Exhibit 99.1
| | | | |
 | | | | PRESS CONTACT: Carey P. Hendrickson, Chief Financial Officer Phone: 1-972-770-5600 |
FOR IMMEDIATE RELEASE
CAPITAL SENIOR LIVING CORPORATION
REPORTS SECOND QUARTER 2014 RESULTS
Company Acquires Two Communities for Approximately $34 Million
DALLAS – (BUSINESS WIRE) – August 5, 2014 – Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one of the nation’s largest operators of senior living communities, today announced operating and financial results for the second quarter of 2014. Company highlights for the second quarter include:
Operating and Financial Summary (seeNon-GAAP Financial Measures below)
| • | | Revenue in the second quarter of 2014 increased 7.1% to $93.4 million, an increase of $6.2 million from the second quarter of 2013. |
| • | | Average monthly rent for the consolidated communities increased 2.0% to $3,156 per occupied unit in the second quarter of 2014, an increase of $62 per occupied unit from the second quarter of 2013. |
| • | | Same-community occupancies were 87.1% for the second quarter of 2014, a 20 basis point sequential improvement from the first quarter of 2014 and a 30 basis point improvement from the second quarter of 2013. |
| • | | Adjusted EBITDAR increased 6.9% to $32.2 million in the second quarter of 2014, excluding two continuing care retirement communities (“CCRC’s”) that are being repositioned and one community acquired in 2013 that is being leased-up after recently receiving an upgraded license. The Company’s Adjusted EBITDAR margin was 35.6% for the second quarter of 2014, an increase of 110 basis points versus the second quarter of the prior year. |
| • | | Adjusted Cash From Facility Operations (“CFFO”) was $9.9 million or $0.35 per share in the second quarter of 2014, excluding the three communities previously noted. |
| • | | The Company completed the acquisition of three senior living communities in the second quarter for a purchase price of approximately $83.6 million. These communities are expected to generate incremental annual CFFO of approximately $0.11 per share. |
CAPITAL/Page 2
| • | | The Company announces today the acquisition of two additional communities in states where the Company already has existing operations for a purchase price of approximately $33.9 million. These communities are expected to generate incremental annual CFFO of approximately $0.04 per share. |
“We are pleased to report positive results for the second quarter, with growth in revenue, occupancy, EBITDAR and CFFO,” said Lawrence A. Cohen, Chief Executive Officer of the Company. “Our second quarter same-community revenues grew one percent as compared to the second quarter of 2013, reflecting the cumulative effect of competitive pricing in 2013 while we dealt with higher levels of attrition. In the second quarter of 2014, our same-community average monthly rent increased over the first quarter of 2014 by an annualized rate of nearly 3 percent and our same store occupancy increased year-over-year for the first time since the second quarter of 2013, which encourages us about the second half of the year. We continue to be focused on reducing attrition and are making steady progress on our work to convert approximately 360 vacant independent living units to assisted living and memory care units, which we expect to improve overall occupancy by approximately 300 basis points once they are stabilized.
“Complementing this growth is a robust pipeline that allows us to continue our disciplined and strategic acquisition program that increases our ownership of high-quality senior living communities in geographically concentrated regions and generates meaningful increases in CFFO, earnings and real estate value. We closed on three such communities in the second quarter and are pleased to announce that we completed the acquisition of two additional communities yesterday.
“Also, our recent refinancing has strengthened our balance sheet by adding to our liquidity. We believe that we are well positioned to make meaningful gains in shareholder value as a substantially all private-pay business in an industry that benefits from need-driven demand, limited new supply, and an improving economy and housing market.”
Recent Investment Activity
| • | | On August 4, 2014, the Company completed the acquisition of two senior living communities for a combined purchase price of $33.9 million. These communities add to the Company’s operations in the states of Virginia and Wisconsin and are comprised of 184 assisted living units. |
Highlights of this transaction include:
| | • | | Increases annual CFFO by approximately $1.3 million, or $0.04 per share. |
CAPITAL/Page 3
| | • | | Adds approximately $0.5 million to earnings, or $0.02 per share. |
| | • | | Increases annual revenue by approximately $8.2 million. |
| | • | | Average occupancy at each community is greater than 90%. |
| | • | | Average monthly rents for the communities are approximately $3,700. |
The two communities were financed with an aggregate of approximately $26.2 million of non-recourse 10-year mortgage debt at a fixed interest rate of 4.59%.
