Five Star Quality Care, Inc. (NYSE:FVE) today announced certain
preliminary financial data and information for the quarter and nine
months ended September 30, 2013.
As described below, at this time we are not reporting income from
continuing operations, income (loss) from discontinued operations, or
net income because we recently discovered non-cash errors in our
historical accounting accruals for income taxes in certain periods.
Third Quarter 2013 Financial Highlights:
-
Total revenues from continuing operations for the third quarter of
2013 increased 9.3% to $324.7 million from $297.1 million for the same
period in 2012. Our senior living revenues and management fee revenues
from continuing operations for the third quarter of 2013 increased
1.1% to $272.7 million from $269.9 million for the same period in 2012.
-
Earnings from continuing operations before interest, taxes,
depreciation and amortization, or EBITDA from continuing operations,
for the third quarter of 2013 was $9.3 million compared to $12.1
million for the same period in 2012. EBITDA from continuing operations
excluding certain items was $10.0 million and $12.1 million for the
third quarters of 2013 and 2012, respectively. A reconciliation of
income from continuing operations before income taxes determined in
accordance with U.S. generally accepted accounting principles, or
GAAP, to EBITDA from continuing operations and EBITDA from continuing
operations excluding certain items for the quarters ended September
30, 2013 and 2012 appears later in this press release.
-
Income from continuing operations before income taxes for the third
quarter of 2013 was $1.6 million, compared to $4.3 million for the
same period in 2012. Income from continuing operations before income
taxes for the third quarter of 2013 included a loss on early
extinguishment of debt of $599,000.
Third Quarter 2013 Operating Highlights (continuing operations):
-
Occupancy at our owned and leased senior living communities for the
third quarter of 2013 was 85.9% compared to 86.2% for the same period
in 2012.
-
The average monthly rate at our owned and leased senior living
communities for the third quarter of 2013 increased by 1.5% to $4,411
from $4,345 for the same period in 2012.
-
The percentage of revenues derived from residents’ private resources
at our owned and leased senior living communities for the third
quarter of 2013 increased 50 basis points to 77.1% from 76.6% for the
same period in 2012.
Year to Date Financial Highlights:
-
Total revenues from continuing operations for the nine months ended
September 30, 2013 increased 9.9% to $972.0 million from $884.8
million for the same period in 2012. Our senior living revenues and
management fee revenues from continuing operations for the nine months
ended September 30, 2013 increased 1.0% to $815.8 million from $808.0
million for the same period in 2012.
-
EBITDA from continuing operations for the nine months ended September
30, 2013 was $30.3 million compared to $38.0 million for the same
period in 2012. EBITDA from continuing operations excluding certain
items was $31.0 million and $34.6 million for the nine months ended
September 30, 2013 and 2012, respectively. A reconciliation of income
from continuing operations before income taxes determined in
accordance with GAAP to EBITDA from continuing operations and EBITDA
from continuing operations excluding certain items for the nine months
ended September 30, 2013 and 2012 appears later in this press release.
-
Income from continuing operations before income taxes for the nine
months ended September 30, 2013 was $7.2 million compared to $15.6
million for the same period in 2012. Income from continuing operations
before income taxes for the nine months ended September 30, 2013
included a loss on early extinguishment of debt of $599,000. Income
from continuing operations before income taxes for the nine months
ended September 30, 2012 included a gain on settlement of litigation
of $3.4 million.
Accounting for Income Taxes:
In connection with the preparation of our Quarterly Report on Form 10-Q
for the quarter ended September 30, 2013, our management identified
errors relating to our accounting for income taxes in prior periods that
resulted primarily from the accounting for our deferred income taxes.
These items are non-cash and the net effect of correcting the errors is
expected to increase our net deferred tax assets and to increase our
benefit for income taxes. Our management is currently evaluating our
accounting for these items, and is working with the Audit Committee of
our Board of Directors and Ernst & Young LLP, our independent registered
public accounting firm, to determine what changes, if any, to our
historical or future accounting may be appropriate. We do not expect to
file our Quarterly Report on Form 10-Q for the quarter ended September
30, 2013 when due; instead, we intend to file a notification of late
filing on Form 12b-25, which form and related rule provide for a five
day extension to file. We can provide no assurances that we will file
our Quarterly Report on Form 10-Q by the expiration of that five day
extension period. We have not concluded if we will be required to
restate any previously issued financial statements or whether any such
financial statements should no longer be relied upon nor have we made a
determination as to the effect of these matters on management’s
assessment of the effectiveness of our disclosure controls and
procedures or our internal control over financial reporting. For these
reasons, at this time we are not reporting our income from continuing
operations, income (loss) from discontinued operations, or net income
for the three and nine months ended September 30, 2013 and 2012.
