Attached files
| file | filename |
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| EX-99.2 - EX-99.2 - CAPITAL SENIOR LIVING CORP | d631387dex992.htm |
| 8-K - 8-K - CAPITAL SENIOR LIVING CORP | d631387d8k.htm |
Exhibit 99.1
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| Press Contact: | ||
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Carey Hendrickson, Chief Financial Officer Phone: 1-972-770-5600 |
FOR IMMEDIATE RELEASE
CAPITAL SENIOR LIVING CORPORATION
REPORTS THIRD QUARTER 2018 RESULTS
DALLAS – (GLOBE NEWSWIRE) – November 6, 2018 – Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one of the nation’s largest operators of senior housing communities, today announced operating and financial results for the third quarter 2018.
“Against a difficult industry environment, Capital Senior Living continues to navigate headwinds and address issues head-on,” said Lawrence A. Cohen, Chief Executive Officer of the Company. “We achieved modest growth in occupancy on a sequential basis and average monthly rent, but are disappointed to report decreases in other key financial metrics. We are executing broad-based operational and financial initiatives to further position the Company for long-term success.”
Operating and Financial Summary (all amounts in this operating and financial summary exclude two communities that are undergoing lease-up or significant renovation and conversion, unless otherwise noted; also, see Non-GAAP Financial Measures below and reconciliation of Non-GAAP measures to the most directly comparable GAAP measure on the final page of this release.)
| • | Revenue in the third quarter of 2018, including all communities, was $115.7 million, a $1.7 million, or 1.4%, decrease from the third quarter of 2017. The third quarter of 2018 includes $0.5 million of revenue from the Company’s two communities impacted by Hurricane Harvey in late August 2017. Revenue for these two communities was $1.3 million in the third quarter of 2017. |
| • | Revenue for consolidated and same communities, which exclude two communities undergoing lease-up or significant renovation and conversion and the Company’s two communities impacted by Hurricane Harvey, was $113.6 million in the third quarter of 2018, a decrease of 0.8% as compared to the third quarter of 2017. |
| • | Occupancy for consolidated and same communities was 85.6% in the third quarter of 2018, an increase of 10 basis points from the second quarter of 2018 and a decrease of 130 basis points from the third quarter of 2017. |
| • | Average monthly rent for consolidated and same communities was $3,628, an increase of $21 per occupied unit, or 0.6%, as compared to the third quarter of 2017. |
CAPITAL/Page 2
| • | Income from operations, including all communities, was $1.7 million in the third quarter of 2018 compared to $4.5 million in the third quarter of 2017. |
| • | The Company’s Net Loss for the third quarter of 2018, including all communities, was $11.1 million. |
| • | Excluding items noted and reconciled on the final page of this release, the Company’s adjusted net loss was $6.6 million in the third quarter of 2018. |
| • | Adjusted EBITDAR was $36.1 million in the third quarter of 2018 compared to $37.9 million in the third quarter of 2017. Adjusted EBITDAR is a financial valuation measure, rather than a financial performance measure, used by management and others to evaluate the value of companies in the senior living industry. |
| • | Adjusted Cash From Facility Operations (“CFFO”) was $8.1 million in the third quarter of 2018 compared to $11.1 million in the third quarter of 2017. |
“We continue to find ways to reduce costs via our newly-implemented procurement system and the nationalization of contracts,” said Carey P. Hendrickson, Chief Financial Officer of the Company. “In addition, the full installation of an integrated business information system will provide a higher level of data transparency and analysis throughout the organization. We expect the implementation to be complete by year end.”
Mr. Hendrickson continued, “We expect market conditions to remain challenging. Consistent with our normal business practices, we continue to seek ways to strengthen our financial foundation and optimize our asset portfolio. As part of this effort, we expect to close on a Master Credit Facility by late December to address our nearest-term fixed-debt maturities and raise cash proceeds of approximately $20 million. Concurrently, we are planning to divest a limited number of assets for which we expect to generate strong value. We recognize the challenges ahead, and are focused on building a stronger Capital Senior Living for the benefit of our shareholders and all stakeholders.”
