Nevada
|
001-13498
|
93-1148702
|
||
(State or Other Jurisdiction
|
(Commission File Number)
|
(IRS Employer
|
||
Of Incorporation)
|
Identification No.)
|
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))
|
99.1
|
Press Release of Assisted Living Concepts, Inc. dated November 4, 2011 announcing the results of operations and financial condition for its third quarter ended September 30, 2011.
|
By:
|
/s/ John Buono
John Buono
|
|||||
Senior Vice President,
|
||||||
Chief Financial Officer & Treasurer
|
§
|
Posted 25% increase in earnings per share over the third quarter of 2010.
|
§
|
Increased average private pay occupancy by 70 and 56 units over the third quarter of 2010 and the second quarter of 2011, respectively.
|
§
|
Increased Adjusted EBITDAR as a percent of revenues to 36.4%, up from 34.5% in the third quarter of 2010.
|
§
|
Increased cash provided by operating activities for the nine months ended September 30, 2011 by 13.7% from the nine months ended September 30, 2010.
|
§
|
Declared quarterly dividend of $0.10 per share
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Diluted earnings per common share
|
$ | 0.25 | $ | 0.20 | $ | 0.73 | $ | 0.47 | ||||||||
Pro forma diluted earnings per common share excluding One-Time Items
|
$ | 0.24 | $ | 0.20 | $ | 0.68 | $ | 0.54 |
1.
|
A reduction in tax expense associated with the settlement of all issues associated with a tax allocation agreement with a subsidiary of our former parent Extendicare Inc. (now Extendicare Real Estate Investment Trust) ($0.0 million and $0.8 million for the quarter and nine months ended September 30, 2011, respectively)
|
2.
|
Income/expense associated with a mark to market adjustment for interest rate swap agreements ($0.1 million income and $0.1 million expense net of tax for the quarter and nine months ended September 30, 2011, respectively)
|
3.
|
The write-off of deferred financing fees associated with our refinanced debt ($0.0 million and $0.2 million net of tax for the quarter and nine months ended September 30, 2011, respectively)
|
4.
|
Gains on sales of equity investments ($0.0 million and $0.6 million net of tax for the quarter and nine months ended September 30, 2011, respectively)
|
5.
|
Income associated with purchase accounting adjustments on repaid debt ($0.1 million and $0.1 million net of tax for the quarter and nine months ended September 30, 2011, respectively)
|
1.
|
The reclassification of a decline in the fair market value of equity securities from a component of the Company’s stockholders’ equity to the Company’s income statement ($1.3 million net of tax).
|
2.
|
The realignment of ALC’s divisional level management structure in order to better match specific operating talents with certain geographical opportunities. In connection with this realignment, ALC incurred certain non-recurring expenses primarily related to personnel ($0.3 million net of tax).
|
3.
|
The decision not to complete an expansion project due to higher than anticipated site costs ($0.1 million net of tax). We will continue to evaluate existing owned properties for expansion growth.
|
§
|
increased $1.1 million or 5.6% from $20.2 million and 34.5% of revenues in the third quarter of 2010; and
|
§
|
decreased $0.4 million or 1.8% from $21.7 million and 37.0% of revenues in the second quarter of 2011.
|
§
|
increased $1.9 million or 12.4% from $15.0 million and 25.7% of revenues in the third quarter of 2010; and
|
§
|
decreased $0.4 million or 2.2% from $17.3 million and 29.5% of revenues in the second quarter of 2011.
|
§
|
increased $4.3 million or 7.3% from $58.5 million and 33.5% of revenues in the nine months ended September 30, 2010.
