NEWTON, Mass.--(BUSINESS WIRE)--
Five Star Senior Living Inc. (Nasdaq: FVE) today announced its financial
results for the quarter ended September 30, 2018.
Financial Results for the quarter ended
September 30,
2018:
-
Senior living revenue for the third quarter of 2018 decreased 2.5% to
$272.7 million from $279.7 million for the same period in
2017, primarily due to Five Star's sale of six senior living
communities in December 2017, January 2018, February 2018 and June
2018 to Senior Housing Properties Trust (Nasdaq: SNH), which Five Star
is currently managing for SNH, the sale by Five Star and SNH of one
skilled nursing facility to a third party in June 2018 that was
previously leased to Five Star and a decrease in occupancy, partially
offset by an increase in revenues from ancillary services, such as
rehabilitation and wellness services. Management fee revenue for the
third quarter of 2018 increased 17.4% to $4.0 million, primarily due
to an increase in the number of managed communities compared to the
same period in 2017.
-
Net loss for the third quarter of 2018 was $21.6 million, or $0.43 per
diluted share, compared to net loss of $6.6 million, or $0.13 per
diluted share, for the same period in 2017. 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 matter, or the litigation
recovery.
-
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, for the third quarter of 2018 was $(12.4) million compared to
$4.1 million for the same period in 2017. EBITDA excluding certain
items noted in the supplemental information provided below, or
Adjusted EBITDA, was $(12.4) million and $3.3 million for the third
quarters of 2018 and 2017, respectively. A reconciliation of net loss
determined in accordance with U.S. generally accepted accounting
principles, or GAAP, to EBITDA and Adjusted EBITDA for the quarters
ended September 30, 2018 and 2017 appears later in this press release.
Operating Results for the quarter ended
September 30,
2018:
-
Occupancy at owned and leased senior living communities for the third
quarter of 2018 was 82.0% compared to 83.0% for the same period in
2017.
-
The average monthly rate at owned and leased senior living communities
for the third quarter of 2018 increased 1.1% to $4,701 from $4,648 for
the same period in 2017.
-
The percentage of revenue derived from residents’ private resources at
owned and leased senior living communities for the third quarter of
2018 was 77.8% compared to 78.1% for the same period in 2017.
Financial Results for the nine months ended
September 30,
2018:
-
Senior living revenue for the nine months ended September 30, 2018
decreased 2.9% to $818.1 million from $842.9 million for the same
period in 2017, primarily due to Five Star's sale of six senior living
communities in December 2017, January 2018, February 2018 and June
2018 to SNH, which Five Star is currently managing for SNH, the sale
by Five Star and SNH of one skilled nursing facility to a third party
in June 2018 that was previously leased to Five Star and a decrease in
occupancy, partially offset by an increase in revenues from ancillary
services, such as rehabilitation and wellness services. Management fee
revenue for the nine months ended September 30, 2018 increased 8.3% to
$11.4 million, primarily due to an increase in the number of managed
communities compared to the same period in 2017.
-
Net loss for the nine months ended September 30, 2018 was $50.4
million, or $1.02 per diluted share, compared to net loss of $19.9
million, or $0.40 per diluted share, for the same period in 2017. Net
loss for the nine months ended September 30, 2018 included a gain on
sale of senior living communities of $7.1 million, or $0.14 per
diluted share, primarily due to Five Star's sale of four senior living
communities in January, February and June 2018 to SNH, which Five Star
is currently managing for SNH. Net loss for the nine months ended
September 30, 2017 included the $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 Five
Star's monetization of alternative minimum tax credits during the
second quarter of 2017.
-
EBITDA for the nine months ended September 30, 2018 was $(22.0)
million compared to $10.5 million for the same period in
2017. Adjusted EBITDA for the nine months ended September 30, 2018 was
$(28.2) million compared to $10.0 million for the same period in
2017. A reconciliation of net loss determined in accordance with GAAP
to EBITDA and Adjusted EBITDA for the nine months ended September 30,
2018 and 2017 appears later in this press release.
Other:
-
Five Star faces challenges that are currently negatively impacting its
revenues, expenses, cash flows and results from operations, and Five
Star expects these challenges to continue at least through 2019. These
conditions raise substantial doubt about Five Star’s ability to
continue as a going concern. Based on Five Star’s cash balance at
September 30, 2018 and projected cash needs for the next 12 months,
Five Star’s management believes that Five Star will need to increase
its revenues, reduce its costs and/or pursue other transactions to be
able to continue to fund its operating and capital requirements and
meet its debt covenant obligations.