| • | | On June 30, 2014, the Company completed the acquisition of three senior living communities in Ohio that it previously operated under a joint venture agreement (the “Ohio JV Communities”) in which it previously held a 10 percent interest for a purchase price of approximately $83.6 million. Highlights of this transaction include the following incremental changes (net of the Company’s management fees of approximately $0.9 million and CSU’s portion of JV net income of approximately $0.2 million): |
| | • | | Increases annual revenue by $16.9 million |
| | • | | Adds $6.8 million of EBITDAR |
| | • | | Increases annual Adjusted CFFO by approximately $3.1 million, or $0.11 per share |
| | • | | Improves earnings by $1.2 million, or $0.04 per share |
Two of the Ohio JV Communities were financed with approximately $40.1 million of non-recourse 10-year mortgage debt with a blended fixed interest rate of 4.41%. One community was financed with a $21.6 million two-year bridge loan with a variable interest rate of approximately 2.9%.
| | • | | On June 27, 2014, the Company closed a refinance of debt on 15 owned communities that were originally set to mature in July 2015. The Company achieved a substantial reduction in the interest rate on the debt associated with these communities and received $36.5 million of incremental cash proceeds from the new loans. The new mortgage debt consists of $135.5 million in long-term debt at a fixed rate of 4.24%, a 172 basis point reduction in rate, and approximately $21 million in bridge loans with a variable interest rate of approximately 4.65%. The Company’s interest expense remains approximately the same due to the lower interest rate and the Company’s total debt service payment decreases approximately $1.0 million due to re-setting the principal amortization to 30 years from 25 years. |
CAPITAL/Page 4
| • | | The Company is conducting due diligence on additional acquisitions of high-quality senior living communities in states with extensive existing operations. Subject to completion of customary closing conditions, an acquisition of approximately $13.5 million is expected to close by the end of the third quarter of 2014. |
Financial Results—Second Quarter
For the second quarter of 2014, the Company reported revenue of $93.4 million, compared to revenue of $87.2 million in the second quarter of 2013. Resident and healthcare revenue increased from the second quarter of the prior year by approximately $6.3 million, or 7.4%, due to the acquisition of 11 communities during or after the second quarter of 2013, not including the three communities purchased effective June 30, 2014, net of a decrease in revenue associated with the two CCRC’s being repositioned.
During 2013, the Company decided to close the skilled nursing units in its two CCRC’s and convert this space to private-pay use. In 2013, the Company acquired a property for which it sought an upgraded assisted living license, which was received in July 2014. Pending lease-up of the higher-licensed units, the Company removed this community from its non-GAAP measures and certain supplemental information. Excluding these three communities, average monthly rent for the consolidated communities was $3,156 per occupied unit in the second quarter of 2014, an increase of $62, or 2.0%, over the second quarter of 2013. Financial occupancy of the consolidated portfolio averaged 87.4% in the second quarter of 2014, a 50 basis point improvement over the second quarter of 2013.
Operating expenses for the second quarter of 2014 were $55.6 million, an increase of $4.5 million from the second quarter of 2013, primarily due to the acquisition of 11 communities during or after the second quarter of 2013, not including the three communities purchased effective June 30, 2014, net of a decrease in expenses associated with the two communities being repositioned.
General and administrative expenses for the second quarter of 2014 were $0.4 million less than the second quarter of 2013, mostly due to significantly lower healthcare expense. General and administrative expenses as a percentage of revenues under management were 4.3% in the second quarter of 2014, excluding transaction and other one-time costs of approximately $0.7 million, as compared to 4.9% in the first quarter of 2014.
Adjusted EBITDAR for the second quarter of 2014 was approximately $32.2 million, an increase of $2.1 million, or 6.9%, from the second quarter of 2013. The Adjusted EBITDAR margin for the second quarter of 2014 was 35.6%, an increase of 110 basis points from the second quarter of 2013.