Other Highlights:
In August 2013, we began managing a senior living community in Georgia
with 93 living units. Also in October 2013, we began managing two senior
living communities in Georgia with a combined total of 153 living units
and a senior living community in Tennessee with 60 living units. In
November 2013, we began managing a senior living community in Wisconsin
with 68 living units. These five communities are owned by Senior Housing
Properties Trust, or SNH, in a taxable subsidiary.
In June 2013, we agreed to offer for sale 11 senior living communities
with 753 living units. Seven of these communities with 578 living units
are skilled nursing facilities, or SNFs, and four of these communities
with 175 living units are assisted living communities. Ten of these
communities are owned by and leased from SNH and one community is owned
by us. In August 2013, SNH completed the sale of one of these
communities, a SNF with 112 living units. As a result of this sale, our
annual minimum rent payable to SNH decreased by $255,000 in accordance
with the terms of our applicable lease with SNH. The remaining 10
communities identified in June 2013 are currently being offered for
sale. Also, one additional assisted living community with 102 living
units which is leased by us from SNH that we agreed to offer for sale
prior to June 2013 continues to be offered for sale. As of September 30,
2013, the results of operations for all these communities which either
are currently being offered for sale (11 communities) or have been
recently sold (one community) are classified as discontinued operations,
and, in aggregate, the majority of revenues generated from these
communities came from government funded programs, such as Medicare and
Medicaid.
In August 2013, we and SNH entered into an agreement with certain
unrelated third parties, pursuant to which SNH agreed to sell two
rehabilitation hospitals that we lease and where the majority of
revenues are paid by Medicare. In connection with this sale, we agreed
to transfer the operations of these hospitals and several leased
in-patient and out-patient clinics that are affiliated with these
hospitals. Upon completion of the sale and transfer of operations, our
annual rent payable to SNH and others will decrease by approximately
$11.5 million and we currently expect to realize cash proceeds of
between $6.5 and $7.5 million by retaining our working capital
investment in these hospitals. The transfer of the operations of these
hospitals and related operations is subject to various closing
conditions, including the new operator’s obtaining appropriate licenses
and regulatory approvals. We currently expect that this transaction may
be completed by mid-2014. During the third quarter of 2013, we
classified our rehabilitation hospital business as discontinued
operations.
In July 2013, we redeemed all $24.9 million principal amount of our
3.75% convertible senior notes outstanding at a redemption price equal
to the principal amount plus accrued and unpaid interest. We funded this
redemption with cash on hand and borrowings under our revolving credit
facility. In connection with this redemption, in the third quarter of
2013 we recorded a loss on early extinguishment of debt of $599,000,
net, for unamortized issuance costs.
Conference Call:
Later today, November 12, 2013, at 10:00 a.m. Eastern Time, we will host
a conference call to discuss the third quarter financial information.
Following management’s presentation, there will be a question and answer
period.
The conference call telephone number is (800) 700-7860. Participants
calling from outside the United States and Canada should dial (612)
332-0820. 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 11:59 p.m. Eastern Time, November 19, 2013. To hear
the replay, dial (320) 365-3844. The replay pass code is 305216.
A live audio webcast of the conference call will also be available in a
listen only mode on the Company’s website at www.fivestarseniorliving.com.
Participants wanting to access the webcast should visit the Company’s
website about five minutes before the call. The archived webcast will be
available for replay on the Company’s website for about one week after
the call. The transcription, recording and retransmission in any way
of the Company’s third quarter 2013 conference call is strictly
prohibited without the prior written consent of the Company. The
Company’s website is not incorporated as part of this press release.
About Five Star Quality Care, Inc.:
Five Star Quality Care, Inc. is a senior living and healthcare services
company. As of September 30, 2013, we operated 251 senior living
communities (excluding those senior living communities we have
classified as discontinued operations) with 29,743 living units located
in 31 states, including 30 communities (2,946 living units) that we own
and operate, 181 communities (20,026 living units) that we lease and
operate, and 40 communities (6,771 living units) that we manage. These
communities include independent living, assisted living, continuing care
and skilled nursing communities. We also operate two rehabilitation
hospitals which we have classified as discontinued operations. We are
headquartered in Newton, Massachusetts.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT
INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
THIS PRESS RELEASE REPORTS CERTAIN PRELIMINARY FINANCIAL DATA AND
INFORMATION FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2013.
