ARV Assisted Living Reports Results, Nine Months Ended December 31, 1997; ARV to Exit Rehabilitation Therapy and Apartment Tax Credit Business Lines.COSTA MESA Costa Mesa (kŏs`tə mā`sə), city (1990 pop. 96,357), Orange co., S Calif., on the Pacific south of Santa Ana; inc. 1953. It is a transportation, residential, and light industrial center. , Calif.--(BW HealthWire)--March 24, 1998--ARV Assisted Living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. , Inc. (Amex:SRS SRS, SRS-A see slow-reacting substance. ) today announced its operating results for the three months and fiscal period (nine months) ended December December: see month. 31, 1997. As previously announced, the Company has changed its fiscal year to a calendar year effective December 31, 1997. For the quarter ended December 31, 1997, the Company reported total revenue of $26.7 million, an increase of $5.8 million or 28% over the same period a year ago. The quarterly loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $4.0 million, or 32 cents per common share, which included $4.4 million, or 34 cents per common share, of special general and administrative expenses offset by a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain of $5.5 million, or 43 cents per common share, from the sale of LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control interests. This compares to a loss of $114,000, or 1 cent per common share for the same quarter in the prior year. The Company announced its plans to exit the rehabilitation rehabilitation: see physical therapy. therapy and the apartment tax credit businesses and has accounted for the financial impact as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The quarterly loss from discontinued operations totaled $13.2 million or $1.03 per common share. In total, the Company reported a quarterly net loss of $17.2 million or $1.35 per common share compared to net income of $255,000 or 3 cents per common share in the comparable quarter during the prior year. For the nine months ended December 31, 1997, the Company reported total revenue of $77.3 million, an increase of $25.4 million or 49% over the same period a year ago. The Company's loss from continuing operations for the nine months ended December 31, 1997 was $8.6 million, or 77 cents per common share, compared to income of $1.0 million, or 11 cents per common share for the same period in the prior year. The Company's loss from discontinued operations totaled $13.6 million or $1.21 per common share. ARV ARV abbr. Bible American Revised Version ARV n abbr (= American Revised Version) → traducción americana de la Biblia ARV n abbr (= reported a total nine-month net loss of $22.1 million or $1.98 per common share. This compares to net income of $867,000 or 9 cents per common share, which included an extraordinary charge, net of income taxes, of $386,000 or 4 cents per common share, during the comparable nine-month period in the prior year. Howard Howard, English noble family. Landowners in Norfolk from the 13th cent., the Howards obtained the duchy of Norfolk through the marriage of Sir Robert Howard to Margaret Mowbray, daughter of Thomas Mowbray, 1st duke of Norfolk. G. Phanstiel, Chairman and Chief Executive Officer, commented on the results of operations: "While disappointed with the 1997 results, I am highly encouraged by several recent decisions the Company has made in a very short period to advance its strategic plan. To facilitate focus on our core business, the Company has made plans to exit the rehabilitation therapy and apartment tax credit businesses. Due to a lack of strategic fit with our geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. cluster cluster, in astronomy: see star cluster; galaxy. (1) Two or more systems working together. See clustering. (2) Also called an "allocation unit" or "file allocation unit," it is some number of disk sectors that are treated as a unit. strategy, we sold our interests in the Prospect Park and Waterside Villas entities and recorded a profit on the sale of $5.5 million. As previously announced, during the first quarter of 1998 we acquired the rights to acquire interests in 13 Hillsdale Hillsdale, borough (1990 pop. 9,750), Bergen co., NE N.J.; inc. 1923. It is primarily residential. communities which builds upon the momentum established in 1997 when we added 974 new units through development and acquisition. All of these activities are expected to be accretive to earnings in 1999 or sooner." Acquisition and Development Activity During calendar year 1997, the Company added seven new communities totaling 974 units to its portfolio. Of these communities, four were newly developed (442 units) and three were acquired from third parties (532 units). The Company completed the 123 unit Villa villa. Although used to designate any country residence, especially in Italy and S France, the term villa particularly refers to a type of pleasure residence with extensive grounds favored by the Romans and richly developed in Italy in the Renaissance. Las Posas community in Camarillo Camarillo (kă'mərē`yō), city (1990 pop. 52,303), Ventura co., S Calif.; inc. 1964. It is the center of a fertile farm area where citrus fruits and flowers are grown. , CA which opened on December 15, 1997. As of mid-March n. 1. the middle part of March. Noun 1. mid-March - the middle part of March period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" , the community had reached 71% occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy . Construction of five additional assisted living communities expected to contain 633 units continued on schedule. The following table illustrates the expected timing of new community development. The Company also owns additional sites not listed below on which it intends to develop assisted living communities. The timing of this development activity will be announced for the quarter in which construction begins or the project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. has been finalized See finalization. . -0-
Communities Anticipated
Under Construction Location Units Opening
Sun Lake Terrace Las Vegas, NV 129 1st Quarter 1998(a)
Canterbury Woods Attleboro, MA 132 2nd Quarter 1998
The Inn at Brookside Stockton, CA 76 3rd Quarter 1998
The Lakes Fort Myers, FL 154 3rd Quarter 1998
Sutton Place Las Vegas, NV 142 3rd Quarter 1998
Total Facilities Under Construction 633
(a) Opened in February 1998.
