NEWTON, Mass.--(BUSINESS WIRE)--
Five Star Senior Living Inc. (Nasdaq: FVE) today announced its financial
results for the quarter ended September 30, 2017.
Financial Results for the quarter ended September 30,
2017:
-
Senior living revenue for the third quarter of 2017 increased 0.1% to
$279.7 million from $279.3 million for the same period in
2016, primarily due to an increase in average monthly rates to
residents who pay privately for services, offset by a decrease in
occupancy. Management fee revenue for the third quarter of 2017
increased 2.3% to $3.4 million from $3.3 million for the same period
in 2016, primarily due to an increase in the number of managed
communities compared to the same period in 2016.
-
Net loss for the third quarter of 2017 was $6.6 million, or $0.13 per
diluted share, compared to net loss of $5.9 million, or $0.12 per
diluted share, for the same period in 2016. Net loss for the third
quarter of 2017 included a $0.8 million, or $0.02 per diluted share,
payment that Five Star received from its former liability insurer
related to a previously disclosed litigation settlement by Five Star,
or our litigation recovery. Net loss for the third quarter of 2016
included a benefit for income taxes of $0.9 million, or $0.02 per
diluted share, related to a reduction of previously accrued estimated
state tax expense.
-
Earnings from continuing operations before interest, taxes,
depreciation and amortization, or EBITDA, for the third quarter of
2017 was $4.1 million compared to $3.3 million for the same period in
2016. EBITDA excluding certain items noted in the supplemental
information provided below, or Adjusted EBITDA, was $3.3 million and
$4.3 million for the third quarters of 2017 and 2016, respectively. A
reconciliation of loss from continuing operations determined in
accordance with U.S. generally accepted accounting principles, or
GAAP, to EBITDA and Adjusted EBITDA for the third quarters of 2017 and
2016 appears later in this press release.
Operating Results for the quarter ended September 30,
2017 (continuing operations):
-
Occupancy at owned and leased senior living communities for the third
quarter of 2017 was 83.0% compared to 83.8% for the same period in
2016.
-
The average monthly rate at owned and leased senior living communities
for the third quarter of 2017 increased 0.9% to $4,648 from $4,608 for
the same period in 2016.
-
The percentage of revenue derived from residents’ private resources at
owned and leased senior living communities for the third quarter of
2017 was 78.1% compared to 78.6% for the same period in 2016.
Financial Results for the nine months ended September 30, 2017:
-
Senior living revenue for the nine months ended September 30, 2017
increased 0.1% to $842.9 million from $842.3 million for the same
period in 2016. The increase in senior living revenue is primarily a
result of an increase in average monthly rates to residents who pay
privately for services, partially offset by a decrease in occupancy
and a $1.0 million reversal in revenue reserves during the 2016 period
as a result of the final settlement amount of the previously disclosed
Medicare compliance assessment at one of Five Star's skilled nursing
facilities, or the Compliance Assessment, being less than the
previously estimated amount. Management fee revenue for the nine
months ended September 30, 2017 increased 17.6% to $10.5 million from
$9.0 million for the same period in 2016. The increase in management
fee revenue was primarily due to an increase in the number of managed
communities compared to the same period in 2016 and the modifications
to the calculations of management fees under Five Star's management
arrangements that became effective on July 1, 2016.
-
Net loss for the nine months ended September 30, 2017 was $19.9
million, or $0.40 per diluted share, compared to net loss of $16.2
million, or $0.33 per diluted share, for the same period in 2016. Net
loss for the nine months ended September 30, 2017 included our $0.8
million, or $0.02 per diluted share, litigation recovery and a benefit
for income taxes of $1.3 million, or $0.03 per diluted share,
resulting primarily from monetizing alternative minimum tax credits in
the second quarter of 2017. Net loss for the same period in 2016
included a $1.5 million, or $0.03 per diluted share, reversal in
revenue reserves and accrued liability for estimated penalties related
to the Compliance Assessment and a provision for income taxes of $2.8
million, or $0.06 per diluted share.
-
EBITDA for the nine months ended September 30, 2017 was $10.5 million
compared to $18.8 million for the same period in 2016. Adjusted EBITDA
was $10.0 million and $19.3 million for the nine months ended
September 30, 2017 and 2016, respectively. A reconciliation of loss
from continuing operations determined in accordance with GAAP to
EBITDA and Adjusted EBITDA for the nine months ended September 30,
2017 and 2016 appears later in this press release.
