Capital Senior Living Corporation Reports First Quarter 2003 Earnings of $0.06 Per Share.Business Editors DALLAS--(BUSINESS WIRE)--April 30, 2003 Capital Senior Living Corporation (NYSE NYSE See: New York Stock Exchange :CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. ), one of the country's largest operators of senior living communities, announced today its operating results for the first quarter of fiscal 2003.
Company highlights for the first quarter include:
-- Net income of $1.2 million, or diluted earnings per share of
$0.06
-- Cash earnings (net income plus depreciation) of $2.5 million,
or $0.13 per diluted share
-- EBITDA (income from operations plus depreciation) of $4.1
million
-- Recently opened communities (including the Spring Meadows
properties) leased to 74% versus 60% one year ago
-- Average occupancy rate on stabilized communities of 92%
-- Operating margins (before property taxes, insurance and
management fees) of 49% in independent and assisted living
communities
-- Same community revenue increase of 5.8%
The Company reported first quarter 2003 earnings of $1.2 million or $0.06 per share compared to first quarter 2002 earnings of $1.8 million or $0.09 per share. Last year's results included recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. earnings of $0.05 per share and a gain of $0.04 per share on the sale of two assets owned by an affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: partnership. "We were pleased to increase recurring earnings by 20% versus the same period of the prior year," James A. Stroud This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Chairman of the Company, said. "These results reflect our continued focus on operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and expense controls." OPERATING AND FINANCIAL RESULTS For the first quarter of 2003, the Company produced revenues of $14.5 million compared to revenues of $16.6 million in the same period of 2002. The primary factor contributing to lower revenues in 2003 was the contribution of four senior living communities to a joint venture with Blackstone Blackstone, river, c.50 mi (80 km) long, rising near Worcester, Mass., and flowing SE to Narragansett Bay at Providence, R.I. The river's clean water was a major factor in the early development of the area's textile industry. Real Estate Advisors in the second quarter of last year. On a comparable basis, resident revenues from communities owned in both periods grew by $0.7 million. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (defined as income from operations plus depreciation) was $4.1 million in the first quarter of 2003, compared to $4.6 million in the prior year period. Net income for the first quarter of 2003 was $1.2 million, or 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 of $0.06. Excluding the gain on the sale of two assets which were sold by an affiliated partnership in the first quarter of 2002, prior year diluted earnings per share were $0.05. Consequently, recurring earnings improved 20% year-over-year. Cash earnings (defined as net income plus deprecation dep·re·cate tr.v. de·pre·cat·ed, de·pre·cat·ing, de·pre·cates 1. To express disapproval of; deplore. 2. To belittle; depreciate. ) were $2.5 million, or $0.13 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 in the first quarter of 2003, compared to cash earnings of $3.5 million or $0.17 per diluted share in the prior year. Last year's results benefited from a gain on the sale of two assets. UPDATE ON ACQUISITION OF TRIAD Triad Term used variously for secret societies in Qing-dynasty China (and sometimes earlier), for modern Chinese crime gangs, and for crime gangs of other Asian nationals operating in their own countries or abroad. INTERESTS The Company announced on March 31, 2003 that it has executed Partnership Interest Purchase Agreements to purchase the remaining interests in Triad Senior Living II, L.P., Triad Senior Living III, L.P., Triad Senior Living IV, L.P., and Triad Senior Living V, L.P., (the "Triad Entities"). The Company currently has an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 1% limited partnership interest in each of the Triad Entities. The Triad Entities own twelve communities with a combined resident capacity of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,670 residents. The resident capacity mix is 95% independent living and 5% 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. , with all revenues derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from private pay sources. The Company will purchase the partnership interests of the general partner and other third party limited partnership interests of the Triad Entities for approximately $1.7 million in cash plus liabilities assumed. If the transaction had been completed as of December December: see month. 31, 2002, the Company would have increased its assets by approximately $189.0 million and would have increased its liabilities by approximately $129.0 million, after eliminating intercompany balances of approximately $60.0 million, representing advances from the Company. Upon completion of this transaction, which the Company expects to take place in the third fiscal quarter of 2003, the Company will wholly own each partnership. The purchase agreements are subject to customary terms and conditions. These twelve communities produced $13.0 million of revenues in 2002 and, if owned during that period, would have increased the Company's resident revenues by 23%. Of the twelve communities acquired, eleven opened between November November: see month. 2000 and January January: see month. 2002. These eleven communities improved their lease-up levels to 69% as of March 31, 2003 from 40% the previous year. The last community, which opened in May of 2002, was leased to 78% as of March 31, 2003. "The acquisition of these partnership interests will benefit our shareholders in a number of ways," Lawrence Lawrence. 1 City (1990 pop. 26,763), Marion co., central Ind., a residential suburb of Indianapolis, on the West Fork of the White River. It has light manufacturing. 2 City (1990 pop. 65,608), seat of Douglas co., NE Kans. A. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Chief Executive Officer said. "Our balance sheet will be greatly simplified and our business model will be far more transparent once we begin consolidating the operations of these twelve communities. We will also receive an immediate boost to revenues. On the other hand, the elimination of interest income on the Triad advances and greater depreciation on the increased asset base will initially result in net losses, although cash earnings are expected to be positive. Due to our substantial depreciation expenses, it is important for our shareholders to understand that cash flow has been, and will continue to be, the yardstick by which we measure operating performance, while we do anticipate steady progress toward regaining re·gain tr.v. re·gained, re·gain·ing, re·gains 1. To recover possession of; get back again: regain one's strength. See Synonyms at recover. 