Operating Results
Graham P. Espley-Jones, Chief Financial Officer, commented on the
operations of the Company's facilities: "Total occupancy of the 46
facilities owned or leased by the Company at December 31, 1997 was
84.5%. Excluding four newly-developed facilities that are in the
lease-up stage, the occupancy of the Company's portfolio at December
31, 1997 was 87.8%. On a same facility basis, the occupancy of the
39 facilities owned or leased by the Company for four quarters or
more was 87.3% compared to 88.5% at December 31, 1996.
"On a same facility basis, operating margins were 34.4% during the
quarter ended December 31, 1997 compared to a 35.5% margin for the
same quarter in the prior year. Revenue from assisted living
services on a same facility basis for the quarter ended December 31,
1997 grew by 34% over the same quarter in the prior year. As a
result, on a same facility basis, assisted living services provided
15% of the revenue from assisted living facilities in the quarter
ended December 31, 1997 compared with 12% of the revenue from these
facilities in the same quarter during the prior year. The average
monthly revenue per occupied unit increased 9.3% from $1,586 to
$1,734 primarily due to the 34% increase in income from assisted
living services and an average 5% increase in the base service
package.
"General and administrative expenses during the quarter ended
December 31, 1997 included $4.4 million of special expenses. These
included amounts incurred in the Company's successful proxy battle
against the unwelcome advance of Emeritus (Amex:ESC), severance and
other one-time payments to founders of the Company and other
management and system conversion costs."
The forward-looking statements contained in this news release are
subject to certain risks and uncertainties that could cause actual
results to differ materially, including without limitation,
licensing, permitting and construction delays on projects under
construction and development, delays in the satisfaction of, or the
inability to satisfy, licensure requirements for acquired facilities,
the possibility that financing for acquisition and development may
become less available or more expensive and the possibility that
integration of operations for facilities developed or acquired may
not occur efficiently.
These and other risks are detailed in the Company's Form 10-K/A
filed with the Securities and Exchange Commission for the year ended
March 31, 1997 and Form 10-K to be filed for the fiscal period ended
December 31, 1997.
Founded in 1980, ARV is one of the largest operators of assisted
living communities in the nation, currently operating 50 communities
containing 6,418 units in 10 states and has five communities
containing 633 units under construction in California, Florida,
Massachusetts and Nevada. ARV is also under contract to purchase
interests in 13 senior housing communities located in California
containing approximately 1,900 units.
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ARV Assisted Living, Inc.
Statement of Operations
(Unaudited)
(all amounts in thousands, except per share amounts)
Three Months Ended December 31,
1997 1996
Revenue:
Assisted living community revenue $26,598 $20,799
Management fees from affiliates 133 145
Total revenue 26,731 20,944
Expenses:
Assisted living community
operating expenses 18,092 13,627
Assisted living community
lease expenses 5,544 3,121
General and administrative 9,288 1,625
Depreciation and amortization 1,732 1,364
Total expenses 34,656 19,737
Income (loss) from operations (7,925) 1,207
Other income (expense):
Interest income 1,170 369
Other income, net 51 (70)
Gain on sale of LLC interests 5,511 --
Interest expense (1,843) (1,497)
Total other income (expense) 4,889 (1,198)
Income (loss) from continuing operations
before income tax expense (benefit)
and minority interest in income of
majority owned partnerships (3,036) 9
Income tax expense (benefit) 734 (13)
Income (loss) from continuing operations
before minority interest in income of
majority owned partnerships (3,770) 22
Minority interest in income of majority
owned partnerships 269 136
Loss from continuing operations (4,039) (114)
Income (loss) from discontinued
operations, net (13,209) 369
Net income (loss) $(17,248) $255
Earnings (loss) per share information:
Basic net loss per common share from
continuing operations $(0.32) $(0.01)
Basic net income (loss) per common
share from discontinued operations (1.03) 0.04
Basic net income (loss) per share $(1.35) $0.03
Weighted average shares outstanding 12,817 9,606
Note: Basic and diluted earnings per share are the same since
potentially dilutive securities are antidilutive during both periods
presented.
ARV Assisted Living, Inc.
