Exhibit 99.1
Capital
Senior
Living
Corporation
For Immediate Release Contact: Ralph A. Beattie
972/770-5600
CAPITAL SENIOR LIVING CORPORATION
REPORTS SECOND QUARTER 2003 EARNINGS OF $0.15 PER SHARE,
INCLUDING $0.05 PER SHARE FROM OPERATIONS
DALLAS - (BUSINESS WIRE) - July 29, 2003 - Capital Senior Living Corporation
(NYSE:CSU), one of the country's largest operators of senior living communities,
announced today its operating results for the second quarter of fiscal 2003.
Company highlights for the second quarter include:
o Net income of $3.1 million, or $0.15 diluted earnings per share
o Cash earnings (net income plus depreciation) of $4.4 million
o EBITDA (income from operations plus depreciation) of $3.5 million
o Recently opened communities (including the Spring Meadows properties)
leased to 80% versus 66% one year ago
o Average occupancy rate on stabilized communities of 91%
o Operating margins (before property taxes, insurance and management fees) of
48% in independent and assisted living communities
o Same community revenue increase of 5.0%, versus the second quarter of 2002
The Company reported second quarter 2003 earnings of $3.1 million or $0.15 per
diluted share compared to second quarter 2002 earnings of $0.8 million or $0.04
per diluted share. The results for the second quarter of 2003 include earnings
from operations of $0.05 per share, with the remainder attributable to gains on
the sales of two assets.
"We were pleased to increase recurring earnings by approximately 16% versus the
second quarter of the prior year," said James A. Stroud, Chairman of the
Company. "Our focus on operating margins and expense controls has resulted in
solid earnings growth for the first half of the year."
OPERATING AND FINANCIAL RESULTS
During the second quarter of this year, the Company contributed the Cottonwood
Village community to its joint venture with an affiliate of Blackstone Real
Estate Advisors ("Blackstone"), part of the Blackstone Group.
As a result of the contribution, the Company retired $7.4 million of long-term
debt, received $3.1 million in cash from the venture, and retained a 10%
interest in the
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community. Pursuant to the terms of the joint venture, the Company will earn
fees
under a long-term management contract, and may earn additional incentive
payments under the joint venture.
The Company realized a pre-tax gain on this transaction of approximately $3.4
million, equivalent to approximately $0.10 per share after tax. The Company also
recognized a gain of less than $0.01 per share on the sale of a parcel of land
in Omaha, Nebraska.
Excluding the gains on the sales of assets, the Company earned $0.9 million of
net income in the quarter on revenues of $14.3 million. This compares to net
income of $0.8 million in the second quarter of 2002 on revenues of $16.2
million.
Revenues in the second quarter of 2002 included four communities which were
contributed to the Blackstone venture in June of 2002. The communities produced
$2.3 million of revenues in the second quarter of last year. On a comparable
basis, resident revenues from communities owned in both periods grew by $0.3
million.
EBITDA (defined as net income from operations plus depreciation) was $3.5
million in the second quarter of 2003, compared to $4.4 million in the prior
year period.
Cash earnings (defined as net income plus depreciation) were $4.4 million in the
second quarter of 2003, compared to cash earnings of $2.3 million in the second
quarter of the prior year.
For the first half of 2003, the Company produced revenues of $28.8 million and
net income of $4.3 million, or $0.21 per diluted share. This compares to
revenues of $32.8 million and net income of $2.6 million, or $0.13 per diluted
share for the same period of 2002.
Excluding gains on the sales of assets in both periods, earnings per diluted
share increased from $0.10 in the first half of 2002 to $0.11 in the first half
of 2003.
The Company produced cash earnings of $7.0 million in the first half of 2003,
compared to cash earnings of $5.8 million in the comparable period of the prior
year.
ACQUISITION OF TRIAD INTERESTS
The Company announced on March 31, 2003 that it had executed Partnership
Interest Purchase Agreements to purchase the remaining interests in Triad Senior
Living II, L.P., Triad Senior Living III, L.P., Triad Senior Living IV, L.P.,
and Triad Senior Living V, L.P., (the "Triad Entities"). Effective July 1, 2003,
the Company purchased the partnership interests of the general partner and other
third party limited partnership interests of the Triad Entities. The Company
purchased these interests with cash of $1.3 million and promissory notes in the
aggregate amount of $0.4 million. These notes are payable no later than January
2, 2004
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The Company previously had an approximate 1% limited partnership interest in
each of the Triad Entities. The Triad Entities are comprised of 12 communities
with a combined resident capacity of approximately 1,670 residents. The resident
capacity mix is 95% independent living and 5% assisted living, with all revenues
derived from private pay sources.