CAPITAL/Page 5
The Company had a negligible adjusted net income for the second quarter of 2014, excluding non-recurring or non-economic items reconciled on the final page of this release, which include a combined $7.0 million charge for a prepayment penalty and the write-off of deferred loan costs associated with the Company’s refinancing of 15 owned communities in the second quarter of 2014. This compares to a net loss of $9.8 million before adjusting for these non-recurring or non-economic items. Adjusted CFFO was $9.9 million, or $0.35 per share, in the second quarter of 2014, an increase of $0.4 million, or $0.01 per share, versus the second quarter of 2013.
Operating Activities
The Company is well positioned as a substantially all private-pay business and is further enhancing its private-pay revenues by converting formerly skilled nursing space at two CCRC’s to private-pay use. While these communities are being re-positioned, same-community results for these two communities will be excluded.
Same-community revenue in the second quarter of 2014 increased 1.0% versus the second quarter of 2013. Same-community expenses increased 3.5% from the second quarter of the prior year. Labor costs, including benefits, were up approximately 2.9%, food costs increased 1.7% and utilities were 2.4% higher. Advertising and promotion fees were $0.4 million higher due to initiatives aimed at increasing occupancy and revenue.
Same-community results in the second quarter of 2014 showed significant sequential improvement over the first quarter of 2014. Same-community revenues were up sequentially over the first quarter by 0.6%, with same-community occupancies up 20 basis points to 87.1% and average rents up $22, or 0.7%, to $3,141 per occupied unit. Same community expenses were $0.4 million lower than the first quarter of 2014 and net operating income was 2.2% higher than the first quarter of 2014.
Capital expenditures for the second quarter of 2014 were approximately $4.7 million, representing $3.6 million of investment spending and $1.1 million of recurring capital expenditures. If annualized, spending for recurring capital expenditures was approximately $380 per unit.
Balance Sheet
The Company ended the quarter with $39.4 million of cash and cash equivalents, including restricted cash. During the quarter, the Company received $36.5 million in cash proceeds related to the refinance of debt on 15 owned communities, invested $21.9 million of cash as equity to complete the acquisitions of three communities and spent $4.7 million on capital improvements.
CAPITAL/Page 6
As of June 30, 2014, the Company financed its 63 owned communities with mortgages totaling $589.2 million at interest rates averaging 4.7%. All of the Company’s debt is at fixed interest rates, except for six bridge loans totaling approximately $65.2 million at variable rates averaging 3.9%. The Company has no mortgage maturities before the third quarter of 2015.
The Company’s cash on hand and cash flow from operations are expected to be sufficient for working capital, prudent reserves and the equity needed to fund the Company’s acquisition program.
Q2 2014 Conference Call Information
The Company will host a conference call with senior management to discuss the Company’s second quarter financial results. The call will be held on Tuesday, August 5, 2014, at 5:00 p.m. Eastern Time. The call-in number is 913-312-0836, confirmation code 9712118. A link to a simultaneous webcast of the teleconference will be available atwww.capitalsenior.com through Windows Media Player or RealPlayer.
For the convenience of the Company’s shareholders and the public, the conference call will be recorded and available for replay starting August 5, 2014, at 8:00 p.m. Eastern Time, until August 14, 2014, at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 9712118. The conference call will also be made available for playback via the Company’s corporate website,www.capitalsenior.com, beginning August 5, 2014.
Non-GAAP Financial Measures
Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. The Company believes that these non-GAAP measures are useful in identifying trends in day-to-day performance because they exclude items that are of little or no significance to operations and provide indicators to management of progress in achieving optimal operating performance. In addition, these measures are used by many research analysts and investors to evaluate the performance and the value of companies in the senior living industry. The Company strongly urges you to review the reconciliation of net income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the reconciliation of net loss to Adjusted Net Income and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.
CAPITAL/Page 7
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 strategy is to provide value to residents by providing quality senior living services at reasonable prices. The Company’s communities emphasize a continuum of care, which integrates independent living, assisted living, and home care services, to provide residents the opportunity to age in place. The Company operates 115 senior living communities in geographically concentrated regions with an aggregate capacity of approximately 15,000 residents.
Safe Harbor
The forward-looking statements 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 terms, financing, refinancing, community sales, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, 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.
For information about Capital Senior Living, visitwww.capitalsenior.com.
Contact Carey P. Hendrickson, Chief Financial Officer, at 972-770-5600 for more information.
