8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): March 3, 2008 (March 3, 2008)

FIVE STAR QUALITY CARE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland

(State or Other Jurisdiction of Incorporation)

1-16817	04-3516029
(Commission File Number)	(IRS Employer Identification No.)

400 Centre Street, Newton, Massachusetts	02458
(Address of Principal Executive Offices)	(Zip Code)

617-796-8387

(Registrant’s Telephone Number, Including Area Code)

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:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    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 March 3, 2008, Five Star Quality Care, Inc., or the Company, issued a press release setting forth the Company’s results of operations and financial condition as of and for the quarter and twelve months ended December 31, 2007. A copy of the Company’s press release is furnished as Exhibit 99.1 hereto.

Item 9.01.  Financial Statements and Exhibits.

(d)           Exhibits.

The Company hereby furnishes the following exhibit:

99.1     Press Release dated March 3, 2008.

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.

FIVE STAR QUALITY CARE, INC.

By: /s/ Bruce J. Mackey Jr.      

Name:  Bruce J. Mackey Jr.

Title: Treasurer and Chief Financial Officer

Date: March 3, 2008

EX-99.1

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

EXHIBIT 99.1

FOR IMMEDIATE RELEASE	Contact:  Timothy A. Bonang, Manager of Investor Relations, or
	Katherine L. Johnston, Investor Relations Analyst
	(617) 796-8245
	www.fivestarqualitycare.com

Five Star Quality Care, Inc. Reports Fourth Quarter 2007 Results

____________________________________

Newton, MA (March 3, 2008).  Five Star Quality Care, Inc. (AMEX: FVE) today announced its financial results for the quarter and year ended December 31, 2007.

Fourth Quarter 2007 Financial Highlights

§ Total revenues for the quarter increased to $251.2 million from $234.6 million for the same period last year.

§ Net income per share from continuing operations, basic and diluted, for the fourth quarter were $0.22 and $0.20, respectively, compared to a loss of $1.04, basic and diluted, for the same period last year.

§ The weighted average number of basic and diluted common shares outstanding totaled 31,757,755 and 41,488,524, respectively for the quarter ended December 31, 2007, and 31,581,456, basic and diluted, for the quarter ended December 31, 2006.

Fourth Quarter 2007 Operational Highlights (senior living communities)

§ Overall occupancy for the quarter was 90.3% compared with 90.1% for the same period a year ago.

§ For those senior living communities that Five Star has operated continuously since October 1, 2006 (comparable communities), occupancy for the quarter was 90.4% compared with 90.7% in the fourth quarter of 2006.

§ Average daily rate for the quarter increased by 6%, to $140, over the same period a year ago.

§ Comparable communities average daily rate for the quarter increased by 6%, to $148, over the same period a year ago.

§ The percent of revenue derived from residents’ private resources in the quarter was 66% compared to 67% for the fourth quarter of 2006.

§ Wages and benefits as a percent of senior living revenues for the quarter were 49.8% compared with 51.1% for the fourth quarter of 2006.

Results for the year ended December 31, 2007:

§ Total revenues for year ended December 31, 2007 increased to $972.9 million from $815.6 million for the same period last year.

§ Net income per share from continuing operations, basic and diluted, for the year ended December 31, 2007 were $0.82 and $0.75, respectively, compared to a loss of $3.83, basic and diluted, for the same period last year. During the year ended December 31, 2007, Five Star recognized a gain on extinguishment of debt totaling $4.5 million, or $0.14 and $0.11 per share from continuing operations, basic and diluted, respectively.

§ The weighted average number of basic and diluted common shares outstanding totaled 31,710,252and 41,488,524, respectively for the year ended December 31, 2007 and 28,604,617 basic and diluted, for the year ended December 31, 2006.

Conference Call:

On March 3, 2008 at 11:00 a.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 fourth quarter and year end 2007 financial results.  Following the company’s remarks, there will be a question and answer period.

The conference call telephone number is (888) 663-2259.  Participants calling from outside the United States and Canada should dial (913) 312-1464. 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 12:00 a.m. Eastern Time Monday, March 10, 2008. To hear the replay, dial (719) 457-0820.  The replay pass code is 7731403.

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.  Five Star owns, leases and operates 161 senior living communities with over 17,900 living units located in 29 states.  These communities include independent living, assisted living and skilled nursing communities.  Five Star also operates five institutional pharmacies and two rehabilitation hospitals.  Five Star is headquartered in Newton, Massachusetts.

