Capital Senior Living Corporation Reports First Quarter 2005 Earnings.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- 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, today announced operating results for the first quarter of fiscal 2005. Company highlights for the first quarter include: --Revenues of $24.2 million versus $22.6 million for the first quarter of last year --Net loss of $0.8 million, or a $0.03 loss per share, versus a $2.0 million loss, or $0.09 per share, in the first quarter of 2004 --Cash earnings (net income plus depreciation and amortization) of $2.4 million, or $0.09 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, versus $0.9 million for the first quarter of 2004 --Adjusted 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 (income from operations plus depreciation and amortization) of $5.8 million, versus $4.1 million in the prior year period --Average physical occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) on 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. communities of 90% --Operating margins (before property taxes, insurance and management fees) of 47% in stabilized independent and 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. communities --All community revenue increase of 6% versus the prior year The Company reported a first quarter 2005 loss of $0.8 million or $0.03 per share, compared to a loss of $2.0 million or $0.09 per share in the comparable period of 2004. "We remain focused on achieving growth in revenues and cash earnings," commented 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. "During the quarter, we experienced higher occupancies and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . These achievements resulted in a 140% improvement in our income from operations from the first quarter of 2004." Operating and Financial Results For the first quarter of 2005, the Company reported revenues of $24.2 million, compared to revenues of $22.6 million in the first quarter of 2004, an increase of $1.6 million or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. seven percent. Resident and health care revenue increased from the first quarter of the prior year by approximately $1.3 million as a result of a 4.4 percent increase in the average monthly rent and a 2.3 percent increase in 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 in our consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: properties. Management services revenue increased by over $0.3 million, primarily due to the acquisition of CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. Management in the third quarter of 2004, which resulted in the addition of 14 communities under management. Even with the increase in revenues, 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. were lower than the comparable quarter of the prior year by over $0.2 million. These improved operating margins, combined with an increase of approximately three percent in general and administrative expenses, resulted in income from operations more than doubling versus the first quarter of the prior year. Consequently, Adjusted EBITDA (defined as income from operations plus depreciation and amortization) for the first quarter of 2005 was $5.8 million, compared to $4.1 million in the first quarter of 2004, an increase of $1.7 million or approximately 42%. Interest expense net of interest income was approximately $0.3 million higher in the first quarter of 2005 compared to the first quarter of 2004, due to higher rates on the Company's variable rate debt. In the first quarter of 2005, the Company recorded a gain of nearly $0.3 million on treasury rate lock agreements with a previous lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. to Triad II, which was acquired by the Company in July July: see month. of 2003. These rate lock agreements, along with interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , were originally required by the lender to hedge the risk that the costs of future issuance of debt may be adversely affected by changes in interest rates. The debt related to these agreements was refinanced in the fourth quarter of 2004, no longer qualifying these agreements as an effective interest rate hedge. The Company's income statement will reflect a gain on this derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. in future quarters if there is a net increase in the interest rate on the ten-year treasury note during the quarter, or a loss if this interest rate declines. These gains or losses will continue until the settlement date of January January: see month. 