CAPITAL/Page 8
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
| | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2014 | | | 2013 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 27,934 | | | $ | 13,611 | |
Restricted cash | | | 11,437 | | | | 11,425 | |
Accounts receivable, net | | | 4,934 | | | | 3,752 | |
Accounts receivable from affiliates | | | 412 | | | | 416 | |
Federal and state income taxes receivable | | | 5,401 | | | | 5,123 | |
Deferred taxes | | | 557 | | | | 845 | |
Property tax and insurance deposits | | | 9,105 | | | | 11,036 | |
Prepaid expenses and other | | | 4,462 | | | | 6,605 | |
| | | | | | | | |
Total current assets | | | 64,242 | | | | 52,813 | |
Property and equipment, net | | | 732,560 | | | | 649,967 | |
Investments in unconsolidated joint ventures | | | — | | | | 1,010 | |
Other assets, net | | | 44,063 | | | | 41,759 | |
| | | | | | | | |
Total assets | | $ | 840,865 | | | $ | 745,549 | |
| | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 1,024 | | | $ | 3,813 | |
Accounts payable to affiliates | | | — | | | | 1 | |
Accrued expenses | | | 26,595 | | | | 29,321 | |
Current portion of notes payable | | | 10,287 | | | | 11,918 | |
Current portion of deferred income | | | 12,298 | | | | 11,215 | |
Current portion of capital lease and financing obligations | | | 970 | | | | 948 | |
Customer deposits | | | 1,625 | | | | 1,489 | |
| | | | | | | | |
Total current liabilities | | | 52,799 | | | | 58,705 | |
Deferred income | | | 16,982 | | | | 18,021 | |
Capital lease and financing obligations, net of current portion | | | 40,680 | | | | 41,093 | |
Deferred taxes | | | 557 | | | | 845 | |
Other long-term liabilities | | | 1,492 | | | | 1,559 | |
Notes payable, net of current portion | | | 580,707 | | | | 467,376 | |
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 – 29,059 and 28,845 in 2014 and 2013, respectively | | | 294 | | | | 292 | |
Additional paid-in capital | | | 147,883 | | | | 143,721 | |
Retained earnings | | | 405 | | | | 14,871 | |
Treasury stock, at cost – 350 shares | | | (934 | ) | | | (934 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 147,648 | | | | 157,950 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 840,865 | | | $ | 745,549 | |
| | | | | | | | |
CAPITAL/Page 9
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Revenues: | | | | | | | | | | | | | | | | |
Resident and health care revenue | | $ | 91,600 | | | $ | 85,301 | | | $ | 181,774 | | | $ | 170,076 | |
Affiliated management services revenue | | | 207 | | | | 196 | | | | 415 | | | | 381 | |
Community reimbursement revenue | | | 1,618 | | | | 1,722 | | | | 3,093 | | | | 2,987 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 93,425 | | | | 87,219 | | | | 185,282 | | | | 173,444 | |
Expenses: | | | | | | | | | | | | | | | | |
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) | | | 55,585 | | | | 51,130 | | | | 111,276 | | | | 101,250 | |
General and administrative expenses | | | 4,651 | | | | 5,081 | | | | 9,622 | | | | 10,003 | |
Facility lease expense | | | 14,889 | | | | 14,269 | | | | 29,683 | | | | 28,539 | |
Stock-based compensation expense | | | 2,717 | | | | 1,293 | | | | 4,077 | | | | 2,289 | |
Depreciation and amortization | | | 10,816 | | | | 10,761 | | | | 21,767 | | | | 22,650 | |
Community reimbursement expense | | | 1,618 | | | | 1,722 | | | | 3,093 | | | | 2,987 | |
| | | | | | | | | | | | | | | | |
Total expenses | | | 90,276 | | | | 84,256 | | | | 179,518 | | | | 167,718 | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 3,149 | | | | 2,963 | | | | 5,764 | | | | 5,726 | |