Recent Investment Activity
| • | The Company expects to close on a Master Credit Facility in the fourth quarter of 2018 or early in the first quarter of 2019 that will refinance the fixed-rate debt on 19 communities, including all of the Company’s 2021 maturities, which are the earliest maturities for the Company’s fixed-rate debt, and a majority of the Company’s 2022 and 2023 maturities. The refinance is expected to result in net proceeds of approximately $20 million. Closing of the Master Credit Facility is subject to customary conditions, including lender approval. |
CAPITAL/Page 3
| • | In the fourth quarter of 2018, the Company anticipates closing on a supplemental loan which is expected to result in approximately $2.3 million of net cash proceeds. The supplemental loan will be on terms similar to other supplemental loans closed by the Company. Closing of the anticipated new supplemental loan is subject to customary conditions, including lender approval. |
Financial Results - Third Quarter
For the third quarter of 2018, the Company reported revenue of $115.7 million, compared to revenue of $117.3 million in the third quarter of 2017. Revenue for consolidated communities excluding the two communities undergoing significant renovation and conversion, and the two Houston communities impacted by Hurricane Harvey, was $113.6 million, a decrease of 0.8% in the third quarter of 2018 as compared to the third quarter of 2017.
Operating expenses for the third quarter of 2018 were $76.2 million, an increase of $1.6 million, or 2.1%, from the third quarter of 2017. Operating expenses include a $1.3 million business interruption insurance credit related to the Company’s two Houston communities impacted by Hurricane Harvey to offset the lost revenues and continuing expenses, and to restore the communities’ net income for the third quarter of 2018 based on an approximate average of the communities’ net income in the seven months of 2017 prior to the hurricane.
General and administrative expenses for the third quarter of 2018 were $5.6 million. This compares to general and administrative expenses of $5.4 million in the third quarter of 2017. Excluding transaction and conversion costs in both periods, general and administrative expenses decreased $0.4 million in the third quarter of 2018 as compared to the third quarter of 2017. As a percentage of revenues under management, general and administrative expenses, excluding transaction and conversion costs, were 4.0% in the third quarter of 2018 compared to 4.3% in the third quarter of 2017.
Income from operations for the third quarter of 2018 was $1.7 million. The Company recorded a net loss on a GAAP basis of $11.1 million in the third quarter of 2018. Excluding items noted and reconciled on the final page of this release, the Company’s adjusted net loss was $6.6 million in the third quarter of 2018.
The Company’s Non-GAAP financial measures exclude two communities that are undergoing significant renovation and conversion (see “Non-GAAP Financial Measures” below). Three communities that were previously excluded from the Company’s Non- GAAP financial measures were added back to such measures beginning in the first quarter of 2018.
CAPITAL/Page 4
Adjusted EBITDAR for the third quarter of 2018 was $36.1 million as compared to $37.9 million in the third quarter of 2017. Adjusted CFFO was $8.1 million in the third quarter of 2018, as compared to $11.1 million in the third quarter of 2017.
Operating Activities
Same-community results exclude two communities previously noted that are undergoing lease-up or significant renovation and conversion, and the two Houston communities impacted by Hurricane Harvey. Same-community results also exclude certain conversion costs.
Same-community revenue in the third quarter of 2018 decreased 0.8% versus the third quarter of 2017.
Same-community operating expenses increased 3.2% from the third quarter of the prior year, excluding conversion costs in both periods. On the same basis, labor costs, including benefits, increased 2.8%, utilities decreased 1.5%, and food costs decreased 5.0%, all as compared to the third quarter of 2017. Same-community net operating income decreased 7.6% in the third quarter of 2018 as compared to the third quarter of 2017.
Capital expenditures for the third quarter of 2018 were $7.2 million.
Balance Sheet
The Company ended the quarter with $22.7 million of cash and cash equivalents, including restricted cash. As of September 30, 2018, the Company financed its owned communities with mortgages totaling $950.3 million at interest rates averaging 4.8%. All of the Company’s debt is at fixed interest rates, except for two bridge loans totaling approximately $76.3 million at September 30, 2018, one of which matures in the first quarter of 2020 and the other in the fourth quarter of 2021. The earliest maturity date for the Company’s fixed-rate debt is in 2021.
The Company’s cash on hand and cash flow from operations are expected to be sufficient for working capital and to fund the Company’s capital expenditures.
