-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ThXuE5WnJQgzElxFXeFUPmX80oHM3pmhpGQ7uz8cqjC4AEvzuJ2CPkmQFIHwnwt9 ySg4bGoKxfe3fFR6wt6FDw== 0000899078-05-000345.txt : 20050504 0000899078-05-000345.hdr.sgml : 20050504 20050503185111 ACCESSION NUMBER: 0000899078-05-000345 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050502 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050504 DATE AS OF CHANGE: 20050503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL SENIOR LIVING CORP CENTRAL INDEX KEY: 0001043000 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-NURSING & PERSONAL CARE FACILITIES [8050] IRS NUMBER: 752678809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13445 FILM NUMBER: 05796609 BUSINESS ADDRESS: STREET 1: 14160 DALLAS PKWY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9727705600 MAIL ADDRESS: STREET 1: 14160 DALLAS PKWY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75240 8-K 1 form8k-may2005.txt FORM 8-K, MAY 2, 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) May 3, 2005 ----------------------------- Capital Senior Living Corporation - ------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - ------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-13445 75-2678809 - ------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 14160 Dallas Parkway Suite 300 Dallas Texas 75254 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (972) 770-5600 - ------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On May 3, 2005, the registrant announced its financial results for the quarter ended March 31, 2005 by issuing a press release. The full text of the press release issued in connection with the announcement is attached hereto as Exhibit No. 99.1. This information being furnished under this Item 2.02 and Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The press release contains, and may implicate, forward-looking statements regarding the registrant and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated. In the press release, the registrant's management utilized non-GAAP financial measures to describe the registrant's adjusted EBITDA, cash earnings and cash earnings per share. These non-GAAP financial measures are used by management to evaluate financial performance and resource allocation for its facilities and for the registrant as a whole. These measures are commonly used as an analytical indicator within the senior housing industry, and also serve as a measure of leverage capacity and debt service ability. The registrant has provided this information in order to enhance investors overall understanding of the registrant's financial performance and prospects. In addition, because the registrant has historically provided this type of information to the investment community, the registrant believes that including this information provides consistency in its financial reporting. These non-GAAP financial measures should not be considered as measures of financial performance under generally accepted accounting principles, and items excluded from them are significant components in understanding and assessing financial performance. These measures should not be considered in isolation or as an alternative to net income, cash flows generated by operating, investing, or financing activities, earnings per share or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. Because these measures are not measurements determined in accordance with generally accepted accounting principles and are thus susceptible to varying calculations, these measures as presented may not be comparable to other similarly titled measures of other companies. Item 9.01 Financial Statements and Exhibits (a) Not applicable. (b) Not applicable. (c) Exhibits. The following exhibit to this current report on Form 8-K is not being filed but is being furnished pursuant to Item 9.01: 99.1 Press Release dated May 3, 2005 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 3, 2005 Capital Senior Living Corporation By: /s/ Ralph A. Beattie ---------------------------------- Name: Ralph A. Beattie Title: Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Exhibit Name ----------- ------------- The following exhibit to this current report on Form 8-K is not being filed but is being furnished pursuant to Item 9.01: 99.1 Press Release dated May 3, 2005 EX-99 2 exhibit99-1.txt EXHIBIT 99.1, PRESS RELEASE EXHIBIT 99.1 [OBJECT OMITTED] Capital Senior Living Corporation For Immediate Release Contact: Ralph A. Beattie 972/770-5600 CAPITAL SENIOR LIVING CORPORATION REPORTS FIRST QUARTER 2005 EARNINGS DALLAS -- (BUSINESS WIRE) -- May 3, 2005 -- Capital Senior Living Corporation (NYSE:CSU), one of the country's largest operators of senior living communities, today announced operating results for the first quarter of fiscal 2005. Company highlights for the first quarter include: o Revenues of $24.2 million versus $22.6 million for the first quarter of last year o Net loss of $0.8 million, or a $0.03 loss per share, versus a $2.0 million loss, or $0.09 per share, in the first quarter of 2004 o Cash earnings (net income plus depreciation and amortization) of $2.4 million, or $0.09 per diluted share, versus $0.9 million for the first quarter of 2004 o Adjusted EBITDA (income from operations plus depreciation and amortization) of $5.8 million, versus $4.1 million in the prior year period o Average physical occupancy rate on stabilized communities of 90% o Operating margins (before property taxes, insurance and management fees) of 47% in stabilized independent and assisted living communities o All community revenue increase of 6% versus the prior year The Company reported a first quarter 2005 loss of $0.8 million or $0.03 per share, compared to a loss