|
§
|
increased $6.4 million or 14.8% from $43.1 million and 24.7% of revenues in the nine months ended September 30, 2010.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues
|
$
|
58,553
|
$
|
58,529
|
$
|
175,589
|
$
|
174,693
|
||||||||
Expenses:
|
||||||||||||||||
Residence operations (exclusive of depreciation and
|
34,545
|
34,902
|
103,144
|
105,419
|
||||||||||||
amortization and residence lease expense shown below)
|
||||||||||||||||
General and administrative
|
2,928
|
3,664
|
10,558
|
11,694
|
||||||||||||
Residence lease expense
|
4,430
|
5,161
|
13,225
|
15,355
|
||||||||||||
Depreciation and amortization
|
5,807
|
5,745
|
17,260
|
17,113
|
||||||||||||
Total operating expenses
|
47,710
|
49,472
|
144,187
|
149,581
|
||||||||||||
Income from operations
|
10,843
|
9,057
|
31,402
|
25,112
|
||||||||||||
Other (expense) income:
|
||||||||||||||||
Other-than-temporary investments impairment
|
—
|
—
|
—
|
(2,026
|
)
|
|||||||||||
Interest expense:
|
||||||||||||||||
Debt
|
(1,858
|
)
|
(1,893
|
)
|
(6,046
|
)
|
(5,680
|
)
|
||||||||
Change in fair value of derivatives and amortization
|
164
|
—
|
(94
|
)
|
—
|
|||||||||||
Write-off of deferred financing costs
|
—
|
—
|
(279
|
)
|
—
|
|||||||||||
Interest income
|
2
|
2
|
8
|
10
|
||||||||||||
Gain on sale of securities
|
—
|
—
|
910
|
—
|
||||||||||||
Income before income taxes
|
9,151
|
7,166
|
25,901
|
17,416
|
||||||||||||
Income tax expense
|
(3,388
|
)
|
(2,599
|
)
|
(8,851
|
)
|
(6,340
|
)
|
||||||||
Net income
|
$
|
5,763
|
$
|
4,567
|
$
|
17,050
|
$
|
11,076
|
||||||||
Weighted average common shares:
|
||||||||||||||||
Basic
|
22,962
|
23,034
|
22,951
|
23,108
|
||||||||||||
Diluted
|
23,236
|
23,358
|
23,261
|
23,440
|
||||||||||||
Per share data:
|
||||||||||||||||
Basic earnings per common share
|
$
|
0.25
|
$
|
0.20
|
$
|
0.74
|
$
|
0.48
|
||||||||
Diluted earnings per common share
|
$
|
0.25
|
$
|
0.20
|
$
|
0.73
|
$
|
0.47
|
||||||||
Dividend declared and paid per common share
|
$
|
0.10
|
$
|
—
|
$
|
0.20
|
$
|
—
|
||||||||
Adjusted EBITDA (1)
|
$
|
16,895
|
$
|
15,036
|
$
|
49,540
|
$
|
43,136
|
||||||||
Adjusted EBITDAR (1)
|
$
|
21,325
|
$
|
20,197
|
$
|
62,765
|
$
|
58,491
|
||||||||
(1) See attached tables for definitions of Adjusted EBITDA and Adjusted EBITDAR and reconciliations of net income to Adjusted EBITDA and Adjusted EBITDAR
|
September 30,
|
December 31,
|
||||||
2011
|
2010
|
||||||
ASSETS
|
(unaudited)
|
||||||
Current Assets:
|
|||||||
Cash and cash equivalents
|
$
|
2,599
|
$
|
13,364
|
|||
Cash and escrow deposits – restricted
|
3,955
|
3,472
|
|||||
Investments
|
1,708
|
4,599
|
|||||
Accounts receivable, less allowances of $2,433 and $1,414, respectively
|
4,308
|
3,201
|
|||||
Prepaid expenses and other current assets, net
|
4,129
|
3,020
|
|||||
Income tax receivable
|
—
|
356
|
|||||
Deferred income taxes
|
3,560
|
5,108
|
|||||
Current assets of discontinued operations
|
168
|
168
|
|||||
Total current assets
|
20,427
|
33,288
|
|||||
Property and equipment, net
|
431,966
|
437,303
