Exhibit 99.1
FOR IMMEDIATE RELEASE | | Contact: Timothy A. Bonang, Vice President, Investor Relations |
| | Elisabeth A. Heiss, Manager, Investor Relations |
| | (617) 796-8245 |
| | www.fivestarseniorliving.com |
Five Star Quality Care, Inc. Reports First Quarter 2011 Results
Newton, MA (April 28, 2011). Five Star Quality Care, Inc. (NYSE: FVE) today announced its financial results for the quarter ended March 31, 2011.
First Quarter 2011 Financial Highlights:
· Total revenues for the first quarter of 2011 increased 3.2% to $308.3 million from $298.8 million for the same period in the previous year.
· Income from continuing operations for the first quarter of 2011 was $5.6 million compared to $4.6 million for the same period in the previous year.
· Income per share from continuing operations for the first quarter of 2011 was $0.16 and $0.15 per basic and diluted share, respectively, compared to $0.13 per basic and diluted share for the same period in the previous year.
· Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the first quarter of 2011 was $10.5 million compared to $9.0 million for the same period in the previous year. A reconciliation of income from continuing operations determined in accordance with U.S. generally accepted accounting principles, or GAAP, to EBITDA for the quarters ended March 31, 2011 and 2010 appears later in this press release.
First Quarter 2011 Operating Highlights (Senior Living Communities):
· Senior living occupancy for the first quarter of 2011 was 85.5% compared to 86.2% for the same period in the previous year.
· Senior living average daily rate for the first quarter of 2011 increased by 3.5% to $152.05 from $146.97 for the same period in the previous year.
· The percentage of senior living revenue derived from residents’ private resources for the first quarter of 2011 decreased to 71.2% from 72.8% for the same period in the previous year.
· For those senior living communities that were operated continuously since January 1, 2010 (comparable communities), occupancy for the first quarter of 2011 was 85.4% compared to 86.2% for the same period in the previous year.
· The average daily rate at comparable communities for the first quarter of 2011 increased by 3.7% to $152.36 from $146.97 in the same period the previous year.
Conference Call:
On April 28, 2011 at 10:00 a.m. Eastern Daylight Time, Bruce J. Mackey Jr., President and Chief Executive Officer, and Paul V. Hoagland, Chief Financial Officer, will host a conference call to discuss the first quarter financial results. Following the Company’s remarks, there will be a question and answer period.
The conference call telephone number is (800) 230-1059. Participants calling from outside the United States and Canada should dial (612) 234-9960. 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 11:59 p.m. Eastern Daylight Time Tuesday, May 10, 2011. To hear the replay, dial (800) 475-6701. The replay pass code is 179317.
A live audio webcast of the conference call will also be available in a listen only mode on the Company’s website at www.fivestarqualitycare.com. Participants wanting to access the webcast should visit the Company’s website about five minutes before the call. The archived webcast will be available for replay on the Company’s website 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 210 senior living communities with 22,291 living units located in 29 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.
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Supplemental Information
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share data)
(unaudited)
| | Three months ended
March 31, | |
| | 2011 | | 2010 | |
Revenues: | | | | | |
Senior living revenue | | $ | 263,379 | | $ | 255,215 | |
Rehabilitation hospital revenue | | 25,625 | | 24,052 | |
Institutional pharmacy revenue | | 19,337 | | 19,577 | |
Total revenues | | 308,341 | | 298,844 | |
| | | | | |
Operating expenses: | | | | | |
Senior living wages and benefits | | 130,337 | | 126,079 | |
Other senior living operating expenses | | 63,349 | | 62,234 | |
Rehabilitation hospital expenses | | 24,053 | | 22,657 | |
Institutional pharmacy expenses | | 18,889 | | 19,022 | |
Rent expense | | 47,662 | | 46,708 | |
General and administrative | | 13,670 | | 13,147 | |
Depreciation and amortization | | 4,311 | | 3,886 | |
Total operating expenses | | 302,271 | | 293,733 | |
| | | | | |
Operating income | | 6,070 | | 5,111 | |
| | | | | |
Interest, dividend and other income | | 319 | | 662 | |
Interest and other expense | | (501 | ) | (659 | ) |
Gain on investments in trading securities | | — | | 669 | |
Loss on UBS put right related to auction rate securities | | — | | (670 | ) |
Equity in income (losses) of Affiliates Insurance Company | | 37 | | (28 | ) |
Gain on sale of available for sale securities | | 76 | | — | |
| | | | | |
Income from continuing operations before income taxes | | 6,001 | | 5,085 | |
Provision for income taxes | | (379 | ) | (493 | ) |
Income from continuing operations | | 5,622 | | 4,592 | |
Loss from discontinued operations | | (1,489 | ) | (507 | ) |
| | | | | |
Net income | | $ | 4,133 | | $ | 4,085 | |
| | | | | |
Weighted average shares outstanding - basic | | 36,020 | | 35,669 | |
| | | | | |
Weighted average shares outstanding - diluted | | 38,909 | | 39,492 | |
| | | | | |
Basic income per share from: | | | | | |
Continuing operations | | $ | 0.16 | | $ | 0.13 | |
Discontinued operations | | (0.04 | ) | (0.01 | ) |
Net income per share - basic | | $ | 0.12 | | $ | 0.12 | |
| | | | | |
Diluted income per share from: | | | | | |
Continuing operations | | $ | 0.15 | | $ | 0.13 | |
Discontinued operations | | (0.04 | ) | (0.01 | ) |
Net income per share - diluted | | $ | 0.11 | | $ | 0.12 | |
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FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands, except share data)
(unaudited)
| | March 31,
2011 | | December 31,
2010 | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 26,008 | | $ | 20,770 | |
Accounts receivable, net of allowance | | 64,419 | | 64,806 | |
Investments in available for sale securities | | 14,062 | | 13,854 | |
Restricted cash | | 6,838 | | 6,594 | |
Acquisition deposits | | 13,000 | | — | |
Prepaid expenses and other current assets | | 19,872 | | 17,084 | |
Assets of discontinued operations | | 12,542 | | 12,857 | |
Total current assets | | 156,741 | | 135,965 | |
| | | | | |
Property and equipment, net | | 201,277 | | 201,223 | |
Restricted cash | | 15,771 | | 14,535 | |
Restricted investments in available for sale securities | | 3,359 | | 3,259 | |
Goodwill, equity investment and other long term assets | | 24,547 | | 24,812 | |
Total assets | | $ | 401,695 | | $ | 379,794 | |
| | | | | |
Liabilities and Shareholders’ Equity | | | | | |
Current liabilities | | $ | 155,334 | | $ | 137,911 | |
Convertible senior notes | | 37,282 | | 37,905 | |
Other long term liabilities | | 39,581 | | 39,211 | |
Shareholders’ equity - 36,019,864 shares issued and outstanding at March 31, 2011 and December 31, 2010 | | 169,498 | | 164,767 | |
Total liabilities and shareholders’ equity | | $ | 401,695 | | $ | 379,794 | |
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FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended | |
| | March 31, | |
| | 2011 | | 2010 | |
| | | | | |
Number of communities (end of period) | | 210 | | 209 | |
Number of living units (end of period) | | 22,291 | | 22,181 | |
Number of living units % growth | | 0.5 | % | | |
| | | | | |
Occupancy | | 85.5 | % | 86.2 | % |
Average daily rate (ADR) | | $ | 152.05 | | $ | 146.97 | |
ADR % growth | | 3.5 | % | | |
| | | | | |
Percent breakdown of net senior living revenues: | | | | | |
Medicare | | 16.0 | % | 14.2 | % |
Medicaid | | 12.8 | % | 13.0 | % |
Private and other sources | | 71.2 | % | 72.8 | % |
Total | | 100.0 | % | 100.0 | % |
| | | | | |
Senior living revenues | | $ | 263,379 | | $ | 255,215 | |
Senior living revenues % growth | | 3.2 | % | | |
| | | | | |
Senior living wages and benefits | | $ | 130,337 | | $ | 126,079 | |
Senior living wages and benefits as a % of senior living revenues | | 49.5 | % | 49.4 | % |
Other senior living operating expenses | | $ | 63,349 | | $ | 62,234 | |
Other senior living operating expenses as a % of senior living revenues | | 24.1 | % | 24.4 | % |
Community expenses(2) % growth | | 2.9 | % | | |
(1) Excludes data for institutional pharmacy, rehabilitation hospital operations and discontinued senior living operations.
(2) Community expenses consist of senior living wages and benefits and other senior living operating expenses as shown on our condensed consolidated statement of income.
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FIVE STAR QUALITY CARE, INC.
COMPARABLE SENIOR LIVING COMMUNITY OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended | |
| | March 31,(2) | |
| | 2011 | | 2010 | |
| | | | | |
Number of communities (end of period) | | 209 | | 209 | |
Number of living units (end of period) | | 22,181 | | 22,181 | |
| | | | | |
Occupancy | | 85.4 | % | 86.2 | % |
Average daily rate (ADR) | | $ | 152.36 | | $ | 146.97 | |
ADR % growth | | 3.7 | % | | |
| | | | | |
Percent breakdown of net senior living revenues: | | | | | |
Medicare | | 16.1 | % | 14.2 | % |
Medicaid | | 12.8 | % | 13.0 | % |
Private and other sources | | 71.1 | % | 72.8 | % |
Total | | 100.0 | % | 100.0 | % |
| | | | | |
Senior living revenues | | $ | 262,440 | | $ | 255,215 | |
Senior living revenues % growth | | 2.8 | % | | |
| | | | | |
Senior living wages and benefits | | $ | 129,921 | | $ | 126,079 | |
Senior living wages and benefits as a % of senior living revenues | | 49.5 | % | 49.4 | % |
Other senior living operating expenses | | $ | 63,126 | | $ | 62,234 | |
Other senior living operating expenses as a % of senior living revenues | | 24.1 | % | 24.4 | % |
Community expenses(3) % growth | | 2.5 | % | | |
(1) Excludes data for institutional pharmacy, rehabilitation hospital operations and discontinued senior living operations.
(2) Communities that we have operated continuously since January 1, 2010.
(3) Community expenses consist of senior living wages and benefits and other senior living operating expenses as shown on our condensed consolidated statement of income.
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FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended | |
| | March 31, | |
| | 2011 | | 2010 | |
| | | | | |
Independent and assisted living community revenue(2) | | $ | 208,356 | | $ | 201,770 | |
Skilled nursing facility revenue | | 55,023 | | 53,445 | |
Total senior living revenue | | $ | 263,379 | | $ | 255,215 | |
| | | | | |
Independent and assisted living community wages and benefits | | $ | 95,821 | | $ | 91,700 | |
Skilled nursing facility wages and benefits | | 34,516 | | 34,379 | |
Total senior living wages and benefits | | $ | 130,337 | | $ | 126,079 | |
| | | | | |
Independent and assisted living community operating expenses | | $ | 50,035 | | $ | 49,472 | |
Skilled nursing facility operating expenses | | 13,314 | | 12,762 | |
Total other senior living operating expenses | | $ | 63,349 | | $ | 62,234 | |
(1) Excludes data for discontinued senior living operations.
(2) Includes rehabilitation and other specialty service revenues provided at residential facilities and expenses associated with our captive insurance company.
