Exhibit 99.1
|
Investor Contact: Carey Hendrickson, Chief Financial Officer Phone: 1-972-770-5600 chendrickson@capitalsenior.com |
FOR IMMEDIATE RELEASE
CAPITAL SENIOR LIVING CORPORATION REPORTS
FIRST QUARTER 2020 RESULTS
Provides Update Related to COVID-19
DALLAS – May 21, 2020 – Capital Senior Living Corporation (the “Company”) (NYSE: CSU), one of the nation’s largest operators of senior housing communities, announced today operating and financial results for the first quarter ended March 31, 2020.
Recent Highlights
| • | Operating expenses decreased $3.3 million in the first quarter of 2020 as compared to the fourth quarter of 2019 resulting in sequential improvement of several of the Company’s key financial metrics. |
| • | Rent payments on 31 underperforming leased communities were reduced by 25% effective February 1, and six underperforming leased communities were converted to management agreements effective March 1, as a result of agreements reached with the Company’s landlords in the first quarter of 2020 for early termination of its Master Leases. |
| • | The Company sold an underperforming non-core community on March 31, 2020, generating $6.9 million in net cash proceeds. |
| • | Short-term forbearance agreements were reached with certain lenders resulting in lower debt payments beginning in April 2020. |
“The sequential improvement in key financial metrics in the first quarter, along with lower lease and debt payments, has enabled us to focus our efforts on meeting the incremental challenges posed by the COVID-19 pandemic,” said Kimberly S. Lody, President and Chief Executive Officer. “During these last eight weeks, our community-level and central support teams have steadfastly cared for our residents’ physical, cognitive, and emotional well-being, and I am so proud of their dedication and heroism during this unprecedented time. While our financial results will be impacted by the pandemic for the next several months, we look forward to continuing our operational turnaround as market conditions stabilize.”
Financial Results - First Quarter
For the first quarter of 2020, the Company reported revenue of $106.1 million, compared with revenue of $114.2 million in the first quarter of 2019. The disposition of four communities since the first quarter of 2019 accounted for $3.5 million of the decrease, and the conversion of six formerly leased communities to management agreements effective March 1, 2020, accounted for $1.1 million of the decrease. Total occupancy in the first quarter of 2020 was 80.0%, a decrease of 310 basis points as compared to the first quarter of 2019, and monthly average rent was $3,674, an increase of 1.6% as compared to the first quarter of 2019.
Operating expenses for the first quarter of 2020 were $75.4 million, the same as in the first quarter of 2019. The first quarter of 2019 included $1.9 million of operating expenses related to four communities disposed of since the first quarter of 2019 and $0.7 million for the six formerly leased communities that were converted to management agreements effective March 1, 2020. Also, the Company had $1.2 million in business interruption credits related to the Company’s two communities previously impacted by Hurricane Harvey in the first quarter of 2019 but did not have any such credits in the first quarter of 2020.
CAPITAL/Page 2
General and administrative expenses for the first quarter of 2020 were $6.7 million versus $7.6 million in the first quarter of 2019. Excluding transaction and conversion costs in both periods, general and administrative expenses decreased $0.6 million in the first quarter of 2020 versus the first quarter of 2019 due to lower healthcare claims under the Company’s self-insured healthcare plan. As a percentage of revenues under management, general and administrative expenses, excluding transaction and conversion costs, were 4.9% in the first quarter of 2020.
The first quarter of 2020 includes an $11.0 million non-cash gain and a $36.5 million non-cash long-lived asset impairment charge, both of which are related to the leased communities and the associated agreements executed with Healthpeak, Ventas and Welltower. The Company also recorded a $7.4 million non-cash loss on the sale of a non-core community in the first quarter of 2020.
Loss from operations for the first quarter of 2020 was $3.7 million. Net loss was $48.4 million for the first quarter of 2020.