Other:
In September 2017, Five Star prepaid a 6.47% mortgage note that had a
principal balance of approximately $13.1 million. In connection with
this prepayment, Five Star recorded a gain of approximately $0.1 million
on early extinguishment of debt, net of unamortized premiums and a
prepayment penalty equal to 1% of the principal prepaid, during the
third quarter of 2017.
In November 2017, Five Star entered an agreement to sell six senior
living communities to Senior Housing Properties Trust (Nasdaq: SNH) for
an aggregate sales price of approximately $104.0 million, including, as
of September 30, 2017, $2.4 million of mortgage debt that will be
prepaid at closing with proceeds from the sale and SNH's assumption of
approximately $33.7 million of mortgage debt securing certain of these
senior living communities and excluding closing costs. Five Star expects
to enter management and pooling arrangements with SNH to manage these
senior living communities as these sales occur. These sales are subject
to conditions, including SNH's assumption of any applicable mortgage
debt and receipt of any applicable regulatory approvals. The closings of
these sales are expected to occur as third party approvals are received
between now and the end of the first quarter of 2018.
Conference Call:
On November 9, 2017, at 10:00 a.m. Eastern Time, Five Star will host a
conference call to discuss its third quarter 2017 results. Following
management’s presentation, there will be a question and answer period.
The conference call telephone number is (877) 329-4332. Participants
calling from outside the United States and Canada should dial (412)
317-5436. 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 on Thursday, November 16,
2017. To hear the replay, dial (412) 317-0088. The replay pass code is
10113372.
A live audio webcast of the conference call will also be available in a
listen only mode on Five Star’s website, which is located at www.fivestarseniorliving.com. Participants
wanting to access the webcast should visit Five Star’s website about
five minutes before the call. The archived webcast will be available for
replay on Five Star’s website for about one week after the call. The
transcription, recording and retransmission in any way of Five
Star’s third quarter 2017 conference call are
strictly prohibited without the prior written consent of Five
Star. Five Star’s website is not incorporated as part of this press
release.
About Five Star Senior Living Inc.:
Five Star Senior Living Inc. is a senior living and healthcare services
company. As of September 30, 2017, Five Star operated 283 senior living
communities with 31,812 living units located in 32 states, including 215
communities (23,005 living units) that it owned or leased and 68
communities (8,807 living units) that it managed. These communities
include independent living, assisted living, continuing care retirement
communities and skilled nursing communities. Five Star is 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 FIVE STAR
USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE”, "WILL", “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR
SIMILAR EXPRESSIONS, FIVE STAR IS MAKING FORWARD LOOKING STATEMENTS.
THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR’S 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 FIVE STAR’S FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
FIVE STAR HAS ENTERED AN AGREEMENT TO SELL SIX SENIOR LIVING
COMMUNITIES TO SNH FOR APPROXIMATELY $104.0 MILLION, INCLUDING $2.4
MILLION OF MORTGAGE DEBT THAT WILL BE PREPAID AT CLOSING WITH PROCEEDS
FROM THE SALE AND SNH'S ASSUMPTION OF APPROXIMATELY $33.7 MILLION OF
MORTGAGE DEBT AND EXCLUDING CLOSING COSTS, AND FIVE STAR EXPECTS TO
ENTER MANAGEMENT AND POOLING ARRANGEMENTS WITH SNH TO MANAGE THESE
SENIOR LIVING COMMUNITIES. THESE SALES ARE SUBJECT TO CONDITIONS.
THESE CONDITIONS MAY NOT BE MET AND THESE SALES AND RELATED MANAGEMENT
AND POOLING ARRANGEMENTS MAY NOT OCCUR, MAY BE DELAYED BEYOND THE
FIRST QUARTER OF 2018 OR THEIR TERMS MAY CHANGE.
THE INFORMATION CONTAINED IN FIVE STAR’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN FIVE
STAR’S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE FIVE STAR’S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE STATED IN OR IMPLIED BY FIVE STAR’S FORWARD
LOOKING STATEMENTS. FIVE STAR’S FILINGS WITH THE SEC ARE AVAILABLE ON
THE SEC’S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, FIVE STAR DOES NOT INTEND TO UPDATE OR CHANGE
ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.