THIS PRELIMINARY FINANCIAL DATA AND INFORMATION IS SUBJECT TO CHANGE
AFTER WE COMPLETE OUR ACCOUNTING FOR THE PERIODS PRESENTED.
-
THIS PRESS RELEASE STATES THAT THERE ARE 11 SENIOR LIVING COMMUNITIES
CURRENTLY BEING OFFERED FOR SALE THAT EITHER WE LEASE FROM SNH (10
COMMUNITIES) OR WE OWN (ONE COMMUNITY). SNH AND WE MAY NOT RECEIVE
OFFERS TO PURCHASE THESE COMMUNITIES ON TERMS SNH AND WE ARE WILLING
TO ACCEPT; FOR THESE OR OTHER REASONS, SOME OR ALL OF THESE 11
COMMUNITIES MAY NOT BE SOLD IN THE FUTURE.
-
THIS PRESS RELEASE STATES THAT WE HAVE AGREED TO TRANSFER THE
OPERATIONS OF TWO REHABILITATION HOSPITALS AND SEVERAL AFFILIATED
IN-PATIENT AND OUT-PATIENT CLINICS AND THAT WE EXPECT THE TRANSFER MAY
OCCUR BY MID-2014. THIS TRANSFER IS SUBJECT TO COMPLETION OF SNH’S
SALE OF THE REHABILITATION HOSPITALS’ REAL ESTATE ASSETS AND VARIOUS
OTHER CLOSING CONDITIONS, INCLUDING THE NEW OPERATOR’S OBTAINING
APPROPRIATE LICENSES AND REGULATORY APPROVALS. SOME OF THESE
CONDITIONS MAY NOT BE MET. AS A RESULT, THIS TRANSACTION MAY NOT
OCCUR, THIS TRANSACTION MAY BE DELAYED OR THE TERMS MAY CHANGE.
-
THIS PRESS RELEASE STATES THAT WE EXPECT TO REALIZE CASH PROCEEDS OF
BETWEEN $6.5 MILLION AND $7.5 MILLION BY RETAINING OUR WORKING CAPITAL
INVESTMENT IN OUR REHABILITATION HOSPITAL BUSINESS. THIS EXPECTED
AMOUNT IS BASED ON AMOUNTS OF OUR WORKING CAPITAL INVESTMENTS IN THESE
HOSPITALS AND RELATED OPERATIONS AS OF SEPTEMBER 30, 2013. THE AMOUNT
OF NET WORKING CAPITAL WE RETAIN WILL DEPEND ON MANY FACTORS,
INCLUDING THE FINANCIAL RESULTS OF THE OPERATIONS OF THE
REHABILITATION HOSPITALS PRIOR TO TRANSFER. ACCORDINGLY, THE AMOUNT OF
NET WORKING CAPITAL THAT WE MAY RETAIN IS NOT ASSURED AND MAY BE LESS
THAN $6.5 MILLION.
-
THIS PRESS RELEASE STATES THAT OUR ACCOUNTING FOR INCOME TAXES FOR
CERTAIN PERIODS HAS NOT BEEN COMPLETED, THAT WE ARE WORKING WITH OUR
AUDIT COMMITTEE AND ERNST & YOUNG LLP, OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM, TO DETERMINE WHAT CHANGES, IF ANY, TO OUR
HISTORICAL AND FUTURE ACCOUNTING MAY BE APPROPRIATE, THAT WE DO NOT
EXPECT TO FILE OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 2013, BY THE DUE DATE AND THAT WE INTEND TO FILE A FORM
12b-25 TO OBTAIN A FIVE DAY EXTENSION TO FILE OUR FORM 10-Q. THESE
STATEMENTS MAY IMPLY THAT WE WILL RESOLVE THESE MATTERS AND BE ABLE TO
FILE OUR FORM 10-Q BY THE REQUIRED DEADLINE, AS IT MAY BE EXTENDED.
HOWEVER, THERE CAN BE NO ASSURANCES THIS WILL OCCUR. IF WE FAIL TO
FILE OUR FORM 10-Q BY THE EXTENDED DEADLINE, OUR ABILITY TO USE OUR
CURRENTLY EFFECTIVE SHELF REGISTRATION STATEMENT ON FORM S-3 WILL BE
RESTRICTED AND WE MAY INCUR OTHER NEGATIVE EFFECTS.
