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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capital Senior Living Corp | NYSE:CSU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 33.54 | 0 | 01:00:00 |
Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one of the nation’s largest operators of senior living communities, today announced operating and financial results for the second quarter of 2015. Company highlights for the second quarter include:
Operating and Financial Summary (all amounts in this operating and financial summary exclude four communities that are undergoing repositioning, lease-up or significant renovation and conversion, unless otherwise noted; also, see Non-GAAP Financial Measures below)
“We are successfully executing on our strategic plan which resulted in significant growth during the second quarter in all of our key metrics, including revenue, occupancy, average monthly rent, NOI, Adjusted EBITDAR and Adjusted CFFO as compared to the prior year,” said Lawrence A. Cohen, Chief Executive Officer of the Company. “Our same-community NOI grew 4.7%, our Adjusted CFFO increased 22.3% and we reported a record-high second quarter Adjusted EBITDAR margin of 36.8%. We were particularly pleased with the second quarter growth in our same-community occupancy, which increased 60 basis points from the first quarter of 2015 and 40 basis points from the second quarter of 2014. We continue to see limited new supply and construction in our local markets. Also, our conversions of independent living units to assisted living and memory care units continue to show timely progress.
“Complementing this growth is a robust pipeline that allows us to continue our disciplined and strategic acquisition program that increases our ownership of high-quality senior living communities in geographically concentrated regions and generates meaningful increases in CFFO, earnings and real estate value. We have closed on six such communities so far this year, and we continue to pursue additional opportunities.
“We believe that we are well positioned to make meaningful gains in shareholder value as a substantially all private-pay business in an industry that benefits from need-driven demand, limited new supply in our local markets, a strong housing market and an improving economy.”
Recent Investment Activity
The communities were financed with an aggregate of approximately $20.3 million of non-recourse 10-year mortgage debt at an average fixed interest rate of 4.68%.
The community was financed with approximately $9.9 million of non-recourse 10-year mortgage debt at an average fixed rate of 4.25%.
Financial Results - Second Quarter
For the second quarter of 2015, the Company reported revenue of $101.6 million, compared to revenue of $93.4 million in the second quarter of 2014, an increase of 8.7%. Resident and healthcare revenue increased from the second quarter of the prior year by approximately $10.0 million, or 10.9%, mostly due to the acquisition of 12 communities during or after the second quarter of 2014. As expected, community reimbursement revenue and affiliated management revenue decreased approximately $1.8 million in the second quarter of 2015 as compared to the second quarter of 2014. The acquisition of three Ohio communities in which the Company previously held a 10% interest as a joint venture on June 30, 2014, resulted in the elimination of these two revenue items as well as community reimbursement expense.
Operating expenses for the second quarter of 2015 were $60.7 million, an increase of $5.1 million from the second quarter of 2014, primarily due to the acquisition of 12 communities during or after the second quarter of 2014.
General and administrative expenses for the second quarter of 2015 were $5.7 million, which includes $0.8 million of transaction and other one-time costs. Excluding transaction and other one-time costs, general and administrative expenses increased $0.9 million in the second quarter of 2015 as compared to the second quarter of 2014. As a percentage of revenues under management, general and administrative expenses, excluding transaction and other one-time costs, were 4.8% in the second quarter of 2015 as compared to 4.2% in the second quarter of 2014.
The Company’s Non-GAAP financial measures exclude four communities that are undergoing repositioning, lease-up of higher-licensed units or significant renovation and conversion (see “Non-GAAP Financial Measures” below). Also, as previously noted, beginning in 2015, the Company no longer includes the change in prepaid resident rent as a component of Adjusted CFFO as it is a non-economic timing item.
Adjusted EBITDAR for the second quarter of 2015 was approximately $35.7 million, an increase of $3.5 million, or 11.0%, from the second quarter of 2014. This does not include EBITDAR of $0.9 million related to four communities undergoing repositioning, lease-up or significant renovation and conversion. The Adjusted EBITDAR margin for the second quarter of 2015 was 36.8%, which is a record-high second quarter margin for the Company and an increase of 120 basis points from the second quarter 2014 margin of 35.6%.