Q3 2018 Conference Call Information
The Company will host a conference call with senior management to discuss the Company’s third quarter 2018 financial results. The call will be held on Tuesday, November 6, 2018, at 5:00 p.m. Eastern Time. The call-in number is 323-994-2093, confirmation code 9869850. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com through Windows Media Player or RealPlayer.
CAPITAL/Page 5
For the convenience of the Company’s shareholders and the public, the conference call will be recorded and available for replay starting November 6, 2018 at 8:00 p.m. Eastern Time, until November 15, 2018 at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 9869850. The conference call will also be made available for playback via the Company’s corporate website, www.capitalsenior.com.
Non-GAAP Financial Measures of Operating Performance
Adjusted EBITDAR is a financial valuation measure and Adjusted Net Income/(Loss) and Adjusted CFFO are financial performance measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the costs associated with our results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
Adjusted EBITDAR is a valuation measure commonly used by our management, research analysts and investors to value companies in the senior living industry. Because Adjusted EBITDAR excludes interest expense and rent expense, it allows our management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements.
The Company believes that Adjusted Net Income/(Loss) and Adjusted CFFO are useful as performance measures in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of our primary business. Adjusted Net Income/(Loss) and Adjusted CFFO provide indicators to management of progress in achieving both consolidated and individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry.
The Company strongly urges you to review on the last page of this release the reconciliation of net loss to Adjusted EBITDAR and the reconciliation of net income/(loss) to Adjusted Net Income/(Loss) and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.
About the Company
Capital Senior Living Corporation is one of the nation’s largest operators of residential communities for senior adults. The Company’s operating strategy is to provide value to residents by providing quality senior housing services at reasonable prices. The Company’s communities emphasize a continuum of care, which integrates independent living, assisted living, and memory care services, to provide residents the opportunity to age in place. The Company operates 129 senior housing communities in geographically concentrated regions with an aggregate capacity of approximately 16,500 residents.
CAPITAL/Page 6
Safe Harbor
The forward-looking statements in this release are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially, including, but not limited to, the Company’s ability to generate sufficient cash flow to satisfy its debt and lease obligations and to fund the Company’s capital improvement projects to expand, redevelop, and/or reposition its senior living communities; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance its existing debt as such debt matures; the Company’s compliance with its debt and lease agreements; the Company’s ability to complete acquisitions and dispositions upon favorable terms or at all; the risk of oversupply and increased competition in the markets which the Company operates; the risk of increased competition for skilled workers due to wage pressure and changes in regulatory requirements; the departure of the Company’s key officers and personnel; the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; the risks associated with a decline in economic conditions generally; the adequacy and continued availability of the Company’s insurance policies and the Company’s ability to recover any losses it sustains under such policies; changes in accounting principles and interpretations; and the other risks and factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission.
For information about Capital Senior Living, visit www.capitalsenior.com.
Contact Carey P. Hendrickson, Chief Financial Officer, at 972-770-5600 for more information.
CAPITAL/Page 7
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except per share data)
| September 30, 2018 |
December 31, 2017 |
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| ASSETS | ||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 9,245 | $ | 17,646 | ||||