If the transaction had been completed as of June 30, 2003, the Company would
have increased its property and equipment by approximately $182.9 million,
reduced its notes receivable from affiliates by approximately $73.7 million, and
increased its liabilities by approximately $118.9 million.
These 12 communities produced $9.7 million of revenues in the first half of 2003
and, if owned during that period, would have increased the Company's resident
revenues by 37%. These 12 communities improved their lease-up levels to 71% as
of June 30, 2003 from 51% the previous year.
"The acquisition of these partnership interests will benefit our shareholders in
a number of ways," said Lawrence A. Cohen, Chief Executive Officer. "Our balance
sheet will be greatly simplified and our business model will be far more
transparent once we begin consolidating the operations of these 12 communities.
We will also receive an immediate boost to revenues. On the other hand, the
elimination of interest income on the Triad advances and greater depreciation on
the increased asset base will initially result in net losses, although cash
earnings are expected to be positive. Due to our substantial depreciation
expenses, it is important for our shareholders to understand that cash flow has
been, and will continue to be, the yardstick by which we measure operating
performance, while we do anticipate steady progress toward regaining positive
earnings per share."
2Q03 CONFERENCE CALL INFORMATION
The Company will host a conference call with senior management to discuss the
Company's second quarter 2003 financial results. The call will be held on
Wednesday, July 30, 2003 at 11:00 am Eastern Time.
The call-in number is 913-981-5542. No confirmation number is required. A link
to a simultaneous webcast of the teleconference will be available at
www.capitalsenior.com through Windows Media Player or RealPlayer.
For the convenience of the Company's shareholders and the public, the conference
call will be recorded and available for replay starting July 30, 2003 at 2:00 pm
Eastern Time, until August 6, 2003 at 8:00 pm Eastern Time. To access the
conference call replay, call 719-457-0820 (reference code 427361). The
conference call will also be made available for playback via the Company's
corporate website, www.capitalsenior.com, and will be available until the next
earnings release date.
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ABOUT THE COMPANY
Capital Senior Living Corporation is one of the nation's largest operators of
residential communities for senior adults. The Company's operating philosophy
emphasizes a continuum of care, which integrates independent living, assisted
living and home care services, to provide residents the opportunity to age in
place.
The Company currently owns and/or operates 43 communities in 20 states with a
total capacity of approximately 6,900 residents. In the communities operated by
the Company, 86 percent of residents live independently and 14 percent of
residents require assistance with activities of daily living.
This release contains certain financial information not derived in accordance
with generally accepted accounting principles (GAAP), including EBITDA, cash
earnings and cash earnings per share. The Company believes this information is
useful to investors and other interested parties. Such information should not be
considered as a substitute for any measures derived in accordance with GAAP, and
may not be comparable to other similarly titled measures of other companies.
Reconciliation of this information to the most comparable GAAP measures is
included as an attachment to this release.
The forward-looking statements in this release are subject to certain risks and
uncertainties that could cause results to differ materially, including, but not
without limitation to, the Company's ability to find suitable acquisition
properties at favorable terms, financing, licensing, business conditions, risks
of downturns in economic condition generally, and satisfaction of closing
conditions such as those pertaining to licensure. These and other risks are
detailed in the Company's reports filed with the Securities and Exchange
Commission.
Contact Ralph A. Beattie, Chief Financial Officer, at 972-770-5600 or Matt
Hayden, Hayden Communications, Inc. at 760-487-1137 for more information.
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CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2003 2002
------------ ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 6,268 $ 11,768
Restricted cash............................................... 4,490 4,490
Accounts receivable, net...................................... 1,156 1,461
Accounts receivable from affiliates........................... 424 218
Federal and state income taxes receivable..................... -- 1,171
Deferred taxes................................................ 462 399
Assets held for sale.......................................... 1,739 --
Prepaid expenses and other.................................... 4,728 1,164
--------- ---------
Total current assets.................................. 19,267 20,671
Property and equipment, net..................................... 144,150 153,544
Deferred taxes.................................................. 6,842 7,106
Due from affiliates............................................. 456 513
Notes receivable from affiliates................................ 92,886 86,470
Investments in limited partnerships............................. 1,712 1,238
Assets held for sale............................................ 2,392 4,131
Other assets, net............................................... 4,568 4,578
--------- ---------
Total assets.......................................... $ 272,273 $ 278,251
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................. $ 1,533 $ 2,322
Accrued expenses.............................................. 4,132 4,638
Current portion of notes payable.............................. 10,408 9,715
Federal and state income taxes payable........................ 680 --
Customer deposits............................................. 939 1,023
---------- ----------
Total current liabilities............................. 17,692 17,698
Deferred income................................................. -- 7
Deferred income from affiliates................................. 916 1,194
Notes payable, net of current portion........................... 130,649 140,385
Minority interest in consolidated partnership................... 443 686
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 15,000; no shares issued or outstanding -- --
Common stock, $.01 par value:
Authorized shares -- 65,000
Issued and outstanding shares-- 19,747 and 19,737
at June 30, 2003 and December 31, 2002, respectively..... 197 197
Additional paid-in capital.................................... 92,014 91,990
Retained earnings............................................. 30,362 26,094
---------- ----------
Total shareholders' equity............................ 122,573 118,281
---------- ----------
Total liabilities and shareholders' equity............ $ 272,273 $ 278,251
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CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
--------------------------------- --------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- --------------------------------
2003 2002 2003 2002
--------------- --------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------- ---------------- ---------------- ----------------
Revenues:
Resident and healthcare revenue........... $ 13,309 $ 15,329 $ 26,517 $ 30,908
Rental and lease income................... -- -- -- 37
Unaffiliated management services revenue.. -- 212 295 578
Affiliated management services revenue.... 892 444 1,802 854
Affiliated development fees............... 69 216 137 399
----------- ----------- ------------ ------------
Total revenues........................ 14,270 16,201 28,751 32,776
Expenses:
Operating expenses........................ 8,219 8,882 15,843 17,654
General and administrative expenses....... 2,551 2,958 5,267 6,115
Depreciation and amortization............. 1,339 1,534 2,686 3,180
----------- ----------- ------------ ------------
Total expenses........................ 12,109 13,374 23,796 26,949
----------- ----------- ------------ ------------
Income from operations.......................... 2,161 2,827 4,955 5,827
Other income (expense):
Interest income........................... 1,784 1,434 3,421 2,863
Interest expense.......................... (2,577) (2,748) (5,170) (5,576)
Equity in the gains of affiliates......... 20 20 73 31
Gain (loss) on sale of assets............. 3,491 (354) 3,491 1,929
----------- ----------- ------------ ------------
Income before income taxes and minority interest in
consolidated partnership.................. 4,879 1,179 6,770 5,074
Provision for income taxes...................... (1,867) (460) (2,612) (1,584)
----------- ----------- ------------ ------------
Income before minority interest in consolidated
partnership............................... 3,012 719 4,158 3,490
Minority interest in consolidated partnership... 55 59 110 (901)
----------- ----------- ------------ ------------
Net income...................................... $ 3,067 $ 778 $ 4,268 $ 2,589
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Net income per share:
Basic..................................... $ 0.16 $ 0.04 $ 0.22 $ 0.13
============ ============ ============ ============
Diluted................................... $ 0.15 $ 0.04 $ 0.21 $ 0.13
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Weighted average shares outstanding - basic 19,747 19,721 19,742 19,719
=========== =========== ============ ============
Weighted average shares outstanding - diluted 19,897 19,978 19,880 20,000
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CAPITAL SENIOR LIVING CORPORATION
RECONCILATION OF NON-GAAP ITEMS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- --------------------------------
2003 2002 2003 2002
--------------- --------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
EBITDA reconciliation:
Income from operation..................... $ 2,161 $ 2,827 $ 4,955 $ 5,827
Depreciation and amortization............. 1,339 1,534 2,686 3,180
----------- ----------- ------------ ------------
EBITDA................................ $ 3,500 $ 4,361 $ 7,641 $ 9,007
=========== =========== ============= =============
Cash earnings reconciliation:
Net income................................ $ 3,067 $ 778 $ 4,268 $ 2,589
Depreciation and amortization............. 1,339 1,534 2,686 3,180
----------- ----------- ------------ ------------
Cash earnings......................... $ 4,406 $ 2,312 $ 6,954 $ 5,769
=========== =========== ============= =============
Cash earnings per diluted share reconciliation:
Net income per diluted share.............. $ 0.15 $ 0.04 $ 0.22 $ 0.13
Depreciation and amortization per diluted
share..................................... 0.07 0.08 0.13 0.16
------------ ------------ ------------ ------------
Cash earnings per diluted share....... $ 0.22 $ 0.12 $ 0.35 $ 0.29
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