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 the earliest event reported) May 5, 2008

Assisted Living Concepts, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada
(State or Other Jurisdiction
of Incorporation) 001-13498
(Commission File Number) 93-1148702
(IRS Employer
Identification No.)

W140 N8981 Lilly Road, Menomonee Falls, Wisconsin 53051
(Address of Principal Executive Offices) (Zip Code)

(262) 257-8888
(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:

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))

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition

Item 9.01 Financial Statements and Exhibits

SIGNATURE

Press Release

Item 2.02. Results of Operations and Financial Condition

On May 5, 2008, Assisted Living Concepts, Inc. issued a press release announcing its results of operations and financial condition for its first quarter ended March 31, 2008. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

(c)  Exhibits

The following exhibit is being furnished herewith:

99.1 Press Release of Assisted Living Concepts, Inc. dated May 5, 2008 announcing the results of operations and financial condition for its first quarter ended March 31, 2008.

SIGNATURE

     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 5, 2008	By:	/s/ John Buono
		John Buono
		Senior Vice President, Chief Financial Officer & Treasurer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Assisted Living Concepts, Inc. Announces 2008 First Quarter Results;
Reports Improved Mix and Margins

MENOMONEE FALLS, WISCONSIN May 5, 2008

Highlights:

• Private pay mix as a percent of revenue exceeds 90%

• Adjusted EBITDAR as a percent of revenue exceeds 30%

• Expansion program construction begins — on target for fourth quarter occupancy permits

Assisted Living Concepts, Inc. (“ALC”) (NYSE:ALC) reported net income of $4.1 million in the 2008 first quarter as compared to net income of $4.7 million in the 2007 first quarter.

Diluted earnings per common share for the first quarter of 2008 were $0.06 per share as compared to $0.07 per share for the first quarter of 2007.

“Despite lower same store overall occupancy, we improved revenues and adjusted EBITDAR through strategic acquisitions and cost reductions due to lower Medicaid occupancy,” commented Laurie Bebo, President and Chief Executive Officer of Assisted Living Concepts, Inc. “In addition, we are excited to announce we are in the construction phase of our expansion program and expect to begin occupying new additions by the fourth quarter of 2008. To date, costs are in line with our original estimates.”

Effective January 1, 2008, ALC completed the acquisition of the operations of BBLRG, LLC doing business as Cara Vita, consisting of eight assisted living residences and a total of 541 leased residences for a purchase price (including expenses) of $14.5 million. On January 1, 2008, the Cara Vita residences had 481 occupied units, all private pay. The properties associated with the residences are leased with an initial term expiring in March 2015 with three five-year renewal options. Results of the operations of the Cara Vita residences are included in the 2008 financial data beginning January 1, 2008. ALC does not anticipate making significant operational changes at the Cara Vita residences, however; certain general and administrative expenses are expected to be managed at reduced cost.

Certain non-GAAP financial measures are used in the discussions in this release in evaluating the performance of the business. See attached tables for definitions of adjusted EBITDA and adjusted EBITDAR, reconciliations of net income to adjusted EBITDA and adjusted EBITDAR, calculations of adjusted EBITDA and adjusted EBITDAR as a percentage of total revenues and non-GAAP reconciliation information.

As of March 31, 2008, ALC operated 216 assisted living residences representing 9,076 units.

Quarters ended March 31, 2008, December 31, 2007, March 31, 2007

Revenues of $60.2 million in the first quarter ended March 31, 2008,

• increased $3.7 million or 6.6% from $56.5 million in the fourth quarter of 2007 and

• increased $2.7 million or 4.7% from $57.5 million in the first quarter of 2007.

Adjusted EBITDA for the first quarter of 2008 was $13.3 million, 22.1% of revenues and

• increased $0.9 million (6.8%) from $12.5 million and 22.1% of revenues in the fourth quarter of 2007 and

• increased $0.3 million (1.9%) from $13.1 million and decreased from 22.7% of revenues in the first quarter of 2007.

Adjusted EBITDAR for the first quarter of 2008 was $18.2 million, 30.3% of revenues and

• increased $2.2 million (13.7%) from $16.0 million and 28.4% of revenues in the fourth quarter of 2007 and

• increased $1.5 million (8.7%) from $16.8 million and 29.2% of revenues in the first quarter of 2007.