| Restricted cash |
13,473 | 13,378 | ||||||
| Accounts receivable, net |
12,129 | 12,307 | ||||||
| Property tax and insurance deposits |
12,451 | 14,386 | ||||||
| Prepaid expenses and other |
4,647 | 6,332 | ||||||
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| Total current assets |
51,945 | 64,049 | ||||||
| Property and equipment, net |
1,070,951 | 1,099,786 | ||||||
| Other assets, net |
16,817 | 18,836 | ||||||
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| Total assets |
$ | 1,139,713 | $ | 1,182,671 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Accounts payable |
$ | 9,006 | $ | 7,801 | ||||
| Accrued expenses |
37,678 | 40,751 | ||||||
| Current portion of notes payable, net of deferred loan costs |
18,016 | 19,728 | ||||||
| Current portion of deferred income |
14,342 | 13,840 | ||||||
| Current portion of capital lease and financing obligations |
3,347 | 3,106 | ||||||
| Federal and state income taxes payable |
299 | 383 | ||||||
| Customer deposits |
1,298 | 1,394 | ||||||
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| Total current liabilities |
83,986 | 87,003 | ||||||
| Deferred income |
8,621 | 10,033 | ||||||
| Capital lease and financing obligations, net of current portion |
46,510 | 48,805 | ||||||
| Deferred taxes |
1,941 | 1,941 | ||||||
| Other long-term liabilities |
12,916 | 16,250 | ||||||
| Notes payable, net of deferred loan costs and current portion |
926,008 | 938,206 | ||||||
| Commitments and contingencies |
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| Shareholders’ equity: |
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| Preferred stock, $.01 par value: |
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| Authorized shares – 15,000; no shares issued or outstanding |
— | — | ||||||
| Common stock, $.01 par value: |
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| Authorized shares – 65,000; issued and outstanding shares – 31,262 and 30,505 in 2018 and 2017, respectively |
318 | 310 | ||||||
| Additional paid-in capital |
186,054 | 179,459 | ||||||
| Retained deficit |
(123,211 | ) | (95,906 | ) | ||||
| Treasury stock, at cost – 494 shares in 2018 and 2017 |
(3,430 | ) | (3,430 | ) | ||||
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| Total shareholders’ equity |
59,731 | 80,433 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,139,713 | $ | 1,182,671 | ||||
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CAPITAL/Page 8
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except per share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues: |
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| Resident revenue |
$ | 115,650 | $ | 117,318 | $ | 344,920 | $ | 350,026 | ||||||||
| Expenses: |
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| Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) |
76,195 | 74,636 | 220,863 | 220,703 | ||||||||||||
| General and administrative expenses |
5,589 | 5,361 | 17,323 | 17,678 | ||||||||||||
| Facility lease expense |
14,077 | 13,943 | 42,515 | 42,498 | ||||||||||||
| Loss on facility lease termination |
— | — | — | 12,858 | ||||||||||||
| Stock-based compensation expense |
2,095 | 1,962 | 6,603 | 5,833 | ||||||||||||
| Depreciation and amortization expense |
15,998 | 16,903 | 46,891 | 50,862 | ||||||||||||
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| Total expenses |
113,954 | 112,805 | 334,195 | 350,432 | ||||||||||||
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| Income (Loss) from operations |
1,696 | 4,513 | 10,725 | (406 | ) | |||||||||||
| Other income (expense): |
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| Interest income |
42 | 19 | 117 | 51 | ||||||||||||
| Interest expense |
(12,705 | ) | (12,531 | ) | (37,771 | ) | (36,940 | ) | ||||||||
| Gain (Loss) on disposition of assets, net |
7 | (1 | ) | 10 | (126 | ) | ||||||||||
| Other income |
— | 1 | 2 | 6 | ||||||||||||
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| Loss before provision for income taxes |
(10,960 | ) | (7,999 | ) | (26,917 | ) | (37,415 | ) | ||||||||
| Provision for income taxes |
(129 | ) | (133 | ) | (388 | ) | (394 | ) | ||||||||
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| Net loss |
$ | (11,089 | ) | $ | (8,132 | ) | $ | (27,305 | ) | $ | (37,809 | ) | ||||
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| Per share data: |