Statement of Operations
(Unaudited)
(all amounts in thousands, except per share amounts)
Nine Months Ended December 31,
1997 1996
Revenue:
Assisted living community revenue $76,887 $50,830
Management fees from affiliates 388 999
Total revenue 77,275 51,829
Expenses:
Assisted living community operating
expenses 51,247 32,430
Assisted living community lease
expenses 15,773 8,736
General and administrative 15,759 4,922
Depreciation and amortization 4,896 2,935
Total expenses 87,675 49,023
Income (loss) from operations (10,400) 2,806
Other income (expense):
Interest income 1,821 1,647
Other income, net 321 1,088
Gain on sale of LLC interests 5,511 --
Interest expense (4,568) (4,149)
Total other income (expense) 3,085 (1,414)
Income (loss) from continuing
operations before income
tax expense and minority interest
in income of majority owned
partnerships (7,315) 1,392
Income tax expense 484 115
Income (loss) from continuing operations
before minority interest in income
of majority owned partnerships (7,799) 1,277
Minority interest in income of majority
owned partnerships 773 241
Income (loss) from continuing operations (8,572) 1,036
Income (loss) from discontinued
operations, net (13,563) 217
Extraordinary item, net -- (386)
Net income (loss) $(22,135) $867
Earnings (loss) per share information:
Basic net income (loss) per common
share from continuing
operations $(0.77) $0.11
Basic net income (loss) per
common share from
discontinued operations (1.21) 0.02
Basic net loss per common share from
extraordinary item, net -- (0.04)
Basic net income (loss) per share $(1.98) $0.09
Weighted average shares outstanding 11,169 9,366
Note: Basic and diluted earnings per share are the same since
potentially dilutive securities are antidilutive during both periods
presented.
ARV Assisted Living, Inc.
Statement of Operations
For the Three Months Ended December 31, 1997
(Unaudited)
(In thousands, except per share amounts)
Existing Acquired
Communities(1) Communities(2)
Revenue
Assisted living
community revenue $22,423 $2,428
Management fees
from affiliates -- --
Total revenue 22,423 2,428
Expenses
Assisted living
community operating
expenses 14,706 1,429
Assisted living
community lease
expense 4,167 580
General and administrative -- --
Depreciation and amortization 1,209 103
Total expenses 20,082 2,112
Income (loss) from
operations 2,341 316
Other income (expense)
Interest income -- --
Other income, net -- --
Gain on sale of LLC interests -- --
Interest (expense) (610) (125)
Total other income
(expense) (610) (125)
Income (loss) from continuing
operations before income
tax expense and minority
interest in income of
majority owned partnerships 1,731 191
Income tax expense -- --
Income (loss) from continuing
operations before minority
interest in income of
majority owned partnerships 1,731 191
Minority interest in income of
majority owned partnerships 269 --
Income (loss) from continuing
operations $1,462 $191
Loss from discontinued
operations, net
Net income (loss)
For the Three Months Ended December 31, 1997
(Unaudited)
(In thousands, except per share amounts)
New
Development(3) Corporate Total
Revenue
Assisted living
community revenue $1,747 $-- $26,598
Management fees
from affiliates -- 133 133
Total revenue 1,747 133 26,731
Expenses
Assisted living
community operating
expenses 1,957 -- 18,092
Assisted living
community lease
expense 797 -- 5,544
General and administrative -- 9,288 9,288
Depreciation and amortization 200 220 1,732
Total expenses 2,954 9,508 34,656
Income (loss) from
operations (1,207) (9,375) (7,925)
Other income (expense)
Interest income -- 1,170 1,170
Other income, net -- 51 51
Gain on sale of LLC interests -- 5,511 5,511
Interest (expense) (188) (920) (1,843)
Total other income
(expense) (188) 5,812 4,889
Income (loss) from continuing
operations before income
tax expense and minority
interest in income of
majority owned partnerships (1,395) (3,563) (3,036)
Income tax expense -- 734 734
Income (loss) from continuing
operations before minority
interest in income of
majority owned partnerships (1,395) (4,297) (3,770)
Minority interest in income of
majority owned partnerships -- -- 269
Income (loss) from continuing
operations $(1,395) $(4,297) (4,039)
Loss from discontinued
operations, net (13,209)
Net income (loss) $(17,248)
(1) Represents operations of 39 communities owned, leased or
previously managed (now owned or leased) by the Company over four
quarters or more as of December 31, 1997.
(2) Represents operations of 3 owned and leased communities acquired
from third parties operated by the Company for less than four
quarters as of December 31, 1997.
(3) Represents operations of 5 owned and leased communities
developed by the Company and operated for less than four quarters as
of December 31, 1997.
ARV Assisted Living, Inc.
