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 Third Quarter 2011 Results
Newton, MA (October 27, 2011). Five Star Quality Care, Inc. (NYSE: FVE) today announced its financial results for the quarter and nine months ended September 30, 2011.
Third Quarter 2011 Financial Highlights:
· Total revenues for the third quarter of 2011 increased 8.1% to $329.5 million from $304.8 million for the same period in the previous year.
· Income from continuing operations for the third quarter of 2011 was $3.6 million compared to $5.9 million for the same period in the previous year.
· Income per share from continuing operations for the third quarter of 2011 was $0.08 per share, basic and diluted, compared to $0.17 and $0.16 per share, basic and diluted, respectively, for the same period in the previous year.
· Income from continuing operations for the third quarter of 2011 includes certain items that, in aggregate, increased our earnings by $303,000, or $0.01 per share, basic and diluted. These items were a $529,000 gain on sale of available for sale securities offset by acquisition costs of $226,000. Income from continuing operations for the third quarter of 2010 includes a gain on early extinguishment of debt that increased our earnings by $66,000 but did not have an effect on our earnings per share.
· Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the third quarter of 2011 was $10.3 million compared to $10.1 million for the same period in the previous year. EBITDA for the third quarter of 2011 included those items noted above that, in aggregate, increased our earnings by $303,000, and EBITDA for the third quarter of 2010 included those items noted above that, in aggregate, increased our earnings by $66,000. EBITDA excluding these items was $10.0 million and $10.1 million in the third quarter of 2011 and 2010, respectively. 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 September 30, 2011 and 2010 appears later in this press release.
Third Quarter 2011 Operating Highlights:
· Senior living occupancy at our owned and leased senior living communities for the third quarter of 2011 was 86.0% compared to 86.2% for the same period in the previous year.
· Senior living average daily rate, or ADR, at our owned and leased senior living communities for the third quarter of 2011 increased by 0.6% to $147.46 from $146.55 in the same period in the previous year.
· The percentage of senior living revenues derived from residents’ private resources at our owned and leased senior living communities for the third quarter of 2011 increased to 73.0% from 72.4% for the same period in the previous year.
· For those owned and leased senior living communities that we operated continuously since July 1, 2010 (comparable communities), occupancy for the third quarter of 2011 was 85.6% compared to 86.2% for the same period in the previous year.
· The ADR at comparable communities for the third quarter of 2011 increased by 2.8% to $150.92 from $146.74 in the same period in the previous year.
Year to Date Financial Highlights:
· Total revenues for the nine months ended September 30, 2011 increased 4.9% to $949.0 million from $904.4 million for the same period in the previous year.
· Income from continuing operations for the nine months ended September 30, 2011 was $15.5 million compared to income from continuing operations of $18.7 million for the same period in the previous year.
· Income per share from continuing operations for the nine months ended September 30, 2011 was $0.39 and $0.38 per share, basic and diluted, respectively, compared to $0.52 and $0.51 per share, basic and diluted, respectively, for the same period in the previous year.
· Income from continuing operations for the nine months ended September 30, 2011 includes certain items that, in aggregate, decreased our earnings by $873,000, or $0.02 per share, basic and diluted. These items were a $656,000 gain on sale of available for sale securities and a $1,000 gain on early extinguishment of debt offset by acquisition costs of $1.5 million. Income from continuing operations for the nine months ended September 30, 2010 included certain items that, in aggregate, increased our earnings by $626,000, or $0.02 per share, basic and diluted. These items were a $484,000 gain on early extinguishment of debt and a $142,000 net gain on our UBS put right related to auction rate securities.
· EBITDA for the nine months ended September 30, 2011 was $32.7 million compared to $31.9 million for the same period in the previous year. EBITDA for the nine months ended September 30, 2011 included those items noted above that, in aggregate, decreased our earnings by $873,000, and EBITDA for the nine months ended September 30, 2010 included those items noted above that, in aggregate, increased our earnings by $626,000. EBITDA excluding these items was $33.6 million and $31.3 million in the nine months ended September 30, 2011 and 2010, respectively. A reconciliation of income from continuing operations determined in accordance with GAAP to EBITDA for the nine months ended September 30, 2011 and 2010 appears later in this press release.