of $2.0 million or $0.09 per share in the comparable period of 2004. "We remain focused on achieving growth in revenues and cash earnings," commented James A. Stroud, Chairman of the Company. "During the quarter, we experienced higher occupancies and operating margins. These achievements resulted in a 140% improvement in our income from operations from the first quarter of 2004." OPERATING AND FINANCIAL RESULTS For the first quarter of 2005, the Company reported revenues of $24.2 million, compared to revenues of $22.6 million in the first quarter of 2004, an increase of $1.6 million or approximately seven percent. Resident and health care revenue increased from the first quarter of the prior year by approximately $1.3 million as a result of a 4.4 percent increase in the average monthly rent and a 2.3 percent increase in occupancy in our consolidated properties. Management services revenue increased by over $0.3 million, primarily due to the acquisition of CGI Management in the third quarter of 2004, which resulted in the addition of 14 communities under management. MORE CAPITAL/Page 2 Even with the increase in revenues, operating expenses were lower than the comparable quarter of the prior year by over $0.2 million. These improved operating margins, combined with an increase of approximately three percent in general and administrative expenses, resulted in income from operations more than doubling versus the first quarter of the prior year. Consequently, Adjusted EBITDA (defined as income from operations plus depreciation and amortization) for the first quarter of 2005 was $5.8 million, compared to $4.1 million in the first quarter of 2004, an increase of $1.7 million or approximately 42%. Interest expense net of interest income was approximately $0.3 million higher in the first quarter of 2005 compared to the first quarter of 2004, due to higher rates on the Company's variable rate debt. In the first quarter of 2005, the Company recorded a gain of nearly $0.3 million on treasury rate lock agreements with a previous lender to Triad II, which was acquired by the Company in July of 2003. These rate lock agreements, along with interest rate swaps, were originally required by the lender to hedge the risk that the costs of future issuance of debt may be adversely affected by changes in interest rates. The debt related to these agreements was refinanced in the fourth quarter of 2004, no longer qualifying these agreements as an effective interest rate hedge. The Company's income statement will reflect a gain on this derivative in future quarters if there is a net increase in the interest rate on the ten-year treasury note during the quarter, or a loss if this interest rate declines. These gains or losses will continue until the settlement date of January 3, 2006 or until the Company decides to convert the settlement amount of this obligation to a term note. The Company has an option to convert the settlement amount to a note with a five year term at an interest rate of LIBOR plus 250 basis points. The Company reported a net loss of $0.8 million in the first quarter of 2005, equivalent to a loss of $0.03 per share. Excluding the gain on the treasury rate lock in the quarter, the Company's net loss would have been approximately $0.9 million, equivalent to a loss of approximately $0.04 per share. The Company generated cash earnings (defined as net income plus depreciation and amortization) of $2.4 million, or $0.09 per diluted share, in the first quarter of 2005, compared to $0.9 million, or $0.04 per diluted share, in the first quarter of 2004. The Company had total debt of $259.3 million on March 31, 2005 at a blended average borrowing rate of 6.1 percent. Approximately 17 percent of the Company's debt is at fixed interest rates, approximately 11 percent is at variable rates and the remaining 72 percent is at variable rates with interest rate caps in effect. As of March 31, 2005, the Company had $20.2 million of cash, cash equivalents and restricted cash, and $148.8 million in shareholders' equity, equivalent to nearly $5.78 per share. MORE CAPITAL/Page 3 "The strategic initiatives completed in 2004 have positioned us for continued operating and financial improvements in the current environment," said Lawrence A. Cohen, Chief Executive Officer. "We entered this year with an improved capital structure, including reduced debt, and an expanded portfolio of properties to fuel future growth. We are encouraged by improved industry fundamentals, including higher overall occupancies and rental rates and lower capitalization rates. We expect the convergence of these factors to contribute to continued improvement in the Company's profitability and financial position." 1Q05 CONFERENCE CALL INFORMATION The company will host a conference call with senior management to discuss the Company's first quarter 2005 financial results. The call will be held on Wednesday, May 4, 2005 at 11:00 am Eastern Time. The call-in number is 719-457-2644. No confirmation number is required. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com through Windows Media Player or RealPlayer. For the convenience of the Company's shareholders and the public, the conference call will be recorded and available for replay starting May 4, 2005 at 2:00 pm Eastern Time, until May 11, 2005 at 8:00 pm Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 4010348. The conference call will also be made available for playback via the Company's corporate website, www.capitalsenior.com, and will be available until the next earnings release date. 