|
|||||
Intangible assets, net
|
9,295
|
10,193
|
|||||
Restricted cash
|
2,044
|
3,448
|
|||||
Other assets
|
2,130
|
872
|
|||||
Total assets
|
$
|
465,862
|
$
|
485,104
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|||||||
Accounts payable
|
$
|
5,740
|
$
|
6,154
|
|||
Accrued liabilities
|
20,139
|
20,173
|
|||||
Deferred revenue
|
9,007
|
4,784
|
|||||
Income tax payable
|
500
|
—
|
|||||
Current maturities of long-term debt
|
2,497
|
2,449
|
|||||
Current portion of self-insured liabilities
|
500
|
500
|
|||||
Total current liabilities
|
38,383
|
34,060
|
|||||
Accrual for self-insured liabilities
|
2,075
|
1,597
|
|||||
Long-term debt, less current portion
|
92,356
|
129,661
|
|||||
Deferred income taxes
|
21,372
|
20,503
|
|||||
Other long-term liabilities
|
9,403
|
10,024
|
|||||
Commitments and contingencies
|
|
||||||
Total liabilities
|
163,589
|
195,845
|
|||||
Preferred Stock, par value $0.01 per share, 25,000,000 shares authorized; no shares issued and outstanding
|
—
|
—
|
|||||
Class A Common Stock, $0.01 par value, 160,000,000 shares authorized at September 30, 2011 and December 31, 2010; 24,970,599 and 24,816,738 shares issued and 20,038,727 and 19,934,066 shares outstanding, respectively
|
250
|
248
|
|||||
Class B Common Stock, $0.01 par value, 30,000,000 shares authorized at September 30, 2011 and December 31, 2010; 2,926,932 and 3,040,620 shares issued and outstanding, respectively
|
29
|
30
|
|||||
Additional paid-in capital
|
316,387
|
315,153
|
|||||
Accumulated other comprehensive income/(loss)
|
26
|
(95
|
)
|
||||
Retained earnings
|
62,426
|
49,970
|
|||||
Treasury stock at cost, 4,931,872 and 4,882,672 shares, respectively
|
(76,845
|
)
|
(76,047
|
)
|
|||
Total stockholders’ equity
|
302,273
|
289,259
|
|||||
Total liabilities and stockholders’ equity
|
$
|
465,862
|
$
|
485,104
|
Nine Months Ended
|
|||||||
September 30,
|
|||||||
2011
|
2010
|
||||||
OPERATING ACTIVITIES:
|
|||||||
Net income
|
$
|
17,050
|
$
|
11,076
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation and amortization
|
17,260
|
17,113
|
|||||
Other-than-temporary investments impairment
|
—
|
2,026
|
|||||
Amortization of purchase accounting adjustments for leases
|
(544
|
)
|
(295
|
)
|
|||
Provision for bad debts
|
1,019
|
270
|
|||||
Provision for self-insured liabilities
|
765
|
455
|
|||||
(Gain)/Loss on disposal of fixed assets
|
(95
|
)
|
279
|
||||
Unrealized and realized gain on investments
|
(910
|
)
|
—
|
||||
Equity-based compensation expense
|
973
|
614
|
|||||
Change in fair value of derivatives and amortization
|
94
|
—
|
|||||
Deferred income taxes
|
2,344
|
3,464
|
|||||
Changes in assets and liabilities:
|
|||||||
Accounts receivable
|
(2,126
|
)
|
(811
|
)
|
|||
Supplies, prepaid expenses and other receivables
|
(1,109
|
)
|
(248
|
)
|
|||
Deposits in escrow
|
(483
|
)
|
(271
|
)
|
|||
Current assets – discontinued operations
|
—
|
(132
|
)
|
||||
Accounts payable
|
(265
|
)
|
(446
|
)
|
|||
Accrued liabilities
|
749
|
670
|
|||||
Deferred revenue
|