Other Highlights:
During the third quarter of 2011, we acquired four senior living communities containing 541 living units located in Indiana for $82.4 million, excluding closing costs.
During the third quarter of 2011, we commenced leasing one senior living community from Senior Housing Properties Trust (NYSE: SNH) with a total of 83 living units located in Florida. We also began to manage three senior living communities for the account of SNH and one senior living community for the account of an unaffiliated third party with a total of 481 living units located in Florida and South Carolina.
Conference Call:
On October 27, 2011 at 10:00 a.m. Eastern Daylight Time, Bruce J. Mackey Jr., President and Chief Executive Officer, and Paul V. Hoagland, Treasurer and Chief Financial Officer, will host a conference call to discuss the third quarter financial results. Following the Company’s remarks, there will be a question and answer period.
2
The conference call telephone number is (877) 777-1968. Participants calling from outside the United States and Canada should dial (612) 332-0932. 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 Thursday, November 3, 2011. To hear the replay, dial (320) 365-3844. The replay pass code is 218241. 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. The recording and retransmission in any way of Five Star’s third quarter 2011 conference call is strictly prohibited without the prior written consent of Five Star.
About Five Star Quality Care, Inc.:
Five Star Quality Care, Inc. is a senior living and healthcare services company. Five Star operates 236 senior living communities with 25,181 living units located in 29 states including: 31 communities (2,954 living units) that we own and operate; 191 communities (20,811 living units) that we lease and operate; and 14 communities (1,416 living units) that we manage. These communities include independent living, assisted living and skilled nursing communities. Five Star also operates five institutional pharmacies and two leased rehabilitation hospitals. Five Star is headquartered in Newton, Massachusetts.
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Supplemental Information, page 1 of 7
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, | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
Revenues: | | | | | | | | | |
Senior living revenue | | $ | 275,605 | | $ | 259,767 | | $ | 803,647 | | $ | 770,729 | |
Rehabilitation hospital revenue | | 26,273 | | 24,756 | | 78,235 | | 73,917 | |
Institutional pharmacy revenue | | 18,914 | | 20,280 | | 57,824 | | 59,770 | |
Management fee revenue | | 359 | | — | | 383 | | — | |
Reimbursed costs incurred on behalf of managed communities | | 8,324 | | — | | 8,887 | | — | |
Total revenues | | 329,475 | | 304,803 | | 948,976 | | 904,416 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Senior living wages and benefits | | 136,135 | | 129,071 | | 398,975 | | 382,095 | |
Other senior living operating expenses | | 68,669 | | 62,487 | | 193,123 | | 182,791 | |
Costs incurred on behalf of managed communities | | 8,324 | | — | | 8,887 | | — | |
Rehabilitation hospital expenses | | 23,300 | | 22,579 | | 70,798 | | 68,196 | |
Institutional pharmacy expenses | | 18,472 | | 19,717 | | 56,003 | | 58,223 | |
Rent expense | | 50,140 | | 47,176 | | 145,480 | | 140,809 | |
General and administrative | | 14,418 | | 13,751 | | 42,242 | | 40,975 | |
Depreciation and amortization | | 5,858 | | 4,047 | | 14,779 | | 11,872 | |
Total operating expenses | | 325,316 | | 298,828 | | 930,287 | | 884,961 | |
| | | | | | | | | |
Operating income | | 4,159 | | 5,975 | | 18,689 | | 19,455 | |
| | | | | | | | | |
Interest, dividend and other income | | 368 | | 321 | | 1,017 | | 1,621 | |
