Alterra Announces Fiscal 2000 Results; Provides Update On Restructuring Activities and Operational Initiatives.Business Editors MILWAUKEE--(BUSINESS WIRE)--April 2, 2001 Alterra Healthcare Corporation (AMEX AMEX See: American Stock Exchange :ALI Ali (älē`) (Ali ibn Abu Talib), 598?–661, 4th caliph (656–61). The debate over his right to the caliphate caused a major split in Islam into Sunni and Shiite branches, and he is regarded by the Shiites as the first Imam, or leader: ) today announced financial results for fiscal 2000 and provided an update on 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). activities. At year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , the Company operated or managed 474 residences with a total capacity to serve approximately 22,100 residents. FISCAL 2000 RESULTS The Company reported revenues of $466.5 million for the year ended December December: see month. 31, 2000, a 24% increase over revenues of $376.2 million for 1999. The Company's pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss for 2000 was $84.1 million (excluding $22.5 million of reserves recorded for anticipated losses related to asset dispositions and $5.1 million of non-recurring general and administrative expenses). The pre-tax loss for 2000 includes $57.3 million of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) including depreciation, amortization, and payment-in-kind ("PIK PIK See: Payment-in-kind bond PIK See payment-in-kind security (PIK). ") interest expense. The Company's net loss for 2000 was $117.8 million, which reflects the impact of adjustments to the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of deferred tax assets and an extraordinary gain on 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. RECENT OPERATIONAL RESULTS AND INITIATIVES In the fourth quarter of 2000, the Company's operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: continued to be affected by higher labor costs and increases in expenses related to liability insurance coverage. Overall Company 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 continued to improve in the fourth quarter. For the three months ended December 31, 2000, the Company reported overall occupancy of 84.7%, an increase of 1.8% from the prior quarter and a 4.3% increase over the fourth quarter of 1999. For the three months ended December 31, 2000, the Company reported revenues of $125.3 million, an increase of 24% over revenues for the quarter ended December 31, 1999. The Company reported that it has recently implemented a series of operational initiatives targeted at improving its overall margin performance. These initiatives include the implementation of price increases to compensate for significant increases in fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). related to utilities and insurance. In addition, the Company is reducing its administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. and has completed a restructuring of its field management organization. Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Vick, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. said, "We have been very focused over the last 90 days on implementing these operational initiatives while at the same time maintaining the quality of resident care and services. We remain very committed to our residents, families and our employees." RESTRUCTURING ACTIVITIES AND ASSET DISPOSITION PROGRAM As previously announced, the Company is seeking to comprehensively restructure its capital structure. To conserve cash and fund ongoing residence operations, the Company did not make a significant portion of its debt service and certain lease payments in March 2001, and as a result is in default under many of its major credit instruments and certain of its lease facilities. In light of these pending defaults and the current uncertainty of a successful conclusion to restructuring initiatives, the audit opinion rendered by the Company's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. for 2000 includes a "going concern" qualification. Due to existing payment defaults related to some of the Company's senior indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , the Company is currently prohibited pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. from making cash payments on its convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before . The Company announced that the principal components of its restructuring plan are: (i) the disposition of a substantial number of the Company's residences, which the Company expects to accomplish primarily by actively working with its lenders and lessors to identify new operators and by selling assets through an organized sales process A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, achieving standardized customer interaction in sales and scalable revenue generation. ; (ii) the restructuring of the Company's principal debt and lease obligations, including in certain instances payment deferrals, extensions of additional credit, the rescheduling of debt maturities and the elimination or modification of certain covenants; and (iii) the exchange of new debt, equity or equity-linked securities of the restructured Company for the Company's currently outstanding convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. and joint venture interests held by third parties in certain of the Company's residences. Discussions with the Company's various capital structure constituents have commenced during recent weeks, or in some cases have not commenced at all, and no binding written agreements have been reached. While substantive Substantive may refer to: In grammar:
The Company also announced that Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. & Steers Capital Advisors would coordinate Belonging to a system of indexing by two or more terms. For example, points on a plane, cells in a spreadsheet and bits in dynamic RAM chips are identified by a pair of coordinates. Points in space are identified by sets of three coordinates. activities related to the residence disposition program, which it expects to complete during the remainder of 2001. Alterra offers supportive and selected healthcare services to our nation's frail elderly frail elderly, n.pl older persons (usually over the age of 75 years) who are afflicted with physical or mental disabilities that may interfere with the ability to independently perform activities of daily living. and is the nation's largest operator of freestanding free·stand·ing adj. Standing or operating independently of anything else: a freestanding bell tower; a freestanding maternity clinic. Alzheimer's/ memory care residences. Alterra currently operates in 28 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 "ALI." Statements in this release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc matters that are not historical facts are 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. based on management's belief and assumptions based upon currently available information. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable; it is unable to provide assurances that these expectations will prove to be correct. Forward-looking statements involve a number of risks and uncertainties, including, but not limited to, risks associated with recent defaults under loan and lease obligations, risks associated with a shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in liquidity and the implementation of a restructuring plan, risks associated with the disposition of assets and termination of leases, substantial debt and operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. payment obligations, operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. associated with new residences, the Company's need for additional financing and liquidity, risks associated with construction activities, risks associated with competition, governmental regulation and other uncertainties outlined in the Company's reports filed with the Securities and Exchange Commission. Should one or more of these risks materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. (or the consequences of one or more of these risks worsen wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. worsen Verb to make or become worse worsening adjn ) or should the Company's underlying assumptions prove incorrect, the Company's actual results of operation and financial position in the future could differ materially from those forecasted or expected. The Company assumes no duty to publicly update such statements.