The Company recorded a net loss of $5.2 million in the second quarter. Excluding non-recurring or non-economic items reconciled on the final page of this release, the Company’s adjusted net income was $0.2 million, or $0.01 per share, in the second quarter of 2015. Adjusted CFFO was $11.7 million, or $0.41 per share, in the second quarter of 2015, a 22.3% increase from the second quarter of the prior year. On a comparable basis, Adjusted CFFO was $9.6 million, or $0.34 per share, in the second quarter of 2014.
Operating Activities
Same-community results exclude the four communities previously noted that are undergoing repositioning, lease-up or significant renovation and conversion, and transaction and other one-time costs.
Same-community revenue in the second quarter of 2015 increased 2.1% versus the second quarter of 2014. Same-community expenses decreased 0.2% from the second quarter of the prior year. Labor costs, including benefits, increased 0.6%, while food costs decreased 1.5% and utilities decreased 3.3% in the second quarter of 2015 as compared to the second quarter of the prior year. Same-community net operating income increased 4.7% in the second quarter of 2015 as compared to the second quarter of 2014.
Capital expenditures for the second quarter of 2014 were $8.0 million, representing approximately $6.6 million of investment spending and approximately $1.4 million of recurring capital expenditures. If annualized, spending for recurring capital expenditures was approximately $495 per unit.
Balance Sheet
The Company ended the quarter with $51.7 million of cash and cash equivalents, including restricted cash, a decrease of $11.7 million since March 31, 2015. During the second quarter of 2015, the Company invested $6.6 million of cash as equity to complete the acquisitions of three communities and spent $8.0 million on capital improvements.
As of June 30, 2015, the Company financed its owned communities with mortgages totaling $679.8 million at interest rates averaging 4.6%. All of the Company’s debt is at fixed interest rates, except for two bridge loans totaling approximately $20.3 million at June 30, 2015, at variable rates averaging 4.3%. The Company expects to refinance one of the bridge loans that matures during the fourth quarter of 2015 with 10-year fixed-rate debt during the third quarter of 2015. Otherwise, the Company has no mortgage maturities before the second quarter of 2017.
The Company’s cash on hand and cash flow from operations are expected to be sufficient for working capital, prudent reserves and the equity needed to fund the Company’s acquisition program.
Q2 2015 Conference Call Information
The Company will host a conference call with senior management to discuss the Company’s second quarter 2015 financial results. The call will be held on Tuesday, August 4, 2015, at 5:00 p.m. Eastern Time. The call-in number is 913-312-0653, confirmation code 2595372. 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 August 4, 2015 at 8:00 p.m. Eastern Time, until August 13, 2015 at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 2595372. The conference call will also be made available for playback via the Company’s corporate website, www.capitalsenior.com, beginning August 5, 2015.
Non-GAAP Financial Measures
Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. The Company believes that these non-GAAP measures are useful in identifying trends in day-to-day performance because they exclude items that are of little or no significance to operations and provide indicators to management of progress in achieving optimal operating performance. In addition, these measures are used by many research analysts and investors to evaluate the performance and the value of companies in the senior living industry. The Company strongly urges you to review the reconciliation of net income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the reconciliation of net loss to Adjusted Net Income and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.
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 strategy is to provide value to residents by providing quality senior living services at reasonable prices. The Company’s communities emphasize 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 operates 119 senior living communities in geographically concentrated regions with an aggregate capacity of approximately 15,200 residents.
Safe Harbor
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, refinancing, community sales, 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.
For information about Capital Senior Living, visit www.capitalsenior.com.