-
THIS PRESS RELEASE STATES THAT THE NET EFFECT OF CORRECTING OUR
ACCOUNTING FOR INCOME TAXES IS EXPECTED TO RESULT IN AN INCREASE IN
OUR NET DEFERRED TAX ASSETS AND TO INCREASE OUR BENEFIT FOR INCOME
TAXES. HOWEVER, THE CHANGES, IF ANY, HAVE NOT BEEN DETERMINED AND HOW
WE ULTIMATELY ACCOUNT FOR THESE MATTERS MAY DIFFER FROM OUR CURRENT
EXPECTATIONS.
-
THIS PRESS RELEASE STATES THAT WE HAVE NOT CONCLUDED IF WE WILL BE
REQUIRED TO RESTATE ANY PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR
WHETHER ANY SUCH FINANCIAL STATEMENTS SHOULD NO LONGER BE RELIED UPON.
THESE DECISIONS INVOLVE DETAILED ANALYSES AND CONSIDERATIONS, WHICH
HAVE NOT BEEN COMPLETED. WE CANNOT PROVIDE ANY ASSURANCE WHETHER WE
WILL BE REQUIRED TO RESTATE ANY OF OUR PREVIOUSLY ISSUED FINANCIAL
STATEMENTS OR WHETHER ANY SUCH FINANCIAL STATEMENTS SHOULD NO LONGER
BE RELIED UPON. IF WE ARE REQUIRED TO RESTATE ANY OF OUR PREVIOUSLY
ISSUED FINANCIAL STATEMENTS, WE DO NOT KNOW WHICH FINANCIAL STATEMENTS
OR RELATED FILINGS MAY NEED TO BE RESTATED OR AMENDED OR THE TIMING
FOR COMPLETING THOSE RESTATEMENTS OR AMENDMENTS. ANY DETERMINATION TO
RESTATE PREVIOUSLY ISSUED FINANCIAL STATEMENTS COULD RESULT IN A
SIGNIFICANT DELAY IN OUR FILING OUR QUARTERLY REPORT ON FORM 10-Q FOR
THE QUARTER ENDED SEPTEMBER 30, 2013, AND OTHER APPLICABLE FILINGS.
-
THIS PRESS RELEASE STATES THAT WE HAVE NOT MADE A DETERMINATION AS TO
THE EFFECT OF INTERNAL CONTROL DEFICIENCIES RELATED TO OUR ACCOUNTING
FOR INCOME TAXES ON OUR MANAGEMENT’S ASSESSMENT OF THE EFFECTIVENESS
OF OUR DISCLOSURE CONTROLS AND PROCEDURES OR OUR INTERNAL CONTROL OVER
FINANCIAL REPORTING. IF WE DETERMINE THAT OUR DISCLOSURE CONTROLS AND
PROCEDURES ARE OR WERE INEFFECTIVE OR IF WE OR OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM DETERMINE THAT WE HAVE OR HAD A
MATERIAL WEAKNESS IN OUR INTERNAL CONTROL OVER FINANCIAL REPORTING, WE
MAY BE REQUIRED TO AMEND CERTAIN OF OUR PRIOR FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION, OR THE SEC, TO REFLECT SUCH
CHANGES.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SEC, INCLUDING UNDER
THE CAPTION “RISK FACTORS” IN OUR PERIODIC REPORTS, OR INCORPORATED
THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES
FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SEC ARE
AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.
|
|
|
FIVE STAR QUALITY CARE, INC.