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| Basic net loss per share |
$ | (0.37 | ) | $ | (0.28 | ) | $ | (0.92 | ) | $ | (1.28 | ) | ||||
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| Diluted net loss per share |
$ | (0.37 | ) | $ | (0.28 | ) | $ | (0.92 | ) | $ | (1.28 | ) | ||||
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| Weighted average shares outstanding — basic |
29,877 | 29,512 | 29,779 | 29,427 | ||||||||||||
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| Weighted average shares outstanding — diluted |
29,877 | 29,512 | 29,779 | 29,427 | ||||||||||||
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| Comprehensive loss |
$ | (11,089 | ) | $ | (8,132 | ) | $ | (27,305 | ) | $ | (37,809 | ) | ||||
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CAPITAL/Page 9
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| Nine Months Ended September 30, |
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| 2018 | 2017 | |||||||
| Operating Activities |
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| Net loss |
$ | (27,305 | ) | $ | (37,809 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
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| Depreciation and amortization |
46,891 | 50,862 | ||||||
| Amortization of deferred financing charges |
1,281 | 1,216 | ||||||
| Amortization of deferred lease costs and lease intangibles |
638 | 647 | ||||||
| Amortization of lease incentives |
(1,426 | ) | (950 | ) | ||||
| Deferred income |
(712 | ) | (899 | ) | ||||
| Lease incentives |
— | 5,159 | ||||||
| Loss on facility lease termination |
— | 12,858 | ||||||
| (Gain) Loss on disposition of assets, net |
(10 | ) | 126 | |||||
| Provision for bad debts |
2,254 | 1,355 | ||||||
| Stock-based compensation expense |
6,603 | 5,833 | ||||||
| Changes in operating assets and liabilities: |
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| Accounts receivable |
(2,076 | ) | (3,834 | ) | ||||
| Property tax and insurance deposits |
1,935 | 1,753 | ||||||
| Prepaid expenses and other |
1,685 | 2,387 | ||||||
| Other assets |
1,267 | 5,149 | ||||||
| Accounts payable |
1,205 | (1,076 | ) | |||||
| Accrued expenses |
(3,073 | ) | (2,400 | ) | ||||
| Other liabilities |
(1,908 | ) | 3,649 | |||||
| Federal and state income taxes receivable/payable |
(84 | ) | (108 | ) | ||||
| Deferred resident revenue |
(198 | ) | (1,520 | ) | ||||
| Customer deposits |
(96 | ) | (117 | ) | ||||
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| Net cash provided by operating activities |
26,871 | 42,281 | ||||||
| Investing Activities |
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| Capital expenditures |
(17,954 | ) | (30,165 | ) | ||||
| Cash paid for acquisitions |
— | (85,000 | ) | |||||
| Proceeds from disposition of assets |
22 | 16 | ||||||
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| Net cash used in investing activities |
(17,932 | ) | (115,149 | ) | ||||
| Financing Activities |
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| Proceeds from notes payable |
1,740 | 66,584 | ||||||
| Repayments of notes payable |
(16,844 | ) | (15,414 | ) | ||||
| Cash payments for capital lease and financing obligations |
(2,054 | ) | (2,117 | ) | ||||
| Deferred financing charges paid |
(87 | ) | (950 | ) | ||||
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| Net cash (used in) provided by financing activities |
(17,245 | ) | 48,103 | |||||
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| Decrease in cash and cash equivalents |
(8,306 | ) | (24,765 | ) | ||||
| Cash and cash equivalents and restricted cash at beginning of period |
31,024 | 47,323 | ||||||
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| Cash and cash equivalents and restricted cash at end of period |
$ | 22,718 | $ | 22,558 | ||||
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| Supplemental Disclosures |
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| Cash paid during the period for: |
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| Interest |
$ | 36,345 | $ | 35,108 | ||||
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| Income taxes |
$ | 546 | $ | 534 | ||||
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CAPITAL/Page 10
Capital Senior Living Corporation
Supplemental Information
| Average | ||||||||||||||||||||||||
| Communities | Resident Capacity | Average Units | ||||||||||||||||||||||