Other income (expense): | | | | | | | | | | | | | | | | |
Interest income | | | 16 | | | | 17 | | | | 28 | | | | 121 | |
Interest expense | | | (7,393 | ) | | | (5,694 | ) | | | (14,530 | ) | | | (11,378 | ) |
Write-off of deferred loan costs and prepayment premiums | | | (6,979 | ) | | | — | | | | (6,979 | ) | | | — | |
Joint venture equity investment valuation gain | | | 1,519 | | | | — | | | | 1,519 | | | | — | |
Loss on disposition of assets, net | | | (14 | ) | | | (2 | ) | | | (10 | ) | | | (1 | ) |
Equity in earnings of unconsolidated joint ventures, net | | | 64 | | | | 30 | | | | 105 | | | | 33 | |
Other income | | | 9 | | | | 6 | | | | 17 | | | | 18 | |
| | | | | | | | | | | | | | | | |
Loss before (provision) benefit for income taxes | | | (9,629 | ) | | | (2,680 | ) | | | (14,086 | ) | | | (5,481 | ) |
(Provision) Benefit for income taxes | | | (190 | ) | | | 610 | | | | (380 | ) | | | 1,335 | |
| | | | | | | | | | | | | | | | |
Net loss | | $ | (9,819 | ) | | $ | (2,070 | ) | | $ | (14,466 | ) | | $ | (4,146 | ) |
| | | | | | | | | | | | | | | | |
Per share data: | | | | | | | | | | | | | | | | |
Basic net loss per share | | $ | (0.34 | ) | | $ | (0.07 | ) | | $ | (0.50 | ) | | $ | (0.15 | ) |
| | | | | | | | | | | | | | | | |
Diluted net loss per share | | $ | (0.34 | ) | | $ | (0.07 | ) | | $ | (0.50 | ) | | $ | (0.15 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding — basic | | | 28,298 | | | | 27,809 | | | | 28,222 | | | | 27,697 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding — diluted | | | 28,298 | | | | 27,809 | | | | 28,222 | | | | 27,697 | |
| | | | | | | | | | | | | | | | |
Comprehensive loss | | $ | (9,819 | ) | | $ | (2,070 | ) | | $ | (14,466 | ) | | $ | (4,146 | ) |
| | | | | | | | | | | | | | | | |
CAPITAL/Page 10
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| | | | | | | | |
| | | Six Months Ended
June 30, | |
| | | 2014 | | | 2013 | |
Operating Activities | | | | | | | | |
Net loss | | $ | (14,466 | ) | | $ | (4,146 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 21,767 | | | | 22,650 | |
Amortization of deferred financing charges | | | 646 | | | | 586 | |
Amortization of deferred lease costs and lease intangibles | | | 615 | | | | 650 | |
Deferred income | | | 44 | | | | (938 | ) |
Deferred income taxes | | | — | | | | (975 | ) |
Write-off of deferred loan costs and prepayment premiums | | | 6,979 | | | | — | |
Joint venture equity investment valuation gain | | | (1,519 | ) | | | — | |
Loss on disposition of assets, net | | | 10 | | | | 1 | |
Equity in earnings of unconsolidated joint ventures | | | (105 | ) | | | (33 | ) |
Provision for bad debts | | | 372 | | | | 221 | |
Stock-based compensation expense | | | 4,077 | | | | 2,289 | |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | (1,554 | ) | | | (595 | ) |
Accounts receivable from affiliates | | | 4 | | | | 412 | |
Property tax and insurance deposits | | | 1,931 | | | | 445 | |
Prepaid expenses and other | | | 2,143 | | | | (1,005 | ) |
Other assets | | | (46 | ) | | | (2,742 | ) |
Accounts payable | | | (2,790 | ) | | | (5,071 | ) |
Accrued expenses | | | (2,726 | ) | | | (268 | ) |
Federal and state income taxes receivable/payable | | | (278 | ) | | | 3,007 | |
Customer deposits | | | 136 | | | | (4 | ) |
| | | | | | | | |
Net cash provided by operating activities | | | 15,240 | | | | 14,484 | |
Investing Activities | | | | | | | | |
Capital expenditures | | | (7,887 | ) | | | (5,142 | ) |
Cash paid for acquisitions | | | (98,180 | ) | | | (32,141 | ) |
Proceeds from disposition of assets | | | 4 | | | | — | |