Adjusted EBITDAR for the first quarter of 2020 was $26.3 million. The Company incurred approximately $0.3 million of COVID-19 expenses in March 2020. Adjusted EBITDAR excluding COVID-19 expenses was $26.6 million, a sequential increase of $0.9 million from Adjusted EBITDAR in the fourth quarter of 2019. Adjusted CFFO was $0.2 million. Adjusted CFFO excluding COVID-19 expenses was $0.5 million, a sequential increase of $1.9 million from Adjusted CFFO in the fourth quarter of 2019. (See “Non-GAAP Financial Measures” below).
Same Community Results
Same community results exclude the four non-core communities the Company has disposed of since the first quarter of 2019 and the six Healthpeak communities converted to management agreements effective March 1, 2020. Same-community results also exclude approximately $0.3 million of expenses incurred in March 2020 related to COVID-19 preparedness.
Same-community revenue in the first quarter of 2020 decreased 2.6% versus the first quarter of 2019. Same-community occupancy in the first quarter was 79.9%, a decrease of 280 basis points as compared to the first quarter of 2019 and average monthly rent was $3,772, an increase of 0.9% as compared to the first quarter of 2019.
Same-community operating expenses increased 2.4% in the first quarter of 2020 versus the first quarter of 2019. Same store labor costs, including benefits, increased 5.9%, food costs decreased 1.0%, and utilities decreased 5.5%. Including contract labor, which decreased $0.3 million in the first quarter of 2020, same store total labor costs increased 5.0% when compared with the first quarter of 2019. Same-community net operating income decreased 12.3% in the first quarter of 2020 when compared with the first quarter of 2019. Same-community NOI increased $2.7 million, or 9.4%, in the first quarter of 2020 as compared to the fourth quarter of 2019
Sale of Senior Living Community
As previously announced, the Company closed on the sale of a non-core community in Merrillville, Indiana, on March 31, 2020, at a purchase price of $7.0 million. The transaction resulted in approximately $6.9 million in net cash proceeds. The community consisted of 213 assisted living and memory care units, and had CFFO contribution of approximately $0.2 million in 2019.
CAPITAL/Page 3
COVID-19 Update
The safety and wellbeing of the Company’s residents, employees and caregivers is and has been the Company’s highest priority. At the onset of the COVID-19 pandemic, the Company’s operations team swiftly implemented comprehensive protocols and best practices across the portfolio based on guidance from the Centers for Disease Control as well as federal, state and local authorities. All communities have executed risk-mitigation actions, such as restricting access and assessing the health status of every person entering the communities, including the Company’s employees, all visitors, and all outside service providers. Tours are limited to only the prospect and one family member in most communities, with certain communities only providing virtual tours. New residents and residents returning from a hospital stay are required to isolate in their apartment for fourteen days. All employees are required to adhere to personal protection protocols, including wearing masks at all times. The Company’s communities are cleaned and disinfected at least twice daily. Certain communities with COVID-positive residents have received a specialized disinfecting and decontamination treatment. In most cases, the Company has implemented in-room only dining and activities programming. Due to the vulnerable nature of the Company’s residents, many of these restrictions may continue at its communities even when federal, state, and local stay-at-home and social distancing orders and recommendations are relaxed.
The Company delivered results in line with its expectations in March 2020. New resident leads, visits, and move-in activity declined significantly in April compared to typical levels, adversely impacting occupancy. Consolidated occupancy, excluding the non-core community sold in the first quarter, decreased from 79.8% for the month of March to 78.7% for the month of April. Revenue on the same basis decreased approximately $0.5 million from March to April. We expect further deterioration of occupancy and revenue resulting from fewer move-ins due to the impacts of COVID-19. Lower than normal controllable move-out activity during the COVID-19 pandemic may partially offset future adverse revenue impacts.
The Company has recognized and continues to recognize increases in supplies costs related primarily to personal protection equipment and paper goods required for in-room dining, labor, specialized cleaning and disinfecting costs, and testing of residents and employees. To mitigate the impact of the COVID-related expenditures, the Company has reduced spending on non-essential supplies, travel costs and certain other discretionary items, and has ceased all non-critical capital expenditure projects.
