Assisted Living Concepts Inc. Announces Results for the Three Months and Nine Months Ended September 30, 1998.

PORTLAND, Ore.--(BUSINESS WIRE)--Nov. 5, 1998--Assisted Living Concepts Inc. (AMEX:ALF) (the "Company"), one of the nation's leading providers of assisted living, today reported a 93% increase in revenues for the three months ended September 30, 1998 to $24.2 million from $12.5 million for the same period last year and a 116% increase in earnings before interest, taxes, depreciation and amortization (EBITDA) to $5.4 million from $2.5 million for the three months ended September 30, 1997. Net income before taxes for the three months ended September 30, 1998 was $4.4 million compared to $1.6 million, a 173% increase, for the same period last year.

For the three months ended September 30, 1998, net income was $2.7 million, or $.16 per diluted share as compared to net income of $996,000, or $.09 per share for the same period last year. On a same store basis for the three months ended September 30, 1998, operating income increased 72.4%.

For the nine months ended September 30, 1998, revenues increased 98% to $64.5 million from $32.6 million for the same period last year. Net income for the nine months ended September 30, 1998, excluding the cumulative effect of a change in accounting principle and the non-recurring charges taken in the second quarter of 1998, was $7.1 million or $.42 per diluted share as compared to $2.6 million or $.23 per diluted share for the same period in 1997, a 167% increase.

Net (loss) income, including the non-recurring charges for the nine months ended September 30, 1998 was $(2.4) million, or $(.14) per diluted share, compared to $2.6 million or $.23 per diluted share, for the same period last year.

Development and Acquisitions

For the quarter ended September 30, 1998, the Company added nine residences with 360 units, and expanded three residences by 26 units, bringing the total number of residences to 170 with 6,497 units. This represents an increase of 61 residences with 2,455 units or a 62% increase over the number of units at September 30, 1997. The Company has also begun construction on an expansion project in Oregon and will continue this program in other select areas as market conditions warrant.

The Company signed a letter of intent and expects a fourth quarter close on the purchase of a 51 unit facility in Texas. The purchase price of this residence is $3.4 million and the residence is fully occupied. This facility is of a similar building model to the Company's internal development, expanding the Company's operating base in Texas to 40 residences (1,536 units).

At September 30, 1998, the Company had 28 residences with 1,110 units under construction and 22 residences under development (i.e., the site is under control and development activities have commenced). The Company currently operates in Oregon, Washington, Idaho, Arizona, Texas, Nebraska, New Jersey, Ohio, Indiana, Iowa, South Carolina, Louisiana and Pennsylvania with residences under construction and development in many of its existing markets as well as three additional states.

Financing

During the third quarter, the Company completed a number of financings from various sources. In July, the Company closed on a variable $13.2 million tax exempt bond financing at an all inclusive variable rate of approximately 5%, secured by seven residences in Ohio, and raised $6.6 million in mortgage financing at a fixed rate of 7.6%. In September, the Company raised $5.8 million in mortgage financing at a rate of approximately 8.5% and $5.3 million through a sale-leaseback transaction involving two residences.

In October, the Company received a commitment for a $25 million secured revolving credit facility, subject to certain conditions and expected to close in December, 1998, with PNC Bank, N.A. as agent and Sun Trust Bank, Central Florida, N.A. as a syndicate member. The Company will seek to expand this credit facility as needed. The Company believes that its existing cash (which is approximately $80 million), mortgage and other financing commitments and the credit facility will adequately fund the scheduled development through 1999.

The Company owns, operates, and develops assisted living residences for older adults who need assistance with the activities of daily living, such as bathing and dressing. In addition to housing, the Company provides personal care, support services and makes nursing services available according to the individual needs of its residents and as permitted by state regulation. This combination of housing and services will provide a cost efficient alternative and an independent lifestyle for individuals who do not require the broader array of medical and health services provided by nursing facilities.

