EXHIBIT 99.1
[OBJECT OMITTED] Capital
Senior
Living
Corporation
For Immediate Release Contact: Ralph A. Beattie
972/770-5600
CAPITAL SENIOR LIVING CORPORATION
REPORTS FIRST QUARTER 2005 EARNINGS
DALLAS -- (BUSINESS WIRE) -- May 3, 2005 -- Capital Senior Living Corporation
(NYSE:CSU), one of the country's largest operators of senior living communities,
today announced operating results for the first quarter of fiscal 2005.
Company highlights for the first quarter include:
o Revenues of $24.2 million versus $22.6 million for the first quarter of
last year
o Net loss of $0.8 million, or a $0.03 loss per share, versus a $2.0 million
loss, or $0.09 per share, in the first quarter of 2004
o Cash earnings (net income plus depreciation and amortization) of $2.4
million, or $0.09 per diluted share, versus $0.9 million for the first
quarter of 2004
o Adjusted EBITDA (income from operations plus depreciation and amortization)
of $5.8 million, versus $4.1 million in the prior year period
o Average physical occupancy rate on stabilized communities of 90%
o Operating margins (before property taxes, insurance and management fees) of
47% in stabilized independent and assisted living communities
o All community revenue increase of 6% versus the prior year
The Company reported a first quarter 2005 loss of $0.8 million or $0.03 per
share, compared to a loss of $2.0 million or $0.09 per share in the comparable
period of 2004.
"We remain focused on achieving growth in revenues and cash earnings," commented
James A. Stroud, Chairman of the Company. "During the quarter, we experienced
higher occupancies and operating margins. These achievements resulted in a 140%
improvement in our income from operations from the first quarter of 2004."
OPERATING AND FINANCIAL RESULTS
For the first quarter of 2005, the Company reported revenues of $24.2 million,
compared to revenues of $22.6 million in the first quarter of 2004, an increase
of $1.6 million or approximately seven percent. Resident and health care revenue
increased from the first quarter of the prior year by approximately $1.3 million
as a result of a 4.4 percent increase in the average monthly rent and a 2.3
percent increase in occupancy in our consolidated properties. Management
services revenue increased by over $0.3 million, primarily due to the
acquisition of CGI Management in the third quarter of 2004, which resulted in
the addition of 14 communities under management.
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Even with the increase in revenues, operating expenses were lower than the
comparable quarter of the prior year by over $0.2 million. These improved
operating margins, combined with an increase of approximately three percent in
general and administrative expenses, resulted in income from operations more
than doubling versus the first quarter of the prior year.
Consequently, Adjusted EBITDA (defined as income from operations plus
depreciation and amortization) for the first quarter of 2005 was $5.8 million,
compared to $4.1 million in the first quarter of 2004, an increase of $1.7
million or approximately 42%.
Interest expense net of interest income was approximately $0.3 million higher in
the first quarter of 2005 compared to the first quarter of 2004, due to higher
rates on the Company's variable rate debt.
In the first quarter of 2005, the Company recorded a gain of nearly $0.3 million
on treasury rate lock agreements with a previous lender to Triad II, which was
acquired by the Company in July of 2003. These rate lock agreements, along with
interest rate swaps, were originally required by the lender to hedge the risk
that the costs of future issuance of debt may be adversely affected by changes
in interest rates. The debt related to these agreements was refinanced in the
fourth quarter of 2004, no longer qualifying these agreements as an effective
interest rate hedge.
The Company's income statement will reflect a gain on this derivative in future
quarters if there is a net increase in the interest rate on the ten-year
treasury note during the quarter, or a loss if this interest rate declines.
These gains or losses will continue until the settlement date of January 3, 2006
or until the Company decides to convert the settlement amount of this obligation
to a term note. The Company has an option to convert the settlement amount to a
note with a five year term at an interest rate of LIBOR plus 250 basis points.
The Company reported a net loss of $0.8 million in the first quarter of 2005,
equivalent to a loss of $0.03 per share. Excluding the gain on the treasury rate
lock in the quarter, the Company's net loss would have been approximately $0.9
million, equivalent to a loss of approximately $0.04 per share.
The Company generated cash earnings (defined as net income plus depreciation and
amortization) of $2.4 million, or $0.09 per diluted share, in the first quarter
of 2005, compared to $0.9 million, or $0.04 per diluted share, in the first
quarter of 2004.
The Company had total debt of $259.3 million on March 31, 2005 at a blended
average borrowing rate of 6.1 percent. Approximately 17 percent of the Company's
debt is at fixed interest rates, approximately 11 percent is at variable rates
and the remaining 72 percent is at variable rates with interest rate caps in
effect.