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
|
|
|
(in thousands)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living revenue
|
|
|
|
|
$
|
270,410
|
|
|
|
$
|
268,584
|
|
|
|
$
|
808,882
|
|
|
|
$
|
804,359
|
|
|
Management fee revenue
|
|
|
|
|
|
2,290
|
|
|
|
|
1,277
|
|
|
|
|
6,873
|
|
|
|
|
3,666
|
|
|
Reimbursed costs incurred on behalf of
managed communities
|
|
|
|
|
|
51,983
|
|
|
|
|
27,247
|
|
|
|
|
156,195
|
|
|
|
|
76,750
|
|
|
Total revenues
|
|
|
|
|
|
324,683
|
|
|
|
|
297,108
|
|
|
|
|
971,950
|
|
|
|
|
884,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits
|
|
|
|
|
|
130,843
|
|
|
|
|
131,362
|
|
|
|
|
393,929
|
|
|
|
|
393,387
|
|
|
Other senior living operating expenses
|
|
|
|
|
|
68,227
|
|
|
|
|
64,189
|
|
|
|
|
200,317
|
|
|
|
|
192,247
|
|
|
Costs incurred on behalf of managed
communities
|
|
|
|
|
|
51,983
|
|
|
|
|
27,247
|
|
|
|
|
156,195
|
|
|
|
|
76,750
|
|
|
Rent expense
|
|
|
|
|
|
48,657
|
|
|
|
|
47,698
|
|
|
|
|
145,036
|
|
|
|
|
142,568
|
|
|
General and administrative
|
|
|
|
|
|
15,080
|
|
|
|
|
14,602
|
|
|
|
|
45,664
|
|
|
|
|
45,445
|
|
|
Depreciation and amortization
|
|
|
|
|
|
6,757
|
|
|
|
|
6,195
|
|
|
|
|
19,750
|
|
|
|
|
18,255
|
|
|
Total operating expenses
|
|
|
|
|
|
321,547
|
|
|
|
|
291,293
|
|
|
|
|
960,891
|
|
|
|
|
868,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
3,136
|
|
|
|
|
5,815
|
|
|
|
|
11,059
|
|
|
|
|
16,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, dividend and other income
|
|
|
|
|
|
190
|
|
|
|
|
199
|
|
|
|
|
599
|
|
|
|
|
638
|
|
|
Interest and other expense
|
|
|
|
|
|
(1,179)
|
|
|
|
|
(1,762)
|
|
|
|
|
(3,990)
|
|
|
|
|
(4,793)
|
|
|
Acquisition related costs
|
|
|
|
|
|
(78)
|
|
|
|
|
(100)
|
|
|
|
|
(119)
|
|
|
|
|
(100)
|
|
|
Equity in earnings of Affiliates Insurance
Company
|
|
|
|
|
|
64
|
|
|
|
|
115
|
|
|
|
|
219
|
|
|
|
|
236
|
|
|
Gain on settlement
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
3,365
|
|
|
(Loss) gain on early extinguishment of debt
|
|
|
|
|
|
(599)
|
|
|
|
|
-
|
|
|
|
|
(599)
|
|
|
|
|
45
|
|
|
Gain on sale of available for sale securities
reclassified from other comprehensive income
|
|
|
|
|
|
36
|
|
|
|
|
63
|
|
|
|
|
6
|
|
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
$
|
1,570
|
|
|
|
$
|
4,330
|
|
|
|
$
|
7,175
|
|
|
|
$
|
15,576
|
|
|
|
|
|
|
|
FIVE STAR QUALITY CARE, INC.
|
|
|
|
SENIOR LIVING COMMUNITY FINANCIAL DATA(1) |
|
|
|
(dollars in thousands, except average monthly rate)
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
|
|
|
September 30,(2) |
|
|
|
|
September 30,(2) |
|
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|
|
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
Senior living communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
Number of units (end of period)(3) |
|
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
Occupancy
|
|
|
|
|
|
85.9%
|
|
|
|
|
86.2%
|
|
|
|
|
85.8%
|
|
|
|
|
86.2%
|
|
|
|
Avg. monthly rate(4) |
|
|
|
|
|
$
|
4,411
|
|
|
|
$
|
4,345
|
|
|
|
$
|
4,447
|
|
|
|
$
|
4,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community revenue
|
|
|
|
|
$
|
125,706
|
|
|
|
$
|
123,491
|
|
|
|
$
|
373,149
|
|
|
|
$
|
366,676
|
|
|
|
Continuing care retirement community revenue
|
|
|
|
|
|
97,193
|
|
|
|
|
96,810
|
|
|
|
|
291,649
|
|
|
|
|
291,196
|
|
|
|
Skilled nursing facility revenue
|
|
|
|
|
|
44,483
|
|
|
|
|
44,971
|
|
|
|
|
134,533
|
|
|
|
|
136,602
|
|
|
|
Other (5) |
|
|
|
|
|
|
3,028
|
|
|
|
|
3,312
|
|
|
|
|
9,551
|
|
|
|
|
