American Retirement Reports Continued Growth.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)--Aug. 2, 1999-- 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 (NYSE NYSE See: New York Stock Exchange : ACR See riser card. ), a leading national provider of senior living care, today announced continued growth in revenues and profits for the quarter ending June June: see month. 30, 1999. The Company grew total revenues to $44.5 million in the quarter, an increase of 49% over second quarter 1998 revenue of $29.8 million. For the first six months of the year, revenue increased 55% to $88.0 million on a year to year basis. Net income for the quarter increased to $3.4 million or $.20 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. These results compare to second quarter 1998's net income of $1.6 million or $.14 per diluted share for an increase of 110%. 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 to $15.5 million, a 46% increase over the corresponding prior year period of $10.6 million. For the first half of 1999, net income was $6.8 million, an increase of 144% over the first six months of 1998. Commenting on the Company's results, 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. Bill Sheriff said, "We continue to grow our revenue through expansions, improvements in occupancies and acquisitions. We are focused on developing our senior living networks and opened seven communities, with the capacity for nearly 850 residents, during the second quarter. Five of these communities are free-standing free-standing Managed care adjective Referring to a physically and, often, financially discrete entity–eg, a surgical center, that is separate from, but may be affiliated with, a hospital; FS facilities may provide ambulatory surgery, emergency or 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 that were opened in our network cities of Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. and Tampa/St. Petersburg Petersburg, city (1990 pop. 38,386), politically independent and in no county, SE Va., on the Appomattox River; inc. 1850. A port of entry and an important tobacco market, it has industries producing chemicals, pharmaceuticals, furniture, structural steel, lumber, . The other two were large retirement communities that were opened in Huntsville Huntsville, town, Canada Huntsville, town (1991 pop. 14,997), SE Ont., Canada, on the Muskoka River. It has lumber mills and a woodworking plant, but it is sustained mainly by its year-round tourist trade. and Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. , which we believe will serve as the basis for another successful network. We have over 3,700 new resident capacity in development or under construction and expect 900 of that capacity to be placed into service during the remainder of this year." Mr. Sheriff continued, "We continue to see expansion opportunities through acquisition of large scale communities and free-standing assisted living properties to help fill out our senior living networks." The Company also reported growth in revenue and earnings on a same community basis (i.e. communities owned or leased for at least five quarters). The Company had 16 retirement communities with a resident capacity of 4,598. Same community revenues increased by 4.4% to $26.5 million, with same community 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 increasing to 95% from 90%. Same community 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. increased by 0.1%, leading to a same community EBITDAR increase of 11.3%, to $10.8 million. Same community EBITDAR margins increased to 40.8% from 38.3% for the period. American 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, skilled nursing and Alzheimer's Noun 1. Alzheimer's - a progressive form of presenile dementia that is similar to senile dementia except that it usually starts in the 40s or 50s; first symptoms are impaired memory which is followed by impaired thought and speech and finally complete helplessness care. The Company's strategy is to develop senior living networks in major metropolitan regions. These networks are made up of large continuing care continuing care a professional convention that a veterinarian who is treating an animal is obliged to continue treating that case unless an arrangement is made with its custodian to transfer the care to another practitioner or to a specialist. retirement communities and smaller free-standing assisted living residences located in the same markets. The Company believes that this hub and spoke Any architecture that uses a central connecting point. It is the same as a star topology in a network. A network hub is hardware that functions as a central hub to all nodes. See hub and full mesh.  approach produces management efficiencies and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular marketpenetration - the act of entering into or through something; "the penetration of upper management by women" by offering a range of senior living arrangements at various price levels. American Retirement Corporation currently operates 49 senior living communities in 16 states with an aggregate capacity for approximately 13,100 residents. The Company is currently developing or constructing 28 senior living communities and has expansion projects in progress at ten of its existing communities, which in the aggregate will add capacity for approximately 3,700 residents. Approximately 95 percent of the Company's revenues come from private pay sources. This press release and statements made by or on behalf of American Retirement Corporation 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, including those described in American Retirement Corporation's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 1998 under the caption "Risk Factors" and in American Retirement's other filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included herein, American Retirement Corporation's actual results could differ materially from such forward-looking statements. American Retirement Corporation does not undertake any obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events. -0-
AMERICAN RETIREMENT CORPORATION
CONSOLIDATED FINANCIAL STATEMENT DATA
Statement of Operations Data Three Months Ended Increase (Decrease)
------------------
June 30, June 30,
1999 1998 $ %
----------------------------------------
(in thousands, except per share data)
Revenues:
Resident and health care $ 40,642 $ 27,599 $ 13,043 47.3%
Management services:
Freedom Square and
Freedom Plaza Peoria 1,117 -- 1,117 n/a
Managed with purchase rights 195 100 95 95.0%
Other 338 357 (19) -5.3%
----------------------------------------
Total management fees 1,650 457 1,193 261.1%
Development fees:
Company initiated
development projects 1,936 1,764 172 9.8%
Other 225 -- 225 n/a
----------------------------------------
Total development fees 2,161 1,764 397 22.5%
Total revenues 44,453 29,820 14,633 49.1%
Expenses:
Community operating expense 25,476 17,226 8,250 47.9%
Lease expense:
Synthetic leases 915 221 694 314.0%
REIT leases 977 705 272 38.6%
Other 1,281 1,036 245 23.6%
----------------------------------------
Total lease expense, net 3,173 1,962 1,211 61.7%
General and administrative 3,501 1,982 1,519 76.6%
Depreciation and amortization 3,393 1,856 1,537 82.8%
----------------------------------------
Total operating expenses 35,543 23,026 12,517 54.4%
----------------------------------------
Operating income 8,910 6,794 2,116 31.1%
EBITDAR 15,476 10,612 4,864 45.8%
Other income (expense):
Interest expense (5,443) (3,920) 1,523 38.9%
Interest income 1,876 560 1,316 235.0%
Other 199 82 117 142.7%
----------------------------------------
Other expense, net (3,368) (3,278) 90 2.7%
Income from continuing
operations before
income taxes 5,542 3,516 2,026 57.6%
Income tax expense 2,111 1,286 825 64.2%
----------------------------------------
Income from continuing
operations 3,431 2,230 1,201 53.9%
Discontinued operations,
net of tax -- (593) 593 n/a
----------------------------------------
Net income $ 3,431 $ 1,637 $ 1,794 109.6%
========================================
EPS per diluted share $ 0.20 $ 0.14
====================
Cash EPS per diluted share(1) $ 0.40 $ 0.30
====================
Weighted average diluted shares 17,161 11,587
(1) EPS plus depreciation and amortization per diluted share
Selected Balance June 30, Dec. 31,
Sheet Data 1999 1998
--------------------
(in thousands)
Cash and cash equivalents $ 20,821 $ 20,400
Working capital 26,667 25,804
Land, buildings and
equipment, net 418,636 391,468
Total assets 672,903 595,854
Long-term debt, including
current portion 371,525 300,667
Refundable portion of life
estate fees 49,516 48,805
Shareholders' equity 152,896 145,842
AMERICAN RETIREMENT CORPORATION
CONSOLIDATED FINANCIAL STATEMENT DATA
Statement of Operations Data Six Months Ended Increase (Decrease)
------------------
June 30, June 30,
1999 1998 $ %
----------------------------------------
(in thousands, except per share data)
Revenues:
Resident and health care $ 80,623 $ 53,043 $ 27,580 52.0%
Management services:
Freedom Square and Freedom
Plaza Peoria 2,045 -- 2,045 n/a
Managed with purchase rights 339 100 239 239.0%
Other 676 707 (31) -4.4%
----------------------------------------
Total management fees 3,060 807 2,253 279.2%
Development fees:
Company initiated
development projects 3,915 2,920 995 34.1%
Other 450 90 360 400.0%
----------------------------------------
Total development fees 4,365 3,010 1,355 45.0%
Total revenues 88,048 56,860 31,188 54.9%
Expenses:
Community operating expense 50,702 33,270 17,432 52.4%
Lease expense:
Synthetic leases 1,785 221 1,564 707.7%
REIT leases 1,960 1,354 606 44.8%
Other 2,408 2,072 336 16.2%
----------------------------------------
Total lease expense, net 6,153 3,647 2,506 68.7%
General and administrative 6,763 3,709 3,054 82.3%
Depreciation and amortization 6,705 3,584 3,121 87.1%
----------------------------------------
Total operating expenses 70,323 44,210 26,113 59.1%
----------------------------------------
Operating income 17,725 12,650 5,075 40.1%
EBITDAR 30,583 19,881 10,702 53.8%
Other income (expense):
Interest expense (10,187) (7,685) 2,502 32.6%
Interest income 3,325 1,187 2,138 180.1%
Other 147 34 113 332.4%
----------------------------------------
Other expense, net (6,715) (6,464) 251 3.9%
Income from continuing
operations before
income taxes and cumulative
effect of accounting change 11,010 6,186 4,824 78.0%
Income tax expense 4,185 2,253 1,932 85.8%
----------------------------------------
Income from continuing
operations before cumulative 6,825 3,933 2,892 73.5%
effect of accounting change
Discontinued operations,
net of tax -- (837) 837 n/a
----------------------------------------
Income before cumulative
effect of accounting change 6,825 3,096 3,729 120.4%
Cumulative effect of change in
accounting for start-up costs,
net of tax -- (304) 304 n/a
----------------------------------------
Net income $ 6,825 $ 2,792 $ 4,033 144.4%
========================================
EPS per diluted share(1) $ 0.40 $ 0.27
====================
Cash EPS per diluted share(2) $ 0.79 $ 0.58
====================
Weighted average diluted shares 17,165 11,602
(1) Before cumulative effect of change in accounting for start-up
costs in 1998
(2) EPS plus depreciation and amortization per diluted share (before
cumulative effect of change in accounting principle)
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