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 philosophy emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place. The Company currently operates 54 senior living communities in 20 states with an aggregate capacity of approximately 8,700 residents, including 39 senior living communities which the Company owns or in which the Company has an ownership interest, and 15 communities it manages for third parties. In the communities operated by the company, 84 percent of residents live independently and 16 percent of residents require assistance with activities of daily living. This release contains certain financial information not derived in accordance with generally accepted accounting principles (GAAP), including adjusted EBITDA, cash earnings, cash earnings per share and other items. The Company believes this information is useful to investors and other interested parties. Such information should MORE CAPITAL/Page 4 not be considered as a substitute for any measures derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Reconciliation of this information to the most comparable GAAP measures is included as an attachment to this release. The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission. Contact Ralph A. Beattie, Chief Financial Officer, at 972-770-5600 or Matt Hayden, Hayden Communications, Inc. at 858-456-4533 for more information. MORE CAPITAL/Page 5
CAPITAL SENIOR LIVING CORPORATION CONSOLIDATED BALANCE SHEETS March 31, December 31, 2005 2004 ----------- ----------- (In thousands) ASSETS Current assets: Cash and cash equivalents................................................ $ 19,998 $ 19,515 Restricted cash.......................................................... 160 -- Accounts receivable, net................................................. 2,237 2,073 Accounts receivable from affiliates...................................... 368 1,220 Federal and state income taxes receivable................................ 3,205 2,572 Deferred taxes........................................................... 642 642 Assets held for sale..................................................... 1,008 1,008 Property tax and insurance deposits...................................... 3,276 2,731 Prepaid expenses and other............................................... 1,503 2,766 ----------- ----------- Total current assets............................................. 32,397 32,527 Property and equipment, net................................................ 378,471 381,051 Deferred taxes............................................................. 6,910 7,011 Investments in limited partnerships........................................ 3,232 3,202 Assets held for sale....................................................... 1,026 1,026 Other assets, net.......................................................... 6,530 6,358 ----------- ----------- Total assets..................................................... $ 428,566 $ 431,175 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable......................................................... $ 2,244 $ 2,162 Accounts payable to affiliates........................................... -- 318 Accrued expenses......................................................... 8,266 7,478 Current portion of notes payable......................................... 41,173 42,242 Customer deposits........................................................ 1,957 1,936 ----------- ----------- Total current liabilities........................................ 53,640 54,136 Deferred income............................................................ 932 680 Deferred income from affiliates............................................ 135 125 Other long-term liabilities................................................ 6,642 6,909 Notes payable, net of current portion...................................... 218,140 219,526 Minority interest in consolidated partnership.............................. 249 252 Commitments and contingencies Shareholders' equity: Preferred stock, $.01 par value: Authorized shares -- 15,000; no shares issued or outstanding.......... -- -- Common stock, $.01 par value: Authorized shares -- 65,000 Issued and outstanding shares -- 25,762 and 25,751 in 2005 and 2004, respectively.......................................... 258 258 Additional paid-in capital............................................... 125,002 124,963 Retained earnings........................................................ 23,568 24,326 ----------- ----------- Total shareholders' equity....................................... 148,828 149,547 ----------- ----------- Total liabilities and shareholders' equity....................... $ 428,566 $ 431,175 =========== ===========
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CAPITAL SENIOR LIVING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended March 31, March 31, 2005 2004 ----------- ----------- Revenues: Resident and health care revenue............................. $ 23,374 $ 22,112 Unaffiliated management services revenue..................... 393 40 Affiliated management services revenue....................... 471 474 ----------- ----------- Total revenues.......................................... 24,238 22,626 Expenses: Operating expenses........................................... 14,274 14,526 General and administrative expenses.......................... 4,175 4,036 Depreciation and amortization................................ 3,134 2,957 ----------- ----------- Total expenses.......................................... 21,583 21,519 ----------- ----------- Income from operations......................................... 2,655 1,107 Other income (expense): Interest income.............................................. 23 163 Interest expense............................................. (4,230) (4,084) Gain on treasury rate lock agreement......................... 