9,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living revenue
|
|
|
|
|
$
|
270,410
|
|
|
|
$
|
268,584
|
|
|
|
$
|
808,882
|
|
|
|
$
|
804,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community wages and benefits
|
|
|
|
|
$
|
53,193
|
|
|
|
$
|
53,053
|
|
|
|
$
|
159,625
|
|
|
|
$
|
159,015
|
|
|
|
Continuing care retirement community wages and benefits
|
|
|
|
|
|
47,833
|
|
|
|
|
47,889
|
|
|
|
|
144,839
|
|
|
|
|
144,109
|
|
|
|
Skilled nursing facility wages and benefits
|
|
|
|
|
|
28,049
|
|
|
|
|
28,294
|
|
|
|
|
85,306
|
|
|
|
|
85,496
|
|
|
|
Other (5) |
|
|
|
|
|
|
1,768
|
|
|
|
|
2,126
|
|
|
|
|
4,159
|
|
|
|
|
4,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living wages and benefits
|
|
|
|
|
$
|
130,843
|
|
|
|
$
|
131,362
|
|
|
|
$
|
393,929
|
|
|
|
$
|
393,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community other operating expenses
|
|
|
|
|
$
|
30,720
|
|
|
|
$
|
29,304
|
|
|
|
$
|
90,084
|
|
|
|
$
|
87,248
|
|
|
|
Continuing care retirement community other operating expenses
|
|
|
|
|
|
25,120
|
|
|
|
|
23,829
|
|
|
|
|
74,742
|
|
|
|
|
71,101
|
|
|
|
Skilled nursing facility other operating expenses
|
|
|
|
|
|
10,975
|
|
|
|
|
10,734
|
|
|
|
|
33,468
|
|
|
|
|
32,385
|
|
|
|
Other (5) |
|
|
|
|
|
|
1,412
|
|
|
|
|
322
|
|
|
|
|
2,023
|
|
|
|
|
1,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living other operating expenses
|
|
|
|
|
$
|
68,227
|
|
|
|
$
|
64,189
|
|
|
|
$
|
200,317
|
|
|
|
$
|
192,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes data for managed communities and discontinued operations.
|
(2)
|
|
The number of communities operated between January 1, 2012 and
September 30, 2013 did not change; as a result, there is no separate
same property comparable senior living community financial data
presented.
|
(3)
|
|
Excludes 48 units of one senior living community that has been
temporarily closed for renovations.
|
(4)
|
|
Average monthly rate is calculated as total operating revenues
divided by occupied units during the period, multiplied by 30 days.
|
(5)
|
|
Other senior living relates primarily to rehabilitation and other
specialty service revenues and expenses provided at our residential
facilities.
|
|
|
|
|
|
|
FIVE STAR QUALITY CARE, INC.
|
|
|
PERCENT BREAKDOWN OF SENIOR LIVING COMMUNITY REVENUES(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Independent and assisted living communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
|
|
99.1%
|
|
|
|
|
98.8%
|
|
|
|
|
99.1%
|
|
|
|
|
98.9%
|
|
|
Medicaid
|
|
|
|
|
|
0.9%
|
|
|
|
|
1.2%
|
|
|
|
|
0.9%
|
|
|
|
|
1.1%
|
|
|
Total
|
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
|
|
72.7%
|
|
|
|
|
71.1%
|
|
|
|
|
71.5%
|
|
|
|
|
70.8%
|
|
|
Medicare
|
|
|
|
|
|
20.9%
|
|
|
|
|
22.3%
|
|
|
|
|
22.3%
|
|
|
|
|
22.6%
|
|
|
Medicaid
|
|
|
|
|
|
6.4%
|
|
|
|
|
6.6%
|
|
|
|
|
6.2%
|
|
|
|
|
6.6%
|
|
|
Total
|
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
|
|
25.2%
|
|
|
|
|
27.5%
|
|
|
|
|
25.8%
|
|
|
|
|
26.7%
|
|
|
Medicare
|
|
|
|
|
|
25.8%
|
|
|
|
|
25.3%
|
|
|
|
|
26.2%
|
|
|
|
|
25.8%
|
|
|
Medicaid
|
|
|
|
|
|
49.0%
|
|
|
|
|
47.2%
|
|
|
|
|
48.0%
|
|
|
|
|
47.5%
|
|
|
Total
|
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
|
|
77.1%
|
|
|
|
|
76.6%
|
|
|
|
|
76.5%
|
|
|
|
|
76.1%
|
|
|
Medicare
|
|
|
|
|
|
12.0%
|
|
|
|
|
12.5%
|
|
|
|
|
12.6%
|
|
|
|
|
12.8%
|
|
|
Medicaid
|
|
|
|
|
|
10.9%
|
|
|
|
|
10.9%
|
|
|
|
|
10.9%
|
|
|
|
|
11.1%
|
|
|
Total
|
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes data for managed communities and discontinued
operations.