The Company is utilizing the payroll tax deferral program under the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) to defer the employer portion of payroll taxes from April 2020 through December 2020, which it estimates will accumulate to approximately $7.0 million. One-half of the deferred payroll taxes will be due by December 2021, with the other half due by December 2022. The Company has also entered into short-term debt forbearance agreements with certain of its lenders effective April 1, 2020, some of which will require repayment of the forbearance over a twelve-month period following the end of the forbearance period.
Balance Sheet and Liquidity
The Company ended the first quarter with $27.9 million of cash and cash equivalents, including restricted cash. As of March 31, 2020, the Company financed its owned communities with mortgages totaling $923.0 million at interest rates averaging 4.7%. The majority of the Company’s debt is at fixed interest rates excluding three bridge loans totaling approximately $82.9 million, all with maturities in the first quarter of 2021, and approximately $50 million of long-term variable rate debt under the Company’s Master Credit Facility. The earliest maturity date for the Company’s fixed-rate debt is in 2022.
Going Concern
As described above, COVID-19 has caused, and management expects will continue to cause, a decline in the occupancy levels at the Company’s communities that will negatively impact revenues. Also as described above, the recent outbreak of COVID-19 has required the Company to incur, and management expects will require the Company to continue to incur, significant additional operating costs and expenses in order to care for its residents. Further, residents at certain of its senior housing communities have tested positive for COVID-19, which has increased the costs of caring for the residents at such communities and has resulted in reduced occupancies at such communities.
CAPITAL/Page 4
ASC 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” requires an evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern in the twelve-month period following the date its financial statements are issued. In complying with the requirements under U.S. GAAP to complete an evaluation without considering mitigating factors, the Company considered several conditions or events including (1) uncertainty around the impact of COVID-19 on the Company’s financial results, and (2) anticipated operating losses and negative cash flows from operations for fiscal year 2020. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the issuance of its financial statements in its Form 10-Q for the quarterly period ended March 31, 2020.
The Company has taken or intends to take certain actions to improve its liquidity position and address uncertainty about its ability to continue as a going concern, including:
| • | The Company will continue to execute on its 3-year operational turnaround plan initiated in the first quarter of 2019, which began to show improved operating results in the first quarter of 2020 and is expected to continue to produce incremental profitability improvements |
| • | The Company has implemented additional proactive spending reductions, including reduced discretionary spending and lower capital spending |
| • | The Company took measures in the first quarter of 2020 to exit underperforming leases, which will benefit the Company with reduced rent payments through December 2020 and will eliminate all rent payments beginning January 2021 |
| • | The Company is evaluating the opportunity to sell certain communities that would provide positive net cash proceeds |
| • | The Company has entered into short-term debt forbearance agreements with certain lenders |
| • | The Company is utilizing the CARES Act payroll tax deferral program to delay payment of the employer portion of payroll taxes to be incurred from April 2020 through December 2020 |
| • | The Company is evaluating possible debt and capital options |
Q1 2020 Conference Call Information
The Company will host a conference call with senior management to discuss the Company’s first quarter 2020 financial results on Thursday, May 21, 2020, at 10:00 a.m. Eastern Time. To participate, dial 323-994-2082, and use confirmation code 9553593. 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 21, 2020 at 1:00 p.m. Eastern Time, until May 29, 2020 at 1:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 9553593. The conference call will also be made available for playback via the Company’s corporate website, https://www.capitalsenior.com/investor-relations/conference-calls/.
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 Company management, research analysts and investors to value companies in the senior living industry. Since Adjusted EBITDAR excludes interest expense and rent expense, it allows Company management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements.
CAPITAL/Page 5
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 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. This is included on the last page of this press release.
About the Company
Dallas-based Capital Senior Living Corporation is one of the nation’s largest operators of independent living, assisted living and memory care communities for senior adults. The Company’s 124 communities are home to more than 11,000 residents across 23 states and provide compassionate, resident-centric service and care as well as engaging programming. Capital Senior Living offers seniors the freedom and opportunity to successfully, comfortably and happily age in place. For more information, visit www.capitalsenior.com or connect with the Company on Facebook.