-
In November 2018, Five Star began managing for SNH a senior living
community located in Colorado with 238 living units pursuant to a
management agreement with SNH.
Conference Call:
At 10:00 a.m. Eastern Time this morning, President and Chief Executive
Officer, Bruce Mackey, and Executive Vice President, Chief Financial
Officer and Treasurer, Richard Doyle, will host a conference call to
discuss Five Star's third quarter 2018 results.
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. on Wednesday, November 21, 2018. To access
the replay, dial (412) 317-0088. The replay pass code is 10123764.
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 ofFive
Star’sthird quarter2018conference callarestrictly prohibited without the prior written consent ofFive
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, 2018, Five Star operated 283 senior living
communities with 31,805 living units located in 32 states, including 208
communities (22,290 living units) that it owned or leased and 75
communities (9,515 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, INCLUDING:
-
ANY ACTIONS FIVE STAR MAY TAKE TO ADDRESS THE CURRENT SUBSTANTIAL
DOUBT AS TO ITS ABILITY TO CONTINUE AS A GOING CONCERN MAY NOT BE
SUCCESSFUL. FURTHER, ANY SUCH ACTIONS THAT MAY ADDRESS THAT CONCERN
MAY ONLY PROVIDE RELIEF IN THE SHORT TERM AND COULD INCREASE FIVE
STAR’S FUTURE COSTS AND THEREBY PREVENT OR LIMIT ITS ABILITY TO
OPERATE PROFITABLY IN THE INTERMEDIATE OR LONGER TERM.
-
FIVE STAR’S ABILITY TO OPERATE SENIOR LIVING COMMUNITIES PROFITABLY
DEPENDS ON MANY FACTORS, INCLUDING SOME FACTORS WHICH ARE BEYOND FIVE
STAR’S CONTROL, SUCH AS THE DECREASED DEMAND FOR FIVE STAR’S SERVICES,
AND FIVE STAR MAY NOT BE ABLE TO SUCCESSFULLY OPERATE AND COMPETE.
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.
|
|
|
|
|
|
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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Senior living revenue
|
|
$
|
272,701
|
|
|
$
|
279,654
|
|
|
$
|
818,108
|
|
|
$
|
842,938
|
|
|
Management fee revenue
|
|
4,009
|
|
|
3,414
|
|
|
11,408
|
|
|
10,531
|
|
|
Reimbursed costs incurred on behalf of managed communities
|
|
72,200
|
|
|
64,033
|
|
|
208,009
|
|
|
194,346
|
|
|
Total revenues
|
|
348,910
|
|
|
347,101
|
|
|
1,037,525
|
|
|
1,047,815
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits
|
|
142,035
|
|
|
138,255
|
|
|
418,917
|
|
|
413,196
|
|
|
Other senior living operating expenses
|
|
76,761
|
|
|
71,218
|
|
|
226,302
|
|
|
219,060
|
|
|
Costs incurred on behalf of managed communities
|
|
72,200
|
|
|
64,033
|
|
|
208,009
|
|
|
194,346
|
|
|
Rent expense
|
|
52,282
|
|
|
51,779
|
|
|
156,640
|
|
|
154,524
|
|
|
General and administrative expenses
|
|
18,965
|
|
|
17,851
|
|
|
57,405
|
|
|
56,733
|
|
|
Depreciation and amortization expense
|
|
9,137
|
|
|
9,753
|
|
|
26,974
|
|
|
29,040
|
|
|
Loss (gain) on sale of senior living communities
|
|
62
|
|
|
—
|
|
|
(7,131
|
)
|
|
—
|
|
|
Long lived asset impairment
|
|
—
|
|
|
142
|
|
|
365
|
|
|
528
|
|
|
Total operating expenses
|
|
371,442
|
|
|
353,031
|
|
|
1,087,481
|
|
|
1,067,427
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
(22,532
|
)
|
|
(5,930
|
)
|
|
(49,956
|
)
|
|
(19,612
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest, dividend and other income
|
|
192
|
|
|
167
|
|
|
577
|
|
|
559
|
|
|
Interest and other expense
|
|
(466
|
)
|
|
(1,139
|
)
|
|
(1,773
|
)
|
|
(3,200
|
)
|
|
Gain on early extinguishment of debt
|
|
—
|
|
|
143
|
|
|
—
|
|
|
143
|
|
|
Unrealized gain on equity investments
|
|
133
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
Realized gain (loss) on sale of debt and equity investments, net of
tax
|
|
2
|
|
|
70
|
|
|
(8
|
)
|
|
351
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes and equity in earnings of an investee
|
|
(22,671
|
)
|
|
(6,689
|
)
|
|
(51,033
|
)
|
|
(21,759
|
)
|
|
