Alterra Healthcare Corporation Reports Third Quarter Earnings of $0.23 Per Share and Plans for Significantly Reduced Development.BROOKFIELD Brookfield. 1 Village (1990 pop. 18,876), Cook co., NE Ill., a residential suburb of Chicago; inc. 1893. The noted Chicago Zoological Park (Brookfield Zoo) is there. 2 City (1990 pop. 35,184), Waukesha co., SE Wis. , Wis adv. 1. Certainly; really; indeed. v. t. 1. To think; to suppose; to imagine; - used chiefly in the first person sing. present tense, I wis. See the Note under Ywis. .--(BUSINESS WIRE)--Nov. 3, 1999-- 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: ), the nation's largest and one of the most experienced health care providers operating 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. residences, reported revenues of $100.1 million for the three-month period ending September September: see month. 30, 1999, a 51% increase over revenues of $66.3 million for the same quarter last year. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings grew from $5.3 million in the third quarter of 1998 to $8.1 million in the third quarter of 1999, a 53% increase. At quarter end the Company operated or managed 431 residences with a total capacity to serve 19,688 residents. OPERATING AND FINANCIAL RESULTS; REDUCTION IN DEVELOPMENT ACTIVITY For the three months ended September 30, 1999, the Company reported revenues of $100.1 million and net income of $5.0 million, or $0.23 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share (fully taxed) on 22.3 million weighted average common shares outstanding. This compares to revenues of $66.3 million and net income of $5.8 million, or $0.26 per diluted share (non-taxed) on 22.4 million weighted average common shares outstanding for the comparable period in 1998. For the nine months ended September 30, 1999, the Company reported revenues of $ 274.9 million. Net income for this period before previously reported non-recurring items was $16.2 million, or $0.73 per diluted share (fully taxed) on 22.4 million weighted average common shares outstanding. This compares to revenues of $168.0 million and net income of $14.3 million, or $0.64 per diluted share (non-taxed) on 22.4 million weighted average common shares outstanding, for the same period in 1998. The Company also announced that in light of the competitive environment and tighter capital markets it is actively reviewing its development projects not yet in construction and will determine which to complete or terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. . In conducting this analysis, the Company is considering market-specific and competitive factors on a site-by-site basis. The Company anticipates that upon completion of this review it will elect to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: a significant portion of its pending development projects and, accordingly, take a charge related to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of markets and sites under development and the reduction of its development activities to a modest level. Bill Lasky Las·ky , Jesse Louis 1880-1958. American motion-picture producer who helped found Paramount studios (1933). The pictures he produced include Sergeant York (1941) and The Great Caruso (1951). , President and Chief Executive Officer said, "Significantly reducing our development activity will enable us to focus our attention on stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. and enhancing our core business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . In addition, we are exploring a number of alternatives to strengthen our capital structure. We believe these steps will best position the Company to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. future growth opportunities. Such opportunities should arise as the more intense competitive environment begins to reverse over the next 18 months as the level of new residence openings in the industry sharply declines." "Consistent with our focus on maturing earnings from our in-place operating platform, new management appointments are effective immediately. Tom Komula, who has served as our Chief Financial Officer since 1996, will assume responsibilities for the majority of all administration and national support systems as well as the Company's strategic initiatives covering all ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. services provided to our customers. As we move Alterra forward as a strong operating company operating company A business that engages in transactions with outsiders. , Tom's TOM'S Co., Ltd (株式会社トムス Kabushiki-gaisha Tomusu leadership will be invaluable in helping the company to realize our plan to build a comprehensive and multi-faceted operating platform. Tom's familiarity with all of our corporate staff functions and strategic perspective makes him the right choice to lead our efforts to strengthen our workforce and enhance the services we provide to our customers. In this new role Tom will assume the position of Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive ." "Mark Ohlendorf, Senior Vice President of Finance, will be promoted to Chief Financial Officer. Mark's 17 years of health care finance experience and the tremendous job he has performed in arranging over $1 billion of capital to support the Company's growth, positions him very well to assume his new role. Mark was previously the Chief Financial Officer of Sterling House Corporation, a publicly traded assisted living company, and the Chief Financial Officer of Vitas Healthcare Corporation, the nation's largest provider of hospice hospice, program of humane and supportive care for the terminally ill and their families; the term also applies to a professional facility that provides care to dying patients who can no longer be cared for at home. care." "These changes and other management changes around Tom and Mark will substantially enhance the core business functions of the Company," commented Lasky. 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. RESIDENCE RESULTS For the quarter ended September 30, 1999, the Company operated 290 stabilized residences with a resident capacity of 12,400. These residences had an average 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 for the quarter of 92%. For the three months ended September 30, 1999, these residences achieved revenues of $82.7 million and an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of $31.6 million or 38%. The Company defines stabilized residences as those that have reached 95% occupancy or have been open for 12 months as of the beginning of the reporting period. Weighted average occupancy for all residences -- both stable and in lease-up -- was 81% for the quarter ended September 30, 1999. SAME RESIDENCE RESULTS The Company operated 178 residences that were stabilized for the entire third quarter of 1998 and 1999. For these residences with a capacity to serve 7,600 residents, revenues for the three months ended September 30, 1999, were $48.7 million, a 5% increase over revenues of $46.3 million for the comparable period in 1998. These residences produced operating margins of 40% and 41% during the three-month periods ended September 30, 1999 and 1998, respectively. Average occupancy for these residences was 94% in both third quarters of 1999 and 1998. RESIDENCE DEVELOPMENT In the third quarter of 1999 the Company added 42 operating residences, 13 of which were developed and 23 of which were acquired from Manor A house, a dwelling, or a residence. Historically under English Law, a manor was a parcel of land granted by the king to a lord or other high ranking person. Incident to every manor was the right of the lord to hold a court called the court baron, which was organized to Care, as previously reported, and six of which were developed jointly with Manor Care and are being managed by Alterra. As a result, the Company's net resident capacity increased during the third quarter by 2,775, resulting in 431 operating and managed residences with a resident capacity of 19,688 at the end of the quarter.
FINANCING ACTIVITIES
During the quarter ended September 30, 1999, the Company:
- Completed the acquisition of 28 residences, as previously
announced, from Manor Care. Twenty-six of these residences were
financed under a synthetic lease arrangement which totals $189.1
million;
- Together with Manor Care, closed on the initial $48.2 million of
financing under a $200 million syndicated bank credit facility to
finance joint development of assisted living residences,
especially those which serve the needs of individuals suffering
from Alzheimer's and other forms of dementia; and
- Closed on $13.5 million of debt financing at an average interest
rate of 6.9% under existing bank lines and completed $7.6 million
of sale/leaseback financing with real estate investment trusts
(REITs) at average lease rates of 10.0%.
Alterra offers supportive supportive adjective Pertaining to a Pt management philosophy in which only the Sx of a particular condition are treated; supportive measures are often taken when no specific and/or effective therapy is available or accessible–eg, viral meningitis, or and health care 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/dementia care residences. Alterra currently operates in 27 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." The 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 beliefs and assumptions using currently available information. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. Such statements involve a number of risks and uncertainties, including, but not limited to, 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 ability to manage rapid growth and business diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , the need for additional financing, development and construction risks, risks associated with acquisitions, competition, governmental regulation and other risks and uncertainties detailed in the reports filed by the Company 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 such a development 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 underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
