS SALE IS SUBJECT TO VARIOUS
TERMS AND CONDITIONS TYPICAL OF SUCH TRANSACTIONS, INCLUDING
REGULATORY APPROVALS. THESE TERMS AND CONDITIONS MAY NOT BE MET. AS A
RESULT, THIS TRANSACTION MAY BE DELAYED OR MAY NOT OCCUR OR ITS TERMS
MAY CHANGE.
THIS PRESS RELEASE STATES THAT WE EXPECT THAT THE 39 SENIOR LIVING
COMMUNITIES WE NOW MANAGE WILL GENERATE APPROXIMATELY $9.0 MILLION
ANNUALLY IN MANAGEMENT FEE REVENUES IN 2013, BASED ON CURRENT
OPERATING PERFORMANCE. HOWEVER, ACTUAL ANNUAL MANAGEMENT FEE REVENUES
MAY BE LESS THAN $9.0 MILLION IN 2013 IF OPERATING PERFORMANCE AT THE
COMMUNITIES DECLINES OR FOR OTHER REASONS.
THIS PRESS RELEASE STATES THAT WE HAVE AMPLE CAPACITY ON OUR BALANCE
SHEET WITH $184.4 MILLION AVAILABLE UNDER OUR REVOLVING CREDIT
FACILITIES. HOWEVER, OUR $35.0 MILLION REVOLVING CREDIT FACILITY
EXPIRES ON MARCH 18, 2013, AND WE MAY NOT BE SUCCESSFUL IN RENEWING OR
REFINANCING THAT FACILITY ON TERMS ACCEPTABLE TO US OR OTHERWISE. IN
ADDITION, WE MUST SATISFY CERTAIN CONDITIONS, INCLUDING FINANCIAL
COVENANTS, IN ORDER TO BORROW UNDER OUR REVOLVING CREDIT FACILITIES.
FURTHER, OUR OPERATIONS AND BUSINESS REQUIRE SIGNIFICANT AMOUNTS OF
WORKING CASH AND REQUIRE US TO MAKE SIGNIFICANT CAPITAL EXPENDITURES
TO MAINTAIN OUR COMPETITIVENESS. ACCORDINGLY, WE MAY NOT HAVE
SUFFICIENT CASH LIQUIDITY.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”
IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING
STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE
AT WWW.SEC.GOV.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.
FIVE STAR QUALITY CARE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three months ended December 31,
Twelve months ended December 31,
2012
2011
2012
2011
Revenues:
Senior living revenue
$
279,154
$
274,733
$
1,111,018
$
1,078,380
Rehabilitation hospital revenue
27,547
27,085
107,048
105,320
Management fee revenue
2,151
515
5,817
898
Reimbursed costs incurred on behalf of managed communities
50,245
11,665
126,995
20,552
Total revenues
359,097
313,998
1,350,878
1,205,150
Operating expenses:
Senior living wages and benefits
135,356
137,411
548,164
536,386
Other senior living operating expenses
70,007
66,532
270,069
259,655
Costs incurred on behalf of managed communities
50,245
11,665
126,995
20,552
Rehabilitation hospital expenses
24,763
24,507
96,488
95,305
Rent expense
50,598
49,933
201,641
195,407
General and administrative
16,154
15,298
61,599
57,540
Depreciation and amortization
6,433
5,989
25,064
19,694
Impairment of long-lived assets
-
3,500
-
3,500
Total operating expenses
353,556
314,835
1,330,020
1,188,039
Operating income
5,541
(837
)
20,858
17,111
Interest and other income
243
265
881
1,240
Interest and other expense
(1,475
)
(1,512
)
(6,268
)
(3,917
)
Acquisition related costs
(8
)
(229
)
(108
)
(1,759
)
Gain on settlement
-
-
3,365
-
Gain on early extinguishment of debt
-
-
45
1
Equity in earnings of Affiliates Insurance Company
80
28
316
139
(Loss) gain on sale of available for sale securities reclassified
from other comprehensive income
(81
)
3,460
(19
)
4,116
Income from continuing operations before income taxes
4,300
1,175
19,070
16,931
(Provision) benefit for income taxes
(807
)
51,560
(5,642
)
50,554
Income from continuing operations
3,493
52,735
13,428
67,485
Income (loss) from discontinued operations
6
2,666
11,517
(3,284
)
Net income
$
3,499
$
55,401
$
24,945
$
64,201
Weighted average shares outstanding - basic
48,066
47,702
47,952
42,161
Weighted average shares outstanding - diluted
48,066
50,570
47,952
45,034
Basic income per share from:
Continuing operations
$
0.07
$
1.11
$
0.28
$
1.60
Discontinued operations
-
0.05
0.24
(0.08
)
Net income per share - basic
$
0.07
$
1.16
$
0.52
$
1.52
Diluted income per share from:
Continuing operations
$
0.07
$
1.05
$
0.28
$
1.52
Discontinued operations
-
0.05
0.24
(0.07
)
Net income per share - diluted
$
0.07
$
1.10
$
0.52
$
1.45
FIVE STAR QUALITY CARE, INC.
