Capital Senior Living Corporation Reports Third Quarter 2002 Earnings of Five Cents Per Share From Recurring Operations.Business Editors DALLAS--(BUSINESS WIRE)--Oct. 30, 2002 Company highlights for third quarter 2002 include: -- Resident revenue on same properties increased 9.6% to $13.4 million vs. year ago period; -- Net income of $0.9 million and basic earnings per share of $0.05; -- Cash earnings of $2.2 million, or $0.11 per share; -- Average occupancy rate on stabilized communities of 93 percent; -- Recently opened communities are leased to 72 percent; -- Same community revenue increase of 5.1 percent; and -- Independent and assisted living community operating margins averaged 46 percent. 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 its operating results for the third quarter of 2002. The Company reported net income of $0.9 million, or basic earnings per share of $.05, on $14.5 million in revenues. "We are pleased to report earnings from operations of $0.15 per share through the first nine months of 2002, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to our full year guidance of $0.14-0.16," said 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. "We continue to strengthen our balance sheet as we recently extended by two years the maturity of a $20 million note payable to Newman Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc." OPERATING AND FINANCIAL RESULTS For the third quarter of 2002, the Company reported revenues of $14.5 million compared to $17.0 million for the corresponding period in 2001. The primary factors contributing to lower revenues in 2002 were the sale of the Cambridge Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. Nursing Home during the third quarter of last year and 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 this year. On a comparable basis, resident revenues from the communities owned in both periods grew by $1.2 million or 9.6%. Last year's third quarter revenues also included 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. and lease income on four communities 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. These triple net leases expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. in the fourth quarter of 2001. 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 for the third quarter of 2002 was $3.4 million, compared to $4.5 million in the prior year, primarily due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the leases. Net income was $0.9 million or basic earnings per share of $.05 in the quarter, compared to net income of $1.0 million and $.05 per basic share for the comparable prior year period. Net income for the third quarter of the prior year included the Company's share of a gain on the sale of the Cambridge Nursing Home, which was owned by an affiliated partnership. 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 from operations increased from three cents per basic share last year to five cents per basic share this year. Cash earnings, defined as net income plus depreciation, were $2.2 million or $0.11 per share for the third quarter of 2002, compared to $2.8 million or $0.14 per share for the third quarter of 2001. Last year's cash earnings benefited from a gain on the sale of the Cambridge Nursing Home. For the first nine months of 2002, the Company produced revenues of $47.3 million and net income of $3.5 million, or basic earnings per share of $0.18. This compares to revenues of $53.4 million and net income of $2.1 million, or basic earnings per share of $0.10 for the same period in 2001. Of the basic earnings per share of $0.18 earned through the first nine months of 2002, $0.15 per share represents recurring earrings and the remaining $0.03 per share represents the net gains on asset dispositions and other non-recurring items. The Company generated cash earnings of $8.0 million, or $0.40 per share, compared to cash earnings of $7.3 million or $0.37 per share for the first nine months of 2001. As of September September: see month. 30, 2002, the Company had $18.0 million in cash, cash equivalents and restricted cash, and $117.1 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. . "These results reflect the successful execution of our business plan," stated 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 of the Company. "Our owned communities are generating improved profits and cash flow, and our communities in lease-up are progressing towards stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders . These recently opened communities are leased to 72% capacity, up from 60% at the beginning of the year, representing a 20% growth in new residents. This momentum, coupled with our recently implemented resident referral program, is quite encouraging as referrals have proven to be our best source of contacting and retaining new residents. We have proven to be resilient See resiliency. to the economic turmoil that has affected so many industries during the past few years. 3Q02 CONFERENCE CALL INFORMATION Members of the Company's senior management team will discuss third quarter 2002 results via a telephone conference call on Wednesday Wednesday: see week. , October October: see month. 30, at 11 a.m. 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 913-981-5571. No confirmation number is required. A link to a simultaneous webcast of 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 October 30, 2002 at 2:00 pm Eastern Time until November November: see month. 6, 2002 at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820 (reference code 784230). 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:
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. and home care services, to provide residents the opportunity to age in place. 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6,900 residents. In the communities operated by the Company, 85 percent of residents live independently and 15 percent of residents require assistance with activities of daily living. 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, 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 , and changes in accounting principles and
interpretations. 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)
September 30, December 31,
2002 2001
------------ ------------
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $10,516 $9,975
Restricted cash 7,490 2,100
Accounts receivable, net 1,251 1,438
Accounts receivable from affiliates 526 366
Interest receivable 4,877 6,072
Investment in limited partnership -- 5,774
Federal and state income taxes
receivable 746 1,145
Deferred taxes 2,770 2,770
Prepaid expenses and other 4,441 1,218
-------- --------
Total current assets 32,617 30,858
Property and equipment, net 154,155 196,821
Deferred taxes 7,238 7,540
Notes receivable from affiliates 75,030 59,020
Investments in limited partnerships 1,375 1,827
Assets held for sale 4,494 4,924
Other assets 4,862 7,092
-------- --------
Total assets $279,771 $308,082
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,808 $3,040
Accrued expenses 2,302 3,363
Current portion of notes payable 8,997 25,594
Customer deposits 1,035 1,144
-------- --------
Total current liabilities 18,142 33,141
Deferred income -- 507
Deferred income from affiliates 1,387 1,750
Notes payable, net of current portion 134,885 149,202
Line of credit 7,387 7,553
Minority interest in consolidated
partnership 894 2,385
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value:
Authorized shares 15,000,000;
no shares issued or
outstanding -- --
Common stock, $.01 par value:
Authorized shares 65,000,000;
issued and outstanding
19,736,837 and 19,717,347 at
September 30, 2002 and
December 31, 2001,
respectively 197 197
Additional paid-in capital 91,990 91,935
Retained earnings 24,889 21,412
-------- --------
Total shareholders' equity 117,076 113,544
-------- --------
Total liabilities and
shareholders' equity $279,771 $308,082
======== ========
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2002 2001 2002 2001
--------- --------- --------- --------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues:
Resident and
healthcare revenue $13,401 $15,123 $44,309 $47,262
Rental and lease
income -- 916 37 3,053
Unaffiliated
management services
revenue 258 446 836 1,478
Affiliated
management services
revenue 609 449 1,463 1,269
Unaffiliated
development fees -- -- -- 40
Affiliated
development fees 273 63 672 341
-------- -------- -------- --------
Total revenues 14,541 16,997 47,317 53,443
Expenses:
Operating expenses 8,148 9,407 25,802 28,386
General and
administrative
expenses 2,945 3,110 9,060 9,705
Depreciation and
amortization 1,327 1,738 4,507 5,234
-------- -------- -------- --------
Total expenses 12,420 14,255 39,369 43,325
-------- -------- -------- --------
Income from operations 2,121 2,742 7,948 10,118
Other income (expense):
Interest income 1,521 1,616 4,384 4,749
Interest expense (2,489) (3,743) (8,065) (11,835)
Equity in the losses
of affiliates 14 (62) 45 (398)
Gain on sale of
assets -- 2,425 1,929 2,425
-------- -------- -------- --------
Income before income
taxes, minority interest
in consolidated
partnership and
extraordinary charge 1,167 2,978 6,241 5,059
Provision for income taxes (543) (724) (2,127) (1,354)
-------- -------- -------- --------
Income before minority
interest in consolidated
partnership and
extraordinary charge 624 2,254 4,114 3,705
Minority interest in
consolidated partnership 264 (1,072) (637) (1,493)
-------- -------- -------- --------
Income before
extraordinary charge 888 1,182 3,477 2,212
Extraordinary charge, net
of minority interest and
income tax benefit of $187
and $94, respectively -- (153) -- (153)
-------- -------- -------- --------
Net income $888 $1,029 $3,477 $2,059
======== ======== ======== ========
Per share data:
Basic earnings per
share:
Income before
extraordinary
charge $0.05 $0.06 $0.18 $0.11
Extraordinary charge -- (0.01) -- (0.01)
-------- -------- -------- --------
Net income $0.05 $0.05 $0.18 $0.10
======== ======== ======== ========
Diluted earnings per
share:
Income before
extraordinary
charge $0.04 $0.06 $0.17 $0.11
Extraordinary charge -- (0.01) -- (0.01)
-------- -------- -------- --------
Net income $0.04 $0.05 $0.17 $0.10
======== ======== ======== ========
Weighted average
shares outstanding
- basic 19,727 19,717 19,722 19,717
======== ======== ======== ========
Weighted average
shares outstanding
- diluted 19,845 19,731 19,948 19,722
======== ======== ======== ========
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