CAPITAL SENIOR LIVING CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) June 30, December 31, 2015 2014 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 39,403 $ 39,209 Restricted cash 12,251 12,241 Accounts receivable, net 7,453 5,903 Accounts receivable from affiliates 3 5 Federal and state income taxes receivable 310 — Deferred taxes — 460 Assets held for sale — 35,761 Property tax and insurance deposits 10,698 12,198 Prepaid expenses and other 5,418 6,797 Total current assets 75,536 112,574 Property and equipment, net 811,052 747,613 Other assets, net 35,386 37,514 Total assets $ 921,974 $ 897,701 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,055 $ 2,540 Accounts payable to affiliates — 7 Accrued expenses 29,934 32,154 Notes payable of assets held for sale — 15,076 Current portion of notes payable 23,022 33,664 Current portion of deferred income and resident revenue 13,844 14,603 Current portion of capital lease and financing obligations 1,074 1,054 Federal and state income taxes payable — 219 Customer deposits 1,451 1,499 Total current liabilities 71,380 100,816 Deferred income 14,996 15,949 Capital lease and financing obligations, net of current portion 39,563 40,016 Deferred taxes — 460 Other long-term liabilities 1,359 1,426 Notes payable, net of current portion 660,172 597,860 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 – 29,502 and 29,097 in 2015 and 2014, respectively
299 294 Additional paid-in capital 155,599 151,069 Retained deficit (20,460 ) (9,255 ) Treasury stock, at cost – 350 shares (934 ) (934 ) Total shareholders' equity 134,504 141,174 Total liabilities and shareholders' equity $ 921,974 $ 897,701 See accompanying notes to unaudited consolidated financial statements. CAPITAL SENIOR LIVING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited, in thousands, except per share data)Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015 2014 Revenues: Resident and healthcare revenue $ 101,588 $ 91,600 $ 200,228 $ 181,774 Affiliated management services revenue — 207 — 415 Community reimbursement revenue — 1,618 — 3,093 Total revenues 101,588 93,425 200,228 185,282 Expenses: Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) 60,707 55,585 120,838 111,276 General and administrative expenses 5,718 4,651 10,731 9,622 Facility lease expense 15,298 14,889 30,554 29,683 Stock-based compensation expense 2,717 2,717 4,444 4,077 Depreciation and amortization 13,468 10,816 26,263 21,767 Community reimbursement expense — 1,618 — 3,093 Total expenses 97,908 90,276 192,830 179,518 Income from operations 3,680 3,149 7,398 5,764 Other income (expense): Interest income 11 16 24 28 Interest expense (8,673 ) (7,393 ) (17,028 ) (14,530 ) Write-off of deferred loan costs and prepayment premiums — (6,979 ) (871 ) (6,979 ) Joint venture equity investment valuation gain — 1,519 — 1,519 Loss on disposition of assets, net (65 ) (14 ) (171 ) (10 ) Equity in earnings of unconsolidated joint ventures, net — 64 — 105 Other income — 9 1 17 Loss before provision for income taxes (5,047 ) (9,629 ) (10,647 ) (14,086 ) Provision for income taxes (119 ) (190 ) (558 ) (380 ) Net loss $ (5,166 ) $ (9,819 ) $ (11,205 ) $ (14,466 ) Per share data: Basic net loss per share $ (0.18 ) $ (0.34 ) $ (0.38 ) $ (0.50 ) Diluted net loss per share $ (0.18 ) $ (0.34 ) $ (0.38 ) $ (0.50 ) Weighted average shares outstanding — basic 28,705 28,298 28,636 28,222 Weighted average shares outstanding — diluted 28,705 28,298 28,636 28,222 Comprehensive loss $ (5,166 ) $ (9,819 ) $ (11,205 ) $ (14,466 ) CAPITAL SENIOR LIVING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Six Months EndedJune 30,