Benefit (provision) for income taxes
|
|
263
|
|
|
55
|
|
|
(274
|
)
|
|
1,330
|
|
|
Equity in earnings of an investee, net of tax
|
|
826
|
|
|
31
|
|
|
882
|
|
|
533
|
|
|
Net loss
|
|
$
|
(21,582
|
)
|
|
$
|
(6,603
|
)
|
|
$
|
(50,425
|
)
|
|
$
|
(19,896
|
)
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic and diluted
|
|
49,682
|
|
|
49,242
|
|
|
49,643
|
|
|
49,199
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share—basic and diluted
|
|
$
|
(0.43
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.02
|
)
|
|
$
|
(0.40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
13,128
|
|
|
$
|
26,255
|
|
|
Accounts receivable, net of allowance
|
|
36,860
|
|
|
38,673
|
|
|
Due from related persons
|
|
6,062
|
|
|
4,774
|
|
|
Investments
|
|
21,175
|
|
|
22,524
|
|
|
Restricted cash
|
|
20,123
|
|
|
20,747
|
|
|
Prepaid expenses and other current assets
|
|
26,870
|
|
|
25,132
|
|
|
Assets held for sale
|
|
—
|
|
|
59,080
|
|
|
Total current assets
|
|
124,218
|
|
|
197,185
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
244,748
|
|
|
251,504
|
|
|
Equity investment of an investee
|
|
9,157
|
|
|
8,185
|
|
|
Restricted cash
|
|
1,538
|
|
|
1,476
|
|
|
Restricted investments
|
|
8,753
|
|
|
10,758
|
|
|
Other long term assets
|
|
6,211
|
|
|
6,800
|
|
|
Total assets
|
|
$
|
394,625
|
|
|
$
|
475,908
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Revolving credit facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accounts payable and accrued expenses
|
|
70,419
|
|
|
74,734
|
|
|
Accrued compensation and benefits
|
|
45,057
|
|
|
37,893
|
|
|
Due to related persons
|
|
18,757
|
|
|
18,683
|
|
|
Mortgage notes payable
|
|
333
|
|
|
316
|
|
|
Accrued real estate taxes
|
|
16,430
|
|
|
11,801
|
|
|
Security deposits and current portion of continuing care contracts
|
|
3,573
|
|
|
4,073
|
|
|
Other current liabilities
|
|
39,187
|
|
|
36,361
|
|
|
Liabilities held for sale
|
|
—
|
|
|
34,781
|
|
|
Total current liabilities
|
|
193,756
|
|
|
218,642
|
|
|
|
|
|
|
|
Long term liabilities:
|
|
|
|
|
|
Mortgage notes payable
|
|
7,620
|
|
|
7,872
|
|
|
Accrued self insurance obligations
|
|
32,248
|
|
|
33,082
|
|
|
Deferred gain on sale and leaseback transaction
|
|
61,130
|
|
|
66,087
|
|
|
Other long term liabilities
|
|
4,903
|
|
|
5,231
|
|
|
Total long term liabilities
|
|
105,901
|
|
|
112,272
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
Common stock, par value $.01: 75,000,000 shares authorized,
50,579,744 and 50,524,424 shares issued and outstanding at September
30, 2018 and December 31, 2017, respectively
|
|
506
|
|
|
505
|
|
|
Additional paid in capital
|
|
361,595
|
|
|
360,942
|
|
|
Accumulated deficit
|
|
(268,967
|
)
|
|
(220,489
|
)
|
|
Accumulated other comprehensive income
|
|
1,834
|
|
|
4,036
|
|
|
Total shareholders’ equity
|
|
94,968
|
|
|
144,994
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
394,625
|
|
|
$
|
475,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(unaudited)
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
2018
|
|
2017
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(50,425
|
)
|
|
$
|
(19,896
|
)
|
|
Adjustments to reconcile net loss to cash provided by (used in)
operating activities:
|
|
|
|
|
|
Depreciation and amortization expense
|
|
26,974
|
|
|
29,040
|
|
|
Gain on early extinguishment of debt
|
|
—
|
|
|
(166
|
)
|
|
Gain on sale of senior living communities
|
|
(7,131
|
)
|
|
—
|
|
|
Unrealized gain on equity investments
|
|
(127
|
)
|
|
—
|
|
|
Realized loss (gain) on sale of debt and equity investments
|
|
8
|
|
|
(351
|
)
|
|
Loss on disposal of property and equipment
|
|
263
|
|
|
202
|
|
|
Long lived asset impairment
|
|
365
|
|
|
528
|
|
|
Equity in earnings of an investee, net of tax
|
|
(882
|
)
|
|
(533
|
)
|
|
Stock based compensation
|
|
654
|
|
|
784
|
|
|
Provision for losses on receivables
|
|
3,694
|
|
|
3,632
