Alterra Announces Third Quarter 2003 Results.Business Editors MILWAUKEE--(BUSINESS WIRE)--Nov. 17, 2003 Alterra Healthcare Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ATHC ATHC Access to Health Care ) today announced financial results for the three-month period ended September 30, 2003. At quarter-end, the Company operated or managed 352 residences with a total capacity to serve approximately 16,646 residents. OPERATING AND FINANCIAL RESULTS The Company reported revenues of $102.1 million for the quarter ended September 30, 2003, a 2.7% increase over revenues of $99.4 million for 2002. In the third quarter of 2003, the Company's residence level operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 29.6%, a decrease of 3.8% over residence level operating margins in the third quarter of 2002. Monthly rates averaged $2,912 as of September 30, 2003, an increase of 2.9% over the average monthly rate at September 30, 2002. In addition, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. (excluding costs related to the Company's 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) were $9.0 million in the quarter ended September 30, 2003, a 5.3% reduction from the quarter ended September 30, 2002. The Company's income from operations for the quarter ended September 30, 2003 was $1.1 million. The Company's net loss for the quarter ended September 30, 2003 was $35.8 million and includes $7.1 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 and amortization and payment-in-kind ("PIK PIK See: Payment-in-kind bond PIK See payment-in-kind security (PIK). ") interest expenses and reflects the impact of asset dispositions, reorganization costs, and $24.1 million of losses reflected 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. . As of September 30, 2003, the Company reported overall average occupancy of 82.0%. The September 30, 2003 financial statements have been prepared on a going concern basis, which assumes continuity of operations The degree or state of being continuous in the conduct of functions, tasks, or duties necessary to accomplish a military action or mission in carrying out the national military strategy. and realization of assets and satisfaction of liabilities in the ordinary course of business, and in accordance with Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code Bankruptcy Code may refer to:
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. and classified as Liabilities subject to compromise, at the estimated amount of the applicable allowable claim. Liabilities not subject to compromise are separately classified as current and non-current. Revenues, expenses, realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. and losses, and provisions for losses resulting from the reorganization, approximately $4.3 million at September 30, 2003, are reported separately as Reorganization items. Cash used for reorganization items is disclosed separately in the Consolidated Statements of Cash Flows. Additionally, interest expense accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. subsequent to the bankruptcy filing that is deemed to be impaired and unlikely to be paid is excluded from the financial statements. As of September 30, 2003, approximately $11.1 million of interest expense on the PIK and 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 other miscellaneous notes payable is excluded from the financial statements in accordance with SOP 90-7. 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 22 states. Certain of the information contained herein should be considered "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 that reflect the Company's current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results expressed or implied in such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to satisfy its operating and capital needs during the pendency Pend´en`cy n. 1. The quality or state of being pendent or suspended. 2. The quality or state of being undecided, or in continuance; suspense; as, the pendency of a suit s>. of its bankruptcy case; the Company's ability to successfully negotiate necessary modifications and amendments with its secured lenders and lessors; the Company's ability to access financing needed 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. significant pending debt maturities; the ability of the Company to continue as a going concern; the ability of the Company to develop, prosecute To follow through; to commence and continue an action or judicial proceeding to its ultimate conclusion. To proceed against a defendant by charging that person with a crime and bringing him or her to trial. , confirm and consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. a Chapter 11 plan of reorganization; the Company's ability to consummate the proposed merger with FEBC FEBC Far East Broadcasting Company FEBC Far Eastern Bible College FEBC Fellowship of Evangelical Bible Churches FEBC Far East Banking Corporation (Philippines) ; risks associated with third parties seeking and obtaining court approval for the appointment of a Chapter 11 trustee or to convert the Company's bankruptcy case to a Chapter 7 liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy ; the potential adverse impact of the Company's Chapter 11 filing on the Company's relationships with its residents, vendors and employees; competition and the ability of the Company to attract private pay residents to its residences; the Company's ability to fund and maintain self insurance programs at levels necessary to address potential liability claims and satisfy the requirements of lenders and lessors; government legislation and regulation; and other risks and uncertainties as may be set forth from time to time in the Company's reports filed with the Securities and Exchange Commission.
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months
Ended September 30,
--------------------------
2003 2002
--------------------------
Revenue:
Resident service fees $101,639 $98,626
Other 425 772
--------------------------
Operating revenue 102,064 99,398
Operating expenses (income):
Residence operations 71,874 66,200
Lease expense 15,962 14,755
Lease income (1,270) (3,913)
General and administrative 9,009 11,272
Loss (gain) on disposal (274) (8,700)
Depreciation and amortization 5,660 6,213
--------------------------
Total operating expenses 100,961 85,827
Operating income (loss) 1,103 13,571
Other expenses (income):
Interest expense, net (excludes contractual
interest expense of $3.2 million for the
quarter ended September 30, 2003) 7,591 10,903
Amortization of financing costs 809 930
Gain on debt extinguishments (1,001) --
PIK interest (excludes contractual interest
expense of $7.9 million for the quarter
ended September 30, 2003) 590 6,608
Equity in losses of unconsolidated
affiliates 447 1,793
Reorganization items 4,307 --
--------------------------
Total other expenses, net 12,743 20,234
Loss from continuing operations before
income taxes and cumulative effect of
change in accounting principle (11,640) (6,663)
Income tax expense (35) (30)
--------------------------
Loss from continuing operations before
cumulative effect of change in accounting
principle (11,675) (6,693)
Loss (gain) on discontinued operations (24,128) 787
--------------------------
Net loss $(35,803) $(5,906)
==========================
Loss per common share - basic and diluted:
Loss from continuing operations before
cumulative effect of change in accounting
principle - basis and diluted (0.52) (0.30)
Loss on discontinued operations - basic and
diluted (1.08) 0.03
--------------------------
Net loss per common share - basic and
diluted $(1.60) $(0.27)
==========================
Weighted average common shares outstanding -
basic and diluted 22,266 22,266
==========================
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
September 30, December 31,
2003 2002
------------- ------------
ASSETS
Cash $15,051 $13,797
Assets held for sale 32,851 57,243
Other current assets 35,772 35,063
------------- ------------
Current assets 83,674 106,103
------------- ------------
Land 48,096 61,490
Building and improvements 359,661 444,881
Furniture, fixtures and equipment 85,484 88,458
------------- ------------
Total property and equipment 493,241 594,829
Less: accumulated depreciation (104,979) (102,704)
------------- ------------
Property and equipment, net 388,262 492,125
Other assets 70,225 72,922
------------- ------------
Total assets $542,161 $671,150
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $348,541 $980,289
Long-term obligations, less current
installments 154,903 171,510
Other long-term obligations 2,876 2,147
Liabilities subject to compromise 590,393 --
Redeemable preferred stock -- 6,132
------------- ------------
Stockholders' equity (554,552) (488,928)
------------- ------------
Total liabilities and stockholders' equity $542,161 $671,150
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