Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one
of the nation’s largest operators of senior housing communities,
today announced operating and financial results for the third
quarter 2017. Company highlights for the third 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 and reconciliation of Non-GAAP
measures to the most directly comparable GAAP measure on the final
page of this release.)
- Revenue in the third quarter of 2017, including all
communities, was $117.3 million, a $5.9 million, or 5.3%, increase
from the third quarter of 2016.
- Revenue for consolidated communities, and also excluding the
Company’s two communities impacted by Hurricane Harvey, was $110.1
million in the third quarter of 2017, an increase of 5.9% as
compared to the third quarter of 2016.
- Occupancy for the Company’s consolidated communities, and
excluding the Company’s two communities impacted by Hurricane
Harvey, was 87.2% in the third quarter of 2017, an increase of 30
basis points from the second quarter of 2017 and a decrease of 140
basis points from the third quarter of 2016. Same-community
occupancy was 87.2% in the third quarter of 2017, a 30 basis point
increase from the second quarter of 2017 and a 140 basis point
decrease from the third quarter of 2016.
- Average monthly rent for the Company’s consolidated
communities, and excluding the Company’s two communities impacted
by Hurricane Harvey, in the third quarter of 2017 was $3,600, an
increase of $118 per occupied unit, or 3.4%, as compared to the
third quarter of 2016. Same-community average monthly rent
was $3,572, an increase of $91 per occupied unit, or 2.6%, from the
third quarter of 2016.
- Income from operations, including all communities, was $4.5
million in the third quarter of 2017, which includes the non-cash
amortization of resident leases of $2.1 million associated with
communities acquired by the Company in the previous 12
months.
- The Company’s Net Loss for the third quarter of 2017, including
all communities, was $8.1 million, which includes the non-cash
amortization of resident leases of $2.1 million associated with
communities acquired by the Company in the previous 12 months.
- Excluding items noted and reconciled on the final page of this
release, the Company’s adjusted net loss was $2.2 million in the
third quarter of 2017.
- Adjusted EBITDAR was $37.9 million in the third quarter of 2017
compared to $38.0 million in the third quarter of 2016. Adjusted
EBITDAR is a financial valuation measure, rather than a financial
performance measure, used by management and others to evaluate the
value of companies in the senior living industry. The four
communities undergoing repositioning, lease-up or significant
renovation and conversion, not included in Adjusted EBITDAR,
generated an additional $0.9 million of EBITDAR in the third
quarter of 2017.
- Adjusted Cash From Facility Operations (“CFFO”) was $11.1
million in the third quarter of 2017 compared to $11.6 million in
the third quarter of 2016.
“For many years I have been proud of Capital Senior Living’s
track record of operational excellence but have been disappointed
by the more recent operational and sales challenges we have faced,”
said Lawrence A. Cohen, Chief Executive Officer of the
Company. “We have made a number of broad-based organizational
and operational changes that are restoring and strengthening a
culture of high reliability. We are taking immediate action
to overcome challenges, drive sustainable profitable growth and
enhance shareholder value as we execute a comprehensive strategy to
deliver higher revenues, enhance cash flow and maximize the value
of our owned real estate. I am confident in our key
initiatives and am pleased with the improvements that we saw as we
progressed through the third quarter, including a 90 basis point
improvement in same-community occupancy from June to September and
10% growth in same-community net operating income from June to
September.
“These initiatives are expected to produce further improvement
in our key metrics for the remainder of 2017 and beyond, and
provide a strong foundation on which to execute our long-term
growth strategy focused on organic growth, accretive acquisitions,
conversion of units to higher levels of care and EBITDAR-enhancing
capital expenditures. By diligently executing this strategy,
we expect to increase revenues, reduce operating expenses and
increase EBITDAR and CFFO. We do not intend to pursue any new
acquisitions until the middle part of 2018 so we can focus on
implementing these intiatives. We are committed to returning
Capital Senior Living to operational excellence. With a
disciplined focus on our growth strategy and driving operational
improvements, we will be well positioned to enhance shareholder
value as well as the value of our owned real estate, and further
capitalize on our competitive advantages as a leading pure-play
private-pay senior housing owner/operator.”
Recent Investment Activity
The Company announced today that it has elected not to purchase
the community previously expected to close in mid-October.
Upon the successful implementation of important operating
initiatives, the Company expects to resume pursuing accretive
acquisitions of high-quality communities.
Hurricane Harvey
Two of the Company’s communities in Houston were impacted by
Hurricane Harvey. None of its Florida communities were impacted by
Hurricane Irma.