CONSOLIDATED BALANCE SHEETS DATA
(in thousands)
(unaudited)
December 31, 2012
December 31, 2011
Assets
Current assets:
Cash and cash equivalents
$
24,638
$
28,374
Accounts receivable, net of allowance
53,134
56,509
Investments in available for sale securities
12,920
9,114
Restricted cash
6,548
4,838
Prepaid expenses and other current assets
29,644
20,395
Assets of discontinued operations
10,430
29,022
Total current assets
137,314
148,252
Property and equipment, net
335,612
332,185
Restricted cash
12,166
4,092
Restricted investments in available for sale securities
10,580
13,115
Goodwill, equity investment and other long term assets
75,684
85,833
Total assets
$
571,356
$
583,477
Liabilities and Shareholders' Equity
Current liabilities:
Bridge loan from Senior Housing Properties Trust (or SNH)
$
-
$
38,000
Current portion of convertible senior notes
24,872
-
Other current liabilities
159,088
151,331
Total current liabilities
183,960
189,331
Mortgage notes payable
37,621
38,714
Convertible senior notes
-
37,282
Other long term liabilities
42,970
37,956
Shareholders' equity
306,805
280,194
Total liabilities and shareholders’ equity
$
571,356
$
583,477
FIVE STAR QUALITY CARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended December 31,
Twelve months ended December 31,
2012
2011
2012
2011
Cash flows from operating activities:
Net income
$
3,499
$
55,401
$
24,945
$
64,201
Adjustments to reconcile net income to cash provided by operating
activities:
Depreciation and amortization
6,433
5,989
25,064
19,694
Gain on early extinguishment of debt
-
-
(45
)
(1
)
(Gain) loss from discontinued operations
(6
)
(2,666
)
(11,517
)
3,284
Loss (gain) on sale of available for sale securities
81
(3,460
)
19
(4,116
)
Impairment of long-lived assets
-
3,500
-
3,500
Equity in earnings of Affiliates Insurance Company
(80
)
(28
)
(316
)
(139
)
Stock-based compensation
618
321
1,267
1,271
Deferred income taxes
359
(54,330
)
10,556
(54,699
)
Provision for losses on receivables
1,779
1,461
5,296
5,257
Changes in assets and liabilities:
Accounts receivable
(33
)
(5,842
)
(1,921
)
(6,578
)
Prepaid expenses and other assets
(3,482
)
1,333
(11,270
)
(1,025
)
Accounts payable and accrued expenses
14,576
(3,490
)
15,482
3,537
Accrued compensation and benefits
(7,131
)
(4,172
)
2,011
1,924
Due to related persons
(1,076
)
2,353
(6,944
)
818
Other current and long term liabilities
(2,017
)
(2,040
)
4,128
3,367
Cash provided by (used in) operating activities
13,520
(5,670
)
56,755
40,295
Net cash provided by (used in) discontinued operations
2,298
2,673
(6,018
)
3,417
Cash flows from investing activities:
(Payments from) deposits into restricted cash and investment
accounts, net
(3,548
)
547
(9,784
)
(2,570
)
Acquisition of property and equipment
(17,134
)
(16,419
)
(57,386
)
(60,380
)
Acquisition of senior living communities, net of working capital
assumed
-
-
-
(107,765
)
Purchase of available for sale securities
-
-
(5,076
)
(206
)
Proceeds from sale of pharmacy
-
-
34,298
-
Proceeds from disposition of property and equipment held for sale
12,271
7,393
30,520
33,269
Proceeds from sale of available for sale securities
3,235
8,187
4,163
10,896
Cash used in investing activities
