ARV Assisted Living Reports Results For Quarter Ended Sept. 30, 1997; 51 Percent Quarterly Revenue Growth; Completion of Strategic Investment By Prometheus.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)--Nov. 14, 1997--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 AMEX See: American Stock Exchange :SRS SRS, SRS-A see slow-reacting substance. ) today announced its operating results for the three months ended Sept. 30, 1997 and highlighted the company's continued growth in revenue and the completion of its strategic investment from Prometheus Assisted Living LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Prometheus"), an affiliate of Lazard Freres Real Estate Investors A real estate investor is someone who actively or passively invests in real estate. An active investor may buy a property, make repairs and/or improvements to the property, and sell it later for a profit. LLC ("LFREI"). For its second fiscal quarter ended Sept. 30, 1997, the company reported total revenue of $28.8 million, an increase of 51% over revenue of $19.1 million reported for the same period a year ago. Quarterly net loss was $4.1 million, or 37 cents per common share, compared to a net income of $747,000, or 8 cents per common share for the same quarter in the prior year. For the six months ended Sept. 30, 1997, the company reported a loss of $4.9 million or 47 cents per common share on revenue of $56.2 million compared with income of $612,000 or 7 cents per common share on revenue of $34.4 million during the same period in 1996. John A. Booty BOOTY, war. The capture of personal property by a public enemy on land, in contradistinction to prize, which is a capture of such property by such an enemy, on the sea. 2. , President and Chief Executive Officer, commenting on the period's results stated: "Having opened four new facilities containing 451 units since the beginning of the current fiscal year, we are experiencing the effects of start-up Start-up The earliest stage of a new business venture. losses in the current quarter. "Our operating results for the quarter ended Sept. 30, 1997 reflect $1.3 million of start-up losses incurred in our newly-developed assisted living facilities which have not yet stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. . In addition to the start-up losses incurred, the company's general and administrative expenses increased significantly reflecting $1.2 million in costs associated with the resignation of our former Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. ." Strategic Alliances John J. Rydzewski, Chairman, expressed his enthusiasm with the company's strategic alliances. He said: "During the quarter ended Sept. 30, 1997, ARV ARV abbr. Bible American Revised Version ARV n abbr (= American Revised Version) → traducción americana de la Biblia ARV n abbr (= created an exciting opportunity for its shareholders. The company solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. a strategic alliance with Prometheus Assisted Living LLC while obtaining $86.9 million in new capital through the sale of $26.9 million of its stock at a 23% premium to market at the time of sale and the completion of a $60 million convertible subordinated note transaction. We expect to further enhance our strength and presence in the Northeast through the anticipated alliance with Kapson Senior Quarters." Stock Buy-back Program The company also announced that the Board of Directors unanimously approved the institution of a stock buy-back program in which the company may repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. ARV common shares on the open market from time to time, depending on market conditions. The company has allocated up to $25 million for this stock buy-back program. Development Activity During its second fiscal quarter, the company completed the 24 unit second phase of its Eastlake Terrace facility in Elkhart, Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . and opened Prospect Park, its Brooklyn, N.Y. assisted living facility containing 128 units. Construction of six additional assisted living facilities expected to contain 756 units continued on schedule during the quarter. The following table illustrates the expected timing of new facility development. The company also owns additional sites not listed below on which it intends to develop assisted living facilities. 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-
Facilities
Under
Construction Location Anticipated Anticipated
No. of Opening(1)
Units
Las Posas(2) Camarillo, CA 123 4th Quarter 1997
Sun Lake Terrace Las Vegas, NV 129 1st Quarter 1998
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 756
(1) Denotes calendar quarters
(2) To be operated pursuant to a management agreement
Operating results Regarding the operations of the company's facilities, Graham P. Espley-Jones, chief financial officer, stated: "Excluding five newly-developed facilities that are in the lease-up stage, the average occupancy of the company's portfolio at Sept. 30, 1997 was 89%. Overall, the average occupancy of the 47 facilities owned or leased by the company at Sept. 30, 1997 was 84%. "On a same facility basis, we operted 36 facilities which maintained an average occupancy of 88% consistent with the prior year. Within these facilities, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 36% during the quarter ended Sept. 30, 1997 compared to a 37% margin for the same quarter in the prior year. Total revenue in these facilities grew by 7% while net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 2%. "Revenue from assisted living services on a same facility basis for the quarter ended Sept. 30, 1997 grew by 30% over the same quarter in the prior year. As a result, on a same facility basis, assisted living services provided 16% of the revenue from assisted living facilities in the quarter ended Sept. 30, 1997 compared to 13% of the revenue from these facilities in the same quarter during the prior year. "The average monthly revenue per occupied unit increased 7% from $1,579 to $1,694 primarily due to the 30% increase in income from assisted living services and an average 3% increase in the base service package." The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 licensure (lī´s  nsh requirements for acquired facilities, the possibility that
financing for acquisition and development may become less available or
more expensive, 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. Founded in 1980, ARV is one of the largest operators of assisted living facilities in the nation, currently operating 49 facilities containing approximately 6,302 units, with facilities under development in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Florida, Massachusetts Florida is a town in Berkshire County, Massachusetts, United States. It is part of the Pittsfield, Massachusetts Metropolitan Statistical Area. The population was 676 at the 2000 census. and Nevada. For more information about ARV via facsimile at no cost, call 800/PRO-INFO and dial client code ARVI. -0-
ARV Assisted Living Inc.