This press release contains certain forward-looking statements that are subject to risk and uncertainty. There can be no assurance that these future results will be achieved. Readers are cautioned to refer to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 filed with the Securities and Exchange Commission for a description of factors which could affect the Company's performance. -0-

                    Assisted Living Concepts Inc.
                Consolidated Statements of Operations
               (in thousands, except per share amounts)

                                      Three               Three
                                   Months Ended        Months Ended
                                    30-Sep-97           30-Sep-98

Revenue                         $ 12,505  100.0%   $ 24,162     100.0%
General operating expenses         7,897   63.2%     15,002      62.1%
  General operating income         4,608   36.8%      9,160      37.9%
Corporate general and
 administrative                      691              1,629
Building rentals                   2,695              3,969
Depreciation and amortization        801              1,557
  Total operating expenses         4,187              7,155
Operating income                     421              2,005
Interest expense                    (245)              (723)
Interest income                      138              1,227
Other income                       1,293              1,881
Non-recurring charge                   -                  -
Net income (loss) before
 income taxes                    $ 1,607            $ 4,390
(Provision) benefit for
 income taxes                       (611)            (1,668)
Net income (loss) before
 cumulative effect                   996              2,722
Cumulative effect (net of
 taxes of $1,187)                    $ -                  -
Net Income (loss)                  $ 996            $ 2,722
Net income (loss) per
 common share before cum effect
 (basic)                           $0.09              $0.16
Net income (loss) per
 common share (basic)              $0.09              $0.16
Net income (loss) per common
 share before cum effect
 (diluted)                         $0.09              $0.16
Net income (loss) per common
 share (diluted)                   $0.09              $0.16
Weighted-average common shares
 outstanding (basic)              11,084             17,274
Weighted-average common shares
 outstanding (diluted)            13,517             17,555

                                        Nine                Nine
                                     Months Ended       Months Ended
                                      30-Sep-97           30-Sep-98

Revenue                           $ 32,597  100.0%    $ 64,458 100.0%
General operating expenses          20,146   61.8%      39,727  62.1%
General operating income            12,451   38.2%      24,731  37.9%
Corporate general and
 administrative                      2,008               4,077
Building rentals                     6,264              11,808
Depreciation and amortization        2,009               3,646
  Total operating expenses          10,281              19,531
Operating income                     2,170               5,200
Interest expense                      (653)             (1,376)
Interest income                        414               2,872
Other income                         1,775               4,685
Non-recurring charge                     -              (8,495)
Net income (loss) before
 income taxes                       $ 3,706            $ 2,886
(Provision) benefit for
 income taxes                      $ (1,079)            (2,477)
Net income (loss) before
 cumulative effect                  $ 2,627                409
Cumulative effect (net
 of taxes of $1,187)                    $ -             (2,770)
Net Income (loss)                   $ 2,627           $ (2,361)
Net income (loss) per
 common share before cum effect
 (basic)                              $0.24              $0.02
Net income (loss) per
 common share (basic)                 $0.23             ($0.14)
Net income (loss) per
 common share before
 cum effect (diluted)                 $0.24              $0.02
Net income (loss) per
 common share (diluted)               $0.23             ($0.14)
Weighted-average common
 shares outstanding (basic)          11,018             17,435 (a)
Weighted-average common shares
 outstanding (diluted)               13,492             17,435 (a)

(a) Per FAS 128, basic and diluted weighted average common shares
are the same when a net loss is incurred.

