ARV Assisted Living Reports Third-Quarter Results; Income From Operations for First Nine Months Improves by $4.2 Million.Business Editors 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.--(BUSINESS WIRE)--Nov. 5, 2002 ARV ARV abbr. Bible American Revised Version ARV n abbr (= American Revised Version) → traducción americana de la Biblia ARV n abbr (= 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 operating results for the third quarter ended Sept. 30, 2002. The company reported quarterly net income of $0.2 million, or $0.01 per share, compared with a net loss of $0.7 million, or $(0.04) per share, for the third quarter of 2001. The third quarter of 2002 results represents a $0.9 million, or $0.05 per share, improvement. The company also reported a $2.9 million improvement on year-to- date net income of $0.2 million, or $0.01 per share, compared with the net loss, prior to one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gains on sale of partnership interests and early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, of $2.7 million, or $(0.16) per share. Third Quarter 2002 Results Total revenue for the third quarter of 2002 was $39.7 million, compared with $36.7 million for the same quarter last year. The revenue increase reflects the addition of two assisted living communities that the company acquired as part of the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Retirement Villas Properties III, LP successful tender offer in December December: see month. 2001. Revenues were also positively affected by a $142, or 6.1%, increase in the monthly average revenue per occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. unit from $2,342 for the third quarter of 2001 to $2,484 for the third quarter of 2002. Revenue from assisted living services on a same community basis for the third quarter of 2002 increased 14% over the corresponding quarter for the prior year, factoring out the addition of the two assisted living communities noted earlier. On a same community basis, the 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 of owned or leased communities by the company for four quarters or more was 85.7% at Sept. 30, 2002, compared with 88.2% at Sept. 30, 2001. However, assisted living penetration The successful unauthorized breach of a security perimeter. See penetration test. , on the same community basis, increased to 49.0% for the third quarter 2002, compared with 46.9% for the same quarter a year ago. The $1.9 million increase in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the third quarter of 2002, compared with the third quarter of 2001 relates primarily to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. acquisition of two communities and insurance expense. Income from operations for the third quarter of 2002 was $2.8 million, a $1.1 million improvement over the $1.7 million of income from operations for the third quarter of 2001. On a same community basis, the third quarter operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 38.1%, from 37.5% a year ago same quarter. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2002 Results Total revenue for the nine months ended Sept. 30, 2002, was $119.2 million, compared with $108.0 million for the same period last year. The $11.2 million increase in revenue for the nine months ended Sept. 30, 2002, is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the aforementioned addition of two assisted living facilities and increased rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rates, offset by decreased occupancy rates Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) . The monthly average rate per occupied unit for the nine months ended Sept. 30, 2002, is $2,457, compared with $2,285 for the nine months ended Sept. 30, 2001, a 7.5% increase over prior year period. Total operating expenses for the nine months ended Sept. 30, 2002, were $110.9 million, compared with $103.9 million for the nine months ended Sept. 30, 2001. This increase is primarily due to the aforementioned addition of two assisted living facilities and insurance expense. For the nine months ended Sept. 30, 2002, income from operations increased $4.2 million, to $8.3 million when compared with the nine months ended Sept. 30, 2001. The company's balance sheet restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). is materially complete. The company closed a loan for $24.0 million to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. two mortgage loans with an aggregate principal balance totaling $18.3 million. The company adopted Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " on Jan. 1, 2002, which required the company to prospectively cease amortization of goodwill and instead conduct periodic tests of goodwill for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. . The company completed a transitional test for goodwill impairment and determined that no goodwill impairment was indicated as of Jan. 1, 2002. Income and earnings per share before extraordinary items would have been $0.6 million and $0.04 per share for the nine months ended Sept. 30, 2001, if Statement 142 had been applied to the nine-month period ended Sept. 30, 2001. Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. M. Pasquale Pasquale may refer to:
Conference Call A conference call to discuss ARV's third quarter of 2002 earnings is scheduled for Nov. 6, 2002, at 1 p.m. PST PST Paroxysmal supraventricular tachycardia, see there . The U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number is 866/879-6365 (no password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. required) and the international call-in number is 206/315-8576 (no password required). A replay of the call will be available for a 24-hour period beginning two hours following the end of the live call. To access the replay, dial 800/207-7077 (U.S. and Canada) or 913/383-5767 (international) and enter identification number 4095. About the Company Founded in 1980, ARV is one of the largest operators of assisted living communities in the nation, currently operating 59 communities containing approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 7,000 units in 11 states. The company's common stock is traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. under the symbol SRS and its home page can be found at www.arvi.com. Estimates of future earnings are by definition, and certain other matters discussed in this news release may be, 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The forward-looking statements contained in this release are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as a result of various factors, including, without limitation, licensing; delays in satisfaction of or the inability to satisfy licensure licensure (lī´s  nsh requirements for
acquired communities; business conditions; competition; financings;
changes in interest rates; acquisition risks; market factors that could
affect the value of the company's properties; the risks of
downturns in economic conditions generally; satisfaction of closing
conditions; the possibility that financing for acquisition and
refinancing RefinancingAn extension and/or increase in amount of existing debt. of maturing loans may become less available or more expensive; the possibility that divestitures may not be completed as planned; and the possibility that integration of operations for communities acquired may not occur efficiently. These and other risks are detailed in the company's reports filed with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue un·true adj. un·tru·er, un·tru·est 1. Contrary to fact; false. 2. Deviating from a standard; not straight, even, level, or exact. 3. Disloyal; unfaithful. because of subsequent events.
ARV ASSISTED LIVING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
ASSETS
Sept. 30, Dec. 31,
2002 2001
Current assets:
Cash and cash equivalents $16,227 $13,234
Accounts receivable and amounts due from
affiliates, net 931 744
Prepaids and other current assets 4,113 3,701
Impounds 4,450 3,779
Property held for sale, net -- 763
Total current assets 25,721 22,221
Property, furniture and equipment, net 115,600 116,929
Goodwill, net 18,354 18,354
Operating lease security deposits 9,253 9,414
Other non-current assets, net 18,883 10,259
$187,811 $177,177
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,613 $2,212
Accrued payroll costs 4,459 4,055
Other accrued liabilities 8,450 6,659
Notes payable, current portion 2,202 7,269
Accrued interest payable 960 823
Total current liabilities 17,684 21,018
Notes payable, less current portion 118,939 105,062
Lease liabilities 2,081 1,995
Other non-current liabilities 905 641
139,609 128,716
Minority interest in majority owned entities 131 621
Shareholders' equity 48,071 47,840
$187,811 $177,177
ARV Assisted Living Inc.
Detail of Assisted Living Communities Operated
Communities Sept. 30, Dec. 31,
2002 2001
Owned 17 17
Leased 33 33
Managed 9 8
Total 59 58
Units
Owned 1,816 1,816
Leased 4,310 4,310
Managed 737 648
Total 6,863 6,774
ARV ASSISTED LIVING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPT. 30, 2002 AND 2001
(Unaudited)
(In thousands, except per-share amounts)
Three Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
Revenue:
Assisted living community revenue:
Rental revenue 31,343 29,689 94,916 87,246
Assisted living and other
services 7,314 6,240 21,139 18,224
Skilled nursing facility revenue 744 508 2,338 1,703
Management fees 268 248 797 807
Total revenue 39,669 36,685 119,190 107,980