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 continued spread of COVID-19, including the speed, depth, geographic reach and duration of such spread, new information that may emerge concerning the severity of COVID-19, the actions taken to prevent or contain the spread of COVID-19 or treat its impact, the legal, regulatory and administrative developments that occur at the federal, state and local levels in response to the COVID-19 pandemic, and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts; the impact of COVID-19 on the Company’s ability to continue as a going concern, the Company’s ability to generate sufficient cash flows from operations, additional proceeds from debt refinancings, and proceeds from the sale of assets to satisfy its short and long-term 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, including certain financial covenants, and the risk of cross-default in the event such non-compliance occurs; 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.
Investor Contact Carey P. Hendrickson, Chief Financial Officer, at 972-770-5600 or chendrickson@capitalsenior.com.
Press Contact Susan J. Turkell at 303-766-4343 or sturkell@capitalsenior.com.
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except per share data)
| March 31, 2020 |
December 31, 2019 |
|||||||
| (In thousands) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 17,729 | $ | 23,975 | ||||
| Restricted cash |
10,143 | 13,088 | ||||||
| Accounts receivable, net |
7,462 | 8,143 | ||||||
| Federal and state income taxes receivable |
72 | 72 | ||||||
| Property tax and insurance deposits |
6,567 | 12,627 | ||||||
| Prepaid expenses and other |
4,912 | 5,308 | ||||||
|
|
|
|
|
|||||
| Total current assets |
46,885 | 63,213 | ||||||
| Property and equipment, net |
908,954 | 969,211 | ||||||
| Operating lease right-of-use assets, net |
18,815 | 224,523 | ||||||
| Deferred taxes, net |
76 | 76 | ||||||
| Other assets, net |
3,941 | 10,673 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 978,671 | $ | 1,267,696 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 8,195 | $ | 10,382 | ||||
| Accrued expenses |
38,563 | 46,227 | ||||||
| Current portion of notes payable, net of deferred loan costs |
14,400 | 15,819 | ||||||
| Deferred income |
6,835 | 7,201 | ||||||
| Current portion of financing obligations |
— | 1,741 | ||||||
| Current portion of lease liabilities |
38,976 | 45,988 | ||||||
| Federal and state income taxes payable |
644 | 420 | ||||||
| Customer deposits |
1,179 | 1,247 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
108,792 | 129,025 | ||||||
| Financing obligations, net of current portion |
— | 9,688 | ||||||
| Lease liabilities, net of current portion |
670 | 208,967 | ||||||
| Notes payable, net of deferred loan costs and current portion |
902,606 | 905,637 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ equity (deficit): |
||||||||
| 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 31,389 and 31,441 in 2020 and 2019, respectively |
319 | 319 | ||||||
| Additional paid-in capital |
190,982 | 190,386 | ||||||
| Retained deficit |
(221,268 | ) | (172,896 | ) | ||||
| Treasury stock, at cost — 494 shares in 2020 and 2019 |
(3,430 | ) | (3,430 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity (deficit) |
(33,397 | ) | 14,379 | |||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity (deficit) |
$ | 978,671 | $ | 1,267,696 | ||||
|
|
|
|
|
|||||
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except per share data)