2. positive earnings per share." 1Q03 CONFERENCE CALL INFORMATION The call will be held on Wednesday Wednesday: see week. , April 30, 2003 at 11:00 am Eastern Time. The Company's earnings release announcing first quarter 2003 financial results is scheduled to be released to news services the morning of Wednesday, April 30, 2003. The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number is 913-981-5542. No confirmation number is required. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com through Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. or RealPlayer A multimedia player from RealNetworks that plays RealAudio and RealVideo transmissions. Included is the technology (see RealJukebox) for organizing music files and creating MP3 files from audio CDs. . For the convenience of the Company's shareholders and the public, the conference call will be recorded and available for replay starting April 30, 2003 at 2:00 pm Eastern Time, until May 7, 2003 at 8:00 pm Eastern Time. To access the conference call replay, call 719-457-0820 (reference code 441702). The conference call will also be made available for playback Playback could mean:
ABOUT THE COMPANY Capital Senior Living Corporation is one of the nation's largest operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum Continuum (pl. -tinua or -tinuums) can refer to:
The Company currently owns and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. operates 43 communities in 20 states with a total capacity of approximately 6,900 residents. In the communities operated by the Company, 86 percent of residents live independently and 14 percent of residents require assistance with activities of daily living. This release contains certain financial information not derived in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), including EBITDA, cash earnings and cash earnings per share. The Company believes this information is useful to investors and other interested parties. Such information should not be considered as a substitute for any measures derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Reconciliation of this information to the most comparable GAAP measures is included as an attachment See attach a file. to this release. The 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. in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to find suitable acquisition properties at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms, financing, licensing, business conditions, risks of downturns in economic condition generally, and satisfaction of closing conditions such as those pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to licensure licensure (lī´s  nsh . These and other risks are
detailed in the Company's reports filed with the Securities and
Exchange Commission.
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2003 2002
---------- ------------
ASSETS
Current assets:
Cash and cash equivalents $5,225 $11,768
Restricted cash 4,490 4,490
Accounts receivable, net 1,510 1,461
Accounts receivable from affiliates 412 218
Federal and state income taxes receivable 893 1,171
Deferred taxes 461 399
Assets held for sale 739 --
Prepaid expenses and other 694 1,164
---------- ------------
Total current assets 14,424 20,671
Property and equipment, net 152,789 153,544
Deferred taxes 6,943 7,106
Due from affiliates 386 513
Notes receivable from affiliates 90,878 86,470
Investments in limited partnerships 1,297 1,238
Assets held for sale 3,392 4,131
Other assets, net 4,617 4,578
---------- ------------
Total assets $274,726 $278,251
========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,971 $2,322
Accrued expenses 3,558 4,638
Current portion of notes payable 7,863 9,715
Customer deposits 1,015 1,023
---------- ------------
Total current liabilities 14,407 17,698
Deferred income -- 7
Deferred income from affiliates 1,058 1,194
Notes payable, net of current portion 139,145 140,385
Minority interest in consolidated
partnership 631 686
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 15,000; no shares
issued or outstanding -- --
Common stock, $.01 par value:
Authorized shares -- 65,000
Issued and outstanding shares --
19,738 and 19,718
in 2003 and 2002, respectively 197 197
Additional paid-in capital 91,993 91,990
Retained earnings 27,295 26,094
---------- ------------
Total shareholders' equity 119,485 118,281
---------- ------------
Total liabilities and
shareholders' equity $274,726 $278,251
========== ============
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share)
Three Months Ended
March 31,
-----------------------
2003 2002
----------- -----------
(Unaudited) (Unaudited)
Revenues:
Resident and healthcare revenue $13,208 $15,579
Rental and lease income -- 37
Unaffiliated management services
revenue 295 366
Affiliated management services revenue 910 410
Affiliated development fees 68 183
---------- ----------
Total revenues 14,481 16,575
Expenses:
Operating expenses 7,624 8,772
General and administrative expenses 2,716 3,157
Depreciation and amortization 1,347 1,646
----------- -----------
Total expenses 11,687 13,575
----------- -----------
Income from operations 2,794 3,000
Other income (expense):
Interest income 1,637 1,429
Interest expense (2,593) (2,828)
Equity in the earnings (losses) of
affiliates 53 11
Gain on sale of properties -- 2,283
----------- -----------
Income before income taxes and minority
interest in consolidated partnership 1,891 3,895
Provision for income taxes (745) (1,124)
----------- -----------
Income before minority interest in
consolidated partnership 1,146 2,771
Minority interest in consolidated partnership 55 (960)
----------- -----------
Net income $1,201 $1,811
=========== ===========
Net income per share:
Basic $0.06 $0.09
=========== ===========
Diluted $0.06 $0.09
=========== ===========
Weighted average shares outstanding -
basic 19,738 19,718
=========== ===========
Weighted average shares outstanding -
diluted 19,862 20,022
=========== ===========
CAPITAL SENIOR LIVING CORPORATION
RECONCILIATION OF NON GAAP ITEMS
(in thousands, except per share data)
Three Months Ended
March 31,
----------------------
2003 2002
----------- -----------
(Unaudited) (Unaudited)
EBITDA reconciliation:
Income from operations $2,794 $3,000
Depreciation and amortization 1,347 1,646
----------- -----------
EBITDA 4,141 4,646
=========== ===========
Cash earnings reconciliation:
Net income 1,201 1,811
Depreciation and amortization 1,347 1,646
----------- -----------
Cash earnings 2,548 3,457
=========== ===========
Cash earnings per diluted share
reconciliation:
Net income per diluted share $0.06 $0.09
Depreciation and amortization per
diluted share 0.07 0.08
----------- -----------
Cash earnings per diluted share $0.13 $0.17
=========== ===========
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