Interest and other expense | | (1,034 | ) | (578 | ) | (2,405 | ) | (2,050 | ) |
Acquisition related costs | | (226 | ) | — | | (1,530 | ) | — | |
Gain on investments in trading securities | | — | | — | | — | | 4,856 | |
Loss on UBS put right related to auction rate securities | | — | | — | | — | | (4,714 | ) |
Equity in income (losses) of Affiliates Insurance Company | | 28 | | 35 | | 111 | | (17 | ) |
Gain on early extinguishment of debt | | — | | 66 | | 1 | | 484 | |
Gain on sale of available for sale securities | | 529 | | — | | 656 | | — | |
| | | | | | | | | |
Income from continuing operations before income taxes | | 3,824 | | 5,819 | | 16,539 | | 19,635 | |
(Provision) benefit for income taxes | | (186 | ) | 123 | | (1,006 | ) | (930 | ) |
Income from continuing operations | | 3,638 | | 5,942 | | 15,533 | | 18,705 | |
Loss from discontinued operations | | (4,166 | ) | (784 | ) | (6,733 | ) | (1,309 | ) |
| | | | | | | | | |
Net income (loss) | | $ | (528 | ) | $ | 5,158 | | $ | 8,800 | | $ | 17,396 | |
| | | | | | | | | |
Weighted average shares outstanding - basic | | 47,557 | | 35,724 | | 40,294 | | 35,698 | |
| | | | | | | | | |
Weighted average shares outstanding - diluted | | 47,557 | | 38,937 | | 43,169 | | 39,302 | |
| | | | | | | | | |
Basic income (loss) per share from: | | | | | | | | | |
Continuing operations | | $ | 0.08 | | $ | 0.17 | | $ | 0.39 | | $ | 0.52 | |
Discontinued operations | | (0.09 | ) | (0.02 | ) | (0.17 | ) | (0.03 | ) |
Net income (loss) per share - basic | | $ | (0.01 | ) | $ | 0.15 | | $ | 0.22 | | $ | 0.49 | |
| | | | | | | | | |
Diluted income (loss) per share from: | | | | | | | | | |
Continuing operations | | $ | 0.08 | | $ | 0.16 | | $ | 0.38 | | $ | 0.51 | |
Discontinued operations | | (0.09 | ) | (0.02 | ) | (0.16 | ) | (0.03 | ) |
Net income (loss) per share - diluted | | $ | (0.01 | ) | $ | 0.14 | | $ | 0.22 | | $ | 0.48 | |
Supplemental Information, page 2 of 7
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands, except share data)
(unaudited)
| | September 30,
2011 | | December 31,
2010 | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 41,946 | | $ | 20,770 | |
Accounts receivable, net of allowance | | 59,972 | | 64,806 | |
Investments in available for sale securities | | 17,283 | | 13,854 | |
Restricted cash | | 5,171 | | 6,594 | |
Prepaid expenses and other current assets | | 21,001 | | 17,084 | |
Assets of discontinued operations | | 8,812 | | 12,857 | |
Total current assets | | 154,185 | | 135,965 | |
| | | | | |
Property and equipment, net | | 353,639 | | 201,223 | |
Equity investment in Affiliates Insurance Company | | 5,245 | | 5,076 | |
Restricted cash | | 4,306 | | 14,535 | |
Restricted investments in available for sale securities | | 12,987 | | 3,259 | |
Goodwill and other long term assets | | 18,717 | | 19,736 | |
Total assets | | $ | 549,079 | | $ | 379,794 | |
| | | | | |
Liabilities and Shareholders’ Equity | | | | | |
Current liabilities: | | | | | |
Bridge loan from SNH | | $ | 48,000 | | $ | — | |
Other current liabilities | | 160,195 | | 137,911 | |
Total current liabilities | | 208,195 | | 137,911 | |
| | | | | |
Mortgage notes payable | | 38,977 | | — | |
Convertible senior notes | | 37,282 | | 37,905 | |
Other long term liabilities | | 36,857 | | 39,211 | |
Shareholders’ equity | | 227,768 | | 164,767 | |
Total liabilities and shareholders’ equity | | $ | 549,079 | | $ | 379,794 | |
Supplemental Information, page 3 of 7
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, | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
| | | | | | | | | |
Number of owned and leased communities (end of period) | | 222 | | 209 | | 222 | | 209 | |
Number of owned and leased units (end of period) | | 23,765 | | 22,176 | | 23,765 | | 22,176 | |
Number of living units % growth | | 7.2 | % | | | 7.2 | % | | |
| | | | | | | | | |
Occupancy | | 86.0 | % | 86.2 | % | 85.6 | % | 86.3 | % |
Average daily rate (ADR) | | $ | 147.46 | | $ | 146.55 | | $ | 150.15 | | $ | 146.85 | |
ADR % growth | | 0.6 | % | | | 2.2 | % | | |
| | | | | | | | | |
Percent breakdown of senior living revenues: | | | | | | | | | |
Medicaid | | 12.3 | % | 13.8 | % | 12.6 | % | 13.3 | % |
Medicare | | 14.7 | % | 13.8 | % | 15.4 | % | 14.1 | % |
Private and other sources | | 73.0 | % | 72.4 | % | 72.0 | % | 72.6 | % |
Total | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| | | | | | | | | |
Senior living revenues | | $ | 275,605 | | $ | 259,767 | | $ | 803,647 | | $ | 770,729 | |
Senior living revenues % growth | | 6.1 | % | | | 4.3 | % | | |
| | | | | | | | | |
Senior living wages and benefits | | $ | 136,135 | | $ | 129,071 | | $ | 398,975 | | $ | 382,095 | |
Senior living wages and benefits as a % of senior living revenues | | 49.4 | % | 49.7 | % | 49.6 | % | 49.6 | % |
Other senior living operating expenses | | $ | 68,669 | | $ | 62,487 | | $ | 193,123 | | $ | 182,791 | |
Other senior living operating expenses as a % of senior living revenues | | 24.9 | % | 24.1 | % | 24.0 | % | 23.7 | % |
Community expenses % growth (2) | | 6.9 | % | | | 4.8 | % | | |
(1) | Excludes data for managed communities 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 operations. |
Supplemental Information, page 4 of 7
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) | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
| | | | | | | | | |
Number of owned and leased communities (end of period) | | 208 | | 208 | | 208 | | 208 | |
Number of owned and leased living units (end of period) | | 22,066 | | 22,066 | | 22,066 | | 22,066 | |
| | | | | | | | | |
Occupancy | | 85.6 | % | 86.2 | % | 85.4 | % | 86.3 | % |
Average daily rate (ADR) | | $ | 150.92 | | $ | 146.74 | | $ | 151.78 | | $ | 146.92 | |
ADR % growth | | 2.8 | % | | | 3.3 | % | | |
| | | | | | | | | |
Percent breakdown of senior living revenues: | | | | | | | | | |
Medicaid | | 12.8 | % | 13.8 | % | 12.8 | % | 13.3 | % |
Medicare | | 15.2 | % | 13.8 | % | 15.6 | % | 14.1 | % |
Private and other sources | | 72.0 | % | 72.4 | % | 71.6 | % | 72.5 | % |
Total | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| | | | | | | | | |
Senior living revenues | | $ | 265,002 | | $ | 259,134 | | $ | 788,870 | | $ | 770,096 | |
Senior living revenues % growth | | 2.3 | % | | | 2.4 | % | | |
| | | | | | | | | |
Senior living wages and benefits | | $ | 132,307 | | $ | 128,807 | | $ | 393,461 | | $ | 381,831 | |
Senior living wages and benefits as a % of senior living revenues | | 49.9 | % | 49.7 | % | 49.9 | % | 49.6 | % |
Other senior living operating expenses | | $ | 65,969 | | $ | 62,317 | | $ | 189,462 | | $ | 182,621 | |
Other senior living operating expenses as a % of senior living revenues | | 24.9 | % | 24.0 | % | 24.0 | % | 23.7 | % |
Community expenses % growth (4) | | 3.7 | % | | | 3.3 | % | | |
(1) | Excludes data for managed communities and discontinued senior living operations. |
(2) | Communities that we have operated continuously since July 1, 2010. |
(3) | Communities that we have operated continuously since January 1, 2010. |
(4) | Community expenses consist of senior living wages and benefits and other senior living operating expenses as shown on our condensed consolidated statement of operations. |
Supplemental Information, page 5 of 7
FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
(dollars in thousands, except average daily rate)
| | Three months ended | | Nine months ended | |
| | September 30, | | September 30, | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
| | | | | | | | | |
Independent and assisted living community revenue | | $ | 220,860 | | $ | 204,103 | | $ | 640,067 | | $ | 607,489 | |
Skilled nursing facility revenue | | 54,745 | | 55,664 | | 163,580 | | 163,240 | |
Total senior living revenue | | $ | 275,605 | | $ | 259,767 | | $ | 803,647 | | $ | 770,729 | |
| | | | | | | | | |
Independent and assisted living community wages and benefits | | $ | 101,556 | | $ | 94,097 | | $ | 295,195 | | $ | 277,849 | |
Skilled nursing facility wages and benefits | | 34,579 | | 34,974 | | 103,780 | | 104,246 | |
Total senior living wages and benefits | | $ | 136,135 | | $ | 129,071 | | $ | 398,975 | | $ | 382,095 | |
| | | | | | | | | |
Independent and assisted living community operating expenses | | $ | 54,853 | | $ | 49,418 | | $ | 153,169 | | $ | 145,004 | |
Skilled nursing facility operating expenses | | 13,816 | | 13,069 | | 39,954 | | 37,787 | |
Total other senior living operating expenses | | $ | 68,669 | | $ | 62,487 | | $ | 193,123 | | $ | 182,791 | |
(1) | Excludes data for managed communities and discontinued senior living operations. |
COMPARABLE SENIOR LIVING COMMUNITY FINANCIAL DATA(1)
| | Three months ended | | Nine months ended | |
| | September 30,(2) | | September 30,(3) | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
| | | | | | | | | |
Independent and assisted living community revenue | | $ | 210,257 | | $ | 203,470 | | $ | 625,290 | | $ | 606,856 | |
Skilled nursing facility revenue | | 54,745 | | 55,664 | | 163,580 | | 163,240 | |
Total senior living revenue | | $ | 265,002 | | $ | 259,134 | | $ | 788,870 | | $ | 770,096 | |
| | | | | | | | | |
Independent and assisted living community wages and benefits | | $ | 97,728 | | $ | 93,833 | | $ | 289,681 | | $ | 277,585 | |
Skilled nursing facility wages and benefits | | 34,579 | | 34,974 | | 103,780 | | 104,246 | |
Total senior living wages and benefits | | $ | 132,307 | | $ | 128,807 | | $ | 393,461 | | $ | 381,831 | |
| | | | | | | | | |
Independent and assisted living community operating expenses | | $ | 52,153 | | $ | 49,248 | | $ | 149,508 | | $ | 144,834 | |
Skilled nursing facility operating expenses | | 13,816 | | 13,069 | | 39,954 | | 37,787 | |
Total other senior living operating expenses | | $ | 65,969 | | $ | 62,317 | | $ | 189,462 | | $ | 182,621 | |
(1) | Excludes data for managed communities and discontinued senior living operations. |
(2) | Communities that we have operated continuously since July 1, 2010. |
(3) | Communities that we have operated continuously since January 1, 2010. |
Supplemental Information, page 6 of 7
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, | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
Number of senior living communities(2) (end of period): | | | | | | | | | |
Assisted and independent living communities, owned | | 31 | | 24 | | 31 | | 24 | |
Assisted and independent living communities, leased | | 153 | | 147 | | 153 | | 147 | |
Assisted and independent living communities, managed | | 14 | | — | | 14 | | — | |
Total number of assisted and independent living communities | | 198 | | 171 | | 198 | | 171 | |
| | | | | | | | | |
Skilled nursing communities, leased | | 38 | | 38 | | 38 | | 38 | |
| | | | | | | | | |
Total number of senior living communities | | 236 | | 209 | | 236 | | 209 | |
| | | | | | | | | |
Number of senior living units (end of period): | | | | | | | | | |
Assisted and independent living communities, owned | | 2,954 | | 2,089 | | 2,954 | | 2,089 | |
Assisted and independent living communities, leased(3) | | 17,388 | | 16,664 | | 17,388 | | 16,664 | |
Assisted and independent living communities, managed | | 1,416 | | — | | 1,416 | | — | |
Total number of assisted and independent living units | | 21,758 | | 18,753 | | 21,758 | | 18,753 | |
| | | | | | | | | |
Skilled nursing communities, leased(4) | | 3,423 | | 3,423 | | 3,423 | | 3,423 | |
| | | | | | | | | |
Total number of senior living units | | 25,181 | | 22,176 | | 25,181 | | 22,176 | |
| | | | | | | | | |
Senior living revenues(5): | | | | | | | | | |
Assisted and independent living communities | | $ | 217,829 | | $ | 201,729 | | $ | 631,796 | | $ | 600,824 | |
Skilled nursing communities | | 54,745 | | 55,664 | | 163,580 | | 163,228 | |
Other(6) | | 3,031 | | 2,374 | | 8,271 | | 6,677 | |
Total senior living revenues | | $ | 275,605 | | $ | 259,767 | | $ | 803,647 | | $ | 770,729 | |
| | | | | | | | | |
Senior living data(5): | | | | | | | | | |
Assisted and independent living communities occupancy | | 86.7 | % | 86.4 | % | 86.2 | % | 86.6 | % |
Assisted and independent living communities ADR | | $ | 136.89 | | $ | 135.76 | | $ | 139.59 | | $ | 136.42 | |
Assisted and independent living communities ADR % growth | | 0.8 | % | | | 2.3 | % | | |
| | | | | | | | | |
Skilled nursing communities occupancy | | 81.7 | % | 85.1 | % | 82.5 | % | 84.7 | % |
Skilled nursing communities ADR | | $ | 212.82 | | $ | 205.87 | | $ | 212.19 | | $ | 204.44 | |
Skilled nursing communities ADR % growth | | 3.4 | % | | | 3.8 | % | | |
| | | | | | | | | |
Rehabilitation hospital data: | | | | | | | | | |
Rehabilitation hospital units | | 321 | | 321 | | 321 | | 321 | |
Rehabilitation hospital occupancy | | 54.5 | % | 54.8 | % | 55.0 | % | 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 for the three and nine months ended September 30, 2011 and 2010. |
(4) | Includes 95 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, 2011 and 2010. |
(5) | Excludes data for managed communities. |
(6) | 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 7 of 7
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 presentation of these non-GAAP financial measures may help investors to gain a better understanding of changes in our operating results, and may also help investors who wish to make comparisons between us and other companies on both a GAAP and a non-GAAP basis. These non-GAAP financial measures are used by management to evaluate our financial performance and for comparing our performance over time to the performance of our competitors. EBITDA and EBITDA excluding certain items as presented may not, however, always be comparable to amounts calculated by other companies. This information should not be considered as an alternative to income from continuing operations, net income from continuing operations, 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:
| | Three months ended | | Nine months ended | |
| | September 30, | | September 30, | |
| | 2011 | | 2010 | | 2011 | | 2010 | |
Income from continuing operations | | $ | 3,638 | | $ | 5,942 | | $ | 15,533 | | $ | 18,705 | |
Add: interest and other expense | | 1,034 | | 578 | | 2,405 | | 2,050 | |
Add: income tax expense (benefit) | | 186 | | (123 | ) | 1,006 | | 930 | |
Add: depreciation and amortization | | 5,858 | | 4,047 | | 14,779 | | 11,872 | |
Less: interest, dividend and other income | | (368 | ) | (321 | ) | (1,017 | ) | (1,621 | ) |
EBITDA | | 10,348 | | 10,123 | | 32,706 | | 31,936 | |
Add: acquisition related costs | | 226 | | — | | 1,530 | | — | |
Add: loss on UBS put right related to auction rate securities | | — | | — | | — | | 4,714 | |
Less: gain on sale of investments in available for sale securities | | (529 | ) | — | | (656 | ) | — | |
Less: gain on investments in trading securities | | — | | — | | — | | (4,856 | ) |
Less: gain on early extinguishment of debt | | — | | (66 | ) | (1 | ) | (484 | ) |
EBITDA excluding certain items | | $ | 10,045 | | $ | 10,057 | | $ | 33,579 | | $ | 31,310 | |