| Three months ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenues: |
||||||||
| Resident revenue |
$ | 105,616 | $ | 114,176 | ||||
| Management fees |
56 | — | ||||||
| Community reimbursement revenue |
457 | — | ||||||
|
|
|
|
|
|||||
| Total revenues |
106,129 | 114,176 | ||||||
|
|
|
|
|
|||||
| Expenses: |
||||||||
| Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) |
75,402 | 75,405 | ||||||
| General and administrative expenses |
6,685 | 7,570 | ||||||
| Facility lease expense |
10,992 | 14,235 | ||||||
| Stock-based compensation expense |
596 | (978 | ) | |||||
| Depreciation and amortization expense |
15,715 | 15,974 | ||||||
| Community reimbursement expense |
457 | — | ||||||
|
|
|
|
|
|||||
| Total expenses |
109,847 | 112,206 | ||||||
|
|
|
|
|
|||||
| Income (Loss) from operations |
(3,718 | ) | 1,970 | |||||
| Other income (expense): |
||||||||
| Interest income |
54 | 57 | ||||||
| Interest expense |
(11,670 | ) | (12,564 | ) | ||||
| Write down of assets held for sale |
— | (2,340 | ) | |||||
| Long-lived asset impairment |
(36,461 | ) | — | |||||
| Gain on facility lease modification and termination, net |
11,010 | — | ||||||
| Loss on disposition of assets, net |
(7,356 | ) | — | |||||
| Other income |
1 | 23 | ||||||
|
|
|
|
|
|||||
| Loss before provision for income taxes |
(48,140 | ) | (12,854 | ) | ||||
| Provision for income taxes |
(232 | ) | (130 | ) | ||||
|
|
|
|
|
|||||
| Net loss |
$ | (48,372 | ) | $ | (12,984 | ) | ||
|
|
|
|
|
|||||
| Per share data: |
||||||||
| Basic net loss per share |
$ | (1.59 | ) | $ | (0.43 | ) | ||
|
|
|
|
|
|||||
| Diluted net loss per share |
$ | (1.59 | ) | $ | (0.43 | ) | ||
|
|
|
|
|
|||||
| Weighted average shares outstanding — basic |
30,411 | 30,102 | ||||||
|
|
|
|
|
|||||
| Weighted average shares outstanding — diluted |
30,411 | 30,102 | ||||||
|
|
|
|
|
|||||
| Comprehensive loss |
$ | (48,372 | ) | $ | (12,984 | ) | ||
|
|
|
|
|
|||||
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited, in thousands, except per share data)
| Additional Paid-In Capital |
Retained Deficit |
Treasury Stock |
Total | |||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Balance at January 1, 2019 |
31,273 | $ | 318 | $ | 187,879 | $ | (149,502 | ) | $ | (3,430 | ) | $ | 35,265 | |||||||||||
| Adoption of ASC 842 |
— | — | — | 12,636 | — | 12,636 | ||||||||||||||||||
| Restricted stock awards (cancellations), net |
(150 | ) | (2 | ) | 2 | — | — | — | ||||||||||||||||
| Stock-based compensation |
— | — | (978 | ) | — | — | (978 | ) | ||||||||||||||||
| Net loss |
— | — | — | (12,984 | ) | — | (12,984 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance at March 31, 2019 |
31,123 | $ | 316 | $ | 186,903 | $ | (149,850 | ) | $ | (3,430 | ) | $ | 33,939 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance at January 1, 2020 |
31,441 | $ | 319 | $ | 190,386 | $ | (172,896 | ) | $ | (3,430 | ) | $ | 14,379 | |||||||||||
| Restricted stock awards |
— | — | — | — | — | — | ||||||||||||||||||
| Stock-based compensation |
— | — | 596 | — | — | 596 | ||||||||||||||||||
| Net loss |
— | — | — | (48,372 | ) | — | (48,372 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance at March 31, 2020 |
31,441 | $ | 319 | $ | 190,982 | $ | (221,268 | ) | $ | (3,430 | ) | $ | (33,397 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except per share data)
| Three months ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| (in thousands) | ||||||||
| Operating Activities |
||||||||
| Net loss |
$ | (48,372 | ) | $ | (12,984 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