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Twelve Months
Ended December 31, Ended December 31,
------------------- --------------------
2000 1999 2000 1999(1)
------------------- --------------------
Revenue:
Resident service fees $122,722 $97,621 $452,880 $349,770
Other 2,595 3,638 13,615 26,411
------------------- --------------------
Operating revenue 125,317 101,259 466,495 376,181
Operating expenses:
Residence operations 89,938 67,091 313,514 224,213
Lease expense 20,784 20,559 82,352 69,375
Lease income (5,621) (8,102) (28,222) (25,507)
General
and administrative 12,112 16,743 50,360 44,898
Loss on disposal (2) 10,540 --- 22,515 ---
Depreciation
and amortization 10,616 7,395 36,210 21,178
Non-recurring charge 4,232 47,280 4,232 47,280
------------------- --------------------
Total operating expenses 142,601 150,966 480,961 381,437
Operating income (17,284) (49,707) (14,466) (5,256)
Other income (expense):
Interest expense, net (17,510) (12,788) (71,223) (35,938)
Other, net --- (20) --- (20)
PIK interest (5,714) --- (12,483) ---
Equity in losses
of unconsolidated
affiliates (3,783) (775) (14,762) (1,442)
Minority interest in
losses of
consolidated subsidiaries (1,234) 242 1,264 4,018
------------------- --------------------
Total other
expense, net (28,241) (9,174) (97,204) (33,382)
Loss before income taxes,
extraordinary gain and
cumulative effect
of a change in accounting
principle (45,525) (63,048) (111,670) (38,638)
Income tax
(expense) benefit (37,235) 23,954 (14,672) 14,669
------------------- --------------------
Loss before extraordinary
gain and cumulative effect
of a change in accounting
principle (82,760) (39,094) (126,342) (23,969)
Extraordinary gain on the early
extinguishment of debt, net of tax
expense of $5,232 --- --- 8,536 ---
Cumulative effect of
reporting on the costs of
start-up Activities accounting
change, net of tax --- --- --- (3,837)
------------------- --------------------
Net loss $(82,760) $(39,094) $(117,806) $(27,806)
==================== =====================
Loss per common share - diluted:
Loss before cumulative effect of a change in
accounting principle $(3.74) $(1.77) $(5.71) $(1.09)
Extraordinary item --- --- $0.39 ---
Change in accounting
principle --- --- --- $(0.17)
------------------- --------------------
Net loss per common
share - diluted $(3.74) $(1.77) $(5.33) $(1.26)
=================== ====================
Weighted average common
shares outstanding 22,110 22,093 22,112 22,088
=================== ====================
(1) The twelve-month period ended December 31, 1999 includes $1.8
million in general and administrative costs related to the write-off
of existing signage and other expenses associated with the name change
from Alternative Living Services, Inc. to Alterra Healthcare
Corporation.
(2) Denotes one-time item.
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
December 31, December 31,
2000 1999
------------- ------------
ASSETS
Cash $ 23,688 $ 18,728
Assets held for sale 154,775 ---
Other current assets 73,577 90,501
------------- ------------
Current assets 252,040 109,229
------------- ------------
Land 82,218 70,916
Building and improvements 743,983 656,267
Furniture, fixtures and equipment 94,199 84,941
Construction in progress 41,850 92,741
------------- ------------
Total property and equipment 962,250 904,865
Less: accumulated depreciation (70,370) (41,702)
------------- ------------
Property and equipment, net 891,880 863,163
Other assets 83,845 89,005
------------- ------------
Total assets $1,227,765 $1,061,397
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 381,266 $ 103,777
Convertible debt 395,914 228,600
Long-term obligations,
less current installments 403,036 563,072
Deferred gain on sale and other 5,286 11,592
Minority interest 4,506 3,713
Redeemable preferred stock 4,898 ---
------------- ------------
Stockholders' equity 32,859 150,643
------------- ------------
Total liabilities
and stockholders' equity $1,227,765 $1,061,397
============= ============
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
SELECTED FINANICAL INFORMATION FOR FOURTH QUARTER 2000
(Unaudited)
Quarter ended Quarter ended
December 31, December 31,
2000 1999
------------- ------------
Stabilized residence results:
Number of residences 432 323
Number of beds 19,936 14,522
Average occupancy 88% 90%
Revenues $127.3 million $91.3 million
Operating margin 29% 37%
Same store resident results:
Number of residences 323 202
Number of beds 14,522 8,859
Average occupancy 89% 93%
Revenues $95.0 million $58.0 million
Operating margin 30% 39%
Average rates:
Assisted living residences $2,299 $2,195
Memory care residences 3,195 2,992
Total residences $2,552 $2,429
Average occupancy percentages:
Stabilized residences 88% 90%
Leaseup residences
(including unconsolidated entities) 60% 57%
Total residences (including
unconsolidated entities) 85% 80%
Residences opened during period:
Residences opened 5 18
Capacity added 242 909
Capacity:
Capacity owned 9,582 9,990
Capacity leased 11,648 10,293
Capacity managed 825 370
End of period construction and development
(excluding assets held for sale):
Residences under construction
or development 18 55
Capacity under construction
or development 880 2,887
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