PRO FORMA NET INCOME, EXCLUDING NON-RECURRING CHARGE AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE

                                                        Nine
                                                     Months Ended
                                                      30-Sep-98

Proforma net income before income taxes,
 excluding non-recurring charge and
 cumulative effect of change in accounting
   principle                                           $11,381

Provision for income taxes                              (4,325)

Pro forma net income, excluding non-recurring
 charge and cumulative effect of change in
 accounting principle                                  $ 7,056

Proforma net income per common share, excluding
 non-recurring charge and cumulative effect
 of change in accounting principle (basic)               $0.40

Proforma net income per common share,
 excluding non-recurring charge and
 cumulative effect of change in accounting
 principle (diluted)                                     $0.42

Weighted-average common shares outstanding (basic)      17,435

Weighted-average common shares outstanding (diluted)    17,783


   COMPILATION OF STABILIZED AND START-UP RESIDENCES

                               Stabilized            Start-up
                              Residences(a)         Residences(b)

Revenue                        $ 15,891   100.0%     $ 7,554   100.0%
General operating expenses        9,204    57.9%       5,637    74.6%
General operating income          6,687    42.1%       1,917    25.4%
Corporate general and
 administrative                      --                   --
Building rentals                  2,810                1,153
Depreciation and amortization       578                  815
Total operating expenses          3,388                1,968
Operating income (loss)           3,299                  (51)
Interest expense                   (853)                (843)
Interest income                      --                    3
Other income                         --                   --
Other expense                        --                   --
Net income before taxes           2,446                 (891)
Residences operating                 86                   68
Units operating                   3,138                2,726
Average occupancy rate              92%                  50%

                               Corporate and       Three
                                 Ancillary      Months Ended
                                 Services      Sept. 30, 1998

Revenue                           $ 717          $ 24,162      100.0%
General operating expenses          161            15,002       62.1%
General operating income            556             9,160       37.9%
Corporate general and
 administrative                   1,629             1,629
Building rentals                      6             3,969
Depreciation and amortization       164             1,557
Total operating expenses          1,799             7,155
Operating income (loss)          (1,243)            2,005
Interest expense                    973              (723)
Interest income                   1,224             1,227
Other income                      1,881             1,881
Other expense                        --                --
Net income before taxes           2,835             4,390

Residences operating                                  154
Units operating                                     5,864
Average occupancy rate                                73%

(a)  Stabilized residences are those residences that have been
     operating for twelve months or have achieved a stabilized
     occupancy of 95% or more as of the beginning of the quarter.
     Stabilized residences exclude three properties held for sale and
     one property whose lease was terminated effective Sept. 30, 1998.
(b)  Start-up residences are those residences that have not been
     operating for twelve months and have not achieved a stabilized
     occupancy of 95% or more as of the beginning of the quarter.


                 COMPILATION OF SAME STORE RESIDENCES

                                Three                 Three
                             Months Ended          Months Ended
                            Sept. 30, 1997        Sept. 30, 1998

Revenue                       $ 11,879   100.0%     $ 13,744   100.0%
General operating expense        7,320    61.6%        8,036    58.5%
General operating income         4,559    38.4%        5,708    41.5%
Building rentals                 2,334                 2,603
Depreciation and amortization      702                   480
Total operating expenses         3,036                 3,083
Operating income                 1,523                 2,625
Interest expense                (1,406)                 (821)
Interest income                      3                     1
Other income                       626                    --
Other expense                                             (2)
Income before income taxes       $ 746               $ 1,803
Residences operating                77                    77
Units operating                  2,776                 2,776
Average occupancy rate             80%                   91%

                                  Nine                  Nine
                               Months Ended          Months Ended
                              Sept. 30, 1997        Sept. 30, 1998

Revenue                       $ 25,101   100.0%     $ 27,002   100.0%
General operating expense       14,559    58.0%       15,483    57.3%
General operating income        10,542    42.0%       11,519    42.7%
Building rentals                 4,998                 6,041
Depreciation and amortization      862                   540
Total operating expenses         5,860                 6,581
Operating income                 4,682                 4,938
Interest expense                (1,790)                 (987)
Interest income                      4                     3
Other income                        --
Other expense                       (1)                   (1)
Income before income taxes     $ 2,895               $ 3,953
Residences operating                51                    51
Units operating                  1,778                 1,778
Average occupancy rate             90%                   95%