(5,176
)
(292
)
(3,265
)
(126,756
)
Cash flows from financing activities:
Net proceeds from issuance of common stock
-
-
-
53,953
Proceeds from borrowings on credit facilities
15,000
-
62,500
12,000
Repayments of borrowings on credit facilities
(15,000
)
-
(62,500
)
(12,000
)
Proceeds from borrowing on the bridge loan from Senior Housing
Properties Trust
-
-
-
80,000
Repayments of borrowing on the bridge loan from Senior Housing
Properties Trust
-
(10,000
)
(38,000
)
(42,000
)
Purchase and retirement of convertible senior notes
-
-
(12,038
)
(622
)
Repayments of mortgage notes payable
(299
)
(283
)
(1,170
)
(683
)
Cash (used in) provided by financing activities
(299
)
(10,283
)
(51,208
)
90,648
Change in cash and cash equivalents during the period
10,343
(13,572
)
(3,736
)
7,604
Cash and cash equivalents at beginning of period
14,295
41,946
28,374
20,770
Cash and cash equivalents at end of period
$
24,638
$
28,374
$
24,638
$
28,374
Supplemental cash flow information:
Cash paid for interest
$
1,210
$
2,086
$
4,921
$
3,540
Cash paid for income taxes
$
580
$
79
$
2,132
$
1,336
Non-cash activities:
Real estate acquisition
$
-
$
-
$
-
$
(40,289
)
Assumption of mortgage notes payable
$
-
$
-
$
-
$
40,289
FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
(dollars in thousands, except average monthly rate)
Three months ended
Twelve months ended
December 31,
December 31,
2012
2011
2012
2011
Senior living communities:
Number of communities (end of period)
222
222
222
222
Number of units (end of period)
23,764
23,764
23,764
23,764
Occupancy
85.7
%
86.2
%
85.7
%
85.8
%
Avg. monthly rate
$
4,516
$
4,408
$
4,477
$
4,516
Senior living revenue:
Independent and assisted living community revenue
$
124,690
$
122,230
$
494,553
$
457,149
Continuing care retirement community revenue
97,784
96,586
388,981
394,642
Skilled nursing facility revenue
52,976
53,037
213,895
216,617
Other(2)
3,704
2,880
13,589
9,972
Total senior living revenue
$
279,154
$
274,733
$
1,111,018
$
1,078,380
Senior living wages and benefits:
Independent and assisted living community wages and benefits
$
52,628
$
52,852
$
213,950
$
200,803
Continuing care retirement community wages and benefits
47,539
48,071
191,648
191,187
Skilled nursing facility wages and benefits
33,794
34,505
136,405
138,285
Other(2)
1,395
1,983
6,161
6,111
Total senior living wages and benefits
$
135,356
$
137,411
$
548,164
$
536,386
Senior living other operating expenses:
Independent and assisted living community other operating expenses
$
30,427
$
28,648
$
118,759
$
107,188
Continuing care retirement community other operating expenses
25,736
24,349
96,837
97,699
Skilled nursing facility other operating expenses
14,414
13,002
53,530
52,956
Other(2)
(570
)
533
943
1,812
Total senior living other operating expenses
$
70,007
$
66,532
$
270,069
$
259,655
(1) Excludes data for managed communities, rehabilitation hospitals and
discontinued senior living operations. (2) Other senior living
relates primarily to rehabilitation and other specialty service revenues
and expenses provided at our residential facilities and does not include
revenues and expenses from our rehabilitation hospital operations.