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First quarter ended March 31, 2008 compared to the fourth quarter ended December 31, 2007

Revenues in the first quarter of 2008 increased from the fourth quarter of 2007 primarily due to additional revenues from acquired residences ($4.4 million) and higher average daily revenue as a result of rate increases ($2.3 million), partially offset by a reduction in the number of units occupied by private pay residents ($1.4 million), the planned reduction in the number of units occupied by Medicaid residents ($1.0 million), and one less day in the 2008 quarter ($0.6 million).

Increased adjusted EBITDA and adjusted EBITDAR in the first quarter of 2008 as compared to the fourth quarter of 2007 resulted primarily from higher revenues as discussed above ($3.7 million) and a reduction in general and administrative expenses ($0.5 million) partially offset by increases in residence operations expenses ($2.0 million), and, for EBITDA, an increase in residence lease expense ($1.3 million). The reduction in general and administrative expenses was primarily related to decreases in salaries and benefits and non-repetitive consulting fees primarily associated with completion of work related to compliance with Sarbanes Oxley Section 404. Residence operations and residence lease expenses increased primarily from the Cara Vita acquisition, partially offset by cost reductions due to lower Medicaid occupancy.

First quarter ended March 31, 2008 compared to the first quarter ended March 31, 2007

Revenues in the first quarter of 2008 increased from the first quarter of 2007 primarily due to additional revenues from acquired residences ($5.1 million), higher average daily revenue as a result of rate increases ($4.0 million), and one additional day in the 2008 quarter ($0.6 million), partially offset by the planned reduction in the number of units occupied by Medicaid residents ($5.4 million), a reduction in the number of units occupied by private pay residents ($1.4 million), and revenue from leasing ALC’s corporate office ($0.2 million) in the 2007 period only.

Adjusted EBITDA and adjusted EBITDAR increased in the first quarter of 2008 primarily due to increased revenues discussed above ($2.7 million), partially offset by an increase in residence operations expenses ($1.1 million), an increase in general and administrative expenses ($0.1 million), and, for adjusted EBITDA, an increase in rental expense ($1.2 million). Residence operations and residence lease expenses increased primarily from the Cara Vita acquisition, partially offset by cost reductions due to lower Medicaid occupancy.

Share repurchase program

On December 14, 2006, ALC announced a share repurchase program for up to $20 million of its Class A common stock. On August 20, 2007 and December 18, 2007, ALC announced that its Board of Directors authorized increases to the stock repurchase program of $20 million and $25 million, respectively, bringing the total authorization to $65 million. In the first quarter of 2008, ALC repurchased 1.5 million shares of its Class A common stock at an aggregate cost of $9.1 million and an average price of $6.01 per share. Under the share repurchase program, ALC has repurchased in the aggregate 6.2 million shares of its Class A common stock at an aggregate cost of $48.2 million and an average price of $7.77 per share.

Expansion Program Update

As of the date of this release ALC has begun construction for the expansion units in its program to add 400 units onto existing ALC residences. We are awaiting construction bids on only a few projects. To date, cost estimates have been consistent with our original estimates of $125,000 per unit. Construction is expected to be completed during the second half of 2008.

Financing Activities

As of March 31, 2008 ALC had availability of $61million under its revolving credit facility.

Investor Call

ALC has scheduled a conference call for tomorrow, May 6, 2008, at 10:00 a.m. (Eastern Time) to discuss financial results for the first quarter. The toll-free number for the live call is 877-764-2008, or international 612-332-1020. A taped rebroadcast will be available approximately one hour following the live call until midnight on June 6, 2008. To access the rebroadcast of the call, dial 800-475-6701, or international 320-365-3844; the access code is 909438.

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About Us

Assisted Living Concepts, Inc. and its subsidiaries operate 216 assisted living residences with capacity for over 9,000 residents in 20 states. ALC’s assisted living facilities typically consist of 40 to 60 units and offer residents a supportive, home-like setting and assistance with the activities of daily living. ALC employs approximately 4,800 people.