3, 2006 or until the Company decides to convert the settlement amount of this obligation to a term note. The Company has an option to convert the settlement amount to a note with a five year term at an interest rate of LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 250 basis points. The Company reported a net loss of $0.8 million in the first quarter of 2005, equivalent to a loss of $0.03 per share. Excluding the gain on the treasury rate lock in the quarter, the Company's net loss would have been approximately $0.9 million, equivalent to a loss of approximately $0.04 per share. The Company generated cash earnings (defined as net income plus depreciation and amortization) of $2.4 million, or $0.09 per diluted share, in the first quarter of 2005, compared to $0.9 million, or $0.04 per diluted share, in the first quarter of 2004. The Company had total debt of $259.3 million on March 31, 2005 at a blended blend v. blend·ed or blent , blend·ing, blends v.tr. 1. To combine or mix so that the constituent parts are indistinguishable from one another: average borrowing rate of 6.1 percent. Approximately 17 percent of the Company's debt is at fixed interest rates, approximately 11 percent is at variable rates and the remaining 72 percent is at variable rates with interest rate caps in effect. As of March 31, 2005, the Company had $20.2 million of cash, cash equivalents and restricted cash, and $148.8 million in shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , equivalent to nearly $5.78 per share. "The strategic initiatives completed in 2004 have positioned us for continued operating and financial improvements in the current environment," said 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. "We entered this year with an improved capital structure, including reduced debt, and an expanded portfolio of properties to fuel future growth. We are encouraged by improved industry fundamentals, including higher overall occupancies and rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rates and lower capitalization rates Capitalization Rate According to the Appraisal Institute, it is a method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, by dividing the income estimate by an appropriate rate. . We expect the convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. of these factors to contribute to continued improvement in the Company's profitability and financial position." 1Q05 Conference Call Information The company will host a conference call with senior management to discuss the Company's first quarter 2005 financial results. The call will be held on Wednesday Wednesday: see week. , May 4, 2005 at 11:00 am Eastern Time. 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 719-457-2644. 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 May 4, 2005 at 2:00 pm Eastern Time, until May 11, 2005 at 8:00 pm Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 4010348. 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 operates 54 senior living communities in 20 states with an aggregate capacity of approximately 8,700 residents, including 39 senior living communities which the Company owns or in which the Company has an ownership interest, and 15 communities it manages for third parties. In the communities operated by the company, 84 percent of residents live independently and 16 percent of residents require assistance with activities of daily living. This release contains certain financial information not derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. 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 adjusted EBITDA, cash earnings, cash earnings per share and other items. 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 conditions generally, 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 , availability of insurance at
commercially reasonable rates, and changes in accounting principles and
interpretations among others, and other risks and factors identified
from time to time in our reports filed with the Securities and Exchange
Commission.Contact Ralph A. Beattie Beattie is a surname, and may refer to:
American poet whose works, such as Heart-Shape in the Dust (1940), often explore the history and experiences of African Americans. , Hayden Communications, Inc. at 858-456-4533 for more information.
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
----------- -------------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $19,998 $19,515
Restricted cash 160 --
Accounts receivable, net 2,237 2,073
Accounts receivable from affiliates 368 1,220
Federal and state income taxes receivable 3,205 2,572
Deferred taxes 642 642
Assets held for sale 1,008 1,008
Property tax and insurance deposits 3,276 2,731
Prepaid expenses and other 1,503 2,766
----------- -------------
Total current assets 32,397 32,527
Property and equipment, net 378,471 381,051
Deferred taxes 6,910 7,011
Investments in limited partnerships 3,232 3,202
Assets held for sale 1,026 1,026
Other assets, net 6,530 6,358
----------- -------------
Total assets $428,566 $431,175
=========== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,244 $2,162
Accounts payable to affiliates -- 318
Accrued expenses 8,266 7,478
Current portion of notes payable 41,173 42,242
Customer deposits 1,957 1,936
----------- -------------
Total current liabilities 53,640 54,136
Deferred income 932 680
Deferred income from affiliates 135 125
Other long-term liabilities 6,642 6,909
Notes payable, net of current portion 218,140 219,526
Minority interest in consolidated
partnership 249 252
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 -- 25,762
and 25,751 in 2005 and 2004,
respectively 258 258
Additional paid-in capital 125,002 124,963
Retained earnings 23,568 24,326
----------- -------------
Total shareholders' equity 148,828 149,547
----------- -------------
Total liabilities and shareholders'
equity $428,566 $431,175
=========== =============
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