Statement of Operations
(Unaudited)
(all amounts in thousands except per share amounts)
Three Months Ended Sept. 30,
1997 1996
Revenue:
Assisted living facility
revenue $ 25,624 $ 16,585
Therapy and services 2,637 1,763
Interest income 413 461
Other income 143 288
Total revenue 28,817 19,097
Expenses:
Assisted living facility
operating expense 17,419 10,341
Assisted living facility
lease expense 5,260 2,868
General and administrative 4,406 1,690
Therapy and other 2,543 682
Depreciation and
amortization 1,686 903
Interest 1,483 1,252
Total expenses 32,797 17,736
Income (loss) before income
tax expense (benefit), minority
interest in income of majority
owned entities and extraordinary
item (3,980) 1,361
Income tax expense (benefit) 9 509
Income (loss) before minority
interest in income of majority
owned entities and extraordinary
item (3,989) 852
Minority interest in income of
majority owned partnerships 96 105
Net income (loss) $(4,085) $ 747
Earnings Per Share
Information:
Income (loss) per common
share $ (.37) $ .08
Weighted average common
shares outstanding(1) 11,082 9,523
(1) Includes common stock equivalents
-0-
ARV Assisted Living Inc.
Statement of Operations
(Unaudited)
(all in thousands except per share amounts)
Six Months Ended Sept. 30
1997 1996
Revenue:
Assisted living facility
revenue $ 50,289 $ 30,031
Therapy and services 4,919 2,708
Interest income 652 1,278
Other income 313 425
Total revenue 56,173 34,442
Expenses:
Assisted living facility
operating expense 33,155 18,802
Assisted living facility
lease expense 10,229 5,615
General and
administrative 6,969 3,357
Therapy and other 4,403 682
Depreciation and
amortization 3,164 1,571
Interest 2,887 2,653
Total expenses 60,807 32,680
Income (loss) before income tax
expense (benefit), minority
interest in income of majority
owned entities and extraordinary
item (4,634) 1,762
Income tax expense
(benefit) (249) 659
Income (loss) before minority
interest in income of majority
owned entitities and extraordinary
item (4,385) 1,103
Minority interest in income
of majority owned
partnerships 503 105
Income (loss) before extraordinary
item (4,888) 998
Extraordinary item, loss from early
extinguishment of debt, net of tax
benefit of $231 -- 386
Net income (loss) $(4,888) $ 612
Earnings Per Share Information:
Income (loss) per common share before
extraordinary item $ (.47) $ .11
Extraordinary item -- (.04)
Net income
(loss) per common
share $ (.47) $ .07
Weighted average common shares
outstanding(1) 10,355 9,215
(1) Includes common stock equivalents
-0-
ARV Assisted Living Inc. Statement of Operations See Income statement. For the Six Months Ended Sept. 30, 1997 (Unaudited) (All amounts in thousands except per share amounts) Acquired/ Existing Developed Facilities(1) Facilities(2) Corporate Total Revenue: Assisted living facility revenue $40,570 $9,719 $ -- $50,289 Therapy and services -- -- 4,919 4,919 Interest income -- -- 652 652 Other income -- -- 313 313 Total revenue 40,570 9,719 5,884 56,173 Expenses: Assisted living facility operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. 26,034 7,121 -- 33,155 Assisted living facility lease expense 6,919 3,310 -- 10,229 General and administrative -- -- 6,969 6,969 Therapy and other -- -- 4,403 4,403 Depreciation and amortization 2,071 551 542 3,164 Interest 1,293 353 1,241 2,887 Total expenses 36,317 11,335 13,155 60,807 Loss before income tax expense, minority interest and extra- extra- word element [L.], outside; beyond the scope of; in addition. extra- or extro- pref. Outside; beyond: extracellular. extra- word element. [L. -ordinary item $4,253 $(1,616) $(7,271) (4,634) Income tax benefit (249) Loss before minority interest and extra- -ordinary item (4,385) Minority interest in net income of majority owned partnerships 503 Net loss $(4,888) Earnings Per Share Information: Net loss per common share $ (.47) Weighted average common shares outstanding(a) 10,355 (a) Includes common stock equivalents. (1) Represents operations of 36 facilities owned, leased or previously managed (now owned or leased) by the company over four quarters or more as of Sept. 30, 1997. (2) Represents operations of 6 owned or leased facilities acquired from third parties and five developed facilities operated by the company for less than twelve months as of Sept. 30, 1997. -0- ARV Assisted Living Inc. Unaudited Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (all amounts in thousands) Sept. 30, 1997 March 31, 1997 ASSETS Cash and cash equivalents $24,724 $15,964 Other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. 14,456 12,536 Total current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. 39,180 28,500 Restricted cash 193 1,912 Property, furniture and equipment (net) 131,601 122,199 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 13,589 11,620 Total assets $184,563 $164,231 LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. Accounts payable and accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. $11,801 $10,507 Other current liabilities Other Current Liabilities A balance sheet entry used by companies to group together current liabilities that are not assigned to common liabilities such as debt obligations or accounts payable. 1,243 3,286 Total current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. 13,044 13,793 Notes payable and other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. 91,756 91,057 Total liabilities 104,800 104,850 Minority interest 7,923 8,007 Shareholders' equity 71,840 51,374 Total liabilities and shareholders' equity $184,563 $164,231 -0- ARV Assisted Living Inc. Detail of Assisted Living Facilities Operated Facilities Sept. 30, 1997 Sept. 30, 1996 %Change Owned 15 17 (12%) Leased 32 22 45% Managed 2 2 -- Total 49 41 20% Units Owned 1,888 2,113 (11%) Leased 4,158 2,792 49% Managed 256 256 -- Total 6,302 5,161 22% CONTACT: ARV Assisted Living, Costa Mesa Graham Espley-Jones/Patrick M. Donovan 714/751-7400 |
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