Forward-looking Statements
Statements contained in this release other than statements of historical fact, including statements regarding anticipated financial performance, business strategy and management’s plans and objectives for future operations including managements expectations about improving private payer mix, are forward-looking statements. These forward-looking statements generally include words such as “expect”, “intend”, “will”, “anticipate”, “believe”, “estimate”, “plan”, “strategy” or “objective.” Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. In addition to the risks and uncertainties referred to in the release in connection with forward-looking statements, other risks and uncertainties are identified in ALC’s’ filings with United States Securities and Exchange Commissions and include, but are not limited to, the following: changes in the health care industry in general and the long-term senior care industry in particular because of political and economic influences; changes in regulations governing the industry and ALC’s compliance with such regulations; changes in government funding levels for health care services; resident care litigation, including exposure for punitive damage claims and increased insurance costs, and other claims asserted against ALC; ALC’s ability to maintain and increase census levels; ALC’s ability to attract and retain qualified personnel; the availability and terms of capital to fund ALC’s capital expenditures; changes in competition; and demographic changes. Given these risks and uncertainties, readers are cautioned not to place undue reliance on ALC’s forward-looking statements. All forward-looking statements contained in this report are necessarily estimates reflecting the best judgment of the party making such statements based upon current information. ALC assumes no obligation to update any forward-looking statement.

For further information, contact:
Assisted Living Concepts, Inc.
John Buono
Sr. Vice President, Chief Financial Officer and Treasurer
Phone: (262) 257-8999
Fax: (262) 251-7562
Email: jbuono@alcco.com
Visit ALC’s Website @ www.alcco.com

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ASSISTED LIVING CONCEPTS, INC.
Consolidated Statements of Income
(In thousands, except earnings per share)

	Three Months Ended
	March 31,
	2008			2007
Revenues	$	60,247		$	57,521
Expenses:
Residence operations (exclusive of depreciation and amortization and residence lease expense shown below)		38,925			37,758
General and administrative		3,090			2,987
Residence lease expense		4,898			3,699
Depreciation and amortization		4,896			4,181
Transaction costs		—			56
Total operating expenses		51,809			48,681
Income from operations		8,438			8,840
Other expense:
Interest income		179			466
Interest expense		(2,083	)		(1,681	)
Income before income taxes		6,534			7,625
Income tax expense		(2,483	)		(2,898	)
Net income	$	4,051		$	4,727
Weighted average common shares:
Basic		64,545			69,482
Diluted		65,199			70,205
Per share data:
Basic earnings per common share	$	0.06		$	0.07
Diluted earnings per common share	$	0.06		$	0.07
Adjusted EBITDA (1)	$	13,337		$	13,083
Adjusted EBITDAR (1)	$	18,235		$	16,782

(1) See attached tables for definitions of adjusted EBITDA and adjusted EBITDAR and reconciliations of net income to adjusted EBITDA and adjusted EBITDAR.

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ASSISTED LIVING CONCEPTS, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)

	March 31,			December 31,
ASSETS	2008			2007
Current assets:	(Unaudited)
Cash and cash equivalents	$	14,142		$	14,066
Investments		3,608			4,596
Accounts receivable, less allowances of $971 and $992, respectively		3,555			3,746
Supplies, prepaid expenses and other current assets		7,325			6,733
Deferred income taxes		4,287			4,080
Total current assets		32,917			33,221
Property and equipment, net		395,554			395,141
Goodwill and other intangible assets, net		30,892			20,736
Restricted cash		3,800			8,943
Cash designated for acquisition		—			14,864
Other assets		3,440			3,336
Total assets	$	466,603		$	476,241
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,842		$	7,800
Accrued liabilities		18,116			17,951
Deferred revenue		6,989			6,346
Accrued income taxes		127			198
Current maturities of long-term debt		26,260			26,543
Current portion of self-insured liabilities		300			300
Total current liabilities		59,634			59,138
Accrual for self-insured liabilities		1,028			941
Long-term debt		99,735			103,176
Deferred income taxes		7,822			9,008
Other long-term liabilities		9,523			9,444
Commitments and contingencies
Total Liabilities		177,742			181,707
Preferred Stock, par value $0.01 per share, 25,000,000 shares authorized, none issued or outstanding		—			—
Class A Common Stock, par value $0.01 per share, 400,000,000 shares authorized, 54,628,796 and 56,131,873 issued and outstanding, respectively		595			595
Class B Common Stock, par value $0.01 per share, 75,000,000 shares authorized, 8,717,573 and 8,727,458 issued and outstanding, respectively		100			100
Additional paid-in capital		313,551			313,548
Accumulated other comprehensive (loss) income		(524	)		103
Retained earnings		23,369			19,318
Treasury stock at cost, Class A Common Stock 6,204,760 and 4,691,060 shares, respectively		(48,230	)		(39,130	)
Total Stockholders’ Equity		288,861			294,534
Total Liabilities and Stockholders’ Equity	$	466,603		$	476,241