COMPARABLE SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
| | Three months ended | |
| | March 31, | |
| | 2011 | | 2010 | |
| | | | | |
Independent and assisted living community revenue(2) | | $ | 207,417 | | $ | 201,770 | |
Skilled nursing facility revenue | | 55,023 | | 53,445 | |
Total senior living revenue | | $ | 262,440 | | $ | 255,215 | |
| | | | | |
Independent and assisted living community wages and benefits | | $ | 95,405 | | $ | 91,700 | |
Skilled nursing facility wages and benefits | | 34,516 | | 34,379 | |
Total senior living wages and benefits | | $ | 129,921 | | $ | 126,079 | |
| | | | | |
Independent and assisted living community operating expenses | | $ | 49,812 | | $ | 49,472 | |
Skilled nursing facility operating expenses | | 13,314 | | 12,762 | |
Total other senior living operating expenses | | $ | 63,126 | | $ | 62,234 | |
(1) Communities that we have continuiously operated since Janaury 1, 2010 excludes data for discontinued senior living operations.
(2) Includes rehabilitation and other specialty service revenues provided at residential facilities and expenses associated with our captive insurance company.
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FIVE STAR QUALITY CARE, INC.
OTHER OPERATING DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended
March 31, | |
| | 2011 | | 2010 | |
Number of senior living communities(2) (end of period): | | | | | |
Assisted and independent living communities, owned | | 24 | | 23 | |
Assisted and independent living communities, leased | | 148 | | 148 | |
Total number of assisted and independent living communities | | 172 | | 171 | |
| | | | | |
Skilled nursing communities, leased | | 38 | | 38 | |
| | | | | |
Total number of senior living communities | | 210 | | 209 | |
| | | | | |
Number of senior living units (end of period): | | | | | |
Assisted and independent living communities, owned | | 2,089 | | 1,979 | |
Assisted and independent living communities, leased(3) | | 16,756 | | 16,756 | |
Total number of assisted and independent living units | | 18,845 | | 18,735 | |
| | | | | |
Skilled nursing communities, leased(4) | | 3,446 | | 3,446 | |
| | | | | |
Total number of senior living units | | 22,291 | | 22,181 | |
| | | | | |
Senior living revenues: | | | | | |
Assisted and independent living communities | | $ | 206,035 | | $ | 199,810 | |
Skilled nursing communities | | 55,023 | | 53,445 | |
Other(5) | | 2,321 | | 1,960 | |
Total senior living revenues | | $ | 263,379 | | $ | 255,215 | |
| | | | | |
Senior living data: | | | | | |
Assisted and independent living communities occupancy | | 85.9 | % | 86.5 | % |
Assisted and independent living communities ADR | | $ | 141.24 | | $ | 136.82 | |
Assisted and independent living communities ADR % growth | | 3.2 | % | | |
| | | | | |
Skilled nursing communities occupancy | | 83.3 | % | 84.8 | % |
Skilled nursing communities ADR | | $ | 213.03 | | $ | 203.26 | |
Skilled nursing communities ADR % growth | | 4.8 | % | | |
| | | | | |
Rehabilitation hospital data: | | | | | |
Rehabilitation hospital units | | 321 | | 321 | |
Rehabilitation hospital occupancy | | 54.3 | % | 54.7 | % |
(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 2,026 skilled nursing units in communities where assisted living and independent living services are the predominant services provided.
(4) Includes 95 assisted living and independent living units in communities where skilled nursing services are the predominant services provided.
(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.
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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 U.S. 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 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. The reconciliation of income from continuing operations to EBITDA and EBITDA excluding certain items is as follows:
| | For the three months | |
| | ended March 31, | |
| | 2011 | | 2010 | |
Income from continuing operations | | $ | 5,622 | | $ | 4,592 | |
Add: interest and other expense | | 501 | | 659 | |
Add: income tax expense | | 379 | | 493 | |
Add: depreciation and amortization | | 4,311 | | 3,886 | |
Less: interest, dividend and other income | | (319 | ) | (662 | ) |
EBITDA | | 10,494 | | 8,968 | |
Less: gain on sale of investments in available for sale securities | | (76 | ) | — | |
Add: loss on UBS put right related to auction rate securities | | — | | 670 | |
Less: gain on investments in trading securities | | — | | (669 | ) |
EBITDA excluding certain items | | $ | 10,418 | | $ | 8,969 | |
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