| 400 Centre Street, Newton, MA 02458-2076 |  | tel: (617) 796-8350 fax: (617) 796-8385 |
| FOR IMMEDIATE RELEASE | Contact: Timothy A. Bonang, Vice President, Investor Relations, or |
| | Katherine L. Johnston, Manager, Investor Relations |
| | (617) 796-8245 |
| | www.fivestarqualitycare.com |
Five Star Quality Care, Inc. Reports Third Quarter 2009 Results
____________________________________
Newton, MA (November 2, 2009). Five Star Quality Care, Inc. (NYSE Amex: FVE) today announced its financial results for the quarter and nine months ended September 30, 2009.
Third Quarter 2009 Financial Highlights:
| | § | Total revenues for the third quarter of 2009 increased 5.9% to $297.2 million from $280.6 million for the same period last year. |
| | | |
| | § | Net income for the third quarter of 2009 was $4.1 million compared to a net loss of $2.3 million for the same period last year. |
| | | |
| | § | Net income per share from continuing operations for the third quarter of 2009 was $0.13 and $0.12, basic and diluted, respectively, compared to a net loss per share from continuing operations of $0.05, basic and diluted, for the same period last year. |
| | | |
| | § | Net income from continuing operations for the third quarter of 2009 included several items that, in aggregate, resulted in a positive impact of $4.0 million, or $0.12 and $0.10 per basic and diluted share, respectively. These items included a $3.0 million gain due to the early extinguishment of our convertible senior notes (the Notes), a $795,000 gain on the sale of certain marketable securities held by our captive insurance companies and a $455,000 unrealized gain on our UBS put right related to auction rate securities, offset by a $238,000 unrealized loss on our holdings of auction rate securities. Net loss from continuing operations for the third quarter of 2008 also included several items that, in aggregate, resulted in a negative impact of $4.0 million, or $0.12 and $0.10 per basic and diluted share, respectively. These items included a $3.0 million loss on impairment of our investments in certain marketable securities held by our captive insurance companies and a $1.7 million unrealized loss on our holdings of auction rate securities, offset by a $743,000 gain on the early extinguishment of debt. |
| | | |
| | § | Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the third quarter of 2009 was $9.4 million compared to $2.6 million for the same period last year. As discussed above, EBITDA for the third quarter of 2009 had items that, in aggregate, resulted in a positive impact of $4.0 million. EBITDA for the third quarter of 2008 had items that, in aggregate, resulted in a negative impact of $4.0 million. |
Third Quarter 2009 Operating Highlights (Senior Living Communities):
| | § | Senior living occupancy for the third quarter of 2009 was 86.1% compared to 88.3% for the same period last year. |
| | | |
| | § | Senior living average daily rate for the third quarter of 2009 increased by 2.2% to $145.83 from $142.74 in the same period last year. |
| | | |
| | § | The percentage of senior living revenue derived from private and other resources for the third quarter of 2009 decreased to 69.3% from 69.8% for the same period last year. |
| | | |
| | § | For those senior living communities that we have operated continuously since July 1, 2008 (comparable communities), occupancy for the third quarter of 2009 was 86.6% compared to 88.2% for the same period last year. |
| | | |
| | § | The average daily rate at comparable communities for the third quarter of 2009 increased by 3.6% to $148.33 from $143.24 in the same period last year. |
Year to Date Financial Highlights:
| | § | Total revenues for the nine months ended September 30, 2009 increased 9.9% to $887.7 million from $808.0 million for the same period last year. |
| | | |
| | § | Net income for the nine months ended September 30, 2009 was $38.1 million compared to net income of $2.9 million for the same period last year. |
| | | |
| | § | Net income per share from continuing operations for the nine months ended September 30, 2009 was $1.17 and $1.05, basic and diluted, respectively, compared to $0.23, basic and diluted, for the same period last year. |
| | | |
| | § | Net income from continuing operations for the nine months ended September 30, 2009 included several items that, in aggregate, resulted in a positive impact of $32.8 million, or $1.00 and $0.85 per basic and diluted share, respectively. These items included a $34.3 million gain due to the early extinguishment of our Notes, a $3.4 million unrealized gain on our holdings of auction rate securities and a $795,000 gain on sale of available for sale securities held by our captive insurance companies, offset by a $2.9 million loss due to the impairment of our investments in certain marketable securities held by our captive insurance companies and a $2.8 million unrealized loss on our UBS put right related to auction rate securities. Net income from continuing operations for the nine months ended September 30, 2008 included several items that, in aggregate, resulted in a negative impact of $8.4 million, or $0.26 and $0.20 per basic and diluted share, respectively. These items included a $6.1 million unrealized loss on our holdings of auction rate securities and a $3.0 million loss on impairment of investments in certain marketable securities held by our captive insurance companies, offset by a $743,000 gain on the early extinguishment of debt. |
| | | |
| | § | EBITDA for the nine months ended September 30, 2009 was $54.1 million compared to $19.1 million for the same period last year. As discussed above, EBITDA for the first nine months of 2009, had items that, in aggregate, resulted in a positive impact of $32.8 million. EBITDA for the first nine months of 2008, had items that, in aggregate, resulted in a negative impact of $8.4 million. |
Other Highlights:
During the third quarter, we purchased and retired $15.6 million par value of our outstanding Notes for $12.1 million, plus accrued interest, and recorded a $3.0 million gain, net of related unamortized costs, on the early extinguishment of debt. In October 2009, we purchased and retired an additional $800,000 par value of the Notes for $638,000. We funded these purchases principally from cash received in connection with the lease realignment agreement we entered into with Senior Housing Properties Trust (Senior Housing) on August 4, 2009.
On October 1, 2009, we commenced leasing from Senior Housing a continuing care retirement community with a total of 259 independent, assisted living and skilled nursing units that Senior Housing purchased from an unrelated party.
Conference Call:
On November 2, 2009 at 5:00 p.m. Eastern Daylight Time, Bruce J. Mackey Jr., President and Chief Executive Officer, and Francis R. Murphy, III, Chief Financial Officer, will host a conference call to discuss the third quarter and nine month financial results. Following the Company’s remarks, there will be a question and answer period.
The conference call telephone number is (866) 416-5346. Participants calling from outside the United States and Canada should dial (913) 981-5596. 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 through 8:00 p.m. Eastern Daylight Time Monday, November 9th . To hear the replay, dial (719) 457-0820. The replay pass code is 1239436.
A live audio webcast of the conference call will also be available in a listen only mode on the Company’s web site 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.
About Five Star Quality Care, Inc.:
Five Star Quality Care, Inc. is a senior living and healthcare services company. Five Star owns or leases and operates 206 senior living communities with 21,953 living units located in 30 states. These communities include independent living, assisted living and skilled nursing communities. Five Star also operates five institutional pharmacies and two rehabilitation hospitals. Five Star is headquartered in Newton, Massachusetts.
Supplemental Information, page 1 of 6
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| | | Three months ended September 30, | | | Nine months ended September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Revenues: | | | | | | | | | | | | |
| Senior living revenue | | $ | 253,699 | | | $ | 239,867 | | | $ | 757,305 | | | $ | 682,602 | |
| Rehabilitation hospital revenue | | | 24,641 | | | | 23,938 | | | | 75,008 | | | | 73,103 | |
| Institutional pharmacy revenue | | | 18,868 | | | | 16,814 | | | | 55,418 | | | | 52,301 | |
| Total revenues | | | 297,208 | | | | 280,619 | | | | 887,731 | | | | 808,006 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Senior living wages and benefits | | | 130,266 | | | | 119,792 | | | | 387,078 | | | | 338,809 | |
| Other senior living operating expenses | | | 62,903 | | | | 60,820 | | | | 184,220 | | | | 172,108 | |
| Rehabilitation hospital expenses | | | 22,363 | | | | 22,332 | | | | 68,011 | | | | 67,539 | |
| Institutional pharmacy expenses | | | 18,296 | | | | 17,368 | | | | 54,957 | | | | 50,918 | |
| Rent expense | | | 44,520 | | | | 41,718 | | | | 133,086 | | | | 116,380 | |
| General and administrative | | | 13,465 | | | | 11,948 | | | | 38,914 | | | | 34,803 | |
| Depreciation and amortization | | | 4,003 | | | | 3,684 | | | | 12,445 | | | | 10,954 | |
| Total operating expenses | | | 295,816 | | | | 277,662 | | | | 878,711 | | | | 791,511 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 1,392 | | | | 2,957 | | | | 9,020 | | | | 16,495 | |
| | | | | | | | | | | | | | | | | |
| Interest, dividend and other income | | | 479 | | | | 1,071 | | | | 2,394 | | | | 4,867 | |
| Interest and other expense | | | (964 | ) | | | (1,696 | ) | | | (3,390 | ) | | | (4,890 | ) |
Unrealized gain (loss) on investments in trading securities | | | (238 | ) | | | (1,733 | ) | | | 3,473 | | | | (6,099 | ) |
Unrealized gain (loss) on UBS put right related to auction rate securities | | | 455 | | | | - | | | | (2,832 | ) | | | - | |
Equity in losses of Affiliates Insurance Company | | | (23 | ) | | | - | | | | (132 | ) | | | - | |
| Gain on early extinguishment of debt | | | 3,031 | | | | 743 | | | | 34,262 | | | | 743 | |
| Gain on sale of available for sale securities | | | 795 | | | | - | | | | 795 | | | | - | |
Impairment of investments in available for sale securities | | | - | | | | (3,019 | ) | | | (2,947 | ) | | | (3,019 | ) |
| | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | | 4,927 | | | | (1,677 | ) | | | 40,643 | | | | 8,097 | |
| (Provision) benefit for income taxes | | | (565 | ) | | | 90 | | | | (2,074 | ) | | | (920 | ) |
| Income (loss) from continuing operations | | | 4,362 | | | | (1,587 | ) | | | 38,569 | | | | 7,177 | |
| Loss from discontinued operations | | | (254 | ) | | | (663 | ) | | | (511 | ) | | | (4,321 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 4,108 | | | $ | (2,250 | ) | | $ | 38,058 | | | $ | 2,856 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 34,219 | | | | 31,845 | | | | 32,890 | | | | 31,832 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - diluted | | | 38,835 | | | | 31,845 | | | | 38,554 | | | | 31,832 | |
| | | | | | | | | | | | | | | | | |
| Basic income (loss) per share from: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.13 | | | $ | (0.05 | ) | | $ | 1.17 | | | $ | 0.23 | |
| Discontinued operations | | | (0.01 | ) | | | (0.02 | ) | | | (0.02 | ) | | | (0.14 | ) |
| Net income (loss) per share - basic | | $ | 0.12 | | | $ | (0.07 | ) | | $ | 1.15 | | | $ | 0.09 | |
| | | | | | | | | | | | | | | | | |
| Diluted income (loss) per share from: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.12 | | | $ | (0.05 | ) | | $ | 1.05 | | | $ | 0.23 | |
| Discontinued operations | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) | | | (0.14 | ) |
| Net income (loss) per share - diluted | | $ | 0.11 | | | $ | (0.07 | ) | | $ | 1.04 | | | $ | 0.09 | |
Supplemental Information, page 2 of 6
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands, except share data)
(unaudited)
| | | September 30, 2009 | | | December 31, 2008 | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 26,432 | | | $ | 16,138 | |
| Accounts receivable, net of allowance | | | 61,932 | | | | 66,023 | |
| Investments in trading securities | | | 66,189 | | | | - | |
| Investments in available for sale securities | | | 8,865 | | | | 7,232 | |
| Restricted cash and investments | | | 7,293 | | | | 7,518 | |
| UBS put right related to auction rate securities | | | 8,249 | | | | - | |
| Prepaid expenses and other current assets | | | 16,803 | | | | 17,350 | |
| Total current assets | | | 195,763 | | | | 114,261 | |
| | | | | | | | | |
| Property and equipment, net | | | 187,282 | | | | 190,627 | |
| Investments in trading securities | | | - | | | | 62,866 | |
| Equity investment in Affiliates Insurance Company | | | 4,977 | | | | - | |
| UBS put right related to auction rate securities | | | - | | | | 11,081 | |
| Restricted cash and investments | | | 12,891 | | | | 13,368 | |
| Goodwill and other long term assets | | | 18,675 | | | | 20,435 | |
| Total assets | | $ | 419,588 | | | $ | 412,638 | |
| | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
UBS secured revolving credit facility related to auction rate securities | | $ | 39,704 | | | $ | - | |
| Other current liabilities | | | 140,350 | | | | 129,139 | |
| Total current liabilities | | | 180,054 | | | | 129,139 | |
| | | | | | | | | |
UBS secured revolving credit facility related to auction rate securities | | | - | | | | 21,875 | |
| Long term liabilities | | | 37,333 | | | | 37,344 | |
| Mortgage notes payable | | | 12,314 | | | | 12,441 | |
| Convertible senior notes | | | 51,552 | | | | 126,500 | |
Shareholders’ equity (35,436,064 and 32,205,604 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively) | | | 138,335 | | | | 85,339 | |
| Total liabilities and shareholders’ equity | | $ | 419,588 | | | $ | 412,638 | |
| | | | | | | | | |
| | |
Supplemental Information, page 3 of 6
FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
Number of communities (end of period) | | | 206 | | | | 198 | | | | 206 | | | | 198 | |
Number of living units (end of period) | | | 21,953 | | | | 21,031 | | | | 21,953 | | | | 21,031 | |
Number of living units % growth | | | 4.4 | % | | | - | | | | 4.4 | % | | | - | |
| | | | | | | | | | | | | | | | |
Occupancy | | | 86.1 | % | | | 88.3 | % | | | 86.3 | % | | | 89.1 | % |
Average daily rate (ADR) | | $ | 145.83 | | | $ | 142.74 | | | $ | 146.44 | | | $ | 143.05 | |
ADR % growth | | | 2.2 | % | | | - | | | | 2.4 | % | | | - | |
| | | | | | | | | | | | | | | | |
Percent breakdown of net senior living revenues: | | | | | | | | | | | | | | | | |
Medicare | | | 14.2 | % | | | 13.7 | % | | | 14.5 | % | | | 14.9 | % |
Medicaid | | | 16.5 | % | | | 16.5 | % | | | 16.3 | % | | | 16.9 | % |
Private and other sources | | | 69.3 | % | | | 69.8 | % | | | 69.2 | % | | | 68.2 | % |
Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | |
Senior living revenues | | $ | 253,699 | | | $ | 239,867 | | | $ | 757,305 | | | $ | 682,602 | |
Senior living revenues % growth | | | 5.8 | % | | | - | | | | 10.9 | % | | | - | |
| | | | | | | | | | | | | | | | |
Senior living wages and benefits | | $ | 130,266 | | | $ | 119,792 | | | $ | 387,078 | | | $ | 338,809 | |
Senior living wages and benefits as a % of senior living revenues | | | 51.3 | % | | | 49.9 | % | | | 51.1 | % | | | 49.6 | % |
Other senior living operating expenses | | $ | 62,903 | | | $ | 60,820 | | | $ | 184,220 | | | $ | 172,108 | |
Other senior living operating expenses as a % of senior living revenues | | | 24.8 | % | | | 25.4 | % | | | 24.3 | % | | | 25.2 | % |
Community expenses(2) % growth | | | 7.0 | % | | | - | | | | 11.8 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| (1) | Excludes data for institutional pharmacy, rehabilitation hospital operations and discontinued senior living operations. |
| (2) | Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations. |
Supplemental Information, page 4 of 6
FIVE STAR QUALITY CARE, INC
COMPARABLE SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | September 30,(2) | | | September 30,(3) | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
Number of communities (end of period) | | | 188 | | | | 188 | | | | 164 | | | | 164 | |
Number of living units (end of period) | | | 20,510 | | | | 20,510 | | | | 18,345 | | | | 18,345 | |
| | | | | | | | | | | | | | | | | |
Occupancy | | | 86.6 | % | | | 88.2 | % | | | 87.2 | % | | | 89.3 | % |
Average daily rate (ADR) | | $ | 148.33 | | | $ | 143.24 | | | $ | 149.25 | | | $ | 142.83 | |
ADR % growth | | | 3.6 | % | | | - | | | | 4.5 | % | | | - | |
| | | | | | | | | | | | | | | | | |
Percent breakdown of net senior living revenues: | | | | | | | | | | | | | | | | |
Medicare | | | 14.6 | % | | | 13.8 | % | | | 16.4 | % | | | 15.7 | % |
Medicaid | | | 17.1 | % | | | 16.7 | % | | | 18.4 | % | | | 17.9 | % |
Private and other sources | | | 68.3 | % | | | 69.5 | % | | | 65.2 | % | | | 66.4 | % |
Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | |
Senior living revenues | | $ | 242,438 | | | $ | 238,004 | | | $ | 651,857 | | | $ | 639,386 | |
Senior living revenues % growth | | | 1.9 | % | | | - | | | | 2.0 | % | | | - | |
| | | | | | | | | | | | | | | | | |
Senior living wages and benefits | | $ | 124,740 | | | $ | 119,062 | | | $ | 337,633 | | | $ | 318,074 | |
Senior living wages and benefits as a % of senior living revenues | | | 51.5 | % | | | 50.0 | % | | | 51.8 | % | | | 49.7 | % |
Other senior living operating expenses | | $ | 59,962 | | | $ | 60,442 | | | $ | 160,100 | | | $ | 162,789 | |
Other senior living operating expenses as a % of senior living revenues | | | 24.7 | % | | | 25.4 | % | | | 24.6 | % | | | 25.5 | % |
Community expenses(4) % growth | | | 2.9 | % | | | - | | | | 3.5 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| (1) | Excludes data for institutional pharmacy, rehabilitation hospital operations and discontinued senior living operations. |
| (2) | Communities that we have operated continuously since July 1, 2008. |
| (3) | Communities that we have operated continuously since January 1, 2008. |
| (4) | Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations. |
Supplemental Information, page 5 of 6
FIVE STAR QUALITY CARE, INC.
OTHER OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | | | | | | | | | | | |
| | Three months ended | | | Nine months ended | |
| | September 30, | | | September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Number of senior living communities(2) (end of period): | | | | | | | | | | | | |
Assisted and independent living communities, owned | | | 23 | | | | 16 | | | | 23 | | | | 16 | |
Assisted and independent living communities, leased | | | 136 | | | | 135 | | | | 136 | | | | 135 | |
Total number of assisted and independent living communities | | | 159 | | | | 151 | | | | 159 | | | | 151 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Skilled nursing communities, owned | | | 2 | | | | 2 | | | | 2 | | | | 2 | |
Skilled nursing communities, leased | | | 45 | | | | 45 | | | | 45 | | | | 45 | |
Total number of skilled nursing communities | | | 47 | | | | 47 | | | | 47 | | | | 47 | |
| | | | | | | | | | | | | | | | |
Total number of senior living communities | | | 206 | | | | 198 | | | | 206 | | | | 198 | |
| | | | | | | | | | | | | | | | |
Number of senior living units (end of period): | | | | | | | | | | | | | | | | |
Assisted and independent living communities, owned | | | 1,976 | | | | 1,303 | | | | 1,976 | | | | 1,303 | |
Assisted and independent living communities, leased(3) | | | 15,699 | | | | 15,454 | | | | 15,699 | | | | 15,454 | |
Total number of assisted and independent living units | | | 17,675 | | | | 16,757 | | | | 17,675 | | | | 16,757 | |
| | | | | | | | | | | | | | | | |
Skilled nursing communities, owned | | | 271 | | | | 271 | | | | 271 | | | | 271 | |
Skilled nursing communities, leased(4) | | | 4,007 | | | | 4,003 | | | | 4,007 | | | | 4,003 | |
Total number of skilled nursing units | | | 4,278 | | | | 4,274 | | | | 4,278 | | | | 4,274 | |
| | | | | | | | | | | | | | | | |
Total number of senior living units | | | 21,953 | | | | 21,031 | | | | 21,953 | | | | 21,031 | |
| | | | | | | | | | | | | | | | |
Senior living revenues: | | | | | | | | | | | | | | | | |
Assisted and independent living communities | | $ | 185,405 | | | $ | 173,888 | | | $ | 552,791 | | | $ | 483,746 | |
Skilled nursing communities | | | 66,161 | | | | 64,112 | | | | 198,480 | | | | 193,111 | |
Other(5) | | | 2,133 | | | | 1,867 | | | | 6,034 | | | | 5,745 | |
Total senior living revenues | | $ | 253,699 | | | $ | 239,867 | | | $ | 757,305 | | | $ | 682,602 | |
| | | | | | | | | | | | | | | | |
Senior living data: | | | | | | | | | | | | | | | | |
Assisted and independent living communities occupancy | | | 86.4 | % | | | 88.8 | % | | | 86.5 | % | | | 89.6 | % |
Assisted and independent living communities ADR | | $ | 132.08 | | | $ | 129.73 | | | $ | 132.43 | | | $ | 128.93 | |
Assisted and independent living communities ADR % growth | | | 1.8 | % | | | - | | | | 2.7 | % | | | - | |
| | | | | | | | | | | | | | | | |
Skilled nursing communities occupancy | | | 85.1 | % | | | 86.5 | % | | | 85.4 | % | | | 87.1 | % |
Skilled nursing communities ADR | | $ | 197.54 | | | $ | 188.52 | | | $ | 199.03 | | | $ | 189.37 | |
Skilled nursing communities ADR % growth | | | 4.8 | % | | | - | | | | 5.1 | % | | | - | |
| | | | | | | | | | | | | | | | |
Rehabilitation hospital data: | | | | | | | | | | | | | | | | |
Rehabilitation hospital units | | | 321 | | | | 321 | | | | 321 | | | | 321 | |
Rehabilitation hospital occupancy | | | 58.6 | % | | | 61.7 | % | | | 60.5 | % | | | 63.1 | % |
| | | | | | | | | | | | | | | | |
| (1) | Excludes data for institutional pharmacy operations and discontinued senior living operations. |
| (2) | Communities are categorized by the type of living units which constitute a majority of the total living units at the community. |
| (3) | Includes 1,908 and 1,867 skilled nursing units in communities where assisted living and independent living services are the predominant services provided for the three and nine months ended September 30, 2009 and 2008, respectively. |
| (4) | Includes 88 and 66 assisted living and independent living units in communities where skilled nursing services are the predominant services provided for the three and nine months ended September 30, 2009 and 2008, respectively. |
| (5) | Other senior living revenues relates primarily to rehabilitation and other specialty service revenues provided at residential facilities and does not include revenues from institutional pharmacy or rehabilitation hospital operations. |
Supplemental Information, page 6 of 6
FIVE STAR QUALITY CARE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
Earnings before interest, taxes, depreciation and amortization, or EBITDA, and EBITDA excluding certain items are not financial measures determined according to generally accepted accounting principles, or GAAP. We consider EBITDA and EBITDA excluding certain items to be a meaningful disclosure because we believe that the inclusion of these non-GAAP financial measures may help investors to gain a better understanding of changes in our core operating results, and can also help investors who wish to make comparisons between us and other companies on both a GAAP and a non-GAAP basis. EBITDA and EBITDA excluding certain items as presented may not, however, always be comparable to amounts calculated by other companies. These non-GAAP financial measures are used by management to evaluate financial performance and resource allocation for our communities and for us as a whole and for comparing such performance to that of prior periods and to the performance of our competitors. This information should not be considered as an alternative to net income or any other financial operating or performance measure established by GAAP. Reconciliation of income from continuing operations to EBITDA and EBITDA excluding certain items, for the three and nine months ended September 30, 2009 and 2008 is as follows:
| | | For the three months | | | For the nine months | |
| | | ended September 30, | | | ended September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Income (loss) from continuing operations | | $ | 4,362 | | | $ | (1,587 | ) | | $ | 38,569 | | | $ | 7,177 | |
| Add: interest and other expense | | | 964 | | | | 1,696 | | | | 3,390 | | | | 4,890 | |
| Less: interest, dividend and other income | | | (479 | ) | | | (1,071 | ) | | | (2,394 | ) | | | (4,867 | ) |
| Add: income tax expense (benefit) | | | 565 | | | | (90 | ) | | | 2,074 | | | | 920 | |
| Add: depreciation and amortization | | | 4,003 | | | | 3,684 | | | | 12,445 | | | | 10,954 | |
| EBITDA | | | 9,415 | | | | 2,632 | | | | 54,084 | | | | 19,074 | |
| Add: impairment of certain investments | | | - | | | | 3,019 | | | | 2,947 | | | | 3,019 | |
Add: unrealized loss on investments in trading securities | | | 238 | | | | 1,733 | | | | - | | | | 6,099 | |
Add: unrealized loss on UBS put right related to auction rate securities | | | - | | | | - | | | | 2,832 | | | | - | |
Less: unrealized gain on investments in trading securities | | | - | | | | - | | | | (3,473 | ) | | | - | |
Less: unrealized gain on UBS put right related to auction rate securities | | | (455 | ) | | | - | | | | - | | | | - | |
Less: gain on sale of investments in available for sale securities | | | (795 | ) | | | - | | | | (795 | ) | | | - | |
| Less: gain on early extinguishment of debt | | | (3,031 | ) | | | (743 | ) | | | (34,262 | ) | | | (743 | ) |
| EBITDA excluding certain items | | $ | 5,372 | | | $ | 6,641 | | | $ | 21,333 | | | $ | 27,449 | |