Supplemental Information, page 1of 6

FIVE STAR QUALITY CARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

	Three months ended  December 31,						Year ended December 31,
	2007			2006				2007			2006
Revenues:
Senior living revenue	$	208,615		$	196,299		$	809,934		$	744,897
Hospital revenue		25,294			25,494			102,005			25,494
Pharmacy revenue		17,251			12,777			60,985			45,195
Total revenues		251,160			234,570			972,924			815,586
Operating expenses:
Senior living wages and benefits		103,950			100,390			410,447			382,093
Other senior living operating expenses		52,795			47,473			202,194			186,396
Hospital expenses		22,864			22,722			92,449			22,954
Pharmacy expenses		16,171			13,406			58,012			44,579
Management fee to Sunrise		-			952			-			8,744
Termination expense for certain Sunrise management agreements		-			40,080			-			129,913
Rent expense		32,453			31,248			129,190			109,256
General and administrative expenses		11,670			9,962			43,373			33,829
Depreciation and amortization		3,654			2,803			13,595			9,851
Total operating expenses		243,557			269,036			949,260			927,615
Operating income (loss)		7,603			(34,466	)		23,664			(112,029	)
Interest and other income		1,809			3,772			6,152			6,806
Interest and other expense		(1,883	)		(1,946	)		(6,802	)		(4,364	)
Gain on extinguishment of debt		-			-			4,491			-
Income (loss) from continuing operations before income taxes		7,529			(32,640	)		27,505			(109,587	)
Provision for income taxes		650			-			1,410			-
Income (loss) from continuing operations		6,879			(32,640	)		26,095			(109,587	)
Loss from discontinued operations		(157	)		(1,690	)		(2,769	)		(7,078	)
Net income (loss)	$	6,722		$	(34,330	)	$	23,326		$	(116,665	)
Weighted average shares outstanding  - basic		31,758			31,581			31,710			28,605
Weighted average shares outstanding  - diluted		41,489			31,581			41,441			28,605
Basic income (loss) per share from:
Continuing operations	$	0.22		$	(1.04	)	$	0.82		$	(3.83	)
Discontinued operations		(0.01	)		(0.05	)		(0.08	)		(0.25	)
Net income (loss) per share	$	0.21		$	(1.09	)	$	0.74		$	(4.08	)
Diluted income (loss) per share from:
Continuing operations	$	0.20		$	(1.04	)	$	0.75		$	(3.83	)
Discontinued operations		(0.01	)		(0.05	)		(0.07	)		(0.25	)
Net income (loss) per share	$	0.19		$	(1.09	)	$	0.68		$	(4.08	)
EBITDA(1):
Income (loss) from continuing operations:	$	6,879		$	(32,640	)	$	26,095		$	(109,587	)
Add: income taxes		650			-			1,410			-
Add: depreciation and amortization		3,654			2,803			13,595			9,851
Add: interest and other expense		1,883			1,946			6,802			4,364
Less: interest and other income		(1,809	)		(3,772	)		(6,152	)		(6,806	)
EBITDA	$	11,257		$	(31,663	)	$	41,750		$	(102,178	)

(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 established by accounting principles generally accepted in the United States.

Supplemental Information, page 2 of 6

FIVE STAR QUALITY CARE, INC.

SELECTED BALANCE SHEET DATA

(dollars in thousands)

	December 31,		December 31,
	2007		2006
Assets
Current assets:
Cash and cash equivalents	$	30,999	$	46,241
Accounts receivable, net of reserve		58,803		67,791
Prepaid expenses and other current assets		23,782		41,294
Investment securities:
Investments in trading securities		61,800		46,100
Investments in available-for-sale securities		7,455		4,334
Assets of discontinued operations		3,178		-
Total current assets		186,017		205,760
Long term assets:
Property and equipment, net		131,705		114,898
Other long term assets		42,732		45,753
Total assets	$	360,454	$	366,411
Liabilities and Shareholders’ Equity
Current liabilities	$	104,063	$	132,929
Long term liabilities		27,259		28,098
Mortgage notes payable, long term		15,810		11,454
Convertible Senior notes		126,500		126,500
Shareholders’ equity: 31,818,144 and 31,682,134 shares    issued and outstanding at December 31, 2007 and    2006, respectively		86,822		67,430
Total liabilities and shareholders’ equity	$	360,454	$	366,411

Supplemental Information, page 3 of 6

FIVE STAR QUALITY CARE, INC.

SENIOR LIVING COMMUNITY OPERATING DATA(1)

(dollars in thousands, except average daily rate)

	Three months ended December 31,						Year ended December 31,
	2007			2006			2007			2006
No. of communities (end of period)		161			160			161			160
No. of living units (end of period)		17,906			17,935			17,906			17,935
Occupancy		90.3	%		90.1	%		90.3	%		90.9	%
Average daily rate (ADR)	$	140		$	132		$	137		$	125
ADR % growth		6	%		--			10	%		--
Percent breakdown of net senior living revenues:
Medicare		15	%		14	%		15	%		14	%
Medicaid		19	%		19	%		19	%		19	%
Private		66	%		67	%		66	%		67	%
Total		100	%		100	%		100	%		100	%
Net senior living revenues	$	208,615		$	196,299		$	809,934		$	744,897
Net senior living revenues % growth		6	%		--			9	%		--
Community expenses (2)	$	156,745		$	147,863		$	612,641		$	568,489
Community expenses (2) as a % of net senior living revenues		75	%		75	%		76	%		76	%
Community expenses (2) % growth		6	%		--			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 6

FIVE STAR QUALITY CARE, INC.