The two Houston communities were proactively evacuated to ensure
the safety of their residents. The two communities sustained
flood damage that has resulted in the temporary suspension of their
operations. Remediation is in progress and both communities
are currently expected to begin admitting residents in early
2018. The Company’s property and casualty insurance will
cover all damage to the buildings and the Company’s business
interruption coverage is expected to restore the economic loss
related to the suspension of operations.The Company’s deductible
for the total claim is $0.1 million.
Financial Results - Third Quarter
For the third quarter of 2017, the Company reported revenue of
$117.3 million, compared to revenue of $111.4 million in the third
quarter of 2016, an increase of 5.3%. The increase was mostly
due to the acquisition of three communities during or
since the third quarter of 2016, not including the acquisition
of the four previously-leased communities in the first quarter of
2017 which increased Adjusted CFFO but did not result in increases
to the Company’s revenue or expense. Revenue for consolidated
communities excluding the four communities undergoing
repositioning, lease-up or significant renovation and conversion,
and the two Houston communities impacted by Hurricane Harvey,
increased 5.9% in the third quarter of 2017 as compared to the
third quarter of 2016.
Operating expenses for the third quarter of 2017 were $74.6
million, an increase of $5.0 million from the third quarter of
2016. The increase was primarily due to the acquisitions of
senior housing communities made during or since the third quarter
of 2016 and increased contract labor costs for additional staffing
required for newly licensed memory care and assisted living units,
which decreased during the third quarter as permanent staff was
hired and is expected to continue to decrease in the fourth quarter
of 2017. Operating expenses include a $0.7 million business
interruption insurance credit related to the Company’s two Houston
communities impacted by Hurricane Harvey to offset the their lost
revenues and continuing expenses related to the last seven days of
August and the month of September, and to restore the communities’
net income for those periods based on an approximate average for
the first seven months of 2017.
General and administrative expenses for the third quarter of
2017 were $5.4 million. This compares to general and
administrative expenses of $5.7 million in the third quarter of
2016. Excluding transaction and conversion costs in both
periods, general and administrative expenses decreased $0.3 million
in the third quarter of 2017 as compared to the third quarter of
2016, primarily due to a $0.9 million decrease in net healthcare
expense year over year. As a percentage of revenues under
management, general and administrative expenses, excluding
transaction and conversion costs, were 4.3% in the third quarter of
2017 compared to 4.7% in the third quarter of 2016.
Income from operations for the third quarter of 2017 was $4.5
million. The Company recorded a net loss on a GAAP basis of
$8.1 million in the third quarter of 2017. Excluding items
noted and reconciled on the final page of this release, the
Company’s adjusted net loss was $2.2 million in the third quarter
of 2017.
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), including a community in
Massachusetts undergoing significant renovation that was excluded
beginning in the third quarter of 2017.
Adjusted EBITDAR for the third quarter of 2017 was $37.9 million
as compared to $38.0 million in the third quarter of 2016.
The four communities undergoing repositioning, lease-up or
significant renovation and conversion not included in Adjusted
EBITDAR generated an additional $0.9 million of EBITDAR.
Adjusted CFFO was $11.1 million in the third quarter of 2017, as
compared to $11.6 million in the third quarter of 2016.
Operating Activities
Same-community results exclude the four communities previously
noted that are undergoing repositioning, lease-up or significant
renovation and conversion, the two Houston communities impacted by
Hurricane Harvey, and three communities that were acquired during
or since the third quarter of 2016. Same-community results also
exclude certain transaction and conversion costs.
Same-community revenue in the third quarter of 2017 increased
1.6% versus the third quarter of 2016.
Same-community operating expenses increased 4.2% from the third
quarter of the prior year, excluding conversion costs in both
periods. On the same basis, labor costs, including benefits,
increased 4.0%, food costs increased 1.1% and utilities increased
0.4%, all as compared to the third quarter of 2016. At
communities that have not converted units to higher levels of care
in the last year, labor costs increased 3.5%. The most
significant expense increase was in contract labor costs, mostly
related to additional staffing required for newly licensed memory
care and assisted living units. Contract labor decreased
throughout the third quarter of 2017 as permanent staff was hired
and is expected to continue to decrease in the fourth quarter of
2017. Same-community net operating income decreased 2.4% in
the third quarter of 2017 as compared to the third quarter of 2016.
Execution of a number of recovery initiatives during the third
quarter improved same-community results as the quarter progressed.