|
|
|
|
|
|
|
|
FIVE STAR QUALITY CARE, INC.
|
|
SENIOR LIVING OTHER OPERATING DATA(1) |
|
(dollars in thousands, except average monthly rate)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
2013
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2012
|
|
|
Independent and assisted living communities (owned):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
Number of units (end of period)
|
|
|
|
|
2,946
|
|
|
|
|
2,946
|
|
|
|
|
2,946
|
|
|
|
|
2,946
|
|
|
|
|
2,946
|
|
|
Occupancy
|
|
|
|
|
88.2
|
%
|
|
|
|
87.6
|
%
|
|
|
|
87.5
|
%
|
|
|
|
87.8
|
%
|
|
|
|
86.1
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
3,375
|
|
|
|
$
|
3,379
|
|
|
|
$
|
3,374
|
|
|
|
$
|
3,292
|
|
|
|
$
|
3,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
119
|
|
|
|
|
119
|
|
|
|
|
119
|
|
|
|
|
119
|
|
|
|
|
119
|
|
|
Number of units (end of period)(3) |
|
|
|
|
9,858
|
|
|
|
|
9,858
|
|
|
|
|
9,858
|
|
|
|
|
9,858
|
|
|
|
|
9,858
|
|
|
Occupancy
|
|
|
|
|
89.0
|
%
|
|
|
|
88.1
|
%
|
|
|
|
88.6
|
%
|
|
|
|
89.2
|
%
|
|
|
|
88.9
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
3,645
|
|
|
|
$
|
3,683
|
|
|
|
$
|
3,676
|
|
|
|
$
|
3,604
|
|
|
|
$
|
3,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
Number of units (end of period)(4) |
|
|
|
|
7,346
|
|
|
|
|
7,346
|
|
|
|
|
7,346
|
|
|
|
|
7,346
|
|
|
|
|
7,346
|
|
|
Occupancy
|
|
|
|
|
82.9
|
%
|
|
|
|
83.3
|
%
|
|
|
|
83.7
|
%
|
|
|
|
83.4
|
%
|
|
|
|
84.0
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
5,207
|
|
|
|
$
|
5,230
|
|
|
|
$
|
5,280
|
|
|
|
$
|
5,204
|
|
|
|
$
|
5,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
Number of units (end of period)(5) |
|
|
|
|
2,822
|
|
|
|
|
2,822
|
|
|
|
|
2,822
|
|
|
|
|
2,822
|
|
|
|
|
2,822
|
|
|
Occupancy
|
|
|
|
|
80.8
|
%
|
|
|
|
80.7
|
%
|
|
|
|
81.5
|
%
|
|
|
|
82.2
|
%
|
|
|
|
83.0
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
6,409
|
|
|
|
$
|
6,496
|
|
|
|
$
|
6,644
|
|
|
|
$
|
6,460
|
|
|
|
$
|
6,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities (owned and leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
|
|
211
|
|
|
Number of units (end of period)(3) |
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
|
|
22,972
|
|
|
Occupancy
|
|
|
|
|
85.9
|
%
|
|
|
|
85.6
|
%
|
|
|
|
86.0
|
%
|
|
|
|
86.3
|
%
|
|
|
|
86.2
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
4,411
|
|
|
|
$
|
4,450
|
|
|
|
$
|
4,481
|
|
|
|
$
|
4,392
|
|
|
|
$
|
4,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
|
40
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|
|
|
30
|
|
|
Number of units (end of period)(6) |
|
|
|
|
6,771
|
|
|
|
|
6,678
|
|
|
|
|
6,678
|
|
|
|
|
6,678
|
|
|
|
|
4,488
|
|
|
Occupancy
|
|
|
|
|
87.6
|
%
|
|
|
|
87.4
|
%
|
|
|
|
87.2
|
%
|
|
|
|
87.7
|
%
|
|
|
|
87.6
|
%
|
|
Avg. monthly rate(2) |
|
|
|
$
|
4,140
|
|
|
|
$
|
4,215
|
|
|
|
$
|
4,296
|
|
|
|
$
|
4,144
|
|
|
|
$
|
3,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other ancillary services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rehabilitation and wellness inpatient clinics (end of period)
|
|
|
|
|
50
|
|
|
|
|
51
|
|
|
|
|
53
|
|
|
|
|
50
|
|
|
|
|
50
|
|
|
Rehabilitation and wellness outpatient clinics (end of period)
|
|
|
|
|
51
|
|
|
|
|
51
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|
|
|
46
|
|
|
Home health communities served (end of period)
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes data for discontinued operations.