4,223
|
288
|
|||||
Current liabilities – discontinued operations
|
—
|
(34
|
)
|
||||
Payments of self-insured liabilities
|
(287
|
)
|
(389
|
)
|
|||
Income taxes payable / receivable
|
856
|
664
|
|||||
Changes in other non-current assets
|
2,049
|
1,394
|
|||||
Other non-current assets – discontinued operations
|
—
|
399
|
|||||
Other long-term liabilities
|
(273
|
)
|
225
|
||||
Cash provided by operating activities
|
41,290
|
36,311
|
|||||
INVESTING ACTIVITIES:
|
|||||||
Payment for securities
|
(156
|
)
|
(163
|
)
|
|||
Proceeds on sales of securities
|
3,274
|
—
|
|||||
Payments for new construction projects
|
(523
|
)
|
(4,622
|
)
|
|||
Payments for purchases of property and equipment
|
(10,702
|
)
|
(7,609
|
)
|
|||
Proceeds from the sale of fixed assets
|
146
|
—
|
|||||
Cash used in investing activities
|
(7,961
|
)
|
(12,394
|
)
|
|||
FINANCING ACTIVITIES:
|
|||||||
Payments of financing costs
|
(1,903
|
)
|
—
|
||||
Purchase of treasury stock
|
(798
|
)
|
(2,041
|
)
|
|||
Proceeds on borrowings from revolving credit facility
|
81,000
|
—
|
|||||
Repayments on borrowings from revolving credit facility
|
(63,000
|
)
|
—
|
||||
Repayment of GE credit facility
|
(50,000
|
)
|
—
|
||||
Proceeds from issuance of new mortgage debt
|
—
|
12,250
|
|||||
Repayment of mortgage debt
|
(5,061
|
)
|
(1,383
|
)
|
|||
Issuance of Class A common stock for stock options
|
262
|
31
|
|||||
Dividends paid to stockholders
|
(4,594
|
)
|
—
|
||||
Cash (used)/provided by financing activities
|
(44,094
|
)
|
8,857
|
||||
(Decrease)/increase in cash and cash equivalents
|
(10,765
|
)
|
32,774
|
||||
Cash and cash equivalents, beginning of year
|
13,364
|
4,360
|
|||||
Cash and cash equivalents, end of period
|
$
|
2,599
|
$
|
37,134
|
|||
Supplemental schedule of cash flow information:
|
|||||||
Cash paid during the period for:
|
|||||||
Interest
|
$
|
5,915
|
$
|
5,350
|
|||
Income tax payments, net of refunds
|
6,287
|
2,178
|
Continuing residences*
|
Three Months Ended
|
|||||||||||
September 30,
2011
|
June 30,
2011
|
September 30,
2010
|
||||||||||
Average Occupied Units by Payer Source
|
||||||||||||
Private
|
5,562 | 5,506 | 5,492 | |||||||||
Medicaid
|
66 | 81 | 123 | |||||||||
Total
|
5,628 | 5,587 | 5,615 | |||||||||
Occupancy Mix by Payer Source
|
||||||||||||
Private
|
98.8 | % | 98.6 | % | 97.8 | % | ||||||
Medicaid
|
1.2 | % | 1.4 | % | 2.2 | % | ||||||
Percent of Revenue by Payer Source
|
||||||||||||
Private
|
99.3 | % | 99.1 | % | 98.7 | % | ||||||
Medicaid
|
0.7 | % | 0.9 | % | 1.3 | % | ||||||
Average Revenue per Occupied Unit Day
|
$ | 113.09 | $ | 115.31 | $ | 113.29 | ||||||
Occupancy Percentage*
|
62.4 | % | 62.1 | % | 62.3 | % |
Same residence basis**
|
Three Months Ended
|
|||||||||||
September 30,
2011
|
June 30,
2011
|
September 30,
2010
|
||||||||||
Average Occupied Units by Payer Source
|
||||||||||||
Private
|
5,531 | 5,488 | 5,452 | |||||||||
Medicaid
|
66 | 81 | 115 | |||||||||
Total
|
5,597 | 5,569 | 5,567 | |||||||||
Occupancy Mix by Payer Source
|
||||||||||||