15,715 | 15,974 | ||||||
| Amortization of deferred financing charges |
464 | 432 | ||||||
| Amortization of deferred lease costs and lease intangibles, net |
— | 0 | ||||||
| Deferred income |
137 | (41 | ) | |||||
| Operating lease expense adjustment |
(2,716 | ) | (702 | ) | ||||
| Loss on disposition of assets, net |
7,356 | — | ||||||
| Gain on lease related transactions, net |
(11,010 | ) | — | |||||
| Long-lived asset impairment |
36,461 | — | ||||||
| Write-down of assets held for sale |
— | 2,340 | ||||||
| Provision for bad debts |
745 | 805 | ||||||
| Stock-based compensation expense |
596 | (978 | ) | |||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(72 | ) | (695 | ) | ||||
| Property tax and insurance deposits |
4,059 | 4,586 | ||||||
| Prepaid expenses and other |
893 | 487 | ||||||
| Other assets |
(164 | ) | 482 | |||||
| Accounts payable |
(1,047 | ) | (6,894 | ) | ||||
| Accrued expenses |
(7,648 | ) | (3,674 | ) | ||||
| Other liabilities |
13 | — | ||||||
| Federal and state income taxes receivable/payable |
224 | 153 | ||||||
| Deferred resident revenue |
(424 | ) | (453 | ) | ||||
| Customer deposits |
(69 | ) | 17 | |||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(4,859 | ) | (1,145 | ) | ||||
| Investing Activities |
||||||||
| Capital expenditures |
(5,351 | ) | (3,353 | ) | ||||
| Proceeds from disposition of assets |
6,396 | 0 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) investing activities |
1,045 | (3,353 | ) | |||||
| Financing Activities |
||||||||
| Repayments of notes payable |
(4,922 | ) | (4,333 | ) | ||||
| Cash payments for financing obligations |
(455 | ) | (129 | ) | ||||
| Deferred financing charges paid |
— | (143 | ) | |||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(5,377 | ) | (4,605 | ) | ||||
|
|
|
|
|
|||||
| Decrease in cash and cash equivalents |
(9,191 | ) | (9,103 | ) | ||||
| Cash and cash equivalents and restricted cash at beginning of year |
37,063 | 44,320 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents and restricted cash at end of year |
$ | 27,872 | $ | 35,217 | ||||
|
|
|
|
|
|||||
| Supplemental Disclosures |
||||||||
| Cash paid during the year for: |
||||||||
| Interest |
$ | 10,798 | $ | 11,167 | ||||
|
|
|
|
|
|||||
| Lease modification and termination |
$ | 6,785 | $ | — | ||||
|
|
|
|
|
|||||
| Income taxes |
$ | 9 | $ | 7 | ||||
|
|
|
|
|
|||||
Capital Senior Living Corporation
Supplemental Information
| Communities | Average Resident Capacity | Average Units | ||||||||||||||||||||||
| Q1 20 | Q1 19 | Q1 20 | Q1 19 | Q1 20 | Q1 19 | |||||||||||||||||||
| Portfolio Data |
||||||||||||||||||||||||
| I. Community Ownership / Management |
||||||||||||||||||||||||
| Consolidated communities |
||||||||||||||||||||||||
| Owned |
79 | 83 | 10,055 | 10,767 | 7,634 | 8,249 | ||||||||||||||||||
| Leased |
39 | 46 | 4,981 | 5,756 | 3,754 | 4,414 | ||||||||||||||||||
| Third party communities managed |
6 | — | 549 | — | 476 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
124 | 129 | 15,585 | 16,523 | 11,864 | 12,663 | ||||||||||||||||||
| Independent living |
6,251 | 6,879 | 4,278 | 4,965 | ||||||||||||||||||||
| Assisted living |
9,334 | 9,644 | 7,586 | 7,698 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total |
15,585 | 16,523 | 11,864 | 12,663 | ||||||||||||||||||||
| II. Percentage of Operating Portfolio |
||||||||||||||||||||||||
| Consolidated communities |
||||||||||||||||||||||||
| Owned |
63.7 | % | 64.3 | % | 64.5 | % | 65.2 | % | 64.3 | % | 65.1 | % | ||||||||||||