|
|
|
Amortization of deferred gain on sale and leaseback transaction
|
|
(4,957
|
)
|
|
(4,956
|
)
|
|
Other noncash expense (income) adjustments, net
|
|
279
|
|
|
325
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(1,881
|
)
|
|
(2,797
|
)
|
|
Prepaid expenses and other assets
|
|
(1,715
|
)
|
|
(8,853
|
)
|
|
Accounts payable and accrued expenses
|
|
(2,491
|
)
|
|
3,821
|
|
|
Accrued compensation and benefits
|
|
7,164
|
|
|
8,613
|
|
|
Due from related persons, net
|
|
(1,670
|
)
|
|
9,131
|
|
|
Other current and long term liabilities
|
|
5,879
|
|
|
6,642
|
|
|
Cash (used in) provided by operating activities
|
|
(25,999
|
)
|
|
25,166
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Acquisition of property and equipment
|
|
(36,941
|
)
|
|
(55,049
|
)
|
|
Purchases of investments
|
|
(3,239
|
)
|
|
(10,895
|
)
|
|
Proceeds from sale of property and equipment
|
|
14,749
|
|
|
30,698
|
|
|
Proceeds from sale of land
|
|
—
|
|
|
750
|
|
|
Proceeds from sale of communities
|
|
31,819
|
|
|
—
|
|
|
Proceeds from sale of investments
|
|
6,349
|
|
|
15,681
|
|
|
Cash provided by (used in) investing activities
|
|
12,737
|
|
|
(18,815
|
)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from borrowings on revolving credit facility
|
|
25,000
|
|
|
40,000
|
|
|
Repayments of borrowings on revolving credit facility
|
|
(25,000
|
)
|
|
(35,000
|
)
|
|
Repayments of mortgage notes payable
|
|
(427
|
)
|
|
(14,111
|
)
|
|
Prepayment fees on early extinguishment of debt
|
|
—
|
|
|
(132
|
)
|
|
Payment of deferred financing fees
|
|
—
|
|
|
(1,889
|
)
|
|
Cash used in financing activities
|
|
(427
|
)
|
|
(11,132
|
)
|
|
|
|
|
|
|
Cash flows from discontinued operations:
|
|
|
|
|
|
Net cash provided by operating activities
|
|
—
|
|
|
1,003
|
|
|
Net cash flows provided by discontinued operations
|
|
—
|
|
|
1,003
|
|
|
|
|
|
|
|
Change in cash and cash equivalents and restricted cash
|
|
(13,689
|
)
|
|
(3,778
|
)
|
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
48,478
|
|
|
33,576
|
|
|
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
34,789
|
|
|
$
|
29,798
|
|
|
|
|
|
|
|
Reconciliation of cash and cash equivalents and restricted cash
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
13,128
|
|
|
$
|
8,706
|
|
|
Restricted cash
|
|
21,661
|
|
|
21,092
|
|
|
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
34,789
|
|
|
$
|
29,798
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
1,195
|
|
|
$
|
2,913
|
|
|
Cash paid for income taxes, net
|
|
$
|
338
|
|
|
$
|
275
|
|
|
|
|
|
|
|
Non-cash activities:
|
|
|
|
|
|
Real estate sale
|
|
$
|
33,364
|
|
|
$
|
—
|
|
|
Mortgage notes assumed by purchaser in real estate sale
|
|
$
|
33,364
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 believes the
non-GAAP financial measures presented in the table below are
meaningful supplemental disclosures because they 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 make comparisons
between Five Star and other companies on both a GAAP and a
non-GAAP basis. Five Star believes that EBITDA and Adjusted EBITDA
are meaningful financial measures that may help investors better
understand its financial performance, including by allowing
investors to compare Five Star’s performance between periods and
to the performance of other companies. EBITDA and Adjusted EBITDA
are used by management to evaluate Five Star’s financial
performance and compare Five Star’s performance over time and to
the performance of other companies. Five Star calculates EBITDA
and Adjusted EBITDA as shown below. These measures should not be
considered as alternatives to net income (loss) or operating
income (loss), as indicators of Five Star’s operating performance
or as measures of Five Star’s liquidity. Also, EBITDA and Adjusted
EBITDA as presented may not be comparable to similarly titled
amounts calculated by other companies.