|
(2)
|
|
Average monthly rate is calculated as total operating revenues
divided by occupied units during the period, multiplied by 30 days.
|
(3)
|
|
Excludes 48 units of one senior living community that has been
temporarily closed for renovations.
|
(4)
|
|
Includes 2,031 skilled nursing units in communities where assisted
living and independent living services are the predominant services
provided.
|
(5)
|
|
Includes 69 assisted living and independent living units in
communities where skilled nursing services are the predominant
services provided.
|
(6)
|
|
Includes 472 skilled nursing units in communities where assisted
living and independent living services are the predominant services
provided.
|
|
|
|
FIVE STAR QUALITY CARE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(in thousands)
Earnings from continuing operations before interest, taxes, depreciation
and amortization, or EBITDA from continuing operations, and EBITDA from
continuing operations excluding certain items, or collectively, Non-GAAP
Financial Measures, are not financial measures determined according to
U.S. generally accepted accounting principles, or GAAP. We consider
these Non-GAAP Financial Measures to be meaningful disclosures because
we believe that the presentation of these Non-GAAP Financial Measures
may help investors to gain a better understanding of changes in our
operating results, and may also help investors who wish to make
comparisons between us and other companies on both a GAAP and a non-GAAP
basis. These Non-GAAP Financial Measures are used by management to
evaluate our financial performance and for comparing our performance
over time and to the performance of our competitors. These Non-GAAP
Financial Measures as presented may not, however, be comparable to
amounts calculated by other companies. This information should not be
considered as an alternative to income from continuing operations, net
income, cash flows from operating activities or any other financial,
operating or performance or liquidity measure established by GAAP. The
following table includes the reconciliation of these Non-GAAP Financial
Measures to income from continuing operations before income taxes, which
we consider to be the most directly comparable financial measure under
GAAP for the three and nine months ended September 30, 2013 and 2012. As
further noted above, we are reporting income from continuing operations
before income taxes, rather than income from continuing operations, and
reconciling EBITDA from continuing operations and EBITDA from continuing
operations excluding certain items to income from continuing operations
before income taxes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
2012
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
$
|
|
1,570
|
|
|
|
|
$
|
|
4,330
|
|
|
|
|
|
$
|
|
7,175
|
|
|
|
|
$
|
|
15,576
|
|
|
Add: interest and other expense
|
|
|
|
|
|
|
|
1,179
|
|
|
|
|
|
|
1,762
|
|
|
|
|
|
|
|
3,990
|
|
|
|
|
|
|
4,793
|
|
|
Add: depreciation and amortization
|
|
|
|
|
|
|
|
6,757
|
|
|
|
|
|
|
6,195
|
|
|
|
|
|
|
|
19,750
|
|
|
|
|
|
|
18,255
|
|
|
Less: interest, dividend and other income
|
|
|
|
|
|
|
|
(190)
|
|
|
|
|
|
|
(199)
|
|
|
|
|
|
|
|
(599)
|
|
|
|
|
|
|
(638)
|
|
|
EBITDA from continuing operations
|
|
|
|
|
|
|
|
9,316
|
|
|
|
|
|
|
12,088
|
|
|
|
|
|
|
|
30,316
|
|
|
|
|
|
|
37,986
|
|
|
Add (less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related costs
|
|
|
|
|
|
|
|
78
|
|
|
|
|
|
|
100
|
|
|
|
|
|
|
|
119
|
|
|
|
|
|
|
100
|
|
|
Gain on sale of investments in available for sale
securities
|
|
|
|
|
|
|
|
(36)
|
|
|
|
|
|
|
(63)
|
|
|
|
|
|
|
|
(6)
|
|
|
|
|
|
|
(62)
|
|
|
Gain on litigation settlement
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(3,365)
|
|
|
Loss (gain) on early extinguishment of debt
|
|
|
|
|
|
|
|
599
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
599
|
|
|
|
|
|
|
(45)
|
|
|
EBITDA from continuing operations excluding certain items
|
|
|
|
|
|
$
|
|
9,957
|
|
|
|
|
$
|
|
12,125
|
|
|
|
|
|
$
|
|
31,028
|
|
|
|
|
$
|
|
34,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copyright Business Wire 2013