FIVE STAR QUALITY CARE, INC.
COMPARABLE SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
(dollars in thousands, except average monthly rate)
Three months ended
Twelve months ended
December 31,(2)
December 31,(3)
2012
2011
2012
2011
Senior living communities:
Number of communities (end of period)
222
222
209
209
Number of units (end of period)
23,764
23,764
22,175
22,175
Occupancy
85.7
%
86.2
%
85.4
%
85.6
%
Avg. monthly rate
$
4,516
$
4,408
$
4,605
$
4,580
Senior living revenue:
Independent and assisted living community revenue
$
124,690
$
122,230
$
443,992
$
432,788
Continuing care retirement community revenue
97,784
96,586
388,981
394,642
Skilled nursing facility revenue
52,976
53,037
213,895
216,617
Other(4)
3,704
2,880
13,589
9,972
Total senior living revenue
$
279,154
$
274,733
$
1,060,457
$
1,054,019
Senior living wages and benefits:
Independent and assisted living community wages and benefits
$
52,628
$
52,852
$
197,355
$
192,364
Continuing care retirement community wages and benefits
47,539
48,071
191,648
191,187
Skilled nursing facility wages and benefits
33,794
34,505
136,405
138,285
Other(4)
1,395
1,983
6,161
6,111
Total senior living wages and benefits
$
135,356
$
137,411
$
531,569
$
527,947
Senior living other operating expenses:
Independent and assisted living community other operating expenses
$
30,427
$
28,648
$
105,578
$
100,934
Continuing care retirement community other operating expenses
25,736
24,349
96,837
97,699
Skilled nursing facility other operating expenses
14,414
13,002
53,530
52,956
Other(4)
(570
)
533
943
1,812
Total senior living other operating expenses
$
70,007
$
66,532
$
256,888
$
253,401
(1) Excludes data for managed communities, rehabilitation hospitals and
discontinued senior living operations. (2) Communities that we have
operated continuously since October 1, 2011. (3) Communities that
we have operated continuously since January 1, 2011. (4) Other
senior living relates primarily to rehabilitation and other specialty
service revenues and expenses provided at our residential facilities and
does not include revenues and expenses from our rehabilitation hospital
operations.
FIVE STAR QUALITY CARE, INC.
PERCENT BREAKDOWN OF SENIOR LIVING COMMUNITY REVENUES(1)
Three months ended
Twelve months ended
December 31,
December 31,
2012
2011
2012
2011
Independent and assisted living communities:
Private and other sources
98.9%
98.9%
98.9%
98.9%
Medicaid
1.1%
1.1%
1.1%
1.1%
Total
100.0%
100.0%
100.0%
100.0%
Continuing care retirement communities:
Private and other sources
70.4%
71.4%
70.7%
68.9%
Medicare
22.7%
21.8%
22.6%
24.8%
Medicaid
6.9%
6.8%
6.7%
6.3%
Total
100.0%
100.0%
100.0%
100.0%
Skilled nursing facilities:
Private and other sources
25.8%
25.2%
25.4%
24.6%
Medicare
23.5%
24.2%
24.3%
26.9%
Medicaid
50.7%
50.6%
50.3%
48.5%
Total
100.0%
100.0%
100.0%
100.0%
Total senior living communities:
Private and other sources
74.5%
74.7%
74.5%
72.7%
Medicare
12.6%
12.5%
12.8%
14.6%
Medicaid
12.9%
12.8%
12.7%
12.7%
Total
100.0%
100.0%
100.0%
100.0%
(1) Excludes data for managed communities, rehabilitation hospitals and
discontinued senior living operations.
FIVE STAR QUALITY CARE, INC.