As of March 31, 2005, the Company had $20.2 million of cash, cash equivalents
and restricted cash, and $148.8 million in shareholders' equity, equivalent to
nearly $5.78 per share.
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"The strategic initiatives completed in 2004 have positioned us for continued
operating and financial improvements in the current environment," said Lawrence
A. Cohen, Chief Executive Officer. "We entered this year with an improved
capital structure, including reduced debt, and an expanded portfolio of
properties to fuel future growth. We are encouraged by improved industry
fundamentals, including higher overall occupancies and rental rates and lower
capitalization rates. We expect the convergence of these factors to contribute
to continued improvement in the Company's profitability and financial position."
1Q05 CONFERENCE CALL INFORMATION
The company will host a conference call with senior management to discuss the
Company's first quarter 2005 financial results. The call will be held on
Wednesday, May 4, 2005 at 11:00 am Eastern Time.
The call-in number is 719-457-2644. 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 May 4, 2005 at 2:00 pm
Eastern Time, until May 11, 2005 at 8:00 pm Eastern Time. To access the
conference call replay, call 719-457-0820, confirmation code 4010348. 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 54 senior living communities in 20 states with an
aggregate capacity of approximately 8,700 residents, including 39 senior living
communities which the Company owns or in which the Company has an ownership
interest, and 15 communities it manages for third parties. In the communities
operated by the company, 84 percent of residents live independently and 16
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 adjusted EBITDA,
cash earnings, cash earnings per share and other items. The Company believes
this information is useful to investors and other interested parties. Such
information should
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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 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 858-456-4533 for more information.
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CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
----------- -----------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 19,998 $ 19,515
Restricted cash.......................................................... 160 --
Accounts receivable, net................................................. 2,237 2,073
Accounts receivable from affiliates...................................... 368 1,220
Federal and state income taxes receivable................................ 3,205 2,572
Deferred taxes........................................................... 642 642
Assets held for sale..................................................... 1,008 1,008
Property tax and insurance deposits...................................... 3,276 2,731
Prepaid expenses and other............................................... 1,503 2,766
----------- -----------
Total current assets............................................. 32,397 32,527
Property and equipment, net................................................ 378,471 381,051
Deferred taxes............................................................. 6,910 7,011
Investments in limited partnerships........................................ 3,232 3,202
Assets held for sale....................................................... 1,026 1,026
Other assets, net.......................................................... 6,530 6,358
----------- -----------
Total assets..................................................... $ 428,566 $ 431,175
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................................... $ 2,244 $ 2,162
Accounts payable to affiliates........................................... -- 318
Accrued expenses......................................................... 8,266 7,478
Current portion of notes payable......................................... 41,173 42,242
Customer deposits........................................................ 1,957 1,936
----------- -----------
Total current liabilities........................................ 53,640 54,136
Deferred income............................................................ 932 680
Deferred income from affiliates............................................ 135 125
Other long-term liabilities................................................ 6,642 6,909
Notes payable, net of current portion...................................... 218,140 219,526
Minority interest in consolidated partnership.............................. 249 252
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 -- 25,762 and 25,751 in
2005 and 2004, respectively.......................................... 258 258
Additional paid-in capital............................................... 125,002 124,963
Retained earnings........................................................ 23,568 24,326
----------- -----------
Total shareholders' equity....................................... 148,828 149,547
----------- -----------
Total liabilities and shareholders' equity....................... $ 428,566 $ 431,175
=========== ===========
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CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2005 2004
----------- -----------
Revenues:
Resident and health care revenue............................. $ 23,374 $ 22,112
Unaffiliated management services revenue..................... 393 40
Affiliated management services revenue....................... 471 474
----------- -----------
Total revenues.......................................... 24,238 22,626
Expenses:
Operating expenses........................................... 14,274 14,526
General and administrative expenses.......................... 4,175 4,036
Depreciation and amortization................................ 3,134 2,957
----------- -----------
Total expenses.......................................... 21,583 21,519