In the month of September, same-community revenues increased 2.3%,
expenses decreased 2.3% and net operating income increased 9.1%,
all as compared to the prior year.
Capital expenditures for the third quarter of 2017 were $8.2
million, representing approximately $6.7 million of investment
spending and approximately $1.5 million of recurring capital
expenditures.
Balance Sheet
The Company ended the quarter with $22.6 million of cash and
cash equivalents, including restricted cash. During the third
quarter of 2017, the Company spent $8.2 million on capital
improvements. The Company received reimbursements from one of its
REIT partners totaling $1.5 million in the third quarter for
capital improvements at certain leased communities and expects to
receive additional reimbursements as the remaining projects at
leased communities are completed.
As of September 30, 2017, the Company financed its owned
communities with mortgages totaling $960.2 million at interest
rates averaging 4.7%. All of the Company’s debt is at fixed
interest rates, except for two bridge loans totaling approximately
$76.6 million at September 30, 2017, one of which matures in the
second quarter of 2019 and the other in the first quarter of
2020. The earliest maturity date for the Company’s fixed-rate
debt is in 2021.
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, conversion and
renovation programs.
Q3 2017 Conference Call Information
The Company will host a conference call with senior management
to discuss the Company’s third quarter 2017 financial
results. The call will be held on Wednesday, November 1,
2017, at 5:00 p.m. Eastern Time. The call-in number is
323-701-0230, confirmation code 5634307. 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 November 1, 2017 at 8:00 p.m. Eastern Time, until
November 9, 2017 at 8:00 p.m. Eastern Time. To access the
conference call replay, call 719-457-0820, confirmation code
5634307. The conference call will also be made available for
playback via the Company’s corporate website,
www.capitalsenior.com.
Non-GAAP Financial Measures of Operating
Performance
Adjusted EBITDAR is a financial valuation measure and Adjusted
Net Income and Adjusted CFFO are financial performance measures
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 costs 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.
Adjusted EBITDAR is a valuation measure commonly used by our
management, research analysts and investors to value companies in
the senior living industry. Because Adjusted EBITDAR excludes
interest expense and rent expense, it allows our management,
research analysts and investors to compare the enterprise values of
different companies without regard to differences in capital
structures and leasing arrangements.
The Company believes that Adjusted Net Income and Adjusted CFFO
are useful as performance measures in identifying trends in
day-to-day operations because they exclude the costs associated
with acquisitions and conversions and other items that do not
ordinarily reflect the ongoing operating results of our primary
business. Adjusted Net Income and Adjusted CFFO provide
indicators to management of progress in achieving both consolidated
and individual business unit operating performance and are used by
research analysts and investors to evaluate the performance of
companies in the senior living industry.
The Company strongly urges you to review on the last page of
this release the reconciliation of net loss to Adjusted EBITDAR and
the reconciliation of net (loss) income to Adjusted Net (Loss)
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 housing 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 129 senior housing communities in
geographically concentrated regions with an aggregate capacity of
approximately 16,500 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.