|
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|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living revenue
|
|
|
|
$
|
279,654
|
|
|
|
|
$
|
279,276
|
|
|
|
|
$
|
842,938
|
|
|
|
|
$
|
842,278
|
|
|
Management fee revenue
|
|
|
|
3,414
|
|
|
|
|
3,336
|
|
|
|
|
10,531
|
|
|
|
|
8,955
|
|
|
Reimbursed costs incurred on behalf of managed communities
|
|
|
|
64,033
|
|
|
|
|
62,099
|
|
|
|
|
194,346
|
|
|
|
|
180,623
|
|
|
Total revenues
|
|
|
|
347,101
|
|
|
|
|
344,711
|
|
|
|
|
1,047,815
|
|
|
|
|
1,031,856
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits
|
|
|
|
138,235
|
|
|
|
|
139,056
|
|
|
|
|
413,137
|
|
|
|
|
414,641
|
|
|
Other senior living operating expenses
|
|
|
|
71,238
|
|
|
|
|
70,890
|
|
|
|
|
219,119
|
|
|
|
|
212,565
|
|
|
Costs incurred on behalf of managed communities
|
|
|
|
64,033
|
|
|
|
|
62,099
|
|
|
|
|
194,346
|
|
|
|
|
180,623
|
|
|
Rent expense
|
|
|
|
51,779
|
|
|
|
|
50,625
|
|
|
|
|
154,524
|
|
|
|
|
150,837
|
|
|
General and administrative expenses
|
|
|
|
17,851
|
|
|
|
|
18,542
|
|
|
|
|
56,733
|
|
|
|
|
54,218
|
|
|
Depreciation and amortization expense
|
|
|
|
9,753
|
|
|
|
|
9,398
|
|
|
|
|
29,040
|
|
|
|
|
28,847
|
|
|
Long lived asset impairment
|
|
|
|
142
|
|
|
|
|
196
|
|
|
|
|
528
|
|
|
|
|
502
|
|
|
Total operating expenses
|
|
|
|
353,031
|
|
|
|
|
350,806
|
|
|
|
|
1,067,427
|
|
|
|
|
1,042,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
(5,930
|
)
|
|
|
|
(6,095
|
)
|
|
|
|
(19,612
|
)
|
|
|
|
(10,377
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, dividend and other income
|
|
|
|
167
|
|
|
|
|
237
|
|
|
|
|
559
|
|
|
|
|
766
|
|
|
Interest and other expense
|
|
|
|
(1,139
|
)
|
|
|
|
(945
|
)
|
|
|
|
(3,200
|
)
|
|
|
|
(3,957
|
)
|
|
Gain on early extinguishment of debt
|
|
|
|
143
|
|
|
|
|
—
|
|
|
|
|
143
|
|
|
|
|
—
|
|
|
Gain on sale of available for sale securities reclassified from
accumulated other comprehensive income, net of tax
|
|
|
|
70
|
|
|
|
|
12
|
|
|
|
|
351
|
|
|
|
|
247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes and equity in
earnings of an investee
|
|
|
|
(6,689
|
)
|
|
|
|
(6,791
|
)
|
|
|
|
(21,759
|
)
|
|
|
|
(13,321
|
)
|
|
Benefit (provision) for income taxes
|
|
|
|
55
|
|
|
|
|
934
|
|
|
|
|
1,330
|
|
|
|
|
(2,841
|
)
|
|
Equity in earnings of an investee, net of tax
|
|
|
|
31
|
|
|
|
|
13
|
|
|
|
|
533
|
|
|
|
|
107
|
|
|
Loss from continuing operations
|
|
|
|
(6,603
|
)
|
|
|
|
(5,844
|
)
|
|
|
|
(19,896
|
)
|
|
|
|
(16,055
|
)
|
|
Loss from discontinued operations
|
|
|
|
—
|
|
|
|
|
(53
|
)
|
|
|
|
—
|
|
|
|
|
(131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(6,603
|
)
|
|
|
|
$
|
(5,897
|
)
|
|
|
|
$
|
(19,896
|
)
|
|
|
|
$
|
(16,186
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic and diluted
|
|
|
|
49,242
|
|
|
|
|
48,846
|
|
|
|
|
49,199
|
|
|
|
|
48,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
$
|
(0.33
|
)
|
|
Discontinued operations
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net loss per share—basic and diluted
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
$
|
(0.33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
8,706
|
|
|
|
|
$
|
16,608
|
|
Accounts receivable, net of allowance
|
|
|
|
37,489
|
|
|
|
|
38,324
|
|
Due from related persons
|
|
|
|
8,149
|
|
|
|
|
17,010
|
|
Investments in available for sale securities
|
|
|
|
24,307
|
|
|
|
|
24,081
|
|
Restricted cash
|
|
|
|
19,776
|
|
|
|
|
15,059
|
|
Prepaid expenses and other current assets
|
|
|
|
25,829
|
|
|
|
|
18,305
|
|
Total current assets
|
|
|
|
124,256
|
|
|
|
|
129,387
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
346,845
|
|
|
|
|
351,929
|
|
Restricted cash
|
|
|
|
1,316
|
|
|
|
|
1,909
|
|