-----------------------
March 31, March 31,
2005 2004
----------- -----------
Revenues:
Resident and health care revenue $23,374 $22,112
Unaffiliated management services revenue 393 40
Affiliated management services revenue 471 474
----------- -----------
Total revenues 24,238 22,626
Expenses:
Operating expenses 14,274 14,526
General and administrative expenses 4,175 4,036
Depreciation and amortization 3,134 2,957
----------- -----------
Total expenses 21,583 21,519
----------- -----------
Income from operations 2,655 1,107
Other income (expense):
Interest income 23 163
Interest expense (4,230) (4,084)
Gain on treasury rate lock agreement 267 --
Other income 110 67
----------- -----------
Loss before income taxes and minority interest
in consolidated partnership (1,175) (2,747)
Benefit for income taxes 414 674
----------- -----------
Loss before minority interest in consolidated
partnership (761) (2,073)
Minority interest in consolidated partnership 3 27
----------- -----------
Net loss $(758) $(2,046)
=========== ===========
Per share data:
Basic loss per share $(0.03) $(0.09)
=========== ===========
Diluted loss per share $(0.03) $(0.09)
=========== ===========
Weighted average shares outstanding -- basic 25,754 23,698
=========== ===========
Weighted average shares outstanding --
diluted 25,754 23,698
=========== ===========
CAPITAL SENIOR LIVING CORPORATION
RECONCILIATION OF NON-GAAP ITEMS
(in thousands, except per share amounts)
Three Months Ended
-----------------------
March 31, March 31,
2005 2004
----------- -----------
Cash earnings reconciliation:
Net loss $(758) $(2,046)
Depreciation and amortization 3,134 2,957
----------- -----------
Cash earnings 2,376 911
=========== ===========
Cash earnings per diluted share
reconciliation:
Net loss per diluted share $(0.03) $(0.09)
Depreciation and amortization per diluted
share 0.12 0.13
----------- -----------
Cash earnings per diluted share 0.09 0.04
=========== ===========
Adjusted EBITDA reconciliation:
Income from operations $2,655 $1,107
Depreciation and amortization 3,134 2,957
----------- -----------
Adjusted EBITDA 5,789 4,064
=========== ===========
Reconciliation of net loss excluding gain on
treasury rate lock:
Net loss $(758)
Less gain on treasury rate lock, net of tax (174)
-----------
Net loss excluding gain on treasury lock (932)
===========
Reconciliation of net loss excluding gain on
treasury rate lock:
Net loss per diluted share $(0.03)
Less gain on treasury rate lock, net of tax
per diluted share (0.01)
-----------
Net loss excluding gain on treasury lock
per diluted share (0.04)
===========
Reconciliation of shareholders' equity per
outstanding share:
Shareholders' equity $148,828
Common shares outstanding at March 31, 2005 25,762
-----------
Shareholders' equity per diluted share 5.78
===========
Capital Senior Living Corporation
Supplemental Information
Resident
Communities Capacity
----------------- -------------
Q1 05 Q1 04 Q1 05 Q1 04
-------- -------- ------ ------
Portfolio Data
I. Property Ownership / Management
Consolidated properties 29 31 4,831 4,831
Joint Venture properties (equity
method) 10 10 1,867 1,867
Third party property managed 15 1 1,970 156
-------- -------- ------ ------
Total 54 42 8,668 6,854
Independent living 7,313 5,925
Assisted living 1,185 759
Skilled nursing 170 170
------ ------
Total 8,668 6,854
II. Percentage of Operating
Portfolio
Consolidated properties 53.7% 73.8% 55.7% 70.5%
Joint venture properties (equity
method) 18.5% 23.8% 21.5% 27.2%
Third party property managed 27.8% 2.4% 22.7% 2.3%
-------- -------- ------ ------
Total 100.0% 100.0% 100.0% 100.0%
Independent living 84.4% 86.4%
Assisted living 13.7% 11.1%
Skilled nursing 2.0% 2.5%
------ ------
Total 100.0% 100.0%
Selected Operating Results
I. Consolidated properties
Number of properties 29 31
Resident capacity 4,831 4,831
Financial occupancy (1)
86.2% 83.9%
Revenue (in millions) 23.3 22.1
Operating expenses (in millions) 14.0 14.1
Operating margin 40% 36%
Average monthly rent 2,122 2,033
II. Waterford / Wellington
properties
Number of properties (2) 17 17
Resident capacity 2,426 2,426
Financial occupancy (1) 87.3% 83.2%
Revenue (in millions) 9.9 9.1
Operating expenses (in millions) 5.9 6.0
Operating margin 40% 34%
Average monthly rent 1,777 1,712
III. Total Portfolio
Number of properties 54 42
Resident capacity 8,668 6,854
Financial occupancy (1) 84.0% 82.0%
Revenue (in millions) 40.4 31.8
Operating expenses (in millions) 23.1 19.6
Operating margin 43% 38%
Average monthly rent 2,138 2,139
IV. Consolidated Debt Information
(in thousands, except for interest
rates) Excludes insurance premium
financing
Fixed rate debt 42,537 68,851
Variable rate debt, with a floor -- 51,173
Variable rate debt, with a cap 184,336 35,384
Variable rate debt, no cap or
floor 27,548 105,474
-------- --------
Total debt 254,421 260,882
-------- --------
Fixed rate debt - weighted average
rate 8.0% 7.8%
Variable rate debt - weighted
average rate 5.7% 4.3%
Total debt - weighted average
rate 6.1% 5.3%
(1) Financial occupancy represents actual days occupied divided by
total number of available days.
(2) Excludes Canton and Towne Centre expansions which were
consolidated with their main campus in December 2004.
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