Contact Carey P. Hendrickson, Chief Financial Officer, at
972-770-5600 for more information.
|
|
|
|
CAPITAL SENIOR LIVING CORPORATION |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
(unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
September
30,2017 |
|
|
December 31,2016 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
9,186 |
|
|
$ |
34,026 |
|
Restricted cash |
|
|
13,372 |
|
|
|
13,297 |
|
Accounts
receivable, net |
|
|
8,680 |
|
|
|
13,675 |
|
Property
tax and insurance deposits |
|
|
12,912 |
|
|
|
14,665 |
|
Prepaid
expenses and other |
|
|
3,978 |
|
|
|
6,365 |
|
Total
current assets |
|
|
48,128 |
|
|
|
82,028 |
|
Property
and equipment, net |
|
|
1,105,270 |
|
|
|
1,032,430 |
|
Other
assets, net |
|
|
18,233 |
|
|
|
31,323 |
|
Total
assets |
|
$ |
1,171,631 |
|
|
$ |
1,145,781 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
3,975 |
|
|
$ |
5,051 |
|
Accrued
expenses |
|
|
36,663 |
|
|
|
39,064 |
|
Current
portion of notes payable, net of deferred loan costs |
|
|
16,482 |
|
|
|
17,889 |
|
Current
portion of deferred income |
|
|
14,245 |
|
|
|
16,284 |
|
Current
portion of capital lease and financing obligations |
|
|
2,806 |
|
|
|
1,339 |
|
Federal
and state income taxes payable |
|
|
110 |
|
|
|
218 |
|
Customer
deposits |
|
|
1,428 |
|
|
|
1,545 |
|
Total
current liabilities |
|
|
75,709 |
|
|
|
81,390 |
|
Deferred income |
|
|
10,504 |
|
|
|
12,205 |
|
Capital lease and
financing obligations, net of current portion |
|
|
49,857 |
|
|
|
37,439 |
|
Other long-term
liabilities |
|
|
15,273 |
|
|
|
15,325 |
|
Notes payable, net of
deferred loan costs and current portion |
|
|
935,345 |
|
|
|
882,504 |
|
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 outstandingshares – 30,478
and 30,012 in 2017 and 2016, respectively |
|
|
310 |
|
|
|
305 |
|
Additional paid-in capital |
|
|
177,610 |
|
|
|
171,599 |
|
Retained
deficit |
|
|
(89,547 |
) |
|
|
(51,556 |
) |
Treasury
stock, at cost – 494 shares in 2017 and 2016 |
|
|
(3,430 |
) |
|
|
(3,430 |
) |
Total
shareholders’ equity |
|
|
84,943 |
|
|
|
116,918 |
|
Total
liabilities and shareholders’ equity |
|
$ |
1,171,631 |
|
|
$ |
1,145,781 |
|
|
|
|
|
CAPITAL SENIOR LIVING
CORPORATION |
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS |
|
(unaudited, in thousands, except per share
data) |
|
|
|
|
|
Three Months EndedSeptember
30, |
|
|
Nine Months EndedSeptember
30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resident
revenue |
|
$ |
117,318 |
|
|
$ |
111,436 |
|
|
$ |
350,026 |
|
|
$ |
331,643 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses (exclusive of facility lease expense and depreciation and
amortization expense shown below) |
|
|
74,636 |
|
|
|
69,622 |
|
|
|
220,703 |
|
|
|
203,307 |
|
General
and administrative expenses |
|
|
5,361 |
|
|
|
5,749 |
|
|
|
17,678 |
|
|
|
16,969 |
|
Facility
lease expense |
|
|
13,943 |
|
|
|
15,500 |
|
|
|
42,498 |
|
|
|
46,150 |
|
Loss on
facility lease termination |
|
|
— |
|
|
|
— |
|
|
|
12,858 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
1,962 |
|
|
|
2,479 |
|
|
|
5,833 |
|
|
|
7,482 |
|
Depreciation and amortization expense |
|
|
16,903 |
|
|
|
14,400 |
|
|
|
50,862 |
|
|
|
44,103 |
|
Total
expenses |
|
|
112,805 |
|
|
|
107,750 |
|
|
|
350,432 |
|
|
|
318,011 |
|
Income (Loss) from
operations |
|
|
4,513 |
|
|
|
3,686 |
|
|
|
(406 |
) |
|
|
13,632 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
19 |
|
|
|
15 |
|
|
|
51 |
|
|
|
50 |
|
Interest
expense |
|
|
(12,531 |
) |
|
|
(10,636 |
) |
|
|
(36,940 |
) |
|
|
(30,966 |
) |
Loss on
disposition of assets, net |
|
|
(1 |
) |
|
|
(16 |
) |
|
|
(126 |
) |
|
|
(53 |
) |
Other
income |
|
|
1 |
|
|
|
— |
|
|
|
6 |
|
|
|
233 |
|
Loss before
provision for income taxes |
|
|
(7,999 |
) |
|
|
(6,951 |
) |
|
|
(37,415 |
) |
|
|
(17,104 |
) |
Provision for income
taxes |
|
|
(133 |
) |
|
|
(126 |