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ASSISTED LIVING CONCEPTS, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2008			2007
OPERATING ACTIVITIES:
Net income	$	4,051		$	4,727
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,896			4,181
Amortization of purchase accounting adjustments for:
Leases and debt		(215	)		(215	)
Below market resident leases		—			(39	)
Provision for bad debt		21			150
Provision for professional/general liability insurance		224			150
Payments for professional/general liability insurance		(126	)		(143	)
Deferred income taxes		2,101			551
Equity-based compensation expense		3			6
Changes in assets and liabilities:
Accounts receivable		170			65
Supplies, prepaid expenses and other current assets		(592	)		350
Accounts payable		42			(1,014	)
Accrued liabilities		(464	)		(1,520	)
Deferred revenue		643			1,962
Income taxes payable/receivable		290			2,461
Other non-current assets		5,039			887
Other long-term liabilities		176			353
Cash provided by operating activities		16,259			12,912
INVESTING ACTIVITIES:
Payment for acquisition		(14,524	)		—
Cash designated for acquisition		14,864			—
Payments for new construction projects		(249	)		(1,152	)
Payments for purchases of property and equipment		(3,557	)		(2,827	)
Cash used in investing activities		(3,466	)		(3,979	)
FINANCING ACTIVITIES:
Capital contributions from Extendicare		—			73
Purchase of treasury stock		(9,100	)		—
Repayment of revolving credit facility		(3,000	)		—
Payments of long-term debt		(617	)		(561	)
Cash used in financing activities		(12,717	)		(488	)
Increase in cash and cash equivalents		76			8,445
Cash and cash equivalents, beginning of year		14,066			19,951
Cash and cash equivalents, end of period	$	14,142		$	28,396
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest	$	2,172		$	1,792
Income tax payments, net of refunds		96			(113	)

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ASSISTED LIVING CONCEPTS, INC.
Financial and Operating Statistics

All continuing residences*	Three months ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Average Occupied Units by Payer Source
Private		5,631			5,316			5,219
Medicaid		873			1,032			1,741
Total		6,504			6,348			6,960
Occupancy Mix by Payer Source
Private		86.6	%		83.7	%		75.0	%
Medicaid		13.4	%		16.3	%		25.0	%
Percent of Revenue by Payer Source
Private		90.6	%		88.1	%		81.4	%
Medicaid		9.4	%		11.9	%		18.6	%
Average Revenue per Occupied Unit Day by Payer Source
Private	$	106.51		$	101.75		$	99.18
Medicaid	$	71.31		$	70.97		$	67.98
Combined	$	101.79		$	96.75		$	91.38
Occupancy Percentage		71.7	%		74.4	%		83.7	%

ASSISTED LIVING CONCEPTS, INC.
Financial and Operating Statistics

Same residence basis**	Three months ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Average Occupied Units by Payer Source
Private		5,065			5,231			5,219
Medicaid		873			1,032			1,741
Total		5,938			6,263			6,960
Occupancy Mix by Payer Source
Private		85.3	%		83.5	%		75.0	%
Medicaid		14.7	%		16.5	%		25.0	%
Percent of Revenue by Payer Source
Private		89.7	%		88.0	%		81.4	%
Medicaid		10.3	%		12.0	%		18.6	%
Average Revenue per Occupied Unit Day by Payer Source
Private	$	107.38		$	102.22		$	99.18
Medicaid	$	71.31		$	70.97		$	67.98
Combined	$	102.08		$	97.07		$	91.38
Occupancy Percentage		71.1	%		75.0	%		83.7	%

** Same residence basis excludes the impact of residents added from the acquisition of the 185 unit residence in Dubuque, Iowa purchased on July 20, 2008 and the Cara Vita Acquisition.