Operating expenses:
Assisted living community operating
expense 23,758 22,245 71,114 65,333
Skilled nursing facility expenses 814 667 2,313 1,851
Community lease expense 8,007 7,784 24,032 23,163
General and administrative 2,422 2,376 7,713 7,637
Depreciation and amortization 1,909 1,889 5,737 5,877
Total operating expenses 36,910 34,961 110,909 103,861
Income from operations 2,759 1,724 8,281 4,119
Other income (expense):
Interest income 113 199 273 951
Other income (expense), net 58 (83) 60 (148)
Equity in loss of partnerships (176) -- (802) --
Gain on sale of properties and
partnership
Interests -- -- 54 2,887
Interest expense (2,436) (2,236) (7,090) (6,853)
Total other (expense) (2,441) (2,120) (7,505) (3,163)
Income before income tax expense,
minority interest in income of
majority owned entities and
extraordinary item 318 (396) 776 956
Income tax (expense) benefit (11) 28 (31) (10)
Minority interest in income of
majority owned entities (101) (371) (514) (773)
Income (loss) before extraordinary
item 206 (739) 231 173
Extraordinary gain from early
extinguishment of debt, net of
income tax -- -- -- 1,550
Net income (loss) $206 $(739) $231 $1,723
Basic and diluted income (loss) per
common share:
Income (loss) before extraordinary
gain from early extinguishment of
debt $ 0.01 $ (0.04) $ 0.01 $ 0.01
Extraordinary gain from early
extinguishment of debt, net of
income tax -- -- -- 0.09
Net income (loss) $0.01 $(0.04) $0.01 $0.10
Weighted average common shares
outstanding 17,460 17,460 17,460 17,460
ARV ASSISTED LIVING INC. AND SUBSIDIARIES
Operations Summary
For the Nine Months Ended Sept. 30, 2002
(Unaudited)
(In thousands)
Existing(a) Acquired(b)
Communities Communities Corporate Total
Revenue:
Assisted living community
revenue:
Rental revenue $90,368 $4,548 $-- $94,916
Assisted living and other
services 20,617 522 -- 21,139
Skilled nursing facility
revenue 2,338 -- -- 2,338
Management fees -- -- 797 797
Total revenue 113,323 5,070 797 119,190
Operating expenses:
Assisted living community
operating expense 68,015 3,099 -- 71,114
Community lease expense 24,032 -- -- 24,032
Skilled nursing facility
expenses 2,313 -- -- 2,313
General and administrative -- -- 7,713 7,713
Depreciation and amortization 4,391 601 745 5,737
Total operating expenses 98,751 3,700 8,458 110,909
Income (loss) from operations 14,572 1,370 (7,661) 8,281
Other income (expense):
Interest income -- 39 234 273
Other income (expense), net -- 76 (16) 60
Gain on sale of properties -- -- 54 54
Equity in loss of
partnerships -- -- (802) (802)
Interest expense (4,663) (1,089) (1,338) (7,090)
Total other expense (4,663) (974) (1,868) (7,505)
Income (loss) before income tax
expense and minority interest
in income of majority owned
entities 9,909 396 (9,529) 776
Income tax expense (31)
Minority interest in income of
majority owned entities (514)
Net income $231
(a) Represents operations of 48 communities owned or leased by the
company over four quarters or more as of Sept. 30, 2002.
(b) Represents operations of two communities acquired as part of the
American Retirement Villas Properties III, L.P. tender offer in
December 2001.
ARV ASSISTED LIVING INC. AND SUBSIDIARIES
Operations Summary
For the Three Months Ended Sept. 30, 2002
(Unaudited)
(In thousands)
Existing(a) Acquired(b)
Communities Communities Corporate Total
Revenue:
Assisted living community
revenue:
Rental revenue $29,826 $1,517 $-- $31,343
Assisted living and other
services 7,131 183 -- 7,314
Skilled nursing facility
revenue 744 -- -- 744
Management fees -- -- 268 268
Total revenue 37,701 1,700 268 39,669
Operating expenses:
Assisted living community
operating expense 22,756 1,002 23,758
Community lease expense 8,007 8,007
Skilled nursing facility
expenses 814 814
General and administrative -- 2,422 2,422
Depreciation and amortization 1,488 207 214 1,909
Total operating expenses 33,065 1,209 2,636 36,910
Income (loss) from operations 4,636 491 (2,368) 2,759
Other income (expense):
Interest income -- 15 98 113
Other income (expense), net -- -- 58 58
Gain on sale of properties -- -- -- --
Equity in loss of
partnerships -- -- (176) (176)
Interest expense (1,648) (377) (411) (2,436)
Total other expense (1,648) (362) (431) (2,441)
Income (loss) before income tax
expense and minority interest
in income of majority owned
entities 2,988 129 (2,799) 318
Income tax expense (11)
Minority interest in income of
majority owned entities (101)
Net income $206
(a) Represents operations of 48 communities owned or leased by the
company over four quarters or more as of Sept. 30, 2002.
(b) Represents operations of two communities acquired as part of the
American Retirement Villas Properties III, L.P. tender offer in
December 2001.
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