) |
|
|
(394 |
) |
|
|
(403 |
) |
Net loss |
|
$ |
(8,132 |
) |
|
$ |
(7,077 |
) |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net
loss per share |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(1.28 |
) |
|
$ |
(0.61 |
) |
Diluted
net loss per share |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(1.28 |
) |
|
$ |
(0.61 |
) |
Weighted average shares
outstanding — basic |
|
|
29,512 |
|
|
|
28,959 |
|
|
|
29,427 |
|
|
|
28,879 |
|
Weighted average shares
outstanding — diluted |
|
|
29,512 |
|
|
|
28,959 |
|
|
|
29,427 |
|
|
|
28,879 |
|
Comprehensive loss |
|
$ |
(8,132 |
) |
|
$ |
(7,077 |
) |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
|
|
|
|
CAPITAL SENIOR LIVING CORPORATION |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(unaudited, in thousands) |
|
|
|
|
|
Nine Months EndedSeptember
30, |
|
|
|
2017 |
|
|
2016 |
|
Operating
Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
50,862 |
|
|
|
44,103 |
|
Amortization of deferred financing charges |
|
|
1,216 |
|
|
|
870 |
|
Amortization of deferred lease costs and lease intangibles |
|
|
647 |
|
|
|
434 |
|
Amortization of lease incentives |
|
|
(950 |
) |
|
|
(563 |
) |
Deferred
income |
|
|
(899 |
) |
|
|
15 |
|
Lease
incentives |
|
|
5,159 |
|
|
|
5,858 |
|
Loss on
facility lease termination |
|
|
12,858 |
|
|
|
— |
|
Loss on
disposition of assets, net |
|
|
126 |
|
|
|
53 |
|
Provision
for bad debts |
|
|
1,355 |
|
|
|
1,214 |
|
Stock-based compensation expense |
|
|
5,833 |
|
|
|
7,482 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(3,834 |
) |
|
|
(8,883 |
) |
Property
tax and insurance deposits |
|
|
1,753 |
|
|
|
1,189 |
|
Prepaid
expenses and other |
|
|
2,387 |
|
|
|
(2,112 |
) |
Other
assets |
|
|
5,149 |
|
|
|
(462 |
) |
Accounts
payable |
|
|
(1,076 |
) |
|
|
(1,053 |
) |
Accrued
expenses |
|
|
(2,400 |
) |
|
|
(1,586 |
) |
Other
liabilities |
|
|
3,649 |
|
|
|
8,652 |
|
Federal
and state income taxes receivable/payable |
|
|
(108 |
) |
|
|
(97 |
) |
Deferred
resident revenue |
|
|
(1,520 |
) |
|
|
(784 |
) |
Customer
deposits |
|
|
(117 |
) |
|
|
(249 |
) |
Net cash provided by
operating activities |
|
|
42,281 |
|
|
|
36,574 |
|
Investing
Activities |
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
(30,165 |
) |
|
|
(47,311 |
) |
Cash paid for
acquisitions |
|
|
(85,000 |
) |
|
|
(109,750 |
) |
Proceeds from
disposition of assets |
|
|
16 |
|
|
|
32 |
|
Net cash used in
investing activities |
|
|
(115,149 |
) |
|
|
(157,029 |
) |
Financing
Activities |
|
|
|
|
|
|
|
|
Proceeds from notes
payable |
|
|
66,584 |
|
|
|
112,492 |
|
Repayments of notes
payable |
|
|
(15,414 |
) |
|
|
(12,881 |
) |
Increase in restricted
cash |
|
|
(75 |
) |
|
|
(133 |
) |
Cash payments for
capital lease and financing obligations |
|
|
(2,117 |
) |
|
|
(989 |
) |
Cash proceeds from the
issuance of common stock |
|
|
— |
|
|
|
66 |
|
Excess tax benefits on
stock options exercised |
|
|
— |
|
|
|
(27 |
) |
Purchases of treasury
stock |
|
|
— |
|
|
|
(2,496 |
) |
Deferred financing
charges paid |
|
|
(950 |
) |
|
|
(1,830 |
) |
Net cash provided by
financing activities |
|
|
48,028 |
|
|
|
94,202 |
|
Decrease in cash and
cash equivalents |
|
|
(24,840 |
) |
|
|
(26,253 |
) |
Cash and cash
equivalents at beginning of period |
|
|
34,026 |
|
|
|
56,087 |
|
Cash and cash
equivalents at end of period |
|
$ |
9,186 |
|
|
$ |
29,834 |
|
Supplemental
Disclosures |
|
|
|
|
|
|
|
|
Cash paid during the
period for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
35,108 |
|
|
$ |
30,056 |
|
Income
taxes |
|
$ |
534 |
|
|
$ |
564 |
|
|
|
|
|
Capital Senior Living Corporation |
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
Communities |
|
Resident Capacity |
|
Average Units |
|
|
|
|
|
Q3 17 |
|
Q3 16 |
|
Q3 17 |
|
Q3 16 |
|
Q3 17 |
|
Q3 16 |
Portfolio Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
I.
