American Retirement Corporation Announces Record Revenues and Earnings.NASHVILLE Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn.--(BUSINESS WIRE)--Nov. 4, 1998--American Retirement Corporation (NYSE NYSE See: New York Stock Exchange :ACR See riser card. ) today announced its results for the quarter ended September September: see month. 30, 1998. Net income for the quarter ended September 30, 1998 was $2.3 million, or $0.15 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (fully taxed), compared to net income of $1.0 million, or $0.09 diluted earnings per share (fully taxed), for the same period in 1997. Total revenues for the quarter ended September 30, 1998 increased by 75.8% to $41.6 million from $23.6 million for the third quarter of last year, while earnings before interest, taxes, depreciation, amortization and rents (EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) ) increased by 95.8% to $13.6 million from $7.0 million for the comparable period of the prior year. Since the third quarter of 1997, the Company has added capacity for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6,000 residents through a combination of new resident openings and strategic acquisitions, including the Freedom Group acquisition which was effective July July: see month. 1, 1998. On a Same Community basis, prior to giving effect to the Company's home health care operations, revenues increased by 7.4% from $20.3 million to $21.8 million while EBITDAR increased by 7.9% from $7.7 million to $8.3 million for the quarter. Average 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. 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 Company's Same Communities increased to 95.0% for the quarter ended September 30, 1998, as compared to 94.9% for the comparable period last year (stabilized communities are generally defined as communities or expansions thereof that have achieved 95% occupancy or been open at least 12 months). W.E. Sheriff, 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. and Chairman, remarked, "We achieved a number of major milestones during the quarter as evidenced in part by the announcement of record revenues, earnings and cash flow. The Freedom Group integration is proceeding according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. schedule. In addition to increased revenues and cash flows, the Freedom Group acquisition has further strengthened our management team and expanded our development pipeline. We also closed a public offering of common stock with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to the Company of $64.8 million during the quarter. The additional capital and recently completed acquisitions have positioned us to carry out our growth plans." Net income for the nine month period ended September 30, 1998 was $5.5 million, or $0.42 diluted earnings per share (fully taxed), compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $2.4 million, or $0.23 pro forma diluted earnings per share (fully taxed), for the nine months ended September 30, 1997. Total revenues for the nine month period ended September 30, 1998 increased 46.9% to $100.0 million from $68.0 million for the corresponding period of last year, while EBITDAR increased 63.5% to $32.3 million from $19.8 million for the comparable period of the prior year. 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 Corporation is a national senior living and health care services provider offering a broad range of care and services to seniors, including independent living, 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. , skilled nursing, and home health care services. The Company currently operates 39 senior living communities in 15 states with an aggregate capacity for approximately 11,800 residents. Pursuant to its growth strategy, the Company is developing and constructing 33 senior living communities and has expansion projects in progress at seven of its existing communities, which in the aggregate will add capacity for 4,300 residents. The Company also operates six home health care agencies, including two agencies managed for third-parties. This press release and statements made by or on behalf of the Company relating hereto here·to adv. To this document, matter, or proposition. hereto Adverb Formal or law to this place, matter, or document Adv. 1. may be deemed to constitute forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions 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. These 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. may be affected by certain risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. The Company's actual results could differ materially from such forward-looking statements. -0-
AMERICAN RETIREMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended
-------------------------------
Sept. 30, 1998 Sept. 30, 1997
-------------- --------------
Revenues:
Resident and health care revenue $37,816 $23,146
Management services and other revenue 3,748 497
-------------- --------------
Total revenues 41,564 23,643
Expenses:
Community operating expenses 24,431 14,708
Lease expense (net) 2,561 653
General and administrative 3,497 1,971
Depreciation and amortization 3,479 1,685
-------------- --------------
Total operating expenses 33,968 19,017
-------------- --------------
Income from operations 7,596 4,626
Other income (expense):
Interest expense (5,087) (3,391)
Interest income 1,307 421
Other (25) 4
-------------- --------------
Other income (expense), net (3,805) (2,966)
-------------- --------------
Income before income taxes 3,791 1,660
Income tax expense 1,459 623
-------------- --------------
Net income $2,332 $1,037
============== ==============
Basic earnings per share $0.15 $0.09
============== ==============
Diluted earnings per share $0.15 $0.09
============== ==============
Weighted average shares used:
Basic earnings per share 15,603 11,406
Common stock equivalents 92 178
-------------- -------------
Diluted earnings per share 15,695 11,584
============== ==============
=====================================================================
At Sept. 30, At Dec. 31,
1998 1997
-------------- --------------
Balance Sheet Data:
Cash and cash equivalents $52,231 $44,583
Working Capital 51,646 47,744
Land, building and equipment, net 384,937 229,898
Total assets 598,380 317,154
Long-term debt, including current
portion 301,315 237,354
Refundable portion of life estate
purchase price 49,715 ---
Deferred life estate income 44,774 ---
Shareholders equity 143,875 53,918
====================================================================
AMERICAN RETIREMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Nine months ended
---------------------------------
Sept. 30, 1998 Sept. 30, 1997
---------------- ---------------
Revenues:
Resident and health care revenue $92,281 $66,570
Management services revenue 7,673 1,462
---------------- ---------------
Total revenues 99,954 68,032
Expenses:
Community operating expenses 59,771 42,227
Lease expense (net) 6,208 1,725
General and administrative 7,868 6,041
Depreciation and amortization 7,572 4,891
---------------- ---------------
Total operating expenses 81,419 54,884
---------------- ---------------
Income from operations 18,535 13,148
Other income (expense):
Interest expense (12,395) (10,002)
Interest income 2,494 785
Other 62 (56)
---------------- ---------------
Other income (expense), net (9,839) (9,273)
---------------- ---------------
Income before income taxes 8,696 3,875
Income tax expense 3,225 3,701
---------------- ---------------
Net income $5,471 $174
================ ===============
Basic earnings per share $0.42
================
Diluted earnings per share $0.42
================
Pro forma earnings data(1):
Income before income
taxes, as reported $3,875
Pro forma income tax expense 1,472
---------------
Pro forma net income $2,403
===============
Pro forma basic earnings per share $0.23
===============
Pro forma diluted earnings per share $0.23
===============
Weighted average shares used:
Basic earnings per share 12,893 10,298
Common stock equivalents 171 161
---------------- ---------------
Diluted earnings per share 13,064 10,459
=================================
Footnote to financial table:
(1) The 1997 pro forma adjustment for income taxes excludes the
one-time charge related to the conversion from a non-taxable
limited partnership to a taxable corporation in connection
with the Company's initial public offering and provides for
income taxes as though the Company's predecessor partnership
had been subject to corporate income taxes for the entire
1997 period.
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