2015 2014 Operating Activities Net loss $ (11,205 ) $ (14,466 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 26,263 21,767 Amortization of deferred financing charges 582 646 Amortization of deferred lease costs and lease intangibles 652 615 Deferred income (131 ) (109 ) Write-off of deferred loan costs and prepayment premiums 870 6,979 Joint venture equity investment valuation gain — (1,519 ) Loss on disposition of assets, net 171 10 Equity in earnings of unconsolidated joint ventures — (105 ) Provision for bad debts 544 372 Stock-based compensation expense 4,444 4,077 Changes in operating assets and liabilities: Accounts receivable (2,090 ) (1,554 ) Accounts receivable from affiliates 2 4 Property tax and insurance deposits 1,500 1,931 Prepaid expenses and other 1,379 2,143 Other assets 208 (46 ) Accounts payable (492 ) (2,790 ) Accrued expenses (2,220 ) (2,726 ) Federal and state income taxes receivable/payable (529 ) (278 ) Customer deposits (48 ) 136 Deferred resident revenue (1,581 ) 153 Net cash provided by operating activities 18,319 15,240 Investing Activities Capital expenditures (13,540 ) (7,887 ) Cash paid for acquisitions (74,710 ) (98,180 ) Proceeds from disposition of assets 35,807 4 Proceeds from SHPIII/CSL Transaction — 2,532 Distributions from unconsolidated joint ventures — 102 Net cash used in investing activities (52,443 ) (103,429 ) Financing Activities Proceeds from notes payable 102,332 231,122 Repayments of notes payable (66,315 ) (125,917 ) Increase in restricted cash (10 ) (12 ) Cash payments for capital lease and financing obligations (433 ) (391 ) Cash proceeds from the issuance of common stock 42 169 Excess tax benefits on stock option exercised 49 (82 ) Deferred financing charges paid (1,347 ) (2,377 ) Net cash provided by financing activities 34,318 102,512 Increase in cash and cash equivalents 194 14,323 Cash and cash equivalents at beginning of period 39,209 13,611 Cash and cash equivalents at end of period $ 39,403 $ 27,934 Supplemental Disclosures Cash paid during the period for: Interest $ 16,112 $ 13,980 Income taxes $ 1,020 $ 695 Capital Senior Living Corporation Supplemental Information Average Communities Resident Capacity Average Units Q2 15 Q2 14 Q2 15 Q2 14 Q2 15 Q2 14 Portfolio Data I. Community Ownership / Management Consolidated communities Owned 68 63 8,744 8,363 6,608 6,626 Leased 50 50 6,333 6,333 4,907 5,000 Total 118 113 15,077 14,696 11,515 11,626 Independent living 7,090 7,597 5,512 6,191 Assisted living 7,987 7,099 6,003 5,435 Total 15,077 14,696 11,515 11,626 II. Percentage of Operating Portfolio Consolidated communities Owned 57.6 % 55.8 % 58.0 % 56.9 % 57.4 % 57.0 % Leased 42.4 % 44.2 % 42.0 % 43.1 % 42.6 % 43.0 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Independent living 47.0 % 51.7 % 47.9 % 53.3 % Assisted living 53.0 % 48.3 % 52.1 % 46.7 % Total 100.0 % 100.0 % 100.0 % 100.0 %Capital Senior Living Corporation
Supplemental Information (excludes communities being repositioned/leased up) Selected Operating Results Q2 15 Q2 14 I. Owned communities Number of communities 65 60 Resident capacity 8,135 7,103 Unit capacity 6,159 5,700 Financial occupancy (1) 89.2 % 88.4 % Revenue (in millions) 53.1 43.8 Operating expenses (in millions) (2) 29.4 25.0 Operating margin 45 % 43 % Average monthly rent 3,221 2,899 II. Leased communities Number of communities 49 49 Resident capacity 6,107 6,107 Unit capacity 4,766 4,839 Financial occupancy (1) 86.5 % 85.9 % Revenue (in millions) 44.0 43.3 Operating expenses (in millions) (2) 21.6 21.7 Operating margin 51 % 50 % Average monthly rent 3,555 3,469 III. Consolidated communities Number of communities 114 109 Resident capacity 14,242 13,210 Unit capacity 10,925 10,540 Financial occupancy (1) 88.0 % 87.3 % Revenue (in millions) 97.1 87.1 Operating expenses (in millions) (2) 51.0 46.6 Operating margin 47 % 46 % Average monthly rent 3,364 3,157 IV. Communities under