7

Weighted Average Basic and Diluted Shares

          The basic weighted average number of shares of common stock is based upon the number of shares of Class A and Class B common stock of ALC outstanding. For purposes of determining the diluted weighted average number of shares, the Class B shares were deemed to have been converted into Class A shares at the 1 to 1.075 conversion rate applicable to the Class B common stock. This resulted in an additional 0.7 million shares included in the fully diluted weighted average number of shares outstanding in both the quarters ended March 31, 2008 and 2007.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDAR

          Adjusted EBITDA is defined as net income from continuing operations before income taxes, interest expense net of interest income, depreciation and amortization, equity based compensation expense, transaction costs and non-cash, non-recurring gains and losses, including disposal of assets and impairment of long-lived assets and loss on refinancing and retirement of debt. Adjusted EBITDAR is defined as adjusted EBITDA before rent expenses incurred for leased assisted living properties. Adjusted EBITDA and adjusted EBITDAR are not measures of performance under accounting principles generally accepted in the United States of America, or GAAP. We use adjusted EBITDA and adjusted EBITDAR as key performance indicators and adjusted EBITDA and adjusted EBITDAR expressed as a percentage of total revenues as a measurement of margin.

          We understand that EBITDA and EBITDAR, or derivatives thereof, are customarily used by lenders, financial and credit analysts, and many investors as a performance measure in evaluating a company’s ability to service debt and meet other payment obligations or as a common valuation measurement in the long-term care industry. Moreover, ALC’s revolving credit facility contains covenants in which a form of EBITDA is used as a measure of compliance, and we anticipate EBITDA will be used in covenants in any new financing arrangements that we may establish. We believe adjusted EBITDA and adjusted EBITDAR provide meaningful supplemental information regarding our core results because these measures exclude the effects of non-operating factors related to our capital assets, such as the historical cost of the assets.

          We report specific line items separately, and exclude them from adjusted EBITDA and adjusted EBITDAR because such items are transitional in nature and would otherwise distort historical trends. In addition, we use adjusted EBITDA and adjusted EBITDAR to assess our operating performance and in making financing decisions. In particular, we use adjusted EBITDA and adjusted EBITDAR in analyzing potential acquisitions and internal expansion possibilities. Adjusted EBITDAR performance is also used in determining compensation levels for our senior executives. Adjusted EBITDA and adjusted EBITDAR should not be considered in isolation or as a substitute for net income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. We present adjusted EBITDA and adjusted EBITDAR on a consistent basis from period to period, thereby allowing for comparability of operating performance.

8

Adjusted EBITDA and Adjusted EBITDAR Reconciliation Information

The following table sets forth a reconciliation of net income to adjusted EBITDA and adjusted EBITDAR:

	Three Months Ended
	March 31,
	2008		2007
	(In thousands, unaudited)
Net income	$	4,051	$	4,727
Provision for income taxes		2,483		2,898
Income from operations before income taxes		6,534		7,625
Add:
Depreciation and amortization		4,896		4,181
Interest expense, net		1,904		1,215
Transaction costs		—		56
Non-cash equity based compensation		3		6
Adjusted EBITDA		13,337		13,083
Add: Lease expense		4,898		3,699
Adjusted EBITDAR	$	18,235	$	16,782

The following table sets forth the calculations of adjusted EBITDA and adjusted EBITDAR as percentages of total revenue:

	Three Months Ended
	March 31,
	2008			2007
	(Dollars in thousands, unaudited)
Revenues	$	60,247		$	57,521
Adjusted EBITDA	$	13,337		$	13,083
Adjusted EBITDAR	$	18,235		$	16,782
Adjusted EBITDA as percent of total revenue		22.1	%		22.7	%
Adjusted EBITDAR as percent of total revenue		30.3	%		29.2	%

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