EX-99.1 2 ex99-1.htm EX99-1
Exhibit 99.1

400 Centre Street, Newton, MA 02458-2076
 
 
tel: (617) 796-8350 fax: (617) 796-8385



FOR IMMEDIATE RELEASE 
Contact:
Timothy A. Bonang,
   
Manager of Investor Relations
   
(617) 796-8149
   
www.fivestarqualitycare.com
 

Five Star Quality Care, Inc. Reports
Results for the Period Ended March 31, 2007
____________________________________

Newton, MA (May 9, 2007). Five Star Quality Care, Inc. (AMEX: FVE) today announced its financial results for the quarter ended March 31, 2007.

Results for the quarter ended March 31, 2007:

Income from continuing operations was $5.6 million for the quarter ended March 31, 2007, compared to income from continuing operations of $3.0 million for the same quarter last year. Net income from continuing operations per share, basic and diluted, for the quarters ended March 31, 2007 was $0.18 and $0.17, respectively, compared to $0.14 basic and diluted for the same period last year.

The weighted average number of basic and diluted common shares outstanding totaled 31,684,134 and 41,414,903, respectively, for the quarter ended March 31, 2007, and 20,061,134 for the quarter ended March 31, 2006.
 
Occupancy and Average Daily Rate:

Five Star’s senior living community occupancy for the quarter ended March 31, 2007 was 90%, compared to 91% for the same period in 2006. Occupancy for senior living communities that Five Star has operated continuously since January 1, 2006 was 91% for the quarters ended March 31, 2007 and 2006, respectively.

The average daily rate for senior living communities for the quarter ended March 31, 2007 was $136, compared to $133 for the same period in 2006. The average daily rate for senior living communities that Five Star has operated continuously since January 1, 2006 was $138 for the quarter ended March 31, 2007, compared to $133 for same period in 2006.



Conference Call:

On Wednesday, May 9, 2007 at 1:00 p.m. Eastern Standard Time, Evrett W. Benton, president and chief executive officer, and Bruce J. Mackey Jr., treasurer and chief financial officer, will host a conference call to discuss the first quarter 2007 financial results. Following the Company’s remarks, there will be a question and answer period.

The conference call telephone number is (800) 289-0468. Participants calling from outside the United States and Canada should dial (913) 981-5517. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through midnight on May 16, 2007. To hear the replay, dial (719) 457-0820. The replay pass code is 2774413.

A live audio webcast of the conference call will also be available in a listen only mode on the company’s web site at www.fivestarqualitycare.com. Participants wanting to access the webcast should visit the company’s web site about five minutes before the call. The archived webcast will be available for replay on the company’s web site for about one week after the call.

About Five Star Quality Care, Inc.:

Five Star Quality Care, Inc. is a healthcare services company which operates healthcare and senior living communities. As of today, Five Star owns, leases and operates 161 senior living communities with over 17,950 separate living units located in 29 states. These communities include independent living, assisted living and skilled nursing communities. Five Star also operates six institutional pharmacies, one of which also provides mail order pharmaceuticals to the general public, and two rehabilitation hospitals. Five Star is headquartered in Newton, Massachusetts.


Supplemental Information, page 1of 5
FIVE STAR QUALITY CARE, INC.
CONSOLIDATED STATEMENT OF INCOME
(dollars in thousands, except per share data)

   
Three months ended March 31,
  
   
2007
  
2006
  
Revenues:
              
    Senior living revenue
  
$
196,658
  
$
180,788
  
    Hospital revenue
    
26,770
    
-
  
    Pharmacy revenue
    
16,248
    
11,254
  
Total revenues
    
239,676
    
192,042
  
               
Operating expenses:
              
Senior living wages and benefits
    
101,623
    
90,835
  
Other senior living operating expenses
    
49,469
    
48,488
  
Hospital expenses
    
24,256
    
-
  
Pharmacy expenses
    
15,942
    
10,691
  
Management fee to Sunrise Senior Living, Inc.
    
-
    
3,538
  
Rent expense
    
32,171
    
25,609
  
General and administrative
   
10,059
    
7,220
  
Depreciation and amortization
   
3,179
    
2,268
  
Total operating expenses
    
236,699
    
188,649
  
               
Operating income
    
2,977
    
3,393
  
Interest and other income
    
1,065
    
324
  
Interest expense
    
(1,778
)
  
(758
)
Gain on extinguishment of debt
   
3,557
    
-
  
               
Income from continuing operations before income taxes
    
5,821
    
2,959
  
Provision for income taxes
    
208
    
-
  
Income from continuing operations
    
5,613
    
2,959
  
 
Loss from discontinued operations
    
(849
)
  
(1,300
)
               
Net income
 
$
4,764
  
$
1,659
  
               
Weighted average shares outstanding - basic
   
31,684
    
20,061
  
               
Weighted average shares outstanding - diluted
    
41,415
    
20,061
  
               
Basic income per share from:
              
Continuing operations
  
$
0.18
  
$
0.14
  
Discontinued operations
    
(0.03
)
  
(0.06
)
Net income per share
 
$
0.15
  
$
0.08
  
               
Diluted income per share from:
              
Continuing operations
  
$
0.17
  
$
0.14
  
Discontinued operations
    
(0.02
)
  
(0.06
)
Net income per share
 
$
0.15
  
$
0.08
  
               
EBITDA(1):
              
Income from continuing operations
  
$
5,613
  
$
2,959
  
Add: income taxes
    
208
    
-
  
Add: depreciation and amortization
    
3,179
    
2,268
  
Add: interest expense
    
1,778
    
758
  
    Less: interest and other income
    
(1,065
)
  
(324
)
EBITDA(1)
  
$
9,713
  
$
5,661
  



(1)
We consider earnings before interest, taxes, depreciation and amortization, or EBITDA, to be a meaningful measure of our operating performance because it is useful in measuring our ability to service debt, fund capital expenditures and expand our business. We believe that EBITDA is a meaningful disclosure that may help shareholders to understand better our financial performance, including comparing our performance to similar numbers reported by other companies; however, EBITDA as presented may be not always comparable to amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations, operating income, cash flow from operations, or any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the United States.