COMPARABLE SENIOR LIVING COMMUNITY OPERATING DATA(1)

(dollars in thousands, except average daily rate)

	Three months ended December 31, (2)						Year ended December 31, (3)
	2007			2006			2007			2006
No. of communities (end of period)		154			154			149			149
No. of living units (end of period)		17,342			17,434			16,594			16,594
Occupancy		90.4	%		90.7	%		90.8	%		91.1	%
Average daily rate (ADR)	$	148		$	140		$	140		$	133
ADR % growth		6	%		--			5	%		--
Percent breakdown of net senior living revenues:
Medicare		16	%		15	%		16	%		14	%
Medicaid		19	%		19	%		19	%		19	%
Private		65	%		66	%		65	%		67	%
Total		100	%		100	%		100	%		100	%
Senior living revenues	$	204,129		$	193,170		$	772,602		$	735,122
Senior living revenues  % growth		6	%		--			5	%		--
Community expenses (4)	$	153,123		$	145,508		$	581,624		$	561,000
Community expenses (4) as a % of net senior living revenues		75	%		75	%		75	%		76	%
Community expenses (4) % growth		5	%		--			4	%		--

(1) Excludes data for discontinued operations and for pharmacy and hospital operations.

(2) Communities that we operated continuously since October 1, 2006.

(3) Communities that we operated continuously since January 1, 2006.

(4) Community expenses equal senior living wages and benefits and other senior living operating expenses.

Supplemental Information, page 5 of 6

FIVE STAR QUALITY CARE, INC.

OTHER OPERATING DATA(1)

(dollars in thousands)

	Three months ended December 31,				Year ended December 31,
	2007		2006		2007		2006
No. of communities (2) (end of period):
Assisted living & independent living communities, owned		13		12		13		12
Assisted living & independent living communities, leased		99		99		99		99
Total no. of assisted living & independent living communities		112		111		112		111
Skilled nursing communities, owned		2		2		2		2
Skilled nursing communities, leased		47		47		47		47
Total no. of skilled nursing communities		49		49		49		49
Total no. of communities		161		160		161		160
No. of living units (end of period):
Assisted living & independent living communities, owned		1,068		1,007		1,068		1,007
Assisted living & independent living communities, leased (3)		12,434		12,512		12,434		12,512
Total no. of assisted living & independent living units		13,502		13,519		13,502		13,519
Skilled nursing communities, owned		271		273		271		273
Skilled nursing communities, leased (4)		4,133		4,143		4,133		4,143
Total no. of skilled nursing living units		4,404		4,416		4,404		4,416
Total no. of living units		17,906		17,935		17,906		17,935
Rehabilitation hospital units		321		321		321		321
Senior living revenues:
Assisted living & independent living communities	$	140,733	$	132,830	$	549,622	$	499,504
Skilled nursing communities		66,203		62,448		254,756		242,843
Other (5)		1,679		1,021		5,556		2,550
Total senior living revenues	$	208,615	$	196,299	$	809,934	$	744,897

Assisted living & independent living communities occupancy		91.1	%		90.7	%		91.1	%		91.8	%
Assisted living & independent living communities ADR	$	124		$	118		$	122		$	110
Assisted living & independent living communities ADR % growth		5	%		-			11	%		-
Skilled nursing communities occupancy		87.8	%		88.5	%		87.8	%		88.5	%
Skilled nursing communities ADR	$	186		$	174		$	181		$	170
Skilled nursing communities ADR % growth		7	%		-			6	%		-
Rehabilitation hospital occupancy		62.1	%		63.7	%		63.5	%		63.7	%

(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 1,718 and 1,654 skilled nursing units in communities where assisted living and independent living services are the predominant services provided for the three months and year ended December 31, 2007 and 2006, respectively.
(4)	Includes 66 and 95 assisted living and independent living units in communities where skilled nursing services are the predominant services provided for the three months and year ended December 31, 2007 and 2006, respectively.
(5)	Other senior living revenue relates primarily to rehabilitation and other specialty service revenues provided at residential facilities and does not include pharmacy or hospital operations.

Supplemental Information, page 6 of 6

Reconciliation of Income from Continuing Operations excluding Termination Charges to Loss from Continuing Operations for the three months and year ended December 31, 2006 (dollars in thousands, except per share data):

	For the three months ended December 31, 2006						For the year ended December 31, 2006
	Amount			Per Share(2)			Amount			Per Share(2)
Income from continuing operations excluding termination charges(1)	$	7,440		$	0.24		$	20,326		$	0.71
Termination expense for certain Sunrise management agreements		(40,080	)					(129,913	)
Loss from continuing operations	$	(32,640	)	$	(1.03	)	$	(109,587	)	$	(3.83	)

(1) We believe these adjusted amounts are a meaningful disclosure that may help shareholders to understand better our results of operations for the periods shown.  This information should not be considered as an alternative to income (loss) from continuing operations or income (loss) from continuing operations per share or any other operating or performance measure established by accounting principles generally accepted in the United States.

(2) Both basic and diluted.