Capital
Senior
Living
Corporation
For Immediate Release Contact: Ralph A. Beattie
972/770-5600
CAPITAL SENIOR LIVING CORPORATION
REPORTS FOURTH QUARTER AND FISCAL 2003 EARNINGS
DALLAS - (BUSINESS WIRE) - March 2, 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 fourth quarter and fiscal year
2003.
Company highlights for the 2003 fiscal year include:
o Net income of $5.0 million, or $0.25 diluted earnings per share
o Cash earnings (net income plus depreciation) of $12.8 million
o Adjusted EBITDA (income from operations plus depreciation and amortization)
of $13.6 million
o Completed purchase of all remaining interests in four Triad Senior Living
partnerships which own 12 communities
o Communities in lease-up (including the Spring Meadows properties) leased to
85% versus 70% one year ago
o Average occupancy rate on stabilized communities of 91%
o Operating margins (before property taxes, insurance and management fees) of
47% in independent and assisted living communities
o Stabilized same community revenue increase of 3% versus the prior year
o All community revenue increase of 13% versus the prior year
o Retired $33.7 million of debt
The Company reported fourth quarter 2003 earnings of $0.4 million or $0.02 per
diluted share and full year earnings of $5.0 million or $0.25 per diluted share.
The full year earnings are comprised of approximately $0.20 per diluted share in
gains on the sales of assets and approximately $0.05 per diluted share from
operations, including the recognition of deferred income of approximately $0.10
per diluted share related to the liquidation of the HealthCare Properties, LP
("HCP") partnership.
"We are pleased with our financial performance for 2003, which included
continued progress toward our goals of higher occupancy rates, improved margins
and retirement of debt," said James A. Stroud, Chairman of the Company. "The
communities in lease-up have made great strides toward stabilization in 2003,
and the acquisition of the 12 Triad communities has significantly contributed to
our top-line growth."
CAPITAL/Page 2
OPERATING AND FINANCIAL RESULTS
For the fourth quarter of 2003, the Company reported revenues of $18.9 million,
compared to revenues of $14.2 million in the same period of 2002, an increase of
approximately 33%. The primary factor contributing to the increase in revenues
was the acquisition of 12 Triad communities during the third quarter of 2003.
Adjusted EBITDA (defined as income from operations plus depreciation and
amortization) for the fourth quarter of 2003 was $2.8 million, compared to $4.4
million in the fourth quarter of 2002, with the reduction primarily due to the
consolidation of the 12 Triad communities.
Other income in the fourth quarter of 2003 included $3.4 million that resulted
from the recognition of deferred income upon the liquidation of the HCP
partnership. During 2003, HCP sold its remaining community and subsequently has
been dissolved, with its remaining assets transferred to a liquidating trust.
Net income for the fourth quarter was $0.4 million, or $0.02 per diluted share.
Cash earnings for the fourth quarter (defined as net income plus depreciation)
were $3.0 million, or $0.15 per diluted share, compared to the prior year cash
earnings of $2.5 million, or $0.13 per diluted share.
For the year ended December 31, 2003, the Company reported revenues of $66.3
million, compared to $61.5 million in the prior year. Net income in 2003 was
$5.0 million, or $0.25 per diluted share, compared to 2002 net income of $4.7
million, or $0.24 per diluted share.
The Company generated 2003 cash earnings of $12.8 million, or $0.64 per diluted
share, compared to 2002 cash earnings of $10.5 million, or $0.53 per diluted
share.
As of December 31, 2003, the Company had $13.8 million of cash, cash equivalents
and restricted cash, and $124.4 million in shareholders' equity, equivalent to
approximately $6.27 per share of book value.
As of December 31, 2003, the Company adopted FASB Interpretation No. 46
"Consolidation of Variable Interest Entities" and its adoption resulted in the
Company consolidating Triad I's financial position as of that date and will
result in the Company consolidating Triad I's results of operations beginning
January 1, 2004.
"Capital Senior Living celebrated a year of tremendous accomplishment in 2003,"
said Lawrence A. Cohen, Chief Executive Officer. "The year was highlighted by
continued momentum in the lease-up rates of our Triad communities, one of our
key operating metrics. Several initiatives we implemented last year contributed
to the retirement of debt, provided the basis for enhanced organic growth,
increased our liquidity and
CAPITAL/Page 3
simplified our balance sheet. These initiatives, combined with our offering of
common stock in early 2004, better position us to grow in the future through
joint venture investments in, and acquisitions of, senior living communities. We
are pleased with our performance for last year, and believe that we have built
the foundation for improved shareholder value as we continue to execute our
business strategy."
4Q03 CONFERENCE CALL INFORMATION
The Company will host a conference call with senior management to discuss the
Company's fourth quarter 2003 financial results. The call will be held on
Wednesday, March 3, 2004 at 11:00 am Eastern Time.
The call-in number is 913-981-5509. 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 March 3, 2004 at 2:00 pm
Eastern Time, until March 10, 2004 at 8:00 pm Eastern Time. To access the
conference call replay, call 719-457-0820, confirmation code 700492. 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.
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 operates 42 senior living communities in 20 states with an
aggregate capacity of approximately 6,900 residents, including 41 senior living
communities which the Company owns or in which the Company has an ownership
interest, and one community it manages for a third party.
This release contains certain financial information not derived in accordance
with generally accepted accounting principles (GAAP), including adjusted 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.
CAPITAL/Page 4
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 conditions generally, satisfaction of closing
conditions such as those pertaining to licensure, availability of insurance at
commercially reasonable rates, and changes in accounting principles and
interpretations among others, and other risks and factors identified from time
to time in our 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/ Page 5
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
---------------------------
2003 2002
------------ -----------
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 6,594 $ 11,768
Restricted cash and marketable securities..................... 7,187 4,490
Accounts receivable, net...................................... 1,295 1,028
Accounts receivable from affiliates........................... 604 651
Federal and state income taxes receivable..................... 994 1,072
Deferred taxes................................................ 385 399
Property tax and insurance deposits........................... 1,855 1,475
Prepaid expenses and other.................................... 2,437 1,164
------------ -----------
Total current assets.................................. 21,351 22,047
Property and equipment, net..................................... 380,115 153,544
Deferred taxes.................................................. 6,554 7,106
Due from affiliates............................................. -- 513
Notes receivable from affiliates................................ 4,981 86,470
Investments in limited partnerships............................. 1,762 1,238
Assets held for sale............................................ 2,391 4,131
Other assets, net............................................... 4,179 3,202
------------ -----------
Total assets.......................................... $ 421,333 $ 278,251
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................. $ 2,158 $ 2,322
Accrued expenses.............................................. 6,611 4,638
Current portion of notes payable.............................. 23,488 9,715
Customer deposits............................................. 1,929 1,023
------------ -----------
Total current liabilities............................. 34,186 17,698
Deferred income................................................. 112 7
Deferred income from affiliates................................. 102 1,194
Other long-term liabilities..................................... 6,736 --
Notes payable, net of current portion........................... 255,549 140,385
Minority interest in consolidated partnership................... 281 686
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-- 19,847 and 19,737
at December 31, 2003 and December 31, 2002, respectively. 198 197
Additional paid-in capital.................................... 92,336 91,990
Retained earnings............................................. 31,833 26,094
------------ -----------
Total shareholders' equity............................ 124,367 118,281
------------ -----------
Total liabilities and shareholders' equity............ $ 421,333 $ 278,251
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CAPITAL/ Page 6
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------- --------------------------------
2003 2002 2003 2002
---------------- ---------------- ---------------- ----------------
Revenues:
Resident and healthcare revenue........... $ 18,074 $ 13,265 $ 62,564 $ 57,574
Rental and lease income................... -- -- -- 37
Unaffiliated management services revenue.. 41 233 336 1,069
Affiliated management services revenue.... 769 599 3,236 2,062
Affiliated development fees............... 26 68 189 740
---------------- ---------------- ---------------- ----------------
Total revenues........................ 18,910 14,165 66,325 61,482
Expenses:
Operating expenses........................ 12,331 7,049 40,208 32,851
General and administrative expenses....... 3,762 2,764 12,511 11,824
Depreciation and amortization............. 2,564 1,339 7,791 5,846
---------------- ---------------- ---------------- ----------------
Total expenses........................ 18,657 11,152 60,510 50,521
---------------- ---------------- ---------------- ----------------
Income from operations.......................... 253 3,013 5,815 10,961
Other income (expense):
Interest income........................... 416 1,584 4,278 5,968
Interest expense.......................... (3,527) (2,684) (12,481) (10,749)
Gain (loss) on sale of assets............. 148 (53) 6,751 1,876
Other income.............................. 3,474 24 3,616 69
---------------- ---------------- ---------------- ----------------
Income before income taxes and minority interest in
consolidated partnership.................. 764 1,884 7,979 8,125
Provision for income taxes...................... (315) (888) (3,098) (3,015)
Income before minority interest in consolidated
partnership............................... 449 996 4,881 5,110
Minority interest in consolidated partnership... (7) 209 109 (428)
---------------- ---------------- ---------------- ----------------
Net income...................................... $ 442 $ 1,205 $ 4,990 $ 4,682
================ ================ ================ ================
Net income per share:
Basic..................................... $ 0.02 $ 0.06 $ 0.25 $ 0.24
================ ================ ================ ================
Diluted................................... $ 0.02 $ 0.06 $ 0.25 $ 0.24
================ ================ ================ ================
Weighted average shares outstanding - basic 19,847 19,737 19,784 19,726
================ ================ ================ ================
Weighted average shares outstanding - diluted 20,133 19,822 19,975 19,917
================ ================ ================ ================
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CAPITAL/Page 7
CAPITAL SENIOR LIVING CORPORATION
RECONCILATION OF NON GAAP ITEMS
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------- --------------------------------
2003 2002 2003 2002
---------------- ---------------- ---------------- ----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Adjusted EBITDA reconciliation:
Income from operations.................... $ 253 $ 3,013 $ 5,815 $ 10,961
Depreciation and amortization............. 2,564 1,339 7,791 5,846
---------------- ---------------- ---------------- ----------------
Adjusted EBITDA....................... $ 2,817 $ 4,352 $ 13,606 $ 16,807
================ ================ ================ ================
Cash earnings reconciliation:
Net income................................ $ 442 $ 1,205 $ 4,990 $ 4,682
Depreciation and amortization............. 2,564 1,339 7,791 5,846
---------------- ---------------- ---------------- ----------------
Cash earnings......................... $ 3,006 $ 2,544 $ 12,781 $ 10,528
================ ================ ================ ================
Cash earnings per diluted share reconciliation:
Net income per diluted share.............. $ 0.02 $ 0.06 $ 0.25 $ 0.24
Depreciation and amortization per diluted
share................................... 0.13 0.07 0.39 0.29
---------------- ---------------- ---------------- ----------------
Cash earnings per diluted share....... $ 0.15 $ 0.13 $ 0.64 $ 0.53
================ ================ ================ ================
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