Restricted investments in available for sale securities
|
|
|
|
12,220
|
|
|
|
|
16,589
|
|
Equity investment of an investee and other long term assets
|
|
|
|
12,419
|
|
|
|
|
9,920
|
|
Total assets
|
|
|
|
$
|
497,056
|
|
|
|
|
$
|
509,734
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
|
|
$
|
5,000
|
|
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
197,756
|
|
|
|
|
172,993
|
|
Total current liabilities
|
|
|
|
202,756
|
|
|
|
|
172,993
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable
|
|
|
|
44,269
|
|
|
|
|
58,494
|
|
Deferred gain on sale and leaseback transaction
|
|
|
|
67,739
|
|
|
|
|
72,695
|
|
Other long term liabilities
|
|
|
|
36,689
|
|
|
|
|
41,286
|
|
Shareholders’ equity
|
|
|
|
145,603
|
|
|
|
|
164,266
|
|
Total liabilities and shareholders’ equity
|
|
|
|
$
|
497,056
|
|
|
|
|
$
|
509,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(19,896
|
)
|
|
|
|
$
|
(16,186
|
)
|
|
Adjustments to reconcile net loss to cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
29,040
|
|
|
|
|
28,847
|
|
|
Gain on early extinguishment of debt
|
|
|
|
(298
|
)
|
|
|
|
—
|
|
|
Loss from discontinued operations
|
|
|
|
—
|
|
|
|
|
131
|
|
|
Gain on sale of available for sale securities reclassified from
accumulated other comprehensive income, net of tax
|
|
|
|
(351
|
)
|
|
|
|
(247
|
)
|
|
Loss on disposal of property and equipment
|
|
|
|
202
|
|
|
|
|
70
|
|
|
Long lived asset impairment
|
|
|
|
528
|
|
|
|
|
502
|
|
|
Equity in earnings of an investee, net of tax
|
|
|
|
(533
|
)
|
|
|
|
(107
|
)
|
|
Stock based compensation
|
|
|
|
784
|
|
|
|
|
749
|
|
|
Provision for losses on receivables
|
|
|
|
3,632
|
|
|
|
|
2,598
|
|
|
Amortization of deferred gain on sale and leaseback transaction
|
|
|
|
(4,956
|
)
|
|
|
|
(1,688
|
)
|
|
Other noncash expense (income) adjustments, net
|
|
|
|
325
|
|
|
|
|
(375
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(2,797
|
)
|
|
|
|
(2,809
|
)
|
|
Prepaid expenses and other assets
|
|
|
|
(8,853
|
)
|
|
|
|
(2,314
|
)
|
|
Accounts payable and accrued expenses
|
|
|
|
3,821
|
|
|
|
|
(22,297
|
)
|
|
Accrued compensation and benefits
|
|
|
|
8,613
|
|
|
|
|
8,641
|
|
|
Due from related persons, net
|
|
|
|
9,131
|
|
|
|
|
222
|
|
|
Other current and long term liabilities
|
|
|
|
6,642
|
|
|
|
|
(2,716
|
)
|
|
Cash provided by (used in) operating activities
|
|
|
|
25,034
|
|
|
|
|
(6,979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Increase in restricted cash and investment accounts, net
|
|
|
|
(4,124
|
)
|
|
|
|
(6,833
|
)
|
|
Acquisition of property and equipment
|
|
|
|
(55,049
|
)
|
|
|
|
(40,825
|
)
|
|
Purchases of available for sale securities
|
|
|
|
(10,895
|
)
|
|
|
|
(6,780
|
)
|
|
Proceeds from sale of improvements made to leased communities
|
|
|
|
30,698
|
|
|
|
|
15,180
|
|
|
Proceeds from sale of land
|
|
|
|
750
|
|
|
|
|
—
|
|
|
Proceeds from sale and leaseback transaction
|
|
|
|
—
|
|
|
|
|
112,350
|
|
|
Proceeds from sale of available for sale securities
|
|
|
|
15,681
|
|
|
|
|
13,508
|
|
|
Cash (used in) provided by investing activities
|
|
|
|
(22,939
|
)
|
|
|
|
86,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings on revolving credit facility
|
|
|
|
40,000
|
|
|
|
|
25,000
|
|
|
Repayments of borrowings on revolving credit facility
|
|
|
|
(35,000
|
)
|
|
|
|
(75,000
|
)
|
|
Repayments of mortgage notes payable
|
|
|
|
(14,111
|
)
|
|
|
|
(934
|
)
|
|
Payment of deferred financing fees
|
|
|
|
(1,889
|
)
|
|
|
|
(300
|
)
|
|
Cash used in financing activities
|
|
|
|
(11,000
|
)
|
|
|
|
(51,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from discontinued operations:
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
1,003
|
|
|
|
|
130