Five Star believes that net income (loss) 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 net loss for the three and nine months ended
September 30, 2018 and 2017.
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net loss
|
|
$
|
(21,582
|
)
|
|
$
|
(6,603
|
)
|
|
$
|
(50,425
|
)
|
|
$
|
(19,896
|
)
|
|
Add (less):
|
|
|
|
|
|
|
|
|
|
Interest and other expense
|
|
466
|
|
|
1,139
|
|
|
1,773
|
|
|
3,200
|
|
|
(Benefit) provision for income taxes
|
|
(263
|
)
|
|
(55
|
)
|
|
274
|
|
|
(1,330
|
)
|
|
Depreciation and amortization expense
|
|
9,137
|
|
|
9,753
|
|
|
26,974
|
|
|
29,040
|
|
|
Interest, dividend and other income
|
|
(192
|
)
|
|
(167
|
)
|
|
(577
|
)
|
|
(559
|
)
|
|
EBITDA
|
|
(12,434
|
)
|
|
4,067
|
|
|
(21,981
|
)
|
|
10,455
|
|
|
Add (less):
|
|
|
|
|
|
|
|
|
|
Long lived asset impairment
|
|
—
|
|
|
142
|
|
|
365
|
|
|
528
|
|
|
Costs related to compliance assessment
|
|
12
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
Employee litigation matter
|
|
—
|
|
|
—
|
|
|
605
|
|
|
—
|
|
|
Litigation recovery
|
|
—
|
|
|
(800
|
)
|
|
—
|
|
|
(800
|
)
|
|
Loss (gain) on sale of senior living communities
|
|
62
|
|
|
—
|
|
|
(7,131
|
)
|
|
—
|
|
|
Gain on early extinguishment of debt
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
|
Adjusted EBITDA
|
|
$
|
(12,360
|
)
|
|
$
|
3,266
|
|
|
$
|
(28,248
|
)
|
|
$
|
10,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
SENIOR LIVING COMMUNITY
FINANCIAL DATA(1)
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Senior living revenue:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community revenue (owned)
|
|
$
|
18,534
|
|
|
$
|
23,870
|
|
|
$
|
57,584
|
|
|
$
|
71,445
|
|
|
Independent and assisted living community revenue (leased)
|
|
108,118
|
|
|
109,028
|
|
|
322,792
|
|
|
325,780
|
|
|
Continuing care retirement community revenue (leased)
|
|
96,864
|
|
|
96,842
|
|
|
289,711
|
|
|
293,733
|
|
|
Skilled nursing facility revenue (leased)
|
|
40,612
|
|
|
42,319
|
|
|
122,061
|
|
|
129,328
|
|
|
Ageility physical therapy revenue
|
|
8,573
|
|
|
7,595
|
|
|
25,960
|
|
|
22,652
|
|
|
Total senior living revenue
|
|
$
|
272,701
|
|
|
$
|
279,654
|
|
|
$
|
818,108
|
|
|
$
|
842,938
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community wages and benefits (owned)
|
|
$
|
8,618
|
|
|
$
|
9,992
|
|
|
$
|
25,782
|
|
|
$
|
29,691
|
|
|
Independent and assisted living community wages and benefits (leased)
|
|
49,760
|
|
|
46,902
|
|
|
144,060
|
|
|
139,643
|
|
|
Continuing care retirement community wages and benefits (leased)
|
|
50,774
|
|
|
49,754
|
|
|
151,502
|
|
|
149,593
|
|
|
Skilled nursing facility wages and benefits (leased)
|
|
27,132
|
|
|
26,889
|
|
|
81,628
|
|
|
82,329
|
|
|
Ageility physical therapy wages and benefits
|
|
6,021
|
|
|
5,139
|
|
|
17,589
|
|
|
15,253
|
|
|
Insurance and other (2) |
|
(270
|
)
|
|
(421
|
)
|
|
(1,644
|
)
|
|
(3,313
|
)
|
|
Total senior living wages and benefits
|
|
$
|
142,035
|
|
|
$
|
138,255
|
|
|
$
|
418,917
|
|
|
$
|
413,196
|
|
|
|
|
|
|
|
|
|
|
|
Other senior living operating expenses:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community other operating expenses
(owned)
|
|
$
|
5,483
|
|
|
$
|
6,089
|
|
|
$
|
17,003
|
|
|
$
|
18,844
|
|
|
Independent and assisted living community other operating expenses
(leased)
|
|
28,926
|
|
|
26,161
|
|
|
86,182
|
|
|
80,945
|
|
|
Continuing care retirement community other operating expenses
(leased)
|
|
27,994
|
|
|
24,828
|
|
|
81,705
|
|
|
77,404
|
|
|
Skilled nursing facility other operating expenses (leased)
|
|
11,845
|
|
|
10,490
|
|
|
36,855
|
|
|
35,008
|
|
|
Ageility physical therapy other operating expenses
|
|
809
|
|
|
484
|
|
|
1,906
|
|
|
1,426
|
|
|
Insurance and other (2) |
|
1,704
|
|
|
3,166
|
|
|
2,651
|
|
|
5,433
|
|
|
Total other senior living operating expenses
|
|
$
|
76,761
|
|
|
$
|
71,218
|
|
|
$
|
226,302
|
|
|
$
|
219,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes data for managed communities.