SENIOR LIVING OTHER OPERATING DATA(1)
(dollars in thousands, except average monthly rate)
Three months ended
December 31,
September 30,
June 30,
March 31,
December 31,
2012
2012
2012
2012
2011
Independent and assisted living communities (owned):
Number of communities (end of period)
31
31
31
31
31
Number of units (end of period)
2,952
2,952
2,952
2,952
2,952
Occupancy
88.2%
86.7%
85.7%
85.4%
85.3%
Avg. monthly rate
$
3,360
$
3,373
$
3,364
$
3,329
$
3,309
Independent and assisted living communities (leased):
Number of communities (end of period)
122
122
122
122
122
Number of units (end of period)
10,053
10,053
10,053
10,053
10,053
Occupancy
88.6%
88.3%
88.2%
88.4%
89.2%
Avg. monthly rate
$
3,664
$
3,659
$
3,637
$
3,620
$
3,584
CCRC communities (leased):
Number of communities (end of period)
31
31
31
31
31
Number of units (end of period)(2)
7,336
7,336
7,336
7,336
7,336
Occupancy
83.5%
84.1%
84.0%
84.8%
84.9%
Avg. monthly rate
$
5,320
$
5,231
$
5,242
$
5,224
$
5,171
Skilled nursing facilities (leased):
Number of communities (end of period)
38
38
38
38
38
Number of units (end of period)(3)
3,423
3,423
3,423
3,423
3,423
Occupancy
79.8%
80.2%
80.9%
81.6%
81.4%
Avg. monthly rate
$
6,597
$
6,359
$
6,546
$
6,335
$
6,346
Total senior living communities (owned and leased):
Number of communities (end of period)
222
222
222
222
222
Number of units (end of period)
23,764
23,764
23,764
23,764
23,764
Occupancy
85.7%
85.7%
85.5%
85.9%
86.2%
Avg. monthly rate
$
4,516
$
4,464
$
4,486
$
4,444
$
4,408
Managed communities:
Number of communities (end of period)
39
30
25
25
23
Number of units (end of period)(4)
6,690
4,498
3,738
3,738
3,393
Occupancy
87.5%
87.4%
87.6%
87.3%
85.4%
Avg. monthly rate
$
4,236
$
4,051
$
4,045
$
4,004
$
3,696
Rehabilitation hospitals (leased):
Number of hospitals (end of period)
2
2
2
2
2
Number of units (end of period)
321
321
321
321
321
Occupancy
60.2%
60.7%
59.8%
60.4%
61.4%
Other ancillary services:
Rehabilitation and wellness inpatient clinics (end of period)
50
50
48
47
47
Rehabilitation and wellness outpatient clinics (end of period)
49
46
44
41
39
Home health communities served (end of period)
6
6
6
6
6
(1) Excludes data for discontinued operations. (2) Includes 2,020
skilled nursing units in communities where assisted living and
independent living services are the predominant services provided. (3)
Includes 87 assisted living and independent living units in communities
where skilled nursing services are the predominant services provided. (4)
Includes 478 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, except per share data)
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, and EBITDA excluding certain items, or collectively, Non-GAAP
Financial Measures, are not financial measures determined according to
U.S. generally accepted accounting principles, or GAAP. We consider
these Non-GAAP Financial Measures to be meaningful disclosures because
we believe that the presentation of these Non-GAAP Financial Measures
may help investors to gain a better understanding of changes in our
operating results, and may also help investors who wish to make
comparisons between us and other companies on both a GAAP and a non-GAAP
basis. These Non-GAAP Financial Measures are used by management to
evaluate our financial performance and for comparing our performance
over time and to the performance of our competitors. These Non-GAAP
Financial Measures as presented may not, however, be comparable to
amounts calculated by other companies. This information should not be
considered as an alternative to income from continuing operations, net
income, cash flows from operating activities or any other financial
operating or performance or liquidity measure established by GAAP. The
following table includes the reconciliation of these Non-GAAP Financial
Measures to income from continuing operations, the most directly
comparable financial measure under GAAP reported in our consolidated
financial statements, for the three and twelve months ended December 31,
2012 and 2011.