|
|
|
Net cash used in investing activities
|
|
|
|
—
|
|
|
|
|
(15
|
)
|
|
Net cash flows provided by discontinued operations
|
|
|
|
1,003
|
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
|
(7,902
|
)
|
|
|
|
28,502
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
16,608
|
|
|
|
|
14,672
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
8,706
|
|
|
|
|
$
|
43,174
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
$
|
2,913
|
|
|
|
|
$
|
3,920
|
|
|
Cash paid for income taxes, net
|
|
|
|
$
|
275
|
|
|
|
|
$
|
2,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(in thousands)
(unaudited)
Non-GAAP financial measures are financial measures that are not
determined in accordance with GAAP. Five Star considers these Non-GAAP
financial measures to be meaningful supplemental disclosures because it
believes that the presentation of these Non-GAAP financial measures may
help investors gain a better understanding of changes in Five Star’s
operating results and its ability to pay rent or service debt, make
capital expenditures and expand its business. These Non-GAAP financial
measures also may help investors who wish to make comparisons between
Five Star and other companies on both a GAAP and a non-GAAP basis.
The Non-GAAP financial measures presented are used by management to
evaluate Five Star’s financial performance and for comparing Five Star’s
performance over time and to the performance of its competitors. This
supplemental information should not be considered as an alternative to
income (loss) from continuing operations or net income (loss), as an
indicator of Five Star’s operating performance or as a measure of Five
Star’s liquidity. Non-GAAP financial measures as presented by Five Star
may not be comparable to amounts calculated by other companies.
Five Star believes that income (loss) from continuing operations is the
most directly comparable financial measure determined according to GAAP
to Five Star’s presentation of EBITDA and Adjusted EBITDA. The following
table presents the reconciliation of these Non-GAAP financial measures
to loss from continuing operations for the three and nine months ended
September 30, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended September 30,
|
|
|
|
For the nine months
ended September 30,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Loss from continuing operations
|
|
|
|
$
|
(6,603
|
)
|
|
|
|
$
|
(5,844
|
)
|
|
|
|
$
|
(19,896
|
)
|
|
|
|
$
|
(16,055
|
)
|
|
Add: interest and other expense
|
|
|
|
1,139
|
|
|
|
|
945
|
|
|
|
|
3,200
|
|
|
|
|
3,957
|
|
|
Add: (benefit) provision for income taxes (1)
|
|
|
|
(55
|
)
|
|
|
|
(934
|
)
|
|
|
|
(1,330
|
)
|
|
|
|
2,841
|
|
|
Add: depreciation and amortization expense
|
|
|
|
9,753
|
|
|
|
|
9,398
|
|
|
|
|
29,040
|
|
|
|
|
28,847
|
|
|
Less: interest, dividend and other income
|
|
|
|
(167
|
)
|
|
|
|
(237
|
)
|
|
|
|
(559
|
)
|
|
|
|
(766
|
)
|
|
EBITDA
|
|
|
|
4,067
|
|
|
|
|
3,328
|
|
|
|
|
10,455
|
|
|
|
|
18,824
|
|
|
Add: long lived asset impairment
|
|
|
|
142
|
|
|
|
|
196
|
|
|
|
|
528
|
|
|
|
|
502
|
|
|
Less: costs related to the Compliance Assessment (2)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,498
|
)
|
|
Less: litigation recovery
|
|
|
|
(800
|
)
|
|
|
|
—
|
|
|
|
|
(800
|
)
|
|
|
|
—
|
|
|
Add: transaction costs
|
|
|
|
—
|
|
|
|
|
730
|
|
|
|
|
—
|
|
|
|
|
1,480
|
|
|
Less: gain on early extinguishment of debt
|
|
|
|
(143
|
)
|
|
|
|
—
|
|
|
|
|
(143
|
)
|
|
|
|
—
|
|
|
Adjusted EBITDA
|
|
|
|
$
|
3,266
|
|
|
|
|
$
|
4,254
|
|
|
|
|
$
|
10,040
|
|
|
|
|
$
|
19,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The 2017 nine month period includes Five Star's monetization of
alternative minimum tax credits.