Private
|
98.8 | % | 98.6 | % | 97.9 | % | ||||||
Medicaid
|
1.2 | % | 1.4 | % | 2.1 | % | ||||||
Percent of Revenue by Payer Source
|
||||||||||||
Private
|
99.3 | % | 99.1 | % | 98.8 | % | ||||||
Medicaid
|
0.7 | % | 0.9 | % | 1.2 | % | ||||||
Average Revenue per Occupied Unit Day
|
$ | 112.98 | $ | 115.24 | $ | 113.34 | ||||||
Occupancy Percentage
|
62.7 | % | 62.4 | % | 62.4 | % |
Continuing residences*
|
Nine Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
Average Occupied Units by Payer Source
|
||||||||
Private
|
5,522 | 5,479 | ||||||
Medicaid
|
80 | 166 | ||||||
Total
|
5,602 | 5,645 | ||||||
Occupancy Mix by Payer Source
|
||||||||
Private
|
98.6 | % | 97.1 | % | ||||
Medicaid
|
1.4 | % | 2.9 | % | ||||
Percent of Revenue by Payer Source
|
||||||||
Private
|
99.2 | % | 98.1 | % | ||||
Medicaid
|
0.8 | % | 1.9 | % | ||||
Average Revenue per Occupied Unit Day
|
$ | 114.81 | $ | 113.36 | ||||
Occupancy Percentage*
|
62.3 | % | 62.7 | % |
Same residence basis**
|
Nine Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
Average Occupied Units by Payer Source
|
||||||||
Private
|
5,480 | 5,430 | ||||||
Medicaid
|
80 | 154 | ||||||
Total
|
5,560 | 5,584 | ||||||
Occupancy Mix by Payer Source
|
||||||||
Private
|
98.6 | % | 97.2 | % | ||||
Medicaid
|
1.4 | % | 2.8 | % | ||||
Percent of Revenue by Payer Source
|
||||||||
Private
|
99.1 | % | 98.2 | % | ||||
Medicaid
|
0.9 | % | 1.8 | % | ||||
Average Revenue per Occupied Unit Day
|
$ | 114.41 | $ | 113.43 | ||||
Occupancy Percentage
|
62.5 | % | 62.7 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||
September 30,
2011
|
September 30,
2010
|
June 30,
2011
|
September 30,
2011
|
September 30,
2010
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Net income
|
$ | 5,763 | $ | 4,567 | $ | 6,276 | $ | 17,050 | $ | 11,076 | ||||||||||
Add provision for income taxes
|
3,388 | 2,599 | 3,722 | 8,851 | 6,340 | |||||||||||||||
Income before income taxes
|
$ | 9,151 | $ | 7,166 | $ | 9,998 | $ | 25,901 | $ | 17,416 | ||||||||||
Add:
|
||||||||||||||||||||
Depreciation and amortization
|
5,807 | 5,745 | 5,712 | 17,260 | 17,113 | |||||||||||||||
Interest expense, net
|
2,024 | 1,891 | 2,102 | 6,206 | 5,670 | |||||||||||||||
Non-cash equity based compensation
|
299 | 252 | 393 | 973 | 614 | |||||||||||||||
(Gain)/loss on disposal of fixed assets
|
(54 | ) | (36 | ) | (41 | ) | (95 | ) | 279 | |||||||||||
Write-down of equity investments
|
- | - | - | - | 2,026 | |||||||||||||||
Gain on sale of equity investments
|
- | - | (854 | ) | (910 | ) | - | |||||||||||||
Recovery of purchase accounting associated with early termination of debt
|
(168 | ) | - | - | (168 | ) | - | |||||||||||||
Transaction expense associated with property acquisition
|
- | 18 | - | - | 18 | |||||||||||||||
Change in value of derivative and amortization
|
(164 | ) | - | (29 | ) | 94 | - | |||||||||||||
Write-off of deferred financing fees
|
- | - | - | 279 | - | |||||||||||||||
Adjusted EBITDA
|
16,895 | 15,036 | 17,281 | 49,540 | 43,136 | |||||||||||||||