--TABLES FOLLOW--
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1999 1998 1999 1998
------------------- -------------------
Revenue:
Resident service fees $ 90,683 $64,544 $252,149 $164,830
Other 9,428 1,742 22,773 3,139
-------- -------- -------- --------
Operating revenue 100,111 66,286 274,922 167,969
Operating expenses:
Residence operations 57,526 40,492 157,122 104,063
Lease expense 18,386 11,901 48,816 30,952
General and administrative 9,268 6,295 28,166 16,377
Depreciation and amortization 5,233 5,534 13,783 13,180
-------- -------- -------- --------
Total operating expense 90,413 64,222 247,887 164,572
Operating income 9,698 2,064 27,035 3,397
Other income (expense):
Interest expense, net (9,075) (2,744) (23,150) (5,285)
Lease income 7,579 --- 17,405 ---
Equity in losses of
unconsolidated affiliates (597) (32) (667) (54)
Minority interest in losses
of consolidated subsidiaries 498 5,984 3,776 15,672
-------- -------- -------- --------
Total other (expense)
income, net (1,595) 3,208 (2,636) 10,333
Income before income taxes 8,103 5,272 24,399 13,730
Income tax benefit (expense) (3,079) 549 (9,272) 549
-------- -------- -------- --------
Income after taxes 5,024 5,821 15,127 14,279
-------- -------- -------- --------
Cumulative effect of reporting
on the costs of start-up
activities accounting
change, net of tax -- -- (3,837) --
-------- -------- -------- --------
Net income $5,024 $5,821 $11,290 $14,279
======== ======== ======== ========
Earnings per common share diluted:
Income before cumulative
effect of a change in
accounting principle $0.23 $0.26 $0.68 $0.64
Cumulative effect on prior
periods (to December 31,
1998)of changing to a
different method -- -- $0.17 --
-------- -------- -------- --------
Net income per common share
-- diluted $0.23 $0.26 $0.50 $0.64
======== ======== ======== ========
Weighted average common shares
outstanding 22,262 22,409 22,366 22,386
======== ======== ======== ========
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
COMPARISON OF STABILIZED AND START-UP RESIDENCES
THREE MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
(In Thousands, Except Per Share Data)
Three
Stabilized Start-up Months
Residences Residences Overhead Ended
(1) (2) (3) 9/30/99
---------- ---------- -------- -------
Revenue $82,732 $7,951 $9,428 $100,111
Residence operations
expenses 51,144 6,382 -- 57,526
------- ------ ------ --------
Residence operating income 31,588 1,569 9,428 42,585
Lease expense 13,365 658 4,363 18,386
General and administrative -- -- 9,268 9,268
Depreciation and amortization 3,148 646 1,439 5,233
------- ------ ------ --------
Operating income (loss) 15,075 265 (5,642) 9,698
Interest (expense), net (5,044) (1,190) (2,841) (9,075)
Other income, net -- -- 7,579 7,579
Equity in losses of
unconsolidated affiliates -- -- (597) (597)
Minority interest in losses
of consolidated subsidiaries -- 498 -- 498
------- ------ ------ --------
Total other (expense)
income, net (5,044) (692) 4,141 (1,595)
Income (loss) before income
taxes 10,031 (427) (1,501) 8,103
Income taxes 3,812 (162) (571) 3,079
------- ------ ------ --------
Income (loss) after income
taxes $6,219 $(265) $(930) $5,024
======= ====== ====== ========
(1) Stabilized residences are those 290 residences that have achieved
95% occupancy or have been operating for 12 months, as of the
beginning of the reporting period.
(2) Start-up residences are those 49 residences that have been newly
developed by the Company or acquired and require marketing and
other support services to properly position the facility within
Alterra's operating strategy.
(3) The Company manages 19 residences and has minority interests in
an additional 73 unconsolidated residences which it manages.
ALTERRA HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
September 30, December 31,
1999 1998
------------- ------------
ASSETS
Cash $ 28,046 $ 49,934
Preopening costs, net of amortization -- 7,856
Other current assets 71,079 33,062
------------- ------------
Current assets 99,125 90,852
Land 61,943 55,037
Building and improvements 596,096 407,631
Furniture, fixtures and equipment 75,395 55,655
Construction in progress 97,561 142,433
------------- ------------
Total property and equipment 830,995 660,756
Less: accumulated depreciation (34,851) (20,545)
------------- ------------
Property and equipment, net 796,144 640,211
Other assets 80,974 46,747
------------- ------------
Total assets $ 976,243 $ 777,810
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 75,206 $ 62,547
Convertible debt 228,600 228,600
Long-term obligations, less current
installments 467,358 286,984
Deferred gain on sale and other 10,250 18,347
Minority interest 5,204 4,220
Stockholders' equity 189,625 177,112
------------- ------------
Total liabilities and stockholders'
equity $ 976,243 $ 777,810
============= ============
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion