Exhibit 99.1
FOR IMMEDIATE RELEASE | |
| Contact: Timothy A. Bonang, | |
| Manager of Investor Relations, |
| at 617-796-8149 | |
| www.fivestarqualitycare.com | |
| | | | | |
FIVE STAR QUALITY CARE ANNOUNCES
RESULTS FOR THE PERIODS
ENDED JUNE 30, 2005
____________________________________
Newton, MA (August 11, 2005). Five Star Quality Care, Inc. (AMEX: FVE) today announced its financial results for the periods ended June 30, 2005, compared to the same periods in 2004, as follows (in thousands except per share amounts):
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| | 2005 | | 2004 | | 2005 | | 2004 |
| | | | | | | | |
Total revenues | | $186,172 | | $153,348 | | $368,519 | | $303,381 |
Total operating expenses | | 184,356 | | 152,389 | | 365,104 | | 302,777 |
Operating income | | 1,816 | | 959 | | 3,415 | | 604 |
Interest and other income | | 320 | | 206 | | 566 | | 1,664 |
Interest expense | | (899) | | (98) | | (1,514) | | (245) |
Income from continuing operations before income taxes | | 1,237 | | 1,067 | | 2,467 | | 2,023 |
Provision for income taxes | | 38 | | - | | 73 | | - |
Income from continuing operations | | 1,199 | | 1,067 | | 2,394 | | 2,023 |
Income (loss) from discontinued operations | | (32) | | (124) | | 26 | | (574) |
Net income | | $ 1,167 | | $ 943 | | $ 2,420 | | $ 1,449 |
| | | | | | | | |
Weighted average shares outstanding | | 12,227 | | 8,526 | | 12,219 | | 8,520 |
Basic and diluted income per share: | | | | | | | | |
Income per share from continuing operations | | $ 0.10 | | $ 0.13 | | $ 0.20 | | $ 0.24 |
Net income per share | | $ 0.10 | | $ 0.11 | | $ 0.20 | | $ 0.17 |
On Thursday, August 11, 2005 at 10:00 a.m. Eastern Time, Evrett Benton, president and chief executive officer, and Bruce Mackey, treasurer and chief financial officer, will host a conference call to discuss the second quarter 2005 financial results. Following the company’s remarks, there will be a short question and answer period.
The conference call telephone number is (800) 357-9448. Participants calling from outside the United States and Canada should dial (312) 461-9313. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available from 1:00 p.m. on August 11, 2005 through midnight on August 17, 2005. To hear the replay, dial (719) 457-0820. The replay pass code is 7094912.
A live audio webcast of the conference call will also be available in a listen only mode on the company’s web site, which is located at www.fivestarqualitycare.com. Participants wanting to access the webcast should visit the company’s web site about five minutes before the call. The archived webcast will be available for replay on the company’s web site for about one week after the call.
Five Star Quality Care, Inc. is a healthcare services company which operates senior living communities. FVE owns and leases 155 communities with 17,329 separate living units located in 28 states. These communities include independent living, assisted living and skilled nursing facilities. FVE is headquartered in Newton, Massachusetts.
(end)
Supplemental Information, page 1 of 4
FIVE STAR QUALITY CARE, INC.
CONSOLIDATED STATEMENT OF INCOME
(dollars in thousands, except per share data)
| Three months ended June 30, | | Six months ended June 30, |
| 2005 | | 2004 | | 2005 | | 2004 |
Revenues: | | | | | | | |
Net revenues from residents | $179,072 | | $150,497 | | $356,163 | | $298,362 |
Pharmacy revenue | 7,100 | | 2,851 | | 12,356 | | 5,019 |
Total revenues | 186,172 | | 153,348 | | 368,519 | | 303,381 |
| | | | | | | |
Expenses: | | | | | | | |
Wages and benefits | 92,661 | | 79,872 | | 186,903 | | 161,302 |
Other operating expenses | 46,461 | | 39,313 | | 89,256 | | 75,467 |
Pharmacy expenses | 6,427 | | 2,510 | | 11,451 | | 4,461 |
Management fee to Sunrise Senior Living Services, Inc. (“SLS”) | 5,620 | | 4,557 | | 11,240 | | 9,191 |
Rent expense | 24,556 | | 20,455 | | 49,015 | | 40,582 |
General and administrative | 6,501 | | 4,817 | | 13,508 | | 9,935 |
Depreciation and amortization | 2,130 | | 865 | | 3,731 | | 1,839 |
Total operating expenses | 184,356 | | 152,389 | | 365,104 | | 302,777 |
| | | | | | | |
Operating income | 1,816 | | 959 | | 3,415 | | 604 |
Interest and other income (1) | 320 | | 206 | | 566 | | 1,664 |
Interest expense | (899) | | (98) | | (1,514) | | (245) |
| | | | | | | |
Income from continuing operations before income taxes | 1,237 | | 1,067 | | 2,467 | | 2,023 |
Provision for income taxes | 38 | | - | | 73 | | - |
Income from continuing operations | 1,199 | | 1,067 | | 2,394 | | 2,023 |
Income (loss) from discontinued operations | (32) | | (124) | | 26 | | (574) |
Net income | $ 1,167 | | $ 943 | | $ 2,420 | | $ 1,449 |
| | | | | | | |
Weighted average shares outstanding | 12,227 | | 8,526 | | 12,219 | | 8,520 |
| | | | | | | |
Basic and diluted income (loss) per share from: | | | | | | | |
Continuing operations | $ 0.10 | | $ 0.13 | | $ 0.20 | | $ 0.24 |
Discontinued operations | - | | (0.02) | | - | | (0.07) |
Net income per share | $ 0.10 | | $ 0.11 | | $ 0.20 | | $ 0.17 |
| | | | | | | |
| | | | | | | |
EBITDA (2): | | | | | | | |
Net income | $ 1,167 | | $ 943 | | $ 2,420 | | $ 1,449 |
Add: income taxes | 38 | | - | | 73 | | - |
Add: depreciation and amortization | 2,130 | | 865 | | 3,731 | | 1,839 |
Add: interest expense | 899 | | 98 | | 1,514 | | 245 |
less: (income) loss from discontinued operations | 32 | | 124 | | (26) | | 574 |
less: interest and other income (1) | (320) | | (206) | | (566) | | (1,664) |
EBITDA (2) | $ 3,946 | | $ 1,824 | | $ 7,146 | | $ 2,443 |
| |
| (1) | “Other income” consists primarily of amortization of deferred gains. | |
| (2) | We consider earnings before interest, taxes, depreciation and amortization, or EBITDA, to be an indicative measure of our operating performance. EBITDA is also useful in measuring our ability to service debt, fund capital expenditures and expand our business. Furthermore, we believe that EBITDA is a meaningful disclosure that may help shareholders to understand better our financial performance, including comparing our performance to other companies. However, EBITDA as presented may not be comparable to amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations, operating profit, cash flow from operations, or any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the United States. | |
| | | | | | | | | | | |
Supplemental Information, page 2 of 4
Condensed Balance Sheet Data (dollars in thousands) | |
| June 30, | December 31, |
| 2005 | 2004 |
Assets | | |
Current assets: | | |
Cash and cash equivalents | $18,704 | $26,194 |
Accounts receivable, net of reserve | 39,252 | 36,742 |
Prepaid expenses and other current assets | 11,297 | 13,107 |
Total current assets | 69,253 | 76,043 |
| | |
Property and equipment, net | 147,161 | 95,189 |
Other long term assets | 54,820 | 51,753 |
Total assets | $271,234 | $ 222,985 |
| | |
Liabilities and Shareholders’ Equity | | |
Current liabilities | $74,578 | $59,121 |
Long term liabilities | 29,006 | 25,842 |
Mortgages payable, long term | 69,056 | 42,118 |
Shareholders’ equity: 12,246,634 and 12,096,634 shares issued and outstanding at June 30, 2005 and December 31, 2004, respectively | 98,594 | 95,904 |
Total liabilities and shareholders’ equity | $271,234 | $222,985 |
Supplemental Information, page 3 of 4
The following tables present an overview of our operations for the three months ended June 30, 2005 and 2004:
| | 2005 | 2004 | $Variance | Change |
(dollars in thousands) | | | | | |
Net revenues from residents | | $ 179,072 | $150,497 | $ 28,575 | 19% |
Pharmacy revenue | | 7,100 | 2,851 | 4,249 | 149% |
Wages and benefits | | 92,661 | 79,872 | 12,789 | 16% |
Other operating expenses | | 46,461 | 39,313 | 7,148 | 18% |
Pharmacy expenses | | 6,427 | 2,510 | 3,917 | 156% |
Management fee to SLS | | 5,620 | 4,557 | 1,063 | 23% |
Rent expense | | 24,556 | 20,455 | 4,101 | 20% |