Add: Lease expense
|
4,430 | 5,161 | 4,427 | 13,225 | 15,355 | |||||||||||||||
Adjusted EBITDAR
|
$ | 21,325 | $ | 20,197 | $ | 21,708 | $ | 62,765 | $ | 58,491 | ||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||
September 30,
2011
|
September 30,
2010
|
June 30,
2011
|
September 30,
2011
|
September 30,
2010
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Revenues
|
$ | 58,553 | $ | 58,529 | $ | 58,627 | $ | 175,589 | $ | 174,693 | ||||||||||
Adjusted EBITDA
|
$ | 16,895 | $ | 15,036 | $ | 17,281 | $ | 49,540 | $ | 43,136 | ||||||||||
Adjusted EBITDAR
|
$ | 21,325 | $ | 20,197 | $ | 21,708 | $ | 62,765 | $ | 58,491 | ||||||||||
Adjusted EBITDA as percent of total revenues
|
28.9 | % | 25.7 | % | 29.5 | % | 28.2 | % | 24.7 | % | ||||||||||
Adjusted EBITDAR as percent of total revenues
|
36.4 | % | 34.5 | % | 37.0 | % | 35.7 | % | 33.5 | % |
Three Months Ended
September 30, 2011
|
Three Months Ended
September 30, 2010
|
Nine Months Ended
September 30, 2011
|
Nine Months Ended
September 30, 2010
|
|||||||||||||
(dollars in thousands except per share data) | ||||||||||||||||
Net income
|
$ | 5,763 | $ | 4,567 | $ | 17,050 | $ | 11,076 | ||||||||
Add one time charges:
|
||||||||||||||||
Write down of equity investments
|
- | - | - | 2,026 | ||||||||||||
Write-off of deferred financing costs
|
- | - | 279 | - | ||||||||||||
Change in value of derivative net of amortization
|
- | - | 94 | - | ||||||||||||
Loss on disposal of fixed assets related to expansion project
|
- | - | - | 125 | ||||||||||||
Division realignment expense
|
- | - | - | 453 | ||||||||||||
Less one time credits:
|
||||||||||||||||
Settlement relating to tax allocation agreement
|
- | - | 750 | - | ||||||||||||
Change in value of derivative net of amortization
|
164 | - | - | - | ||||||||||||
Gain on sale of equity investments
|
- | - | 910 | - | ||||||||||||
Recovery of purchase accounting associated with early termination of debt
|
168 | - | 168 | - | ||||||||||||
Net tax (expense) / benefit from charges and credits
|
(123 | ) | - | (262 | ) | 933 | ||||||||||
Pro forma net income excluding one-time charges and credits
|
$ | 5,554 | $ | 4,567 | $ | 15,857 | $ | 12,747 | ||||||||
Weighted average common shares:
|
||||||||||||||||
Basic
|
22,962 | 23,034 | 22,951 | 23,108 | ||||||||||||
Diluted
|
23,236 | 23,358 | 23,261 | 23,440 | ||||||||||||
Per share data:
|
||||||||||||||||
Basic earnings per common share
|
||||||||||||||||
Net income
|
$ | 0.25 | $ | 0.20 | $ | 0.74 | $ | 0.48 | ||||||||
Less: gain/ (loss) from one time charges and credits
|
.01 | - | 0.05 | (0.07 | ) | |||||||||||
Pro forma net income excluding one-time charges and credits
|
$ | 0.24 | $ | 0.20 | $ | 0.69 | $ | 0.55 | ||||||||
Diluted earnings per common share*
|
||||||||||||||||
Net income
|
$ | 0.25 | $ | 0.20 | $ | 0.73 | $ | 0.47 | ||||||||
Less: gain/ (loss) from one time charges and credits
|
.01 | - | 0.05 | (0.07 | ) | |||||||||||
Pro forma net income excluding one-time charges and credits
|
$ | 0.24 | $ | 0.20 | $ | 0.68 | $ | 0.54 |