----------- -----------
Income from operations......................................... 2,655 1,107
Other income (expense):
Interest income.............................................. 23 163
Interest expense............................................. (4,230) (4,084)
Gain on treasury rate lock agreement......................... 267 --
Other income................................................. 110 67
----------- -----------
Loss before income taxes and minority interest in
consolidated partnership..................................... (1,175) (2,747)
Benefit for income taxes....................................... 414 674
----------- -----------
Loss before minority interest in consolidated
partnership.................................................. (761) (2,073)
Minority interest in consolidated partnership.................. 3 27
----------- -----------
Net loss....................................................... $ (758) $ (2,046)
=========== ===========
Per share data:
Basic loss per share......................................... $ (0.03) $ (0.09)
=========== ===========
Diluted loss per share....................................... $ (0.03) $ (0.09)
=========== ===========
Weighted average shares outstanding -- basic.................. 25,754 23,698
=========== ===========
Weighted average shares outstanding -- diluted................ 25,754 23,698
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CAPITAL SENIOR LIVING CORPORATION
RECONCILIATION OF NON-GAAP ITEMS
(in thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2005 2004
------------ -----------
Cash earnings reconciliation:
Net loss................................................ $ (758) $ (2,046)
Depreciation and amortization........................... 3,134 2,957
----------- -----------
Cash earnings....................................... 2,376 911
=========== ===========
Cash earnings per diluted share reconciliation:
Net loss per diluted share.............................. $ (0.03) $ (0.09)
Depreciation and amortization per diluted share......... 0.12 0.13
----------- -----------
Cash earnings per diluted share..................... 0.09 0.04
=========== ===========
Adjusted EBITDA reconciliation:
Income from operations.................................. $ 2,655 $ 1,107
Depreciation and amortization........................... 3,134 2,957
----------- -----------
Adjusted EBITDA..................................... 5,789 4,064
=========== ===========
Reconciliation of net loss excluding gain on
treasury rate lock:
Net loss................................................ $ (758)
Less gain on treasury rate lock, net of tax............. (174)
------------
Net loss excluding gain on treasury lock............ (932)
===========
Reconciliation of net loss excluding gain on
treasury rate lock:
Net loss per diluted share.............................. $ (0.03)
Less gain on treasury rate lock, net of tax
per diluted share....................................... (0.01)
-----------
Net loss excluding gain on treasury lock
per diluted share................................... (0.04)
===========
Reconciliation of shareholders' equity per
outstanding share:
Shareholders' equity.................................... $ 148,828
Common shares outstanding at March 31, 2005............. 25,762
-----------
Shareholders' equity per diluted share.............. 5.78
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Capital Senior Living Corporation
Supplemental Information
Communities Resident Capacity
--------------------------- ---------------------------
Q1 05 Q1 04 Q1 05 Q1 04
------------ ----------- ------------ -----------
Portfolio Data
I. Property Ownership / Management
Consolidated properties 29 31 4,831 4,831
Joint Venture properties (equity method) 10 10 1,867 1,867
Third party property managed 15 1 1,970 156
------------ ----------- ------------ -----------
Total 54 42 8,668 6,854
Independent living 7,313 5,925
Assisted living 1,185 759
Skilled nursing 170 170
------------ -----------
Total 8,668 6,854
II. Percentage of Operating Portfolio
Consolidated properties 53.7% 73.8% 55.7% 70.5%
Joint venture properties (equity method) 18.5% 23.8% 21.5% 27.2%
Third party property managed 27.8% 2.4% 22.7% 2.3%
------------ ----------- ------------ -----------
Total 100.0% 100.0% 100.0% 100.0%
Independent living 84.4% 86.4%
Assisted living 13.7% 11.1%
Skilled nursing 2.0% 2.5%
------------ -----------
Total 100.0% 100.0%
Selected Operating Results
I. Consolidated properties
Number of properties 29 31
Resident capacity 4,831 4,831
Financial occupancy (1) 86.2% 83.9%
Revenue (in millions) 23.3 22.1
Operating expenses (in millions) 14.0 14.1
Operating margin 40% 36%
Average monthly rent 2,122 2,033
II. Waterford / Wellington properties
Number of properties 17 17 (2)
Resident capacity 2,426 2,426
Financial occupancy (1) 87.3% 83.2%
Revenue (in millions) 9.9 9.1
Operating expenses (in millions) 5.9 6.0
Operating margin 40% 34%
Average monthly rent 1,777 1,712
III. Total Portfolio
Number of properties 54 42
Resident capacity 8,668 6,854
Financial occupancy (1) 84.0% 82.0%
Revenue (in millions) 40.4 31.8
Operating expenses (in millions) 23.1 19.6
Operating margin 43% 38%
Average monthly rent 2,138 2,139
IV. Consolidated Debt Information (in thousands, except for
interest rates) Excludes insurance premium financing
Fixed rate debt 42,537 68,851
Variable rate debt, with a floor - 51,173
Variable rate debt, with a cap 184,336 35,384
Variable rate debt, no cap or floor 27,548 105,474
------------ -----------
Total debt 254,421 260,882
------------ -----------
Fixed rate debt - weighted average rate 8.0% 7.8%
Variable rate debt - weighted average rate 5.7% 4.3%
Total debt - weighted average rate 6.1% 5.3%
(1) Financial occupancy represents actual days occupied divided by total number
of available days during the quarter.
(2) Excludes Canton and Towne Centre expansions which were each consolidated
with their main campus in December 2004.
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