For the three months
For the twelve months
ended December 31,
ended December 31,
2012
2011
2012
2011
Income from continuing operations
$
3,493
$
52,735
$
13,428
$
67,485
Add: interest and other expense
1,475
1,512
6,268
3,917
Add: income tax expense
807
-
5,642
157
Add: depreciation and amortization
6,433
5,989
25,064
19,694
Less: income tax benefit
-
(51,560
)
-
(50,711
)
Less: interest, dividend and other income
(243
)
(265
)
(881
)
(1,240
)
EBITDA
11,965
8,411
49,521
39,302
Add: impairment of long-lived assets
-
3,500
-
3,500
Add: acquisition related costs
8
229
108
1,759
Add: loss on sale of investments in available for sale securities
81
-
19
-
Less: gain on sale of investments in available for sale securities
-
(3,460
)
-
(4,116
)
Less: gain on early extinguishment of debt
-
-
(45
)
(1
)
Less: gain on settlement
-
-
(3,365
)
-
EBITDA excluding certain items
$
12,054
$
8,680
$
46,238
$
40,444
Five Star Quality Care, Inc. Timothy A. Bonang, 617-796-8245 Vice
President, Investor Relations or Elisabeth A. Heiss,
617-796-8245 Manager, Investor Relations
Press Release $FVE Five Star Quality Care Inc.
NEWTON, Mass.--(BUSINESS WIRE)-- Five Star Quality Care, Inc. (NYSE: FVE) today announced its financial results for the quarter and year ended December 31, 2012.
Fourth Quarter 2012 Financial Highlights:
Fourth Quarter 2012 Operating Highlights:
Fiscal Year Financial Highlights:
Other Highlights:
During the fourth quarter of 2012, we began to manage nine senior living communities with a combined 2,233 living units for Senior Housing Properties Trust (NYSE: SNH). All of these communities are focused on providing independent and/or assisted living services and generate a large majority of their revenues from residents’ private resources, not from Medicare or Medicaid government funded programs.
In October 2012, we entered an agreement to sell two skilled nursing facilities, or SNFs, with a total of 271 living units that we own which are located in Michigan for $8.0 million, including the assumption by the buyer of $7.5 million of United States Department of Housing and Urban Development mortgage debt. These SNFs receive the majority of their revenues from Medicare/Medicaid reimbursements. The losses generated at these facilities are included in our discontinued operations. We expect the sale of these SNFs to occur before the end of 2013, but completion of this sale is subject to customary closing conditions, including regulatory approvals, and we can provide no assurance that a sale of these SNFs will occur before the end of 2013 or will be completed at all.
Bruce Mackey, President & CEO, made the following statement regarding the fourth quarter results of operations and recent activities:
“Although our occupancy rate for our owned and leased senior living communities declined year over year, this was primarily because of declines in occupancy from high acuity residents at our continuing care retirement communities, or CCRC’s, and SNFs. Occupancy rates at our owned and leased independent and assisted living communities, which combined represent the largest number of units we operate, improved on a year over year basis. Furthermore, our average monthly rate increased in all property types on a year over year basis.
Through external growth, a focus on cost control and growth in our private pay senior living business, we achieved meaningful year over year EBITDA growth. EBITDA excluding certain items for the fourth quarter of 2012 was 39% higher than the fourth quarter of 2011.
During the fourth quarter we completed the transition of 10 senior living communities with 2,472 living units into our management business that were formerly operated by Sunrise and leased from SNH. In addition, during the fourth quarter we began to manage two other senior living communities for SNH with a total of 168 living units. We are now managing a total of 39 senior living communities that we expect may generate annual management fee revenues in 2013 of approximately $9.0 million based on the current operating performance at the communities. We continue to look for opportunities to grow our private pay senior living business through managing, owning and leasing communities and have ample capacity on our balance sheet with $184.4 million available under our revolving credit facilities.”
Conference Call:
Later today, February 15, 2013, at 10:00 a.m. Eastern Time, we will host a conference call to discuss the fourth quarter and year end financial results. Following management’s presentation, there will be a question and answer period.
The conference call telephone number is (800) 553-0288. Participants calling from outside the United States and Canada should dial (612) 332-0530. 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, February 22, 2013. To hear the replay, dial (320) 365-3844. The replay pass code is 279877.