(2) Includes a reversal in revenue
reserves and accrued liability for estimated penalties related to the
Compliance Assessment.
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, (2)
|
|
|
|
Nine months ended
September 30, (2)
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Senior living revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community revenue (owned) (3)
|
|
|
|
$
|
23,870
|
|
|
|
|
$
|
23,632
|
|
|
|
|
$
|
71,445
|
|
|
|
|
$
|
70,518
|
|
Independent and assisted living community revenue (leased) (3)
|
|
|
|
109,028
|
|
|
|
|
108,364
|
|
|
|
|
325,780
|
|
|
|
|
326,413
|
|
Continuing care retirement community revenue (leased)
|
|
|
|
96,842
|
|
|
|
|
97,629
|
|
|
|
|
293,733
|
|
|
|
|
294,234
|
|
Skilled nursing facility revenue (leased)
|
|
|
|
42,319
|
|
|
|
|
42,626
|
|
|
|
|
129,328
|
|
|
|
|
130,733
|
|
Other (4)
|
|
|
|
7,595
|
|
|
|
|
7,025
|
|
|
|
|
22,652
|
|
|
|
|
20,380
|
|
Total senior living revenue (owned and leased)
|
|
|
|
$
|
279,654
|
|
|
|
|
$
|
279,276
|
|
|
|
|
$
|
842,938
|
|
|
|
|
$
|
842,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community wages and benefits (owned) (3)
|
|
|
|
$
|
9,990
|
|
|
|
|
$
|
10,053
|
|
|
|
|
$
|
29,687
|
|
|
|
|
$
|
29,656
|
|
Independent and assisted living community wages and benefits
(leased) (3)
|
|
|
|
46,895
|
|
|
|
|
46,541
|
|
|
|
|
139,624
|
|
|
|
|
138,787
|
|
Continuing care retirement community wages and benefits (leased)
|
|
|
|
49,748
|
|
|
|
|
50,074
|
|
|
|
|
149,574
|
|
|
|
|
149,334
|
|
Skilled nursing facility wages and benefits (leased)
|
|
|
|
25,372
|
|
|
|
|
28,274
|
|
|
|
|
80,806
|
|
|
|
|
83,509
|
|
Other (4)
|
|
|
|
6,230
|
|
|
|
|
4,114
|
|
|
|
|
13,446
|
|
|
|
|
13,355
|
|
Total senior living wages and benefits (owned and leased)
|
|
|
|
$
|
138,235
|
|
|
|
|
$
|
139,056
|
|
|
|
|
$
|
413,137
|
|
|
|
|
$
|
414,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other senior living operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community other operating expenses
(owned) (3)
|
|
|
|
$
|
6,090
|
|
|
|
|
$
|
6,161
|
|
|
|
|
$
|
18,848
|
|
|
|
|
$
|
18,676
|
|
Independent and assisted living community other operating expenses
(leased) (3)
|
|
|
|
26,170
|
|
|
|
|
26,530
|
|
|
|
|
80,964
|
|
|
|
|
79,905
|
|
Continuing care retirement community other operating expenses
(leased)
|
|
|
|
24,834
|
|
|
|
|
25,405
|
|
|
|
|
77,423
|
|
|
|
|
75,939
|
|
Skilled nursing facility other operating expenses (leased)
|
|
|
|
10,494
|
|
|
|
|
11,258
|
|
|
|
|
35,019
|
|
|
|
|
33,908
|
|
Other (4)
|
|
|
|
3,650
|
|
|
|
|
1,536
|
|
|
|
|
6,865
|
|
|
|
|
4,137
|
|
Total senior living operating expenses (owned and leased)
|
|
|
|
$
|
71,238
|
|
|
|
|
$
|
70,890
|
|
|
|
|
$
|
219,119
|
|
|
|
|
$
|
212,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes data for managed communities and discontinued operations.
(2)
The number of owned and leased communities between January 1, 2016 and
September 30, 2017 increased by one due to the leasing of two senior
living communities in December 2016, partially offset by the sale in
September 2016 of one leased community that was not classified as held
for sale; separate comparable senior living community financial data is
not presented because the differences between that data and the data for
all owned and leased communities are not material to Five Star's
operating results.