management Number of communities 114 109 Resident capacity 14,242 13,861 Unit capacity 10,925 10,968 Financial occupancy (1) 88.0 % 87.3 % Revenue (in millions) 97.1 91.2 Operating expenses (in millions) (2) 51.0 48.9 Operating margin 47 % 46 % Average monthly rent 3,364 3,177 V. Same communities under management Number of communities 105 105 Resident capacity 13,239 13,239 Unit capacity 10,341 10,421 Financial occupancy (1) 87.8 % 87.4 % Revenue (in millions) 90.6 88.7 Operating expenses (in millions) (2) 47.2 47.3 Operating margin 48 % 47 % Average monthly rent 3,327 3,246 VI. General and Administrative expenses as a percent of Total Revenues under Management Second Quarter (3) 4.8 % 4.2 % First six months (3) 4.7 % 4.5 % VII. Consolidated Mortgage Debt Information (in thousands, except interest rates) (excludes insurance premium and auto financing) Total fixed rate mortgage debt659,485
524,018 Total variable rate mortgage debt 20,272 65,222 Weighted average interest rate4.64
% 4.74 % (1) Financial occupancy represents actual days occupied divided by total number of available days during the month of the quarter. (2) Excludes management fees, insurance and property taxes. (3) Excludes transaction costs. CAPITAL SENIOR LIVING CORPORATION NON-GAAP RECONCILIATIONS (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Adjusted EBITDAR Net income from operations $ 3,680 $ 3,149 $ 7,398 $ 5,764 Depreciation and amortization expense 13,468 10,816 26,263 21,767 Stock-based compensation expense 2,717 2,717 4,444 4,077 Facility lease expense 15,298 14,889 30,554 29,683 Provision for bad debts 280 134 544 372 Casualty losses 260 101 521 415 Transaction and conversion costs 876 754 1,463 1,241 Communities being repositioned/leased up (872 ) (401 ) (1,354 ) (401 ) Adjusted EBITDAR $ 35,707 $ 32,159 $ 69,833 $ 62,918 Adjusted EBITDAR Margin Adjusted EBITDAR $ 35,707 $ 32,159 $ 69,833 $ 62,918 Total revenues $ 101,588 $ 93,425 $ 200,228 $ 185,282 Communities being repositioned/leased up (4,428 ) (2,995 ) (8,783 ) (6,012 ) Adjusted revenues $ 97,160 $ 90,430 $ 191,445 $ 179,270 Adjusted EBITDAR margin 36.8 % 35.6 % 36.5 % 35.1 % Adjusted net income and net income per share Net loss $ (5,166 ) $ (9,819 ) $ (11,205 ) $ (14,466 ) Casualty losses, net of tax 164 64 328 261 Transaction and conversion costs, net of tax 552 476 922 782 Resident lease amortization, net of tax 2,582 1,991 4,919 4,196 Write-off of deferred loan costs and prepayment premium, net of tax - 4,397 549 4,397 Joint venture equity investment valuation gain, net of tax - (957 ) - (957 ) Loss (Gain) on disposition of assets, net of tax 41 9 110 6 Deferred tax asset valuation allowance 1,851 3,703 4,350 5,395 Tax impact of 4 property sale 9 - 291 - Communities being repositioned/leased up, net of tax 215 153 705 604 Adjusted net income $ 248 $ 17 $ 969 $ 218 Adjusted net income per share $ 0.01 $ 0.00 $ 0.03 $ 0.01 Diluted shares outstanding 28,707 28,301 28,638 28,228 Adjusted CFFO and Adjusted CFFO per share Net loss $ (5,166 ) $ (9,819 ) $ (11,205 ) $ (14,466 ) Non-cash charges, net 17,068 19,689 33,395 32,733 Recurring capital expenditures (1,095 ) (1,036 ) (2,182 ) (2,065 ) Casualty losses 260 101 521 415 Transaction and conversion costs 876 754 1,463 1,241 Tax impact of 4 property sale 9 - 291 - Tax impact of Spring Meadows Transaction (106 ) (106 ) (212 ) (212 ) Communities being repositioned/leased up, net of tax (138 ) (10 ) 152 318 Adjusted CFFO $ 11,708 $ 9,573 $ 22,223 $ 17,964 Adjusted CFFO per share $ 0.41 $ 0.34 $ 0.78 $ 0.64
View source version on businesswire.com: http://www.businesswire.com/news/home/20150804006907/en/
Capital Senior Living CorporationCarey Hendrickson, 1-972-770-5600Chief Financial Officer
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