| Leased |
31.5 | % | 35.7 | % | 32.0 | % | 34.8 | % | 31.6 | % | 34.9 | % | ||||||||||||
| Third party communities managed |
4.8 | % | 0.0 | % | 3.5 | % | 0.0 | % | 4.0 | % | 0.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
| Independent living |
40.1 | % | 41.6 | % | 36.1 | % | 39.2 | % | ||||||||||||||||
| Assisted living |
59.9 | % | 58.4 | % | 63.9 | % | 60.8 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Capital Senior Living Corporation
Supplemental Information
| Q1 20 | Q1 19 | |||||||
| Selected Operating Results |
||||||||
| I. Owned communities |
||||||||
| Number of communities at quarter-end |
79 | 83 | ||||||
| Resident capacity |
10,055 | 10,767 | ||||||
| Unit capacity |
7,634 | 8,249 | ||||||
| Financial occupancy (1) |
80.6 | % | 84.1 | % | ||||
| Revenue (in millions) |
67.9 | 73.2 | ||||||
| Operating expenses (in millions) (2) |
49.1 | 50.1 | ||||||
| Operating margin |
28 | % | 32 | % | ||||
| Average monthly rent |
3,579 | 3,517 | ||||||
| II. Leased communities |
||||||||
| Number of communities at quarter-end |
39 | 46 | ||||||
| Resident capacity |
4,981 | 5,756 | ||||||
| Unit capacity |
3,754 | 4,414 | ||||||
| Financial occupancy (1) |
78.8 | % | 81.3 | % | ||||
| Revenue (in millions) |
37.7 | 41.0 | ||||||
| Operating expenses (in millions) (2) |
24.6 | 25.0 | ||||||
| Operating margin |
35 | % | 39 | % | ||||
| Average monthly rent |
3,857 | 3,804 | ||||||
| III. Consolidated communities |
||||||||
| Number of communities at quarter-end |
118 | 129 | ||||||
| Resident capacity |
15,036 | 16,523 | ||||||
| Unit capacity |
11,388 | 12,663 | ||||||
| Financial occupancy (1) |
80.0 | % | 83.1 | % | ||||
| Revenue (in millions) |
105.6 | 114.2 | ||||||
| Operating expenses (in millions) (2) |
73.6 | 75.1 | ||||||
| Operating margin |
30 | % | 34 | % | ||||
| Average monthly rent |
3,674 | 3,615 | ||||||
| IV. Communities under management |
||||||||
| Number of communities at quarter-end |
124 | 129 | ||||||
| Resident capacity |
15,585 | 16,523 | ||||||
| Unit capacity |
11,864 | 12,663 | ||||||
| Financial occupancy (1) |
80.1 | % | 83.1 | % | ||||
| Revenue (in millions) |
106.7 | 114.2 | ||||||
| Operating expenses (in millions) (2) |
74.3 | 75.1 | ||||||
| Operating margin |
30 | % | 34 | % | ||||
| Average monthly rent |
3,658 | 3,615 | ||||||
| V. Same Store Consolidated communities |
||||||||
| Number of communities |
118 | 118 | ||||||
| Resident capacity |
15,036 | 15,036 | ||||||
| Unit capacity |
11,388 | 11,400 | ||||||
| Financial occupancy (1) |
79.9 | % | 82.7 | % | ||||
| Revenue (in millions) |
101.6 | 104.4 | ||||||
| Operating expenses (in millions) (2) |
70.3 | 68.7 | ||||||
| Operating margin |
31 | % | 34 | % | ||||
| Average monthly rent |
3,722 | 3,689 | ||||||
| VI. General and Administrative expenses as a percent of Total Revenues under Management |
| |||||||
| Current Quarter (3) |
4.9 | % | 5.1 | % | ||||
| Year to Date (3) |
4.9 | % | 5.1 | % | ||||
| VII. Consolidated Debt Information (in thousands, except for interest
rates) |
| |||||||
| Total variable rate mortgage debt |
790,052 | 848,925 | ||||||
| Total fixed rate debt |
132,924 | 129,949 | ||||||
| Weighted average interest rate |
4.7 | % | 4.9 | % | ||||
| (1) - | Financial occupancy represents actual days occupied divided by total number of available days during the quarter. |
| (2) - | Excludes management fees, provision for bad debts, and transaction and conversion costs. |
| (3) - | Excludes transaction and conversion costs. |