Statement of Operations
For the Nine Months Ended December 31, 1997
(Unaudited)
(In thousands, except per share amounts)
Existing Acquired
Communities (1) Communities (2)
Revenue
Assisted living
community revenue $66,157 $7,246
Management fees
from affiliates -- --
Total revenue 66,157 7,246
Expenses
Assisted living
community operating
expenses 42,552 4,257
Assisted living
community lease
expense 11,922 1,743
General and administrative -- --
Depreciation and
amortization 3,453 292
Total expenses 57,927 6,292
Income (loss) from
operations 8,230 954
Other income (expense)
Interest income -- --
Other income, net -- --
Gain on sale of
LLC interests -- --
Interest (expense) (1,903) (358)
Total other income
(expense) (1,903) (358)
Income (loss) from continuing
operations before income
tax expense and minority
interest in income of
majority owned
partnerships 6,327 596
Income tax expense -- --
Income (loss) from continuing
operations before minority
interest in income of
majority owned
partnerships 6,327 596
Minority interest in
income of
majority owned
partnerships 1,053 --
Income (loss) from
continuing
operations $5,274 $596
Loss from discontinued
operations, net
Net income (loss)
For the Nine Months Ended December 31, 1997
(Unaudited)
(In thousands, except per share amounts)
New
Development(3) Corporate Total
Revenue
Assisted living
community revenue $3,484 $-- $76,887
Management fees
from affiliates -- 388 388
Total revenue 3,484 388 77,275
Expenses
Assisted living
community operating
expenses 4,438 -- 51,247
Assisted living
community lease
expense 2,108 -- 15,773
General and administrative -- 15,759 15,759
Depreciation and amortization 389 762 4,896
Total expenses 6,935 16,521 87,675
Income (loss) from
operations (3,451) (16,133) (10,400)
Other income (expense)
Interest income -- 1,821 1,821
Other income, net -- 321 321
Gain on sale of LLC interests -- 5,511 5,511
Interest (expense) (307) (2,000) (4,568)
Total other income
(expense) (307) 5,653 3,085
Income (loss) from continuing
operations before income
tax expense and minority
interest in income of
majority owned partnerships (3,758) (10,480) (7,315)
Income tax expense -- 484 484
Income (loss) from continuing
operations before minority
interest in income of
majority owned partnerships (3,758) (10,964) (7,799)
Minority interest in income of
majority owned partnerships (280) -- 773
Income (loss) from continuing
operations $(3,478) $(10,964) (8,572)
Loss from discontinued
operations, net (13,563)
Net income (loss) $(22,135)
(1) Represents operations of 39 communities owned, leased or
previously managed (now owned or leased) by the Company over four
quarters or more as of December 31, 1997.
(2) Represents operations of 3 owned and leased communities acquired
from third parties operated by the Company for less than four
quarters as of December 31, 1997.
(3) Represents operations of 5 owned and leased communities
developed by the Company and operated for less than four quarters as
of December 31, 1997.
ARV Assisted Living, Inc.
Unaudited Condensed Consolidated Balance Sheet
(all amounts in thousands)
December 31, 1997 March 31, 1997
ASSETS
Cash and cash
equivalents $102,776 $15,809
Other current assets 4,491 7,150
Net current assets
discontinued operations -- 1,829
Total current assets 107,267 24,788
Restricted cash 206 1,912
Property, furniture and
equipment, net 117,557 122,027
Other assets 6,821 11,140
Net non-current assets
discontinued operations 1,234 2,080
Total assets $233,085 $161,947
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued
liabilities $15,996 $9,728
Notes payable - current 9,388 2,027
Net current liabilities discontinued
operations 6,558 --
Other current liabilities 46 86
Total current liabilities 31,988 11,841
Notes payable and other liabilities 82,494 90,725
Total Liabilities 114,482 102,566
Minority interest 7,168 8,007
Shareholders' Equity 111,435 51,374
Total liabilities and
shareholders' equity $233,085 $161,947
ARV Assisted Living, Inc.
Detail of Assisted Living Facilities Operated
Facilities December 31, 1997 March 31, 1997 %Change
Owned 14 14 --
Leased 32 29 10%
Managed 3 2 50%
Total 49 45 9%
Units
Owned 1,760 1,760 --
Leased 4,158 3,839 8%
Managed 379 256 48%
Total 6,297 5,855 8%
CONTACT: ARV Assisted Living, Inc. Graham P. Espley-Jones (CFO See Chief Financial Officer. ), 714/751-7400 Patrick M. Donovan Don·o·van , William Joseph Known as "Wild Bill." 1883-1959. American army officer and public official who founded and directed (1942-1945) the Office of Strategic Services, an intelligence-gathering agency that was a forerunner of the CIA. (VP, Finance), 714/751-7400 |
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