General and administrative | | 6,501 | 4,817 | 1,684 | 35% |
Depreciation and amortization | | 2,130 | 865 | 1,265 | 146% |
Interest and other income | | 320 | 206 | 114 | 55% |
Interest expense | | 899 | 98 | 801 | 817% |
Provision for income taxes | | 38 | - | 38 | - |
Income (loss) from discontinued operations | | (32) | (124) | 92 | 74% |
Net income | | 1,167 | 943 | 224 | 24% |
| | | | | |
No. of communities (end of period) | | 155 | 101 | - | 54 |
No. of living units (end of period) | | 17,329 | 13,967 | - | 3,362 |
Occupancy | | 90% | 89% | - | 1% |
Average daily rate | | $ 126 | $ 133 | -7 | -5% |
Revenue per day per available unit | | $ 114 | $ 118 | -4 | -3% |
Percent of revenues from Medicare | | 17% | 16% | - | 1% |
Percent of revenues from Medicaid | | 21% | 27% | - | -6% |
Percent of revenues from private and other sources | | 62% | 57% | - | 5% |
Comparable communities (communities that we operated continuously since April 1, 2004):
| | Three Months Ended June 30, |
| | 2005 | 2004 | $Variance | Change |
Net revenues from residents (in 000s) | | $ 156,398 | $ 150,497 | $ 5,901 | 4% |
Community expenses (in 000s) | | 123,374 | 119,185 | 4,189 | 4% |
No. of communities (end of period) | | 101 | 101 | - | - |
No. of living units (end of period) | | 13,929 | 13,929 | - | - |
Occupancy | | 90% | 89% | - | 1% |
Average daily rate | | $ 137 | $133 | 4 | 3% |
Revenue per day per available unit | | $ 123 | $118 | 5 | 4% |
Percent of revenues from Medicare | | 19% | 16% | - | 3% |
Percent of revenues from Medicaid | | 24% | 27% | - | -3% |
Percent of revenues from private and other sources | | 57% | 57% | - | - |
Supplemental Information, page 4 of 4
The following tables present an overview of our operations for the six months ended June 30, 2005 and 2004:
| | 2005 | 2004 | $Variance | Change |
(dollars in thousands) | | | | | |
Net revenues from residents | | $ 356,163 | $ 298,362 | $ 57,801 | 19% |
Pharmacy revenue | | 12,356 | 5,019 | 7,337 | 146% |
Wages and benefits | | 186,903 | 161,302 | 25,601 | 16% |
Other operating expenses | | 89,256 | 75,467 | 13,789 | 18% |
Pharmacy expenses | | 11,451 | 4,461 | 6,990 | 157% |
Management fee to SLS | | 11,240 | 9,191 | 2,049 | 22% |
Rent expense | | 49,015 | 40,582 | 8,433 | 21% |
General and administrative | | 13,508 | 9,935 | 3,573 | 36% |
Depreciation and amortization | | 3,731 | 1,839 | 1,892 | 103% |
Interest and other income | | 566 | 1,664 | (1,098) | - 66% |
Interest expense | | 1,514 | 245 | 1,269 | 518% |
Provision for income taxes | | 73 | - | 73 | - |
Income (loss) from discontinued operations | | 26 | (574) | 600 | 105% |
Net income | | 2,420 | 1,449 | 971 | 67% |
| | | | | |
No. of communities (end of period) | | 155 | 101 | - | 54 |
No. of living units (end of period) | | 17,329 | 13,967 | - | 3,362 |
Occupancy | | 90% | 89% | - | 1% |
Average daily rate | | $ 126 | $ 133 | -7 | -5% |
Revenue per day per available unit | | $ 114 | $ 118 | -4 | -3% |
Percent of revenues from Medicare | | 17% | 16% | - | 1% |
Percent of revenues from Medicaid | | 21% | 27% | - | -6% |
Percent of revenues from private and other sources | | 62% | 57% | - | 5% |
Comparable communities (communities that we operated continuously since January 1, 2004):
| | Six Months Ended June 30, |
| | 2005 | 2004 | $Variance | Change |
Net revenues from residents (in 000s) | | $ 312,947 | $ 298,362 | $ 14,585 | 5% |
Community expenses (in 000s) | | 245,072 | 236,769 | 8,303 | 4% |
No. of communities (end of period) | | 101 | 101 | - | - |
No. of living units (end of period) | | 13,929 | 13,929 | - | - |
Occupancy | | 90% | 89% | - | 1% |
Average daily rate | | $ 138 | $ 133 | 5 | 4% |
Revenue per day per available unit | | $ 124 | $ 118 | 6 | 5% |
Percent of revenues from Medicare | | 19% | 16% | - | 3% |
Percent of revenues from Medicaid | | 24% | 27% | - | -3% |
Percent of revenues from private and other sources | | 57% | 57% | - | - |