267 -- Other income................................................. 110 67 ----------- ----------- Loss before income taxes and minority interest in consolidated partnership..................................... (1,175) (2,747) Benefit for income taxes....................................... 414 674 ----------- ----------- Loss before minority interest in consolidated partnership.................................................. (761) (2,073) Minority interest in consolidated partnership.................. 3 27 ----------- ----------- Net loss....................................................... $ (758) $ (2,046) =========== =========== Per share data: Basic loss per share......................................... $ (0.03) $ (0.09) =========== =========== Diluted loss per share....................................... $ (0.03) $ (0.09) =========== =========== Weighted average shares outstanding -- basic.................. 25,754 23,698 =========== =========== Weighted average shares outstanding -- diluted................ 25,754 23,698 =========== ===========
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CAPITAL SENIOR LIVING CORPORATION RECONCILIATION OF NON-GAAP ITEMS (in thousands, except per share amounts) Three Months Ended March 31, March 31, 2005 2004 ------------ ----------- Cash earnings reconciliation: Net loss................................................ $ (758) $ (2,046) Depreciation and amortization........................... 3,134 2,957 ----------- ----------- Cash earnings....................................... 2,376 911 =========== =========== Cash earnings per diluted share reconciliation: Net loss per diluted share.............................. $ (0.03) $ (0.09) Depreciation and amortization per diluted share......... 0.12 0.13 ----------- ----------- Cash earnings per diluted share..................... 0.09 0.04 =========== =========== Adjusted EBITDA reconciliation: Income from operations.................................. $ 2,655 $ 1,107 Depreciation and amortization........................... 3,134 2,957 ----------- ----------- Adjusted EBITDA..................................... 5,789 4,064 =========== =========== Reconciliation of net loss excluding gain on treasury rate lock: Net loss................................................ $ (758) Less gain on treasury rate lock, net of tax............. (174) ------------ Net loss excluding gain on treasury lock............ (932) =========== Reconciliation of net loss excluding gain on treasury rate lock: Net loss per diluted share.............................. $ (0.03) Less gain on treasury rate lock, net of tax per diluted share....................................... (0.01) ----------- Net loss excluding gain on treasury lock per diluted share................................... (0.04) =========== Reconciliation of shareholders' equity per outstanding share: Shareholders' equity.................................... $ 148,828 Common shares outstanding at March 31, 2005............. 25,762 ----------- Shareholders' equity per diluted share.............. 5.78 ===========
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Capital Senior Living Corporation Supplemental Information Communities Resident Capacity --------------------------- --------------------------- Q1 05 Q1 04 Q1 05 Q1 04 ------------ ----------- ------------ ----------- Portfolio Data I. Property Ownership / Management Consolidated properties 29 31 4,831 4,831 Joint Venture properties (equity method) 10 10 1,867 1,867 Third party property managed 15 1 1,970 156 ------------ ----------- ------------ ----------- Total 54 42 8,668 6,854 Independent living 7,313 5,925 Assisted living 1,185 759 Skilled nursing 170 170 ------------ ----------- Total 8,668 6,854 II. Percentage of Operating Portfolio Consolidated properties 53.7% 73.8% 55.7% 70.5% Joint venture properties (equity method) 18.5% 23.8% 21.5% 27.2% Third party property managed 27.8% 2.4% 22.7% 2.3% ------------ ----------- ------------ ----------- Total 100.0% 100.0% 100.0% 100.0% Independent living 84.4% 86.4% Assisted living 13.7% 11.1% Skilled nursing 2.0% 2.5% ------------ ----------- Total 100.0% 100.0% Selected Operating Results I. Consolidated properties Number of properties 29 31 Resident capacity 4,831 4,831 Financial occupancy (1) 86.2% 83.9% Revenue (in millions) 23.3 22.1 Operating expenses (in millions) 14.0 14.1 Operating margin 40% 36% Average monthly rent 2,122 2,033 II. Waterford / Wellington properties Number of properties 17 17 (2) Resident capacity 2,426 2,426 Financial occupancy (1) 87.3% 83.2% Revenue (in millions) 9.9 9.1 Operating expenses (in millions) 5.9 6.0 Operating margin 40% 34% Average monthly rent 1,777 1,712 III. Total Portfolio Number of properties 54 42 Resident capacity 8,668 6,854 Financial occupancy (1) 84.0% 82.0% Revenue (in millions) 40.4 31.8 Operating expenses (in millions) 23.1 19.6 Operating margin 43% 38% Average monthly rent 2,138 2,139 IV. Consolidated Debt Information (in thousands, except for interest rates) Excludes insurance premium financing Fixed rate debt 42,537 68,851 Variable rate debt, with a floor - 51,173 Variable rate debt, with a cap 184,336 35,384 Variable rate debt, no cap or floor 27,548 105,474 ------------ ----------- Total debt 254,421 260,882 ------------ ----------- Fixed rate debt - weighted average rate 8.0% 7.8% Variable rate debt - weighted average rate 5.7% 4.3% Total debt - weighted average rate 6.1% 5.3%
(1) Financial occupancy represents actual days occupied divided by total number of available days during the quarter. (2) Excludes Canton and Towne Centre expansions which were each consolidated with their main campus in December 2004. #### -----END PRIVACY-ENHANCED MESSAGE-----