Proceeds from SHPIII/CSL Transaction | | | 2,532 | | | | — | |
Distributions from unconsolidated joint ventures | | | 102 | | | | 42 | |
| | | | | | | | |
Net cash used in investing activities | | | (103,429 | ) | | | (37,241 | ) |
Financing Activities | | | | | | | | |
Proceeds from notes payable | | | 231,122 | | | | 40,858 | |
Repayments of notes payable | | | (125,917 | ) | | | (17,073 | ) |
Increase in restricted cash | | | (12 | ) | | | (13 | ) |
Cash payments for capital lease and financing obligations | | | (391 | ) | | | (350 | ) |
Cash proceeds from the issuance of common stock | | | 169 | | | | 2,760 | |
Excess tax benefits on stock option exercised | | | (82 | ) | | | (1,445 | ) |
Deferred financing charges paid | | | (2,377 | ) | | | (403 | ) |
| | | | | | | | |
Net cash provided by financing activities | | | 102,512 | | | | 24,334 | |
| | | | | | | | |
Increase in cash and cash equivalents | | | 14,323 | | | | 1,577 | |
Cash and cash equivalents at beginning of period | | | 13,611 | | | | 18,737 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 27,934 | | | $ | 20,314 | |
| | | | | | | | |
Supplemental Disclosures | | | | | | | | |
Cash paid during the period for: | | | | | | | | |
Interest | | $ | 13,980 | | | $ | 10,455 | |
| | | | | | | | |
Income taxes | | $ | 695 | | | $ | 677 | |
| | | | | | | | |
CAPITAL/Page 11
Capital Senior Living Corporation
Supplemental Information
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Average | | | | | | | |
| | | Communities | | | Resident Capacity | | | Average Units | |
| | | Q2 14 | | | Q2 13 | | | Q2 14 | | | Q2 13 | | | Q2 14 | | | Q2 13 | |
Portfolio Data | | | | | | | | | | | | | | | | | | | | | | | | |
I. Community Ownership / Management | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated communities | | | | | | | | | | | | | | | | | | | | | | | | |
Owned | | | 63 | | | | 51 | | | | 7,712 | | | | 6,944 | | | | 6,197 | | | | 5,501 | |
Leased | | | 50 | | | | 50 | | | | 6,333 | | | | 6,298 | | | | 5,000 | | | | 5,029 | |
Joint Venture communities (equity method) | | | — | | | | 3 | | | | 651 | | | | 674 | | | | 429 | | | | 433 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 113 | | | | 104 | | | | 14,696 | | | | 13,916 | | | | 11,626 | | | | 10,964 | |
| | | | | | |
Independent living | | | | | | | | | | | 7,597 | | | | 7,554 | | | | 6,191 | | | | 6,170 | |
Assisted living | | | | | | | | | | | 7,099 | | | | 6,192 | | | | 5,434 | | | | 4,626 | |
Skilled nursing | | | | | | | | | | | — | | | | 170 | | | | — | | | | 168 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | 14,696 | | | | 13,916 | | | | 11,626 | | | | 10,964 | |
II. Percentage of Operating Portfolio | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated communities | | | | | | | | | | | | | | | | | | | | | | | | |
Owned | | | 55.8 | % | | | 49.0 | % | | | 52.5 | % | | | 49.9 | % | | | 53.3 | % | | | 50.2 | % |
Leased | | | 44.2 | % | | | 48.1 | % | | | 43.1 | % | | | 45.3 | % | | | 43.0 | % | | | 45.8 | % |
Joint Venture communities (equity method) | | | — | | | | 2.9 | % | | | 4.4 | % | | | 4.8 | % | | | 3.7 | % | | | 4.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | |
Independent living | | | | | | | | | | | 51.7 | % | | | 54.3 | % | | | 53.3 | % | | | 56.3 | % |
Assisted living | | | | | | | | | | | 48.3 | % | | | 44.5 | % | | | 46.7 | % | | | 42.2 | % |
Skilled nursing | | | | | | | | | | | — | | | | 1.2 | % | | | — | | | | 1.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
CAPITAL/Page 12
Capital Senior Living Corporation
Supplemental Information (excludes 2 communities being repositioned and 1 community in lease up)