|
|
(2)
|
|
Insurance and other expenses primarily relate to Five Star's captive
insurance company subsidiary, which mainly participates in Five
Star's workers' compensation and professional and general liability
insurance programs. Credit balances in senior living wages and
benefits represent premiums earned by Five Star's captive insurance
company subsidiary in excess of expenses recorded in the applicable
period.
|
|
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
COMPARABLE SENIOR LIVING
COMMUNITY FINANCIAL DATA(1)
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
(2)
|
|
Nine Months Ended
September 30,
(3)
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Senior living revenue:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community revenue (owned)
|
|
$
|
18,532
|
|
|
$
|
18,477
|
|
|
$
|
55,108
|
|
|
$
|
55,436
|
|
|
Independent and assisted living community revenue (leased)
|
|
108,118
|
|
|
109,028
|
|
|
322,792
|
|
|
325,780
|
|
|
Continuing care retirement community revenue (leased)
|
|
96,864
|
|
|
96,842
|
|
|
289,711
|
|
|
293,733
|
|
|
Skilled nursing facility revenue (leased)
|
|
40,618
|
|
|
40,508
|
|
|
118,998
|
|
|
123,569
|
|
|
Ageility physical therapy revenue
|
|
7,289
|
|
|
7,523
|
|
|
20,989
|
|
|
21,866
|
|
|
Total senior living revenue
|
|
$
|
271,421
|
|
|
$
|
272,378
|
|
|
$
|
807,598
|
|
|
$
|
820,384
|
|
|
|
|
|
|
|
|
|
|
|
Senior living wages and benefits:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community wages and benefits (owned)
|
|
$
|
8,622
|
|
|
$
|
8,145
|
|
|
$
|
24,882
|
|
|
$
|
24,226
|
|
|
Independent and assisted living community wages and benefits (leased)
|
|
49,760
|
|
|
46,902
|
|
|
144,060
|
|
|
139,643
|
|
|
Continuing care retirement community wages and benefits (leased)
|
|
50,774
|
|
|
49,754
|
|
|
151,502
|
|
|
149,593
|
|
|
Skilled nursing facility wages and benefits (leased)
|
|
27,136
|
|
|
25,700
|
|
|
79,580
|
|
|
78,562
|
|
|
Ageility physical therapy wages and benefits
|
|
5,103
|
|
|
5,066
|
|
|
14,273
|
|
|
14,715
|
|
|
Insurance and other (4) |
|
(270
|
)
|
|
(421
|
)
|
|
(1,644
|
)
|
|
(3,313
|
)
|
|
Total senior living wages and benefits
|
|
$
|
141,125
|
|
|
$
|
135,146
|
|
|
$
|
412,653
|
|
|
$
|
403,426
|
|
|
|
|
|
|
|
|
|
|
|
Other senior living operating expenses:
|
|
|
|
|
|
|
|
|
|
Independent and assisted living community other operating expenses
(owned)
|
|
$
|
5,461
|
|
|
$
|
4,748
|
|
|
$
|
16,068
|
|
|
$
|
14,851
|
|
|
Independent and assisted living community other operating expenses
(leased)
|
|
28,926
|
|
|
26,161
|
|
|
86,182
|
|
|
80,945
|
|
|
Continuing care retirement community other operating expenses
(leased)
|
|
27,994
|
|
|
24,828
|
|
|
81,705
|
|
|
77,404
|
|
|
Skilled nursing facility other operating expenses (leased)
|
|
11,822
|
|
|
9,618
|
|
|
35,728
|
|
|
32,933
|
|
|
Ageility physical therapy other operating expenses
|
|
678
|
|
|
471
|
|
|
1,558
|
|
|
1,302
|
|
|
Insurance and other (4) |
|
1,704
|
|
|
3,166
|
|
|
2,651
|
|
|
5,433
|
|
|
Total other senior living operating expenses
|
|
$
|
76,585
|
|
|
$
|
68,992
|
|
|
$
|
223,892
|
|
|
$
|
212,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes data for managed communities.