Community Ownership / Management |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated communities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned |
|
83 |
|
|
78 |
|
|
10,767 |
|
|
9,771 |
|
|
8,119 |
|
|
7,255 |
|
|
|
|
Leased |
|
46 |
|
|
50 |
|
|
5,756 |
|
|
6,333 |
|
|
4,414 |
|
|
4,900 |
|
|
|
|
Total |
|
129 |
|
|
128 |
|
|
16,523 |
|
|
16,104 |
|
|
12,533 |
|
|
12,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent
living |
|
|
|
|
|
6,879 |
|
|
6,911 |
|
|
5,158 |
|
|
5,227 |
|
|
|
Assisted
living |
|
|
|
|
|
9,644 |
|
|
9,193 |
|
|
7,375 |
|
|
6,928 |
|
|
|
|
Total |
|
|
|
|
|
16,523 |
|
|
16,104 |
|
|
12,533 |
|
|
12,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II.
Percentage of Operating Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated communities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned |
|
64.3 |
% |
|
60.9 |
% |
|
65.2 |
% |
|
60.7 |
% |
|
64.8 |
% |
|
59.7 |
% |
|
|
|
Leased |
|
35.7 |
% |
|
39.1 |
% |
|
34.8 |
% |
|
39.3 |
% |
|
35.2 |
% |
|
40.3 |
% |
|
|
|
Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent
living |
|
|
|
|
|
41.6 |
% |
|
42.9 |
% |
|
41.2 |
% |
|
43.0 |
% |
|
|
Assisted
living |
|
|
|
|
|
58.4 |
% |
|
57.1 |
% |
|
58.8 |
% |
|
57.0 |
% |
|
|
|
Total |
|
|
|
|
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
Capital Senior Living Corporation |
|
|
|
|
|
|
Supplemental Information (excludes four communities being
repositioned/leased up and two Houston
communities impacted by Hurricane Harvey) |
|
|
|
|
|
Selected Operating Results |
|
Q3 17 |
|
Q3 16 |
|
|
|
I.
Owned communities |
|
|
|
|
|
|
|
|
Number of
communities |
|
78 |
|
|
73 |
|
|
|
|
|
Resident capacity |
|
9,841 |
|
|
8,845 |
|
|
|
|
|
Unit capacity (1) |
|
7,469 |
|
|
6,528 |
|
|
|
|
|
Financial occupancy
(2) |
|
88.7 |
% |
|
89.5 |
% |
|
|
|
|
Revenue (in
millions) |
|
69.6 |
|
|
59.4 |
|
|
|
|
|
Operating expenses (in
millions) (3) |
|
44.1 |
|
|
37.2 |
|
|
|
|
|
Operating margin
(3) |
|
37 |
% |
|
37 |
% |
|
|
|
|
Average monthly
rent |
|
3,500 |
|
|
3,389 |
|
|
|
|
II.
Leased communities |
|
|
|
|
|
|
|
|
Number of
communities |
|
45 |
|
|
49 |
|
|
|
|
|
Resident capacity |
|
5,530 |
|
|
6,107 |
|
|
|
|
|
Unit capacity (1) |
|
4,227 |
|
|
4,713 |
|
|
|
|
|
Financial occupancy
(2) |
|
84.5 |
% |
|
87.3 |
% |
|
|
|
|
Revenue (in
millions) |
|
40.6 |
|
|
44.6 |
|
|
|
|
|
Operating expenses (in
millions) (3) |
|
23.6 |
|
|
24.9 |
|
|
|
|
|
Operating margin
(3) |
|
42 |
% |
|
44 |
% |
|
|
|
|
Average monthly
rent |
|
3,785 |
|
|
3,612 |
|
|
|
|
III. Consolidated communities |
|
|
|
|
|
|
|
|
Number of
communities |
|
123 |
|
|
122 |
|
|
|
|
|
Resident capacity |
|
15,371 |
|
|
14,952 |
|
|
|
|
|
Unit capacity |
|
11,696 |
|
|
11,241 |
|
|
|
|
|
Financial occupancy
(2) |
|
87.2 |
% |
|
88.6 |
% |
|
|
|
|
Revenue (in
millions) |
|
110.1 |
|
|
104.0 |
|
|
|
|
|
Operating expenses (in
millions) (3) |
|
67.7 |
|
|
62.1 |
|
|
|
|
|
Operating margin
(3) |
|
39 |
% |
|
40 |
% |
|
|
|
|
Average monthly
rent |
|
3,600 |
|
|
3,482 |
|
|
|
|
IV.