Supplemental Information, page 2 of 5

FIVE STAR QUALITY CARE, INC.
SELECTED BALANCE SHEET DATA
(dollars in thousands)

           
           
   
As of,
  
   
March 31, 2007
  
December 31, 2006
  
Assets
              
Current assets:
              
    Cash and cash equivalents
  
$
46,186
  
$
46,241
  
    Accounts receivable, net of reserve
    
60,210
    
67,791
  
    Prepaid expenses and other current assets
    
33,385
    
41,294
  
    Investments
    
40,759
    
50,434
  
Total current assets
    
180,540
    
205,760
  
               
Long term assets:
              
Property and equipment, net
    
119,924
    
114,898
  
Other long term assets
    
47,160
    
45,753
  
Total assets
  
$
347,624
  
$
366,411
  
               
Liabilities and Shareholders’ Equity
 
              
Current liabilities
 
$
108,900
  
$
132,929
  
Long term liabilities
    
28,642
    
28,098
  
Mortgage payable, long term
    
11,407
    
11,454
  
Convertible senior notes
    
126,500
    
126,500
  
Shareholders’ equity: 31,684,134 and 31,682,134 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively
   
72,175
    
67,430
  
Total liabilities and shareholders’ equity
  
$
347,624
  
$
366,411
  





Supplemental Information, page 3 of 5


FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)



   
Three months ended March 31,
  
   
2007
  
2006
  
           
No. of communities (end of period)
    
160
    
149
  
No. of living units (end of period)
    
17,909
    
16,618
  
               
Occupancy
    
90
%
  
91
%
Average daily rate (ADR)
  
$
136
  
$
133
  
ADR% growth
    
2
%
  
--
  
               
Percent breakdown of net senior living revenues:
              
Medicare
    
15
%
  
15
%
Medicaid
    
18
%
  
19
%
Private
    
67
%
  
66
%
     Total
    
100
%
  
100
%
               
Net senior living revenues
  
$
196,658
  
$
180,788
  
Net senior living revenues % growth
    
9
%
  
--
  
               
Communities expenses(2)
  
$
151,092
  
$
139,323
  
Communities expenses(2) as a % of net senior living revenues
   
77
%
  
77
%
Community expenses(2) % growth
    
8
%
  
--
  
               



(1)
Excludes data for discontinued operations and for pharmacy and hospital operations.
(2)
Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of income.



Supplemental Information, page 4 of 5


FIVE STAR QUALITY CARE, INC.
SAME STORE SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)



   
Three months ended March 31,(2)
  
           
   
2007
  
2006
  
No. of communities (end of period)
    
149
    
149
  
No. of living units (end of period)
    
16,618
    
16,618
  
               
Occupancy
    
91
%
  
91
%
Average daily rate (ADR)
  
$
138
  
$
133
  
ADR% growth
    
4
%
  
--
  
               
Percent breakdown of net senior living revenues:
              
Medicare
    
16
%
  
15
%
Medicaid
    
19
%
  
19
%
Private
    
65
%
  
66
%
    Total
    
100
%
  
100
%
               
Net senior living revenues
 
$
187,695
  
$
180,788
  
Net senior living revenues % growth
    
4
%
  
--
  
               
Communities expenses(2)
  
$
143,764
  
$
139,323
  
Community expenses(3) as a % of net senior living revenues
   
77
%
  
77
%
Communities expenses(3)% growth
   
3
%
  
--
  
               
               



(1)
Excludes data for discontinued operations and for pharmacy and hospital operations.
(2)
Communities that we operated continuously since January 1, 2006.
(3)
Community expenses equal senior living wages and benefits and other senior living operating expenses
.


Supplemental Information, page 5 of 5


FIVE STAR QUALITY CARE, INC.
OTHER OPERATING DATA(1)
(dollars in thousands)



   
Three months ended March 31,
  
   
2007
  
2006 
  
   
 
      
No. of communities(2)(end of period):
              
Assisted living & independent living communities
    
111
    
100
  
Skilled nursing communities
    
49
    
49
  
    Total no. of communities
    
160
    
149
  
               
No. of living units (end of period):
              
Assisted living & independent living communities(3)
    
13,493
    
12,209
  
Skilled nursing communities
    
4,416
    
4,409
  
    Total no. of living units
    
17,909
    
16,618
  
               
Senior living revenue:
              
Assisted living & independent living communities
  
$
134,420
  
$
120,807
  
Skilled nursing communities
    
61,488
    
59,515
  
Other(4)
    
750
    
466
  
    Total senior living revenues
  
$
196,658
  
$
180,788
  


(1)
Excludes data for discontinued operations and for pharmacy and hospital operations.
(2)
Communities are categorized by the type of living units which constitute a majority (or plurality) of the total living units at the community.
(3)
Includes 1,654 and 1,530 skilled nursing units in communities where assisted living and independent living services are the predominant services provided for the three months ended March 31, 2007 and 2006, respectively.
(4)
Other senior living revenue relates primarily to rehabilitation and other specialty service revenue provided at residential facilities but does not include pharmacy or hospital operations.