(3) Data presents the seven communities that
were sold as part of the June 2016 sale and leaseback transaction as
leased for all periods presented.
(4) Other senior living revenue
and expenses primarily relate to rehabilitation and other specialty
service revenues and expenses provided at owned and leased senior living
communities.
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
SENIOR LIVING OTHER OPERATING DATA(1)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
September 30,
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
|
|
2017
|
|
|
|
2017
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2016
|
|
Independent and assisted living communities (owned):(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
26
|
|
|
|
|
26
|
|
|
|
|
26
|
|
|
|
|
26
|
|
|
|
|
26
|
|
|
Number of units (end of period)
|
|
|
|
2,703
|
|
|
|
|
2,703
|
|
|
|
|
2,703
|
|
|
|
|
2,703
|
|
|
|
|
2,703
|
|
|
Occupancy(3)
|
|
|
|
82.9
|
%
|
|
|
|
83.4
|
%
|
|
|
|
83.6
|
%
|
|
|
|
84.6
|
%
|
|
|
|
83.5
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
3,410
|
|
|
|
|
$
|
3,427
|
|
|
|
|
$
|
3,437
|
|
|
|
|
$
|
3,346
|
|
|
|
|
$
|
3,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living communities (leased):(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
128
|
|
|
|
|
128
|
|
|
|
|
128
|
|
|
|
|
128
|
|
|
|
|
126
|
|
|
Number of units (end of period)
|
|
|
|
10,537
|
|
|
|
|
10,537
|
|
|
|
|
10,536
|
|
|
|
|
10,567
|
|
|
|
|
10,439
|
|
|
Occupancy(3)
|
|
|
|
84.6
|
%
|
|
|
|
84.6
|
%
|
|
|
|
85.0
|
%
|
|
|
|
85.4
|
%
|
|
|
|
85.7
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
3,981
|
|
|
|
|
$
|
4,006
|
|
|
|
|
$
|
4,016
|
|
|
|
|
$
|
3,925
|
|
|
|
|
$
|
3,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
Number of units (end of period)(5)
|
|
|
|
7,163
|
|
|
|
|
7,172
|
|
|
|
|
7,171
|
|
|
|
|
7,171
|
|
|
|
|
7,204
|
|
|
Occupancy(3)
|
|
|
|
81.6
|
%
|
|
|
|
81.8
|
%
|
|
|
|
82.9
|
%
|
|
|
|
82.8
|
%
|
|
|
|
82.3
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
5,400
|
|
|
|
|
$
|
5,490
|
|
|
|
|
$
|
5,562
|
|
|
|
|
$
|
5,391
|
|
|
|
|
$
|
5,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
Number of units (end of period)(6)
|
|
|
|
2,602
|
|
|
|
|
2,602
|
|
|
|
|
2,601
|
|
|
|
|
2,601
|
|
|
|
|
2,601
|
|
|
Occupancy(3)
|
|
|
|
80.1
|
%
|
|
|
|
79.7
|
%
|
|
|
|
79.8
|
%
|
|
|
|
80.0
|
%
|
|
|
|
80.2
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
6,725
|
|
|
|
|
$
|
6,973
|
|
|
|
|
$
|
7,079
|
|
|
|
|
$
|
6,977
|
|
|
|
|
$
|
6,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities (owned and leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
215
|
|
|
|
|
215
|
|
|
|
|
215
|
|
|
|
|
215
|
|
|
|
|
213
|
|
|
Number of units (end of period)
|
|
|
|
23,005
|
|
|
|
|
23,014
|
|
|
|
|
23,011
|
|
|
|
|
23,042
|
|
|
|
|
22,947
|
|
|
Occupancy(3)
|
|
|
|
83.0
|
%
|
|
|
|
83.1
|
%
|
|
|
|
83.6
|
%
|
|
|
|
83.9
|
%
|
|
|
|
83.8
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
4,648
|
|
|
|
|
$
|
4,715
|
|
|
|
|
$
|
4,756
|
|
|
|
|
$
|
4,639
|
|
|
|
|
$
|
4,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed communities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
|
|
68
|
|
|
|
|
68
|
|
|
|
|
68
|
|
|
|
|
68
|
|
|
|
|
63
|
|
|
Number of units (end of period)(7)
|
|
|
|
8,807
|
|
|
|
|
8,806
|
|
|
|
|
8,798
|
|
|
|
|
8,788
|
|
|
|
|
8,402
|
|
|
Occupancy(3)
|
|
|
|
85.8
|
%
|
|
|
|
85.7
|
%
|
|
|
|
86.0
|
%
|
|
|
|
86.6
|
%
|
|
|
|
86.4
|
%
|
|
Avg. monthly rate(4)
|
|
|
|
$
|
4,243
|
|
|
|
|
$
|
4,297
|
|
|
|
|
$
|
4,322
|
|
|
|
|
$
|
4,222
|
|
|
|
|
$
|
4,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other ancillary services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ageility physical therapy inpatient clinics (end of period)
|
|
|
|
47
|
|
|
|
|
47
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|
Ageility physical therapy outpatient clinics (end of period)
|
|
|
|
88
|
|
|
|
|
85
|
|
|
|
|
80
|
|
|
|
|
76
|
|
|
|
|
76
|
|
|
Home health communities served (end of period)
|
|
|
|
15
|
|
|
|
|
13
|
|
|
|
|
18
|
|
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes data for discontinued operations.