Communities under management |
|
|
|
|
|
|
|
|
Number of
communities |
|
123 |
|
|
122 |
|
|
|
|
|
Resident capacity |
|
15,371 |
|
|
14,952 |
|
|
|
|
|
Unit capacity (1) |
|
11,696 |
|
|
11,241 |
|
|
|
|
|
Financial occupancy
(2) |
|
87.2 |
% |
|
88.6 |
% |
|
|
|
|
Revenue (in
millions) |
|
110.1 |
|
|
104.0 |
|
|
|
|
|
Operating expenses (in
millions) (3) |
|
67.7 |
|
|
62.1 |
|
|
|
|
|
Operating margin
(3) |
|
39 |
% |
|
40 |
% |
|
|
|
|
Average monthly
rent |
|
3,600 |
|
|
3,482 |
|
|
|
|
V.
Same communities under management |
|
|
|
|
|
|
|
|
Number of
communities |
|
120 |
|
|
120 |
|
|
|
|
|
Resident capacity |
|
14,815 |
|
|
14,617 |
|
|
|
|
|
Unit capacity (1) |
|
11,294 |
|
|
11,234 |
|
|
|
|
|
Financial occupancy
(2) |
|
87.2 |
% |
|
88.6 |
% |
|
|
|
|
Revenue (in
millions) |
|
105.5 |
|
|
103.9 |
|
|
|
|
|
Operating expenses (in
millions) (3) |
|
64.6 |
|
|
62.0 |
|
|
|
|
|
Operating margin
(3) |
|
39 |
% |
|
40 |
% |
|
|
|
|
Average monthly
rent |
|
3,572 |
|
|
3,481 |
|
|
|
|
VI. General and Administrative expenses as a percent of
Total Revenues under Management |
|
|
|
Third quarter (4) |
|
4.3 |
% |
|
4.7 |
% |
|
|
|
|
Year to date (4) |
|
4.6 |
% |
|
4.6 |
% |
|
|
|
VII. Consolidated Mortgage Debt Information (in thousands,
except interest rates) |
|
|
(excludes insurance premium financing) |
|
|
|
|
|
|
|
|
Total fixed rate
mortgage debt |
|
883,607 |
|
|
861,657 |
|
|
|
|
|
Total variable rate
mortgage debt |
|
76,565 |
|
|
11,800 |
|
|
|
|
|
Weighted
average interest rate |
|
4.7 |
% |
|
4.6 |
% |
|
|
|
(1) |
|
Due to
conversion and refurbishment projects completed at certain
communities, unit capacity is higher in Q3 17 than Q3 16 for same
communities under management, which affects all groupings of
communities. |
|
|
(2) |
|
Financial
occupancy represents actual days occupied divided by total number
of available days during the month of the quarter. |
|
|
|
|
(3) |
|
Excludes
management fees, provision for bad debts and transaction and
conversion costs. |
|
|
(4) |
|
Excludes
transaction and conversion costs. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL SENIOR LIVING
CORPORATION |
NON-GAAP RECONCILIATIONS |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Adjusted
EBITDAR |
|
|
|
|
|
|
|
Net
loss |
$ |
(8,132 |
) |
|
$ |
(7,077 |
) |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
Depreciation and amortization expense |
|
16,903 |
|
|
|
14,400 |
|
|
|
50,862 |
|
|
|
44,103 |
|
Stock-based compensation expense |
|
1,962 |
|
|
|
2,479 |
|
|
|
5,833 |
|
|
|
7,482 |
|
Facility
lease expense |
|
13,943 |
|
|
|
15,500 |
|
|
|
42,498 |
|
|
|
46,150 |
|
Loss on
facility lease termination |
|
- |
|
|
|
- |
|
|
|
12,858 |
|
|
|
- |
|
Provision
for bad debts |
|
380 |
|
|
|
405 |
|
|
|
1,355 |
|
|
|
1,214 |
|
Interest
income |
|
(19 |
) |
|
|
(15 |
) |
|
|
(51 |
) |
|
|
(50 |
) |
Interest
expense |
|
12,531 |
|
|
|
10,636 |
|
|
|
36,940 |
|
|
|
30,966 |
|
Loss
(Gain) on disposition of assets, net |
|
1 |
|
|
|
16 |
|
|
|
126 |
|
