Assisted Living Concepts, Inc. Announces Third Quarter 2002 Financial Results.[I TO: *chris.stetkiewicz@reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. .com *marples@compuserve.com *mitzb@kcts.org ]]]]] Business Editors PORTLAND, Ore.--(BUSINESS WIRE)--Nov. 11, 2002 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. Concepts, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ASLC ASLC Alaska Sealife Center ASLC Associated Students of Lewis & Clark College ASLC Accruing Superannuation Liability Contributions ASLC Adaptive Side-Lobe Cancellation ), a national provider of assisted living services, announced today its financial results for the quarter ended Sept. 30, 2002. For the quarter ended Sept. 30, 2002, the Company incurred a net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $524,000, or $0.08 per basic and 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 as compared to a net loss from continuing operations of $7.1 million, or $0.42 per basic and diluted share, for the quarter ended Sept. 30, 2001. Revenue increased $2.1 million to $39.2 million, for the three months ended Sept. 30, 2002, from the comparable period of 2001. All figures are based on same store operations for the Company's 178 residences, and do not include results for five residences sold on Sept. 30, 2002 and one residence which is held for sale. For the quarter ended Sept. 30, 2002, the Company incurred a net loss of $563,000, or $0.09 per basic and diluted share as compared to a net loss of $7.3 million, or $0.43 per basic and diluted share, for the quarter ended Sept. 30, 2001. "We continue to see positive results from our efforts to increase occupancy and revenue at our residences," said Steven L. Vick, president and chief executive officer. "At the same time, we are focusing on ways to enhance valuable resources that are available to our residences and exploring new and innovative service offerings, which are improving the quality of service we provide to our residents." Vick continued, "The sale of the five Florida and Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. residences was completed on Sept. 30, 2002. The completion of this sale, as well as other similar activities, will assist us in our strategic goals of reducing debt and insurance expense, and improving operating results. Additionally, we are pleased with our ability to reduce corporate general and administrative expenses without a reduction in support for our residences or delivery of services to our residents." The proceeds of the sale are being used to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. $4.5 million principal amount of the Senior Secured Notes. In November 2002, in response to evolving public company requirements under the Sarbanes-Oxley Act See SOX. of 2002, Andre Dimitriadis resigned as a member and the chair of the Company's audit committee. Dimitriadis will continue to serve as a director of the Company. As a result of Dimitriadis' resignation, the Company's Board of Directors appointed Mark Holliday, a current director and member of the audit committee, as chair and appointed Richard Ladd, a current director, as a member of the audit committee. As previously announced, effective Dec. 31, 2001, the Company adopted the principles of fresh-start reporting as a result of its emergence from bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . The adoption of fresh-start reporting materially changed the amounts previously recorded in the Company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . Accordingly, operating results and cash flows for the quarter ended Sept. 30, 2002 are generally not comparable to the Company's reported financial data for periods prior to Dec. 31, 2001. As used in this release, the term "Predecessor Company" refers to the Company and its operations for periods prior to the adoption of fresh-start reporting, while the term "Successor Company" is used to describe the Company and its operations for the periods thereafter. The Company recently obtained the terms of the tender offer (the "Offer") being made by M P Acquisition, Co. and MacKenzie Patterson, Inc. to purchase up to $3 million principal amount of the Company's Ten Year Junior Secured Notes (the "Junior Notes") at a price of $670 for $1,000 principal amount (the "Offer Price") of the Junior Notes. The Board of Directors recommends against acceptance of the Offer, because the Board believes that the Offer Price is inadequate. The factors considered by the Board in making its recommendation against acceptance include (i) the fact that the Offer Price has been set below the bid price of the Junior Notes, which was $830 for $1,000 principal amount as of Nov. 6, 2002, (ii) the current and historical financial condition and results of operation of the Company, as well as the future prospects and strategic objectives of the Company, including the risks involved in achieving these prospects and objectives and (iii) the relative lack of liquidity in trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. of the Junior Notes. In making its recommendation the Board has not undertaken any independent review or analysis by outside experts of the adequacy of the Offer Price or acceptability of the Offer. The Board urges the Junior Noteholders to make their own decisions as to the acceptability of