|
|
(2)
|
|
Includes data for senior living communities that Five Star has owned
or leased continuously since July 1, 2017.
|
|
(3)
|
|
Includes data for senior living communities that Five Star has owned
or leased continuously since January 1, 2017.
|
|
(4)
|
|
Insurance and other expenses primarily relate to Five Star's captive
insurance company subsidiary, which mainly participates in Five
Star's workers' compensation and professional and general liability
insurance programs. Credit balances in senior living wages and
benefits represent premiums earned by Five Star's captive insurance
company subsidiary in excess of expenses recorded in the applicable
period.
|
|
|
|
|
|
|
|
FIVE STAR SENIOR LIVING INC.
SENIOR LIVING OTHER OPERATING
DATA
(unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
Independent and assisted living communities (owned):
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
20
|
|
|
20
|
|
|
22
|
|
|
24
|
|
|
26
|
|
|
Number of units (end of period)
|
|
2,108
|
|
|
2,108
|
|
|
2,259
|
|
|
2,474
|
|
|
2,703
|
|
|
Occupancy(2) |
|
81.5
|
%
|
|
81.1
|
%
|
|
80.7
|
%
|
|
82.7
|
%
|
|
82.9
|
%
|
|
Avg. monthly rate(3) |
|
$
|
3,442
|
|
|
$
|
3,392
|
|
|
$
|
3,464
|
|
|
$
|
3,408
|
|
|
$
|
3,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
128
|
|
|
128
|
|
|
128
|
|
|
128
|
|
|
128
|
|
|
Number of units (end of period)
|
|
10,520
|
|
|
10,519
|
|
|
10,510
|
|
|
10,507
|
|
|
10,537
|
|
|
Occupancy(2) |
|
83.7
|
%
|
|
83.6
|
%
|
|
83.4
|
%
|
|
84.4
|
%
|
|
84.6
|
%
|
|
Avg. monthly rate(3) |
|
$
|
3,991
|
|
|
$
|
4,024
|
|
|
$
|
4,070
|
|
|
$
|
3,978
|
|
|
$
|
3,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
31
|
|
|
31
|
|
|
31
|
|
|
31
|
|
|
31
|
|
|
Number of units (end of period)(4) |
|
7,157
|
|
|
7,158
|
|
|
7,158
|
|
|
7,159
|
|
|
7,163
|
|
|
Occupancy(2) |
|
81.3
|
%
|
|
80.6
|
%
|
|
81.5
|
%
|
|
81.8
|
%
|
|
81.6
|
%
|
|
Avg. monthly rate(3) |
|
$
|
5,427
|
|
|
$
|
5,433
|
|
|
$
|
5,584
|
|
|
$
|
5,433
|
|
|
$
|
5,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities (leased):
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
29
|
|
|
29
|
|
|
30
|
|
|
30
|
|
|
30
|
|
|
Number of units (end of period)(5) |
|
2,505
|
|
|
2,505
|
|
|
2,602
|
|
|
2,602
|
|
|
2,602
|
|
|
Occupancy(2) |
|
76.9
|
%
|
|
74.7
|
%
|
|
75.7
|
%
|
|
77.8
|
%
|
|
80.1
|
%
|
|
Avg. monthly rate(3) |
|
$
|
6,874
|
|
|
$
|
6,926
|
|
|
$
|
6,951
|
|
|
$
|
6,721
|
|
|
$
|
6,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities (owned and leased):
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
208
|
|
|
208
|
|
|
211
|
|
|
213
|
|
|
215
|
|
|
Number of units (end of period)
|
|
22,290
|
|
|
22,290
|
|
|
22,529
|
|
|
22,742
|
|
|
23,005
|
|
|
Occupancy(2) |
|
82.0
|
%
|
|
81.4
|
%
|
|
81.7
|
%
|
|
82.6
|
%
|
|
83.0
|
%
|
|
Avg. monthly rate(3) |
|
$
|
4,701
|
|
|
$
|
4,709
|
|
|
$
|
4,796
|
|
|
$
|
4,653
|
|
|
$
|
4,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed communities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Number of communities (end of period)
|
|
75
|
|
|
75
|
|
|
72
|
|
|
70
|
|
|
68
|
|
|
Number of units (end of period)(6) |
|
9,515
|
|
|
9,510
|
|
|
9,258
|
|
|
9,043
|
|
|
8,807
|
|
|
Occupancy(2) |
|
86.7
|
%
|
|
86.1
|
%
|
|
86.0
|
%
|
|
86.0
|
%
|
|
85.8
|
%
|
|