| | | | | | | | |
| | | Q2 14 | | | Q2 13 | |
Selected Operating Results | | | | | | | | |
I. Owned communities | | | | | | | | |
Number of communities | | | 60 | | | | 49 | |
Resident capacity | | | 7,103 | | | | 6,165 | |
Unit capacity | | | 5,700 | | | | 4,882 | |
Financial occupancy (1) | | | 88.4 | % | | | 87.3 | % |
Revenue (in millions) | | | 43.8 | | | | 35.5 | |
Operating expenses (in millions) (2) | | | 25.0 | | | | 19.5 | |
Operating margin | | | 43 | % | | | 45 | % |
Average monthly rent | | | 2,899 | | | | 2,779 | |
II. Leased communities | | | | | | | | |
Number of communities | | | 50 | | | | 50 | |
Resident capacity | | | 6,333 | | | | 6,298 | |
Unit capacity | | | 5,000 | | | | 5,029 | |
Financial occupancy (1) | | | 86.2 | % | | | 86.5 | % |
Revenue (in millions) | | | 44.7 | | | | 44.4 | |
Operating expenses (in millions) (2) | | | 22.5 | | | | 21.6 | |
Operating margin | | | 50 | % | | | 51 | % |
Average monthly rent | | | 3,456 | | | | 3,402 | |
III. Consolidated communities | | | | | | | | |
Number of communities | | | 110 | | | | 99 | |
Resident capacity | | | 13,436 | | | | 12,463 | |
Unit capacity | | | 10,700 | | | | 9,912 | |
Financial occupancy (1) | | | 87.4 | % | | | 86.9 | % |
Revenue (in millions) | | | 88.5 | | | | 79.9 | |
Operating expenses (in millions) (2) | | | 47.4 | | | | 41.1 | |
Operating margin | | | 46 | % | | | 49 | % |
Average monthly rent | | | 3,156 | | | | 3,094 | |
IV. Communities under management | | | | | | | | |
Number of communities | | | 110 | | | | 102 | |
Resident capacity | | | 14,087 | | | | 13,137 | |
Unit capacity | | | 11,129 | | | | 10,345 | |
Financial occupancy (1) | | | 87.4 | % | | | 86.8 | % |
Revenue (in millions) | | | 92.6 | | | | 83.8 | |
Operating expenses (in millions) (2) | | | 49.7 | | | | 43.2 | |
Operating margin | | | 46 | % | | | 48 | % |
Average monthly rent | | | 3,175 | | | | 3,111 | |
V. Same communities under management | | | | | | | | |
Number of communities | | | 100 | | | | 100 | |
Resident capacity | | | 13,031 | | | | 13,001 | |
Unit capacity | | | 10,278 | | | | 10,310 | |
Financial occupancy (1) | | | 87.1 | % | | | 86.8 | % |
Revenue (in millions) | | | 84.3 | | | | 83.5 | |
Operating expenses (in millions) (2) | | | 44.7 | | | | 43.1 | |
Operating margin | | | 47 | % | | | 48 | % |
Average monthly rent | | | 3,141 | | | | 3,112 | |
VI. General and Administrative expenses as a percent of Total Revenues under Management | | | | | | | | |
Second Quarter (3) | | | 4.3 | % | | | 5.2 | % |
First six months (3) | | | 4.7 | % | | | 5.2 | % |
VII. Consolidated Mortgage Debt Information (in thousands, except interest rates) (excludes insurance premium and auto financing) | | | | | | | | |
Total fixed rate mortgage debt | | | 524,018 | | | | 376,747 | |
Total variable rate mortgage debt | | | 65,222 | | | | 4,550 | |
Weighted average interest rate | | | 4.74 | % | | | 5.23 | % |
| (1) | Financial occupancy represents actual days occupied divided by total number of available days during the month of the quarter. |
| (2) | Excludes management fees, insurance and property taxes. |
| (3) | Excludes transaction costs incurred by the Company. |
CAPITAL/Page 13
CAPITAL SENIOR LIVING CORPORATION
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Adjusted EBITDAR | | | | | | | | | | | | | | | | |
Net income from operations | | $ | 3,149 | | | $ | 2,963 | | | $ | 5,764 | | | $ | 5,726 | |
Depreciation and amortization expense | | | 10,816 | | | | 10,761 | | | | 21,767 | | | | 22,650 | |
Stock-based compensation expense | | | 2,717 | | | | 1,293 | | | | 4,077 | | | | 2,289 | |