| Q3 18 | Q3 17 | Q3 18 | Q3 17 | Q3 18 | Q3 17 | |||||||||||||||||||
| Portfolio Data |
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| I. Community Ownership / Management |
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| Consolidated communities |
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| Owned |
83 | 83 | 10,767 | 10,767 | 8,224 | 8,119 | ||||||||||||||||||
| Leased |
46 | 46 | 5,756 | 5,756 | 4,413 | 4,414 | ||||||||||||||||||
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| Total |
129 | 129 | 16,523 | 16,523 | 12,637 | 12,533 | ||||||||||||||||||
| Independent living |
6,879 | 6,879 | 5,007 | 5,158 | ||||||||||||||||||||
| Assisted living |
9,644 | 9,644 | 7,630 | 7,375 | ||||||||||||||||||||
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| Total |
16,523 | 16,523 | 12,637 | 12,533 | ||||||||||||||||||||
| II. Percentage of Operating Portfolio |
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| Consolidated communities |
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| Owned |
64.3 | % | 64.3 | % | 65.2 | % | 65.2 | % | 65.1 | % | 64.8 | % | ||||||||||||
| Leased |
35.7 | % | 35.7 | % | 34.8 | % | 34.8 | % | 34.9 | % | 35.2 | % | ||||||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
| Independent living |
41.6 | % | 41.6 | % | 39.6 | % | 41.2 | % | ||||||||||||||||
| Assisted living |
58.4 | % | 58.4 | % | 60.4 | % | 58.8 | % | ||||||||||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
CAPITAL/Page 11
Capital Senior Living Corporation
Supplemental Information (excludes two communities being repositioned/leased up and two communities impacted by Hurricane Harvey)
Selected Operating Results
| Q3 18 | Q3 17 | |||||||
| I. Owned communities |
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| Number of communities |
79 | 79 | ||||||
| Resident capacity |
10,248 | 10,248 | ||||||
| Unit capacity (1) |
7,779 | 7,777 | ||||||
| Financial occupancy (2) |
87.0 | % | 88.2 | % | ||||
| Revenue (in millions) |
71.6 | 72.2 | ||||||
| Operating expenses (in millions) (3) |
48.1 | 46.5 | ||||||
| Operating margin (3) |
33 | % | 36 | % | ||||
| Average monthly rent |
3,525 | 3,510 | ||||||
| II. Leased communities |
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| Number of communities |
46 | 46 | ||||||
| Resident capacity |
5,756 | 5,756 | ||||||
| Unit capacity (1) |
4,413 | 4,413 | ||||||
| Financial occupancy (2) |
83.2 | % | 84.6 | % | ||||
| Revenue (in millions) |
42.0 | 42.4 | ||||||
| Operating expenses (in millions) (3) |
25.7 | 24.9 | ||||||
| Operating margin (3) |
39 | % | 41 | % | ||||
| Average monthly rent |
3,817 | 3,786 | ||||||
| III. Consolidated and Same communities (4) |
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| Number of communities |
125 | 125 | ||||||
| Resident capacity |
16,004 | 16,004 | ||||||
| Unit capacity |
12,192 | 12,190 | ||||||
| Financial occupancy (2) |
85.6 | % | 86.9 | % | ||||
| Revenue (in millions) |
113.6 | 114.6 | ||||||
| Operating expenses (in millions) (3) |
73.8 | 71.4 | ||||||
| Operating margin (3) |
35 | % | 38 | % | ||||
| Average monthly rent |
3,628 | 3,607 | ||||||
| IV. General and Administrative expenses as a percent of Total Revenues under Management |
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| Third quarter (5) |
4.0 | % | 4.3 | % | ||||
| Year to Date (5) |
4.4 | % | 4.6 | % | ||||
| V. Consolidated Mortgage Debt Information (in thousands, except interest
rates) |
| |||||||
| Total fixed rate mortgage debt |
873,992 | 883,607 | ||||||
| Total variable rate mortgage debt |
76,319 | 76,566 | ||||||
| Weighted average interest rate |
4.78 | % | 4.66 | % | ||||
| (1) | Due to conversion and refurbishment projects completed at certain communities, unit capacity is higher in Q3 18 than Q3 17 for same communities under management, which affects all groupings of communities. |
| (2) | Financial occupancy represents actual days occupied divided by total number of available days during the quarter. |
| (3) | Excludes management fees, provision for bad debts and transaction and conversion costs. |
| (4) | Since the Company has not completed any new acquisitions of communities, other than the four communities which were acquired during the first quarter of fiscal 2017 that were previously leased and already included in the Company’s consolidated operating results, consolidated and same communities are equivalent for the comparable periods and no longer require separate reporting by the Company. |
| (5) | Excludes transaction and conversion costs. |
CAPITAL/Page 12
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Adjusted EBITDAR |
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| Net loss |
$ | (11,089 | ) | $ | (8,132 | ) | $ | (27,305 | ) | $ | (37,809 | ) | ||||
| Depreciation and amortization expense |
15,998 | 16,903 | 46,891 | 50,862 | ||||||||||||
| Stock-based compensation expense |
2,095 | 1,962 | 6,603 | 5,833 | ||||||||||||
| Facility lease expense |
14,077 | 13,943 | 42,515 | 42,498 | ||||||||||||
| Loss on facility lease termination |
— | — | — | 12,858 | ||||||||||||
| Provision for bad debts |
800 | 380 | 2,254 | 1,355 | ||||||||||||
| Interest income |
(42 | ) | (19 | ) | (117 | ) | (51 | ) | ||||||||
| Interest expense |
12,705 | 12,531 | 37,771 | 36,940 | ||||||||||||
| Loss (Gain) on disposition of assets, net |
(7 | ) | 1 | (10 | ) | 126 | ||||||||||
| Other income |
— | (1 | ) | (2 | ) | (6 | ) | |||||||||
| Provision for income taxes |
129 | 133 | 388 | 394 | ||||||||||||
| Casualty losses |
337 | 704 | 766 | 1,727 | ||||||||||||
| Transaction and conversion costs |
1,047 | 439 | 1,885 | 1,992 | ||||||||||||
| Employee benefit reserve adjustments |
— | — | 690 | — | ||||||||||||
| Communities excluded due to repositioning/lease-up |
71 | (927 | ) | 95 | (2,740 | ) | ||||||||||
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|
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| Adjusted EBITDAR |
$ | 36,121 | $ | 37,917 | $ | 112,424 | $ | 113,979 | ||||||||
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| Adjusted Revenues |
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| Total revenues |
$ | 115,650 | $ | 117,318 | $ | 344,920 | $ | 350,026 | ||||||||
| Communities excluded due to repositioning/lease-up |
(1,475 | ) | (5,820 | ) | (4,249 | ) | (15,161 | ) | ||||||||
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| Adjusted revenues |
$ | 114,175 | $ | 111,498 | $ | 340,671 | $ | 334,865 | ||||||||
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| Adjusted net loss and Adjusted net loss per share |
||||||||||||||||
| Net loss |
$ | (11,089 | ) | $ | (8,132 | ) | $ | (27,305 | ) | $ | (37,809 | ) | ||||
| Casualty losses |
337 | 704 | 766 | 1,727 | ||||||||||||
| Transaction and conversion costs |
1,078 | 517 | 1,959 | 2,554 | ||||||||||||
| Employee benefit reserve adjustments |
— | — | 690 | — | ||||||||||||
| Resident lease amortization |
— | 2,085 | — | 7,407 | ||||||||||||
| Loss on facility lease termination |
— | — | — | 12,859 | ||||||||||||
| Loss (Gain) on disposition of assets |
(7 | ) | 1 | (10 | ) | 126 | ||||||||||
| Tax impact of Non-GAAP adjustments (25% in 2018 and 37% in 2017) |
(352 | ) | (1,224 | ) | (679 | ) | (9,129 | ) | ||||||||
| Deferred tax asset valuation allowance |
2,737 | 3,086 | 6,256 | 14,020 | ||||||||||||
| Communities excluded due to repositioning/lease-up |
702 | 750 | 1,996 | 1,787 | ||||||||||||
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|
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| Adjusted net loss |
$ | (6,594 | ) | $ | (2,213 | ) | $ | (16,327 | ) | $ | (6,458 | ) | ||||
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| Diluted shares outstanding |
29,877 | 29,512 | 29,779 | 29,427 | ||||||||||||
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| Adjusted net loss per share |
$ | (0.22 | ) | $ | (0.07 | ) | $ | (0.55 | ) | $ | (0.22 | ) | ||||
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| Adjusted CFFO |
||||||||||||||||
| Net loss |
$ | (11,089 | ) | $ | (8,132 | ) | $ | (27,305 | ) | $ | (37,809 | ) | ||||
| Non-cash charges, net |
18,584 | 20,628 | 55,519 | 76,207 | ||||||||||||
| Lease incentives |
— | (1,504 | ) | — | (5,159 | ) | ||||||||||
| Recurring capital expenditures |
(1,186 | ) | (1,186 | ) | (3,559 | ) | (3,559 | ) | ||||||||
| Casualty losses |
337 | 735 | 766 | 1,759 | ||||||||||||
| Transaction and conversion costs |
1,078 | 517 | 1,959 | 2,329 | ||||||||||||
| Employee benefit reserve adjustments |
— | — | 690 | — | ||||||||||||
| Communities excluded due to repositioning/lease-up |
421 | 29 | 1,129 | (203 | ) | |||||||||||
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| Adjusted CFFO |
$ | 8,145 | $ | 11,087 | $ | 29,199 | $ | 33,565 | ||||||||
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***