the Offer, including the adequacy of the Offer Price, in light of their own investment objectives, need for liquidity, individual financial 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 and tolerance for risk, assessment of the Company's prospects and outlook and any other factors deemed relevant. Assisted Living Concepts, Inc. owns, leases and operates 178 assisted living residences with 6,886 units for older adults who need help with the activities of daily living, such as eating, bathing, dressing and medication management. In addition to housing, the Company provides personal care, support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , and nursing services 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. the individual needs of its residents, as permitted by state law. This combination of housing and services provides a home-like setting and cost efficient alternative that encourages independence for individuals who do not require the broader array of medical and health services health services Managed care The benefits covered under a health contract provided by skilled nursing facilities skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. . The Company currently has operations in Oregon, Washington, Idaho, Nebraska, Iowa, Arizona, Texas, New Jersey, Ohio, Pennsylvania, Indiana, Louisiana, Michigan and South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. . This press release and statements made by or on behalf of Assisted Living Concepts, Inc. 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 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. 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. Such statements, including without limitation, statements containing the words "will," "believes," "anticipates," "estimates," "intends," "expects," "should," "could," and words of similar import, are forward looking statements. These forward-looking statements may be affected by risks and uncertainties, including without limitation (i) our ability to control costs and improve operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , (ii) our ability to increase occupancy, (iii) our ability to increase our revenue at a pace which exceeds expense inflation, (iv) our ability to operate our residences in compliance with evolving regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , and (v) the degree to which our future operating results and financial condition may be affected by a reduction in Medicaid reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates. In light of such risks and uncertainties, our actual results could differ materially from such forward-looking statements. Except as may be required by law, we do not undertake any obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances 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.
ASSISTED LIVING CONCEPTS, INC.
Consolidated Statement of Operations Data
(in thousands, except per share amounts)
Predecessor Successor Predecessor Successor
Company Company Company Company
----------- --------- ----------- ---------
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2002 2001 2002
----------- --------- ----------- ---------
Revenue $37,142 $39,177 $109,680 $114,201
Operating expenses:
Residence operating
expenses 25,278 27,280 74,178 79,125
Corporate general and
administrative 4,546 4,178 13,254 14,073
Building rentals 1,749 941 5,349 2,806
Building rentals with
related party 2,297 2,120 6,889 6,360
Depreciation and
amortization 2,415 1,692 7,277 4,960
----------- --------- ----------- ---------
Total operating
expenses 36,285 36,211 106,947 107,324
----------- --------- ----------- ---------
Operating income 857 2,966 2,733 6,877
----------- --------- ----------- ---------
Other income (expense):
Interest expense (5,303) (3,545) (14,610) (10,602)
Interest income 95 55 382 160
Other income (expense),
net 14 14 (55) 36
----------- --------- ----------- ---------
Total other
expense, net (5,194) (3,476) (14,283) (10,406)
----------- --------- ----------- ---------
Loss before debt
restructure and
reorganization costs (4,337) (510) (11,550) (3,529)
Debt restructure and
reorganization costs (2,805) (14) (4,171) (680)
----------- --------- ----------- ---------
Loss from continuing
operations (7,142) (524) (15,721) (4,209)
Loss from discontinued
operations (191) (39) (421) (433)
----------- --------- ----------- ---------
Net loss $(7,333) $(563) $(16,142) $(4,642)
=========== ========= =========== =========
Basic and diluted loss per
share from continuing
operations $(0.42) $(0.08) $(0.92) $(0.65)
Basic and diluted loss per
share from discontinued
operations (0.01) (0.01) (0.02) (0.07)
----------- --------- ----------- ---------
Basic and diluted net loss
per share $(0.43) $(0.09) $(0.94) $(0.72)
----------- --------- ----------- ---------
Basic and diluted weighted
average shares
outstanding 17,121 6,500 17,121 6,500
=========== ========= =========== =========
Consolidated Balance Sheet Data (in thousands)
Successor Company
Dec. 31, Sept. 30,
2001 2002
-------- ---------
Cash and cash equivalents $ 6,077 $ 2,973
Working deficit $ (6,299) $ (5,352)
Total assets $ 222,253 $ 218,550
Long term debt and capital lease obligation,
excluding current portion $ 161,461 $ 158,621
Shareholders' equity $ 32,799 $ 28,157
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