Facility lease expense | | | 14,889 | | | | 14,269 | | | | 29,683 | | | | 28,539 | |
Provision for bad debts | | | 134 | | | | 221 | | | | 372 | | | | 241 | |
Casualty losses | | | 101 | | | | 152 | | | | 415 | | | | 240 | |
Transaction and conversion costs | | | 755 | | | | 421 | | | | 1,241 | | | | 845 | |
Communities being repositioned/leased up | | | (402 | ) | | | — | | | | (401 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDAR | | $ | 32,159 | | | $ | 30,080 | | | $ | 62,918 | | | $ | 60,530 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDAR Margin | | | | | | | | | | | | | | | | |
Adjusted EBITDAR | | $ | 32,159 | | | $ | 30,080 | | | $ | 62,918 | | | | 60,530 | |
| | | | |
Total revenues | | $ | 93,425 | | | $ | 87,219 | | | $ | 185,282 | | | $ | 173,444 | |
Communities being repositioned/leased up | | | (2,995 | ) | | | — | | | | (6,012 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted revenues | | $ | 90,430 | | | $ | 87,219 | | | $ | 179,270 | | | | 173,444 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted EBITDAR margin | | | 35.6 | % | | | 34.5 | % | | | 35.1 | % | | | 34.9 | % |
| | | | | | | | | | | | | | | | |
Adjusted net income and net income per share | | | | | | | | | | | | | | | | |
Net loss | | $ | (9,819 | ) | | $ | (2,070 | ) | | $ | (14,466 | ) | | $ | (4,146 | ) |
Casualty losses, net of tax | | | 64 | | | | 96 | | | | 261 | | | | 151 | |
Transaction and conversion costs, net of tax | | | 476 | | | | 265 | | | | 782 | | | | 532 | |
Resident lease amortization, net of tax | | | 1,991 | | | | 2,765 | | | | 4,196 | | | | 6,366 | |
Write-off of deferred loan costs and prepayment premium, net of tax | | | 4,397 | | | | — | | | | 4,397 | | | | — | |
Joint venture equity investment valuation gain, net of tax | | | (957 | ) | | | — | | | | (957 | ) | | | — | |
(Gain) Loss on disposition of assets, net of tax | | | 9 | | | | 1 | | | | 6 | | | | 1 | |
Deferred tax asset valuation allowance | | | 3,703 | | | | — | | | | 5,395 | | | | — | |
Communities being repositioned/leased up, net of tax | | | 153 | | | | — | | | | 604 | | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted net income | | $ | 17 | | | $ | 1,057 | | | $ | 218 | | | | 2,904 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted net income per share | | $ | 0.00 | | | $ | 0.04 | | | $ | 0.01 | | | | 0.10 | |
| | | | | | | | | | | | | | | | |
| | | | |
Diluted shares outstanding | | | 28,301 | | | | 27,870 | | | | 28,228 | | | | 27,790 | |
Adjusted CFFO and Adjusted CFFO per share | | | | | | | | | | | | | | | | |
Net loss | | $ | (9,819 | ) | | $ | (2,070 | ) | | $ | (14,466 | ) | | $ | (4,146 | ) |
Non-cash charges, net | | | 20,070 | | | | 12,105 | | | | 32,886 | | | | 24,451 | |
Recurring capital expenditures | | | (1,036 | ) | | | (957 | ) | | | (2,065 | ) | | | (1,905 | ) |
Casualty losses | | | 101 | | | | 152 | | | | 415 | | | | 240 | |
Transaction and conversion costs | | | 755 | | | | 421 | | | | 1,241 | | | | 845 | |
Tax impact of Spring Meadows Transaction | | | (106 | ) | | | (106 | ) | | | (212 | ) | | | (212 | ) |
Tax impact of lease modification | | | — | | | | — | | | | — | | | | — | |
Communities being repositioned/leased up, net of tax | | | (66 | ) | | | — | | | | 301 | | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted CFFO | | $ | 9,899 | | | $ | 9,545 | | | $ | 18,100 | | | $ | 19,273 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted CFFO per share | | $ | 0.35 | | | $ | 0.34 | | | $ | 0.64 | | | $ | 0.69 | |
| | | | | | | | | | | | | | | | |
***