(2) Data presents
the seven communities that were sold as part of the June 2016 sale and
leaseback transaction as leased for all periods presented.
(3) The
calculation of occupancy includes only living units categorized as in
service and as a result, the number of living units may change from
period to period.
(4) Average monthly rate is calculated by taking
the average daily rate, which is defined as total operating revenues for
senior living services divided by occupied units during the period, and
multiplying it by 30 days.
(5) Includes 1,916 skilled nursing units
in communities where assisted living and independent living services are
the predominant services provided.
(6) Includes 69 assisted living
and independent living units in communities where skilled nursing
services are the predominant services provided.
(7) Includes 431
skilled nursing units in communities where assisted living and
independent living services are the predominant services provided.
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
PERCENT BREAKDOWN OF SENIOR LIVING COMMUNITY REVENUE(1)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Independent and assisted living communities (owned): (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
99.0
|
%
|
|
|
|
99.0
|
%
|
|
|
|
98.9
|
%
|
|
|
|
98.9
|
%
|
|
Medicaid
|
|
|
|
1.0
|
%
|
|
|
|
1.0
|
%
|
|
|
|
1.1
|
%
|
|
|
|
1.1
|
%
|
|
Total
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living communities (leased):(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
98.9
|
%
|
|
|
|
99.0
|
%
|
|
|
|
99.0
|
%
|
|
|
|
99.0
|
%
|
|
Medicaid
|
|
|
|
1.1
|
%
|
|
|
|
1.0
|
%
|
|
|
|
1.0
|
%
|
|
|
|
1.0
|
%
|
|
Total
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
74.7
|
%
|
|
|
|
74.2
|
%
|
|
|
|
73.9
|
%
|
|
|
|
74.0
|
%
|
|
Medicare
|
|
|
|
17.9
|
%
|
|
|
|
18.8
|
%
|
|
|
|
19.1
|
%
|
|
|
|
19.2
|
%
|
|
Medicaid
|
|
|
|
7.4
|
%
|
|
|
|
7.0
|
%
|
|
|
|
7.0
|
%
|
|
|
|
6.8
|
%
|
|
Total
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
22.0
|
%
|
|
|
|
26.0
|
%
|
|
|
|
22.7
|
%
|
|
|
|
25.8
|
%
|
|
Medicare
|
|
|
|
17.7
|
%
|
|
|
|
19.7
|
%
|
|
|
|
21.0
|
%
|
|
|
|
20.5
|
%
|
|
Medicaid
|
|
|
|
60.3
|
%
|
|
|
|
54.3
|
%
|
|
|
|
56.3
|
%
|
|
|
|
53.7
|
%
|
|
Total
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities (owned and leased):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
|
|
78.1
|
%
|
|
|
|
78.6
|
%
|
|
|
|
77.8
|
%
|
|
|
|
78.4
|
%
|
|
Medicare
|
|
|
|
9.2
|
%
|
|
|
|
9.9
|
%
|
|
|
|
10.2
|
%
|
|
|
|
10.1
|
%
|
|
Medicaid
|
|
|
|
12.7
|
%
|
|
|
|
11.5
|
%
|
|
|
|
12.0
|
%
|
|
|
|
11.5
|
%
|
|
Total
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes data for managed communities and discontinued operations.
(2)
Data presents the seven communities that were sold as part of the June
2016 sale and leaseback transaction as leased for all periods presented.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171109005443/en/
Source: Five Star Senior Living Inc.