Assisted Living Concepts 8-K Assisted Living Concepts, Inc. Announces Third Quarter 2003 Financial Results

For Immediate Release DRAFT

November 13, 2003

Assisted Living Concepts, Inc.
Announces Third Quarter 2003 Financial Results

DALLAS, TEXAS, November 13, 2003— Assisted Living Concepts, Inc. (OTC.BB: ASLC), a national provider of assisted living services, today announced financial results for the three and nine months ended September 30, 2003.

Operating income, after interest and other expense, was $1.2 million for the quarter ended September 30, 2003, compared to a loss of $0.5 million for the quarter ended September 30, 2002. The Company’s operating income for the quarter ended September 30, 2003 increased to $4.4 million from $3.0 million for the quarter ended September 30, 2002. Revenue increased 8.6% to $42.4 million for the three months ended September 30, 2003 versus $39.1 million for the comparable period of 2002.

Operating income, after interest and other expense, was $3.2 million for the nine months ended September 30, 2003, compared to a loss of $3.5 million for the nine months ended September 30, 2002. The Company’s operating income for the nine months ended September 30, 2003 increased to $13.4 million from $6.9 million for the comparable period of 2002. Revenue increased 10.2% to $125.5 million for the nine months ended September 30, 2003 versus $113.9 million for the comparable period of 2002.

Assisted Living Concepts, Inc. owns, leases and operates 177 assisted living residences with 6,838 units for older adults who need help with the activities of daily living, such as eating, bathing, dressing and medication management. In addition to housing, the Company provides personal care, support services, and nursing services according to the individual needs of its residents, as permitted by state law. This combination of housing and services provides a home-like setting and cost efficient alternative that encourages independence for individuals who do not require the broader array of medical and health services provided by skilled nursing facilities. The Company currently has operations in Oregon, Washington, Idaho, Nebraska, Iowa, Arizona, Texas, New Jersey, Ohio, Pennsylvania, Indiana, Louisiana, Michigan and South Carolina.

Contact Information:
Steven L. Vick, President and Chief Executive Officer
(214) 424-4001
svick@alcco.com

Matthew Patrick, Senior Vice President, Chief Financial Officer and Treasurer
(214) 424-4002
mpatrick@alcco.com

Web address: www.assistedlivingconcepts.com

This press release and statements made by or on behalf of Assisted Living Concepts, Inc. relating hereto may be deemed to constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements, including without limitation, statements containing the words “will,” “believes,” “anticipates,” “estimates,” “intends,” “expects,” “should,” “could,” and words of similar import, are forward looking statements. These forward-looking statements may be affected by risks and uncertainties, including without limitation (i) our ability to control costs and improve operating margins, (ii) our ability to increase

occupancy, (iii) our ability to increase our revenue at a pace which exceeds expense inflation, (iv) our ability to operate our residences in compliance with evolving regulatory requirements, (v) the degree to which our future operating results and financial condition may be affected by a reduction in Medicaid reimbursement rates, and (vi) our ability to extend or renegotiate our current debt agreements. In light of such risks and uncertainties, our actual results could differ materially from such forward-looking statements. Except as may be required by law, we do not undertake any obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

ASSISTED LIVING CONCEPTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2002			2003			2002			2003
Revenue			$	39,069		$	42,443		$	113,896		$	125,519
Operating expenses:
	Residence operating expenses			27,157			28,397			78,784			83,840
	Corporate general and administrative			4,178			4,546			14,074			13,648
	Building rentals			3,061			3,319			9,166			9,543
	Depreciation and amortization			1,692			1,736			4,942			5,113
		Total operating expenses		36,088			37,998			106,966			112,144
Operating income				2,981			4,445			6,930			13,375
Other income (expense):
	Interest expense			(3,545	)		(3,375	)		(10,602	)		(10,233	)
	Interest income			55			97			160			163
	Other income (expense), net			14			—			36			(71	)
		Total other expense, net		(3,476	)		(3,278	)		(10,406	)		(10,141	)
Income (loss) before debt restructure, reorganization costs, and discontinued operations				(495	)		1,167			(3,476	)		3,234
Debt restructure and reorganization costs				(14	)		—			(680	)		—
Income (loss) from continuing operations before income taxes				(509	)		1,167			(4,156	)		3,234
	Income tax expense			—			191			—			958
Income (loss) from continuing operations				(509	)		976			(4,156	)		2,276
Discontinued operations:
	Income (loss) from operations (including gain and loss on sale of assets)			(54	)		—			(486	)		830
	Income tax expense			—			—			—			336
Income (loss) from discontinued operations				(54	)		—			(486	)		494
Net income (loss)			$	(563	)	$	976		$	(4,642	)	$	2,770
Basic earnings per share:
	Income (loss) from continuing operations		$	(0.08	)	$	0.15		$	(0.64	)	$	0.35
	Income (loss) from discontinued operations			(0.01	)		—			(0.07	)		0.08
	Net income (loss)		$	(0.09	)	$	0.15		$	(0.71	)	$	0.43
Diluted earnings per share:
	Income (loss) from continuing operations		$	(0.08	)	$	0.14		$	(0.64	)	$	0.34
	Income (loss) from discontinued operations			(0.01	)		—			(0.07	)		0.08
	Net income (loss)		$	(0.09	)	$	0.14		$	(0.71	)	$	0.42