Avg. monthly rate(3) |
|
$
|
4,164
|
|
|
$
|
4,242
|
|
|
$
|
4,301
|
|
|
$
|
4,254
|
|
|
$
|
4,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other ancillary services:
|
|
|
|
|
|
|
|
|
|
|
|
Number of ageility physical therapy inpatient clinics (end of period)
|
|
47
|
|
|
47
|
|
|
47
|
|
|
47
|
|
|
47
|
|
|
Number of ageility physical therapy outpatient clinics (end of
period)
|
|
120
|
|
|
111
|
|
|
108
|
|
|
92
|
|
|
88
|
|
|
Number of home health communities served (end of period)
|
|
12
|
|
|
12
|
|
|
12
|
|
|
15
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Occupancy and average monthly rate for the three months ended
December 31, 2017, March 31, 2018 and June 30, 2018 include data for
the senior living communities that were sold to SNH during such
periods as owned until the time of sale and as managed from the time
of sale through the end of such periods.
|
|
(2)
|
|
Includes living units categorized as in service. As a result, the
number of living units may change from period to period for reasons
other than the acquisition or disposition of senior living
communities.
|
|
(3)
|
|
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.
|
|
(4)
|
|
Includes 1,916 skilled nursing units in communities where assisted
living and independent living services are the predominant services
provided.
|
|
(5)
|
|
Includes 76 assisted living and independent living units in
communities where skilled nursing services are the predominant
services provided.
|
|
(6)
|
|
Includes 427 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Independent and assisted living communities (owned):
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
98.4
|
%
|
|
99.0
|
%
|
|
98.7
|
%
|
|
98.9
|
%
|
|
Medicaid
|
|
1.6
|
%
|
|
1.0
|
%
|
|
1.3
|
%
|
|
1.1
|
%
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Independent and assisted living communities (leased):
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
98.9
|
%
|
|
98.9
|
%
|
|
98.9
|
%
|
|
99.0
|
%
|
|
Medicaid
|
|
1.1
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
|
1.0
|
%
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Continuing care retirement communities (leased):
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
74.3
|
%
|
|
74.7
|
%
|
|
74.0
|
%
|
|
73.9
|
%
|
|
Medicare
|
|
17.7
|
%
|
|
17.9
|
%
|
|
18.3
|
%
|
|
19.1
|
%
|
|
Medicaid
|
|
8.0
|
%
|
|
7.4
|
%
|
|
7.7
|
%
|
|
7.0
|
%
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing facilities (leased):
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
21.0
|
%
|
|
22.0
|
%
|
|
20.7
|
%
|
|
22.6
|
%
|
|
Medicare
|
|
17.1
|
%
|
|
17.7
|
%
|
|
18.5
|
%
|
|
21.0
|
%
|
|
Medicaid
|
|
61.9
|
%
|
|
60.3
|
%
|
|
60.8
|
%
|
|
56.4
|
%
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Total senior living communities (owned and leased):
|
|
|
|
|
|
|
|
|
|
Private and other sources
|
|
77.8
|
%
|
|
78.1
|
%
|
|
77.7
|
%
|
|
77.8
|
%
|
|
Medicare
|
|
9.1
|
%
|
|
9.2
|
%
|
|
9.6
|
%
|
|
10.2
|
%
|
|
Medicaid
|
|
13.1
|
%
|
|
12.7
|
%
|
|
12.7
|
%
|
|
12.0
|
%
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes data for managed communities.
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181114005255/en/
Contact: Brad Shepherd, Director, Investor Relations
(617) 796-8245
Source: Five Star Senior Living Inc.