|
|
53 |
|
Other
income |
|
(1 |
) |
|
|
- |
|
|
|
(6 |
) |
|
|
(233 |
) |
Provision
for income taxes |
|
133 |
|
|
|
126 |
|
|
|
394 |
|
|
|
403 |
|
Casualty
losses |
|
704 |
|
|
|
634 |
|
|
|
1,727 |
|
|
|
1,069 |
|
Transaction and conversion costs |
|
439 |
|
|
|
1,663 |
|
|
|
1,992 |
|
|
|
3,063 |
|
Communities excluded due to repositioning/lease-up |
|
(927 |
) |
|
|
(779 |
) |
|
|
(2,740 |
) |
|
|
(2,434 |
) |
Adjusted
EBITDAR |
$ |
37,917 |
|
|
$ |
37,988 |
|
|
$ |
113,979 |
|
|
$ |
114,279 |
|
|
|
|
|
|
|
|
|
Adjusted
Revenues |
|
|
|
|
|
|
|
Total
revenues |
$ |
117,318 |
|
|
$ |
111,436 |
|
|
$ |
350,026 |
|
|
$ |
331,643 |
|
Communities excluded due to repositioning/lease-up |
|
(5,820 |
) |
|
|
(4,399 |
) |
|
|
(15,161 |
) |
|
|
(13,198 |
) |
Adjusted
revenues |
$ |
111,498 |
|
|
$ |
107,037 |
|
|
$ |
334,865 |
|
|
$ |
318,445 |
|
|
|
|
|
|
|
|
|
Adjusted net loss and Adjusted net loss per
share |
|
|
|
|
|
|
Net
loss |
$ |
(8,132 |
) |
|
$ |
(7,077 |
) |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
Casualty
losses |
|
704 |
|
|
|
634 |
|
|
|
1,727 |
|
|
|
1,069 |
|
Transaction and conversion costs |
|
517 |
|
|
|
1,663 |
|
|
|
2,554 |
|
|
|
2,831 |
|
Resident
lease amortization |
|
2,085 |
|
|
|
2,583 |
|
|
|
7,407 |
|
|
|
9,593 |
|
Loss on
facility lease termination |
|
- |
|
|
|
- |
|
|
|
12,859 |
|
|
|
- |
|
Loss
(Gain) on disposition of assets |
|
1 |
|
|
|
16 |
|
|
|
126 |
|
|
|
53 |
|
Tax
impact of Non-GAAP adjustments (37%) |
|
(1,224 |
) |
|
|
(1,812 |
) |
|
|
(9,129 |
) |
|
|
(5,012 |
) |
Deferred
tax asset valuation allowance |
|
3,086 |
|
|
|
2,976 |
|
|
|
14,020 |
|
|
|
6,398 |
|
Communities excluded due to repositioning/lease-up |
|
750 |
|
|
|
334 |
|
|
|
1,787 |
|
|
|
994 |
|
Adjusted
net (loss) income |
$ |
(2,213 |
) |
|
$ |
(683 |
) |
|
$ |
(6,458 |
) |
|
$ |
(1,581 |
) |
|
|
|
|
|
|
|
|
Diluted
shares outstanding |
|
29,512 |
|
|
|
28,959 |
|
|
|
29,427 |
|
|
|
28,879 |
|
|
|
|
|
|
|
|
|
Adjusted
net (loss) income per share |
$ |
(0.07 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
Adjusted
CFFO |
|
|
|
|
|
|
|
Net
loss |
$ |
(8,132 |
) |
|
$ |
(7,077 |
) |
|
$ |
(37,809 |
) |
|
$ |
(17,507 |
) |
Non-cash
charges, net |
|
20,628 |
|
|
|
19,597 |
|
|
|
76,207 |
|
|
|
59,466 |
|
Lease
incentives |
|
(1,504 |
) |
|
|
(1,968 |
) |
|
|
(5,159 |
) |
|
|
(5,858 |
) |
Recurring
capital expenditures |
|
(1,186 |
) |
|
|
(1,155 |
) |
|
|
(3,559 |
) |
|
|
(3,451 |
) |
Casualty
losses |
|
735 |
|
|
|
634 |
|
|
|
1,759 |
|
|
|
1,069 |
|
Transaction and conversion costs |
|
517 |
|
|
|
1,663 |
|
|
|
2,329 |
|
|
|
2,831 |
|
Tax
impact of Spring Meadows Transaction |
|
- |
|
|
|
(106 |
) |
|
|
- |
|
|
|
(318 |
) |
Communities excluded due to repositioning/lease-up |
|
29 |
|
|
|
(1 |
) |
|
|
(203 |
) |
|
|
(92 |
) |
Adjusted
CFFO |
$ |
11,087 |
|
|
$ |
11,587 |
|
|
$ |
33,565 |
|
|
$ |
36,140 |
|
PRESS CONTACT:Carey Hendrickson, Chief
Financial Officer Phone: 1-972-770-5600
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