CAPITAL SENIOR LIVING CORPORATION
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
| Three months ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Adjusted EBITDAR |
||||||||
| Net loss |
(48,372 | ) | (12,984 | ) | ||||
| Depreciation and amortization expense |
15,715 | 15,974 | ||||||
| Stock-based compensation expense |
596 | (978 | ) | |||||
| Facility lease expense |
10,992 | 14,235 | ||||||
| Provision for bad debts |
745 | 805 | ||||||
| Interest income |
(54 | ) | (57 | ) | ||||
| Interest expense |
11,670 | 12,564 | ||||||
| Long-lived asset impairment |
36,461 | — | ||||||
| Loss (gain) on lease related transactions, net |
(11,010 | ) | — | |||||
| Write down of asset held for sale |
— | 2,340 | ||||||
| Loss (gain) on disposition of assets, net |
7,356 | — | ||||||
| Other expense (income) |
(1 | ) | (23 | ) | ||||
| Provision for income taxes |
232 | 130 | ||||||
| Casualty losses |
423 | 268 | ||||||
| Transaction and conversion costs |
1,418 | 276 | ||||||
| Employee placement and separation costs |
90 | 1,717 | ||||||
| Communities excluded due to repositioning/lease-up |
— | 55 | ||||||
|
|
|
|
|
|||||
| Adjusted EBITDAR |
$ | 26,261 | $ | 34,322 | ||||
|
|
|
|
|
|||||
| COVID-19 expenses |
291 | — | ||||||
|
|
|
|
|
|||||
| Adjusted EBITDAR excluding COVID-19 expenses |
$ | 26,552 | $ | 34,322 | ||||
|
|
|
|
|
|||||
| Adjusted revenues |
||||||||
| Total revenues |
$ | 106,129 | $ | 114,176 | ||||
| Communities excluded due to repositioning/lease-up |
— | (1,289 | ) | |||||
|
|
|
|
|
|||||
| Adjusted revenues |
$ | 106,129 | $ | 112,887 | ||||
|
|
|
|
|
|||||
| Adjusted net loss and Adjusted net loss per share |
||||||||
| Net loss |
(48,372 | ) | (12,984 | ) | ||||
| Casualty losses |
423 | 268 | ||||||
| Transaction and conversion costs |
1,418 | 294 | ||||||
| Employee placement and separation costs |
90 | 1,717 | ||||||
| Write down of asset held for sale |
— | 2,340 | ||||||
| Long-lived asset impairment |
36,461 | — | ||||||
| Loss (gain) on lease related transactions, net |
(11,010 | ) | — | |||||
| Loss (gain) on disposition of assets, net |
7,356 | — | ||||||
| Tax impact of Non-GAAP adjustments (25%) |
(8,684 | ) | (1,155 | ) | ||||
| Deferred tax asset valuation allowance |
— | 2,901 | ||||||
| Communities excluded due to repositioning/lease-up |
— | 683 | ||||||
|
|
|
|
|
|||||
| Adjusted net loss |
$ | (22,318 | ) | $ | (5,936 | ) | ||
|
|
|
|
|
|||||
| Diluted shares outstanding |
30,411 | 30,102 | ||||||
| Adjusted net income (loss) per share |
$ | (0.73 | ) | $ | (0.20 | ) | ||
| COVID-19 expenses |
291 | — | ||||||
|
|
|
|
|
|||||
| Adjusted net loss excluding COVID-19 expenses |
$ | (22,027 | ) | $ | (5,936 | ) | ||
|
|
|
|
|
|||||
| Adjusted net income (loss) per share excluding COVID-19 expense |
$ | (0.72 | ) | $ | (0.20 | ) | ||
| Adjusted CFFO |
||||||||
| Net loss |
(48,372 | ) | (12,984 | ) | ||||
| Non-cash charges, net |
47,748 | 17,830 | ||||||
| Operating lease payment adjustment to normalize lease commitments |
— | (910 | ) | |||||
| Recurring capital expenditures |
(1,136 | ) | (1,148 | ) | ||||
| Casualty losses |
423 | 268 | ||||||
| Transaction and conversion costs |
1,418 | 294 | ||||||
| Employee placement and separation costs |
90 | 1,717 | ||||||
| Communities excluded due to repositioning/lease-up |
— | 438 | ||||||
|
|
|
|
|
|||||
| Adjusted CFFO |
$ | 171 | $ | 5,505 | ||||
|
|
|
|
|
|||||
| COVID-19 expenses |
291 | — | ||||||
|
|
|
|
|
|||||
| Adjusted CFFO excluding COVID-19 expense |
$ | 462 | $ | 5,505 | ||||
|
|
|
|
|
|||||