A live audio webcast of the conference call will also be available in a listen only mode on the Company’s website at www.fivestarseniorliving.com. Participants wanting to access the webcast should visit the Company’s website about five minutes before the call. The archived webcast will be available for replay on the Company’s website for about one week after the call. The recording and retransmission in any way of the Company’s fourth quarter 2012 conference call is strictly prohibited without the prior written consent of the Company. The Company’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 December 31, 2012, we operated 261 senior living communities with 30,454 living units located in 31 states, including 31 communities (2,952 living units) that we own and operate, 191 communities (20,812 living units) that we lease and operate, and 39 communities (6,690 living units) that we manage. These communities include independent living, assisted living, continuing care and skilled nursing communities. We also operate two leased rehabilitation hospitals. We are 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 WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR 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:
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.
Three months ended
December 31,
Twelve months ended
December 31,
Reimbursed costs incurred on behalf of managed communities
Costs incurred on behalf of managed communities
(Loss) gain on sale of available for sale securities reclassified from other comprehensive income
Income from continuing operations before income taxes
December 31,
2012
December 31,
2011
Twelve months ended December 31,
Adjustments to reconcile net income to cash provided by operating activities:
(Payments from) deposits into restricted cash and investment accounts, net
Acquisition of senior living communities, net of working capital assumed
Proceeds from disposition of property and equipment held for sale
Proceeds from borrowing on the bridge loan from Senior Housing Properties Trust
Repayments of borrowing on the bridge loan from Senior Housing Properties Trust
(1) Excludes data for managed communities, rehabilitation hospitals and discontinued senior living operations.
(2) Other senior living relates primarily to rehabilitation and other specialty service revenues and expenses provided at our residential facilities and does not include revenues and expenses from our rehabilitation hospital operations.
(1) Excludes data for managed communities, rehabilitation hospitals and discontinued senior living operations.
(2) Communities that we have operated continuously since October 1, 2011.
(3) Communities that we have operated continuously since January 1, 2011.
(4) Other senior living relates primarily to rehabilitation and other specialty service revenues and expenses provided at our residential facilities and does not include revenues and expenses from our rehabilitation hospital operations.
(1) Excludes data for managed communities, rehabilitation hospitals and discontinued senior living operations.
(1) Excludes data for discontinued operations.
(2) Includes 2,020 skilled nursing units in communities where assisted living and independent living services are the predominant services provided.
(3) Includes 87 assisted living and independent living units in communities where skilled nursing services are the predominant services provided.
(4) Includes 478 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, except per share data)
Earnings before interest, taxes, depreciation and amortization, or EBITDA, and EBITDA excluding certain items, or collectively, Non-GAAP Financial Measures, are not financial measures determined according to U.S. generally accepted accounting principles, or GAAP. We consider these Non-GAAP Financial Measures to be meaningful disclosures because we believe that the presentation of these Non-GAAP Financial Measures may help investors to gain a better understanding of changes in our operating results, and may also help investors who wish to make comparisons between us and other companies on both a GAAP and a non-GAAP basis. These Non-GAAP Financial Measures are used by management to evaluate our financial performance and for comparing our performance over time and to the performance of our competitors. These Non-GAAP Financial Measures as presented may not, however, be comparable to amounts calculated by other companies. This information should not be considered as an alternative to income from continuing operations, net income, cash flows from operating activities or any other financial operating or performance or liquidity measure established by GAAP. The following table includes the reconciliation of these Non-GAAP Financial Measures to income from continuing operations, the most directly comparable financial measure under GAAP reported in our consolidated financial statements, for the three and twelve months ended December 31, 2012 and 2011.
Add: loss on sale of investments in available for sale securities
Less: gain on sale of investments in available for sale securities
Five Star Quality Care, Inc.
Timothy A. Bonang, 617-796-8245
Vice President, Investor Relations
or
Elisabeth A. Heiss, 617-796-8245